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Tax Equity Fiscal Responsibility Act (TEFRA) Resolution Hearing for Estrella Springs <br />May 6, 2025 <br />Page 3 <br />After the TEFRA Hearing concludes, an "applicable elected representative" of the <br />governmental unit hosting the Project, in this case, the City, must provide approval for the <br />CMFA to issue the Bonds for the Project's financing. <br />The bonds to be issued by the CMFA are the sole responsibility of North Harbor Housing <br />Partners LP. The City bears no financial or legal liability for the project or bond repayment <br />and incurs no indebtedness. <br />The Board of Directors of the California Foundation for Stronger Communities, a <br />California non-profit public benefit corporation (the "Foundation"), serves as the Board of <br />Directors for the CMFA. Through its conduit issuance activities, the CMFA shares a <br />portion of its issuance fees with its member communities and allocates a portion of these <br />fees to the Foundation to support local charities. At the original closing, the CMFA <br />donated $14,616 to the City as part of this sharing of issuance fees. <br />Subordination Agreement with JP Morgan Chase Bank <br />In the title of the original Staff Report published on April 20, 2021, for the approval of a <br />$1,687,047 loan agreement with North Harbor Housing Partners LP, it stated, "approve a <br />future Subordination Agreement with JP Morgan Chase Bank, N.A." However, there was <br />an error in the Staff Report and the Recommended Action # 2 did not include this <br />approval. <br />The loan for JP Morgan Chase Bank is larger than the City's Community Development <br />Block Grant (CDBG) Loan. At the time of permanent loan conversion, JP Morgan Chase <br />Bank (as the senior lender) will require the City to subordinate our $1,687,047 CDBG loan <br />agreement. In order for Jamboree Housing to convert from construction financing to <br />permanent financing for the Project, staff is requesting pre -authorization for the City <br />Manager to execute a future Subordination Agreement with JP Morgan Chase Bank, N.A. <br />for the City's CDBG loan agreement on behalf of the City, approved as to form by the City <br />Attorney. This will correct the Staff Report from four years ago, and allow Jamboree <br />Housing to close on their permanent loan financing in the future. This is a standard <br />subordination that is customary for the City's affordable housing projects. Furthermore, <br />Jamboree Housing will not be able to close on their permanent loan financing for the <br />Project without this approval. <br />FISCAL IMPACT <br />Funds in the amount of $1,011 will be deposited into the Inclusionary Housing Fund <br />revenue account for the TEFRA Hearing Fee — Housing Project (No. 41718002-53902). <br />EXHIBIT(S) <br />1. TEFRA Resolution <br />2. TEFRA Hearing Notice Proof of Publication <br />