Special City Council Meeting on Pelican Harbor TEFRA Tax Exempt Bonds - October 28, 2025

This special meeting was called to continue the public hearing on the TEFRA (Tax Equity and Fiscal Responsibility Act) request for Pelican Harbor Apartments, a 43-unit affordable housing complex for low-income seniors and disabled residents. The council ultimately approved the tax-exempt bond financing with a substitute motion reducing the affordability covenant from 99 years to 60 years. The vote was 4-3.

Public Comments & Testimony

• Multiple speakers expressed support for approving the tax-exempt bonds, arguing that the project already houses vulnerable seniors and that the city should honor commitments made by previous councils. Speakers criticized the council majority for considering withdrawal of support while spending on other projects like the Pacific Air Show.
• Father Nathan Bjornstad (St. Wilfred's Episcopal Church) spoke in favor of granting the tax-exempt bonds, urging quick approval to support housing for those in need.
• Kathy Ryder, a homeowner since 1985, criticized the special meeting at 4 p.m. as limiting public participation and questioned the council's plan for the 46 seniors if the measure failed.
• Joel Bruce, a 78-year-old resident, shared his personal experience with homelessness and expressed support for the project.
• Michelle Kearns, a 25-year resident and former Jamboree employee, vouched for Jamboree's reputation and urged support.

Discussion Items

• Councilmember Williams outlined concerns about the financial structure of affordable housing projects, including the use of tax credits, property tax exemptions, and high executive salaries at Jamboree (noting $635,000 and $526,624 annual compensation for top executives). He argued that voting yes would violate campaign promises against government subsidies.
• Councilmember Kennedy echoed concerns about setting a 99-year precedent for property tax loss and criticized the developer's missed deadlines.
• Councilmember Burns expressed concerns about fiduciary duty and questioned how approving the bonds financially helps Huntington Beach, given that the project is built and no seniors would be evicted even without approval.
• Councilmember McKeon supported the project, noting the site had been vacant for 70 years and was undevelopable by the private sector due to parking and access constraints. He emphasized that the project houses seniors who were previously homeless, reducing city costs for emergency services.
• Councilmember Vandermark shared feedback from nearby residents who reported the development improved the area (removed blight, reduced crime). She argued that since the project already exists, rejecting it would not displace seniors but would affect Jamboree's margins.
• Councilmember Twine highlighted that a no vote could risk the city's $3 million subordinate loan in case of default, whereas a yes vote guarantees affordability and concessions (interest rate increase from 3% to 5%, $5,000 annual payment).
• Jamboree representatives (Mike Massey, Kelsey Brewer, Pete Mitchell) assured that seniors would not be evicted if the TEFRA were denied; they could bridge the funding gap. They noted the project is unprofitable but that they are committed to operating it.

Key Outcomes

• Substitute Motion Passed 4-3: Councilmember Kennedy moved to reduce the affordability covenant from 99 years to 60 years while approving the TEFRA bond financing. The motion passed with Mayor Pro Tem McKeon, Councilmember Kennedy, Councilmember Vandermark, and Councilmember Twine voting yes; Mayor Burns, Councilmember Williams, and Councilmember Gruole voting no.
• The decision approves the tax-exempt bonds for Pelican Harbor Apartments with a 60-year affordability covenant (original term), maintaining the project's affordable status for seniors and disabled residents.
• Meeting adjourned; next regular meeting scheduled for November 4, 2025.