The developer of an affordable housing project slated for South Sierra Avenue is one step closer to obtaining tax-exempt bonds for the complex following the Solana Beach City Council’s unanimous vote in favor of the issuance by the California Municipal Finance Authority.
“Our role is simply to enable the bonds to be tax-exempt,” Deputy Mayor Peter Zahn said. “We’re not on the hook in any other way. It’s totally up to the developer to go forward at the pace and with the funds that they choose.”
In April 2014, the council approved “The Pearl” project, a 10-unit affordable housing complex that totals 12,920 square feet. In addition to one-, two- and three-bedroom units, the project includes 795 square feet of commercial office space and 53 parking spaces in structured parking, replacing the existing 31 public spaces and adding 22 residential and commercial spaces.
Plans were put on hold, however, as the project has been subject to lawsuits by the Seascape Surf Estate Management Corporation, on behalf of nearby condominium owners. Some nearby residents opposed the project for a variety of reasons, including traffic, safety, parking and noise concerns.
Required under the Tax Exempt Fiscal Responsibility Act, or TEFRA, the council on Aug. 24 held a public hearing in connection with the proposed issuance of revenue bonds by the CMFA, a joint exercise of powers authority and public entity of California, in an amount not to exceed $5.5 million.
“Your duty as a City Council and a member of that agency is to take these actions to approve the issuance of the bonds,” City Manager Greg Wade said prior to the vote. “In taking this action, the city has no responsibility whatsoever financially, no liability associated with the issuance of these bonds. It’s strictly on the side of the developer. But this action is required under TEFRA and as part of the CMFA.”
As the borrower, Wade noted that the developer, Hitzke Development Corporation, would have to secure the financing. Funds would help cover construction costs.