Nicely done.

Shake it out.

I'd like to call the special meeting of the city council public financing authority, housing authority to order.

City clerk might have the roll call, please.

Councilman Twine.

Here.

Councilman Kennedy.

Here.

Mayor Pro Tem McKeon.

Here.

Mayor Burns.

Here.

Councilwoman Vandermark.

Here.

Councilman Gruole?

Here.

Williams.

Here.

All present.

All right.

The pledge of allegiance.

Please stand, and it'll be led by City Clerk.

Lisa Lane.

Please face the flag.

Right hand over heart.

Ready?

Begin.

Is that the question?

No.

It's just a member.

Butch.

Butch.

Thank you.

City Clerk, do we have any supplemental communications?

Yes.

Yes.

There are 20 emails received regarding the uh TAFRA public hearing for the Pelican Harbor apartments.

All right.

Do we have anybody to speak for this session?

Signed up to speak.

Yes.

The mayor maybe just remind everyone the public hearing has been continued from the last meeting, so we're continuing the public hearing and hearing testimony again on the matter.

Okay.

As the city attorney had said, the parliamentarian, we are continuing the public hearing from last meeting.

And uh we should restrict comments and stuff towards that, correct?

Correct.

All right.

We have we're going to continue and do the public speakers during the public hearing.

Okay.

Um, any questions are important.

Kia, we've continued it.

Uh then should we just proceed with the staff report?

If there's an is there an additional staff report.

No, there's no additional staff report at the same from the last meeting.

Okay, we're able to answer any questions, though.

All right, and then um we shall let me see.

Do you have any questions on the report?

No report.

Okay.

Uh we have people signed up to speak.

Um we'll open the public hearing again.

Public hearing was already, it's yeah, it's already open, but we'll resume it.

Individuals wishing to uh provide comment on this item schedule for public hearing may do so filling out the request form delivered to the city clerk.

All speakers are encouraged, but not required to identify themselves by name.

Each speaker may have uh a minute unless they're the volume of speakers warrants reducing the time allowance.

So you can start calling the public speakers, Dave Reinerson, me, Sean Roselius, Father Nathan Borinstad, Janet Deporto, Marcia Maddox, Kathy Ryder, Pat Goodman, Joel Bros.

Pab Aspus, Michelle Kearns, First Speaker.

It's often said that if you want to know a person's true character, do not listen to what they say, watch what they do.

This city council majority has voted to give millions of dollars to Pacific Air Show.

We have hundreds of thousands of dollars of city services for the air show, paid over a half million dollars for environmental impact report for the air show.

They voted to allow the sale of alcoholic beverages at the city sports complex.

They voted to contract the financially questionable promoter to put on a light show in Central Park despite serious opposition from the public.

They directed the police department to collaborate with ICE.

And now they're considering withdrawing support for affordable housing for seniors, many of whom are disabled rather than honor the commitments made by their predecessors.

They all profess to be Christian.

From what I read, Christ told people to care for the least among us, to befriend the stranger, and to be compassionate for those who have fallen on hard times.

When I look at this council majority's actions, I think their actions say something very quite different from what they profess.

Next speaker.

Hello, friends.

My name is Sean.

I'm a longtime resident and a former city council candidate way back in 2010.

Let me start out by saying yes on Prop 50.

So after wasting a lot of money trying to cheat the public out of a library, your gross deal with the air show, your refusal to take our budget shortfall seriously, etc., now you're telling us that your idea of serious leadership and authority is to shake down an affordable housing center for fixed income seniors.

This is really gross.

It was also extremely unfortunate that I can barely be shocked at the idea that you would choose to get tough with probably the most defenseless and precarious demographic in the city that you are going to take.

After you guys specifically, we need so much money on political games and personal projects.

I just can't shake the feeling that if this company was better acquainted with your personal campaign committees, this may have gotten for them.

Thank you.

At the last meeting, I heard three council members drone on about taxpayer money being used to house seniors in a project that was deemed unprofitable to the private sector and remained vacant and a blight for many years.

Taxpayer funds, Huntington Beach taxpayer funds were used to pay for an environmental impact report for the Pacific Air Show at the tune of $617,000.

Taxpayer money was used to pay for the public works department to prep before, work during, and clean up after the air show, along with the salaries of our code enforcement officers, our police officers, our firefighters, and our marine safety officers.

And even more staff was used within City Hall, all paid with taxpayer monies.

Revenue we would get from our parking lots is given to the Pacific Air Show.

We have yet to see the benefits and the actual dollar amount the city receives for subsidizing the Pacific Air Show put on by Kevin Elliott with Code 4.

Numbers have been thrown about for years, but an actual dollar amount comparing what our taxpayer money is putting out there with what comes in has yet to be done.

Hi, I'm Father Nathan Bjornstead at St.

Wilfred's Episcopal Church, and I'm here to speak in favor of giving tax exempt bonds to the Pelican Project.

Uh my hope is that each of you will look at the good that this project provides.

Uh the housing that's provided for those who struggle, you know, otherwise to provide housing.

And so my hope is that you will extend these tax exempt uh status and to do so quickly.

So thank you.

Good afternoon.

Kathy Ryder, Huntington Beach Homeowner and Voters since 1985.

A special call meeting at 4 p.m.

is a clear indicator that this council is not really interested in hearing from the residents in Huntington Beach.

Because if this issue is so important that it's a public hearing, shouldn't every effort be made to include the public at a time when more could attend?

And if this does not pass, what exactly is your plan for the 46 senior citizens who will depend on this project for a place to live?

Your disdain for the welfare of our senior citizens is unbecoming of public servants.

And you certainly can do a better job prepping for your meetings.

I read the materials, do you?

You should trust your staff.

Our residents deserve better.

Next speaker.

Mayor Byrne, City Council.

This is more of a message to my fellow Huntington Beach voters.

Last week exposed a deep misunderstanding about the City Council's responsibility to meet the housing needs of its residents.

Pelican Harbor is a success story, a well-designed, well-located community for low-income seniors and residents with disabilities.

It shows how thoughtful locally guided development can provide dignity and stability for those who need it most.

Just about every city council candidate I've ever heard run on a slogan: no high-density development.

It doesn't matter what party they're with.

It's a stance though that conflicts with the council's legal and moral duty to plan for housing.

Since 1969, my understanding is cities have been required through Marina to build homes for all income levels.

Yet the low and very low-income goals are rarely met.

Thank you.

Next speaker.

My name is Pablo Aspas, and I'm a Huntington Beach resident.

I'm here to support the resolution in favor of the low-income residents.

In recent months, I've heard I've heard our City Council members how much you love America, all these blah blah blah, how much you love Americans.

But last week I saw a lack of a generosity on protection of our elders, especially in Mr.

Kennedy, Mr.

Barnes, and Mr.

Williams.

Mr.

Barnes mentioned that we need money for the police department or fixing a hole in the road.

As a taxpayer, I can leave with a hole in the road.

But the 43 people in our community need a house to leave.

I'm for that.

So today you can prove that you you care about people by approving these resolution.

Thank you.

Next speaker.

Yeah, hello.

My name is Joel Bruce.

I moved into my brother's house in 2014 in Huntington Beach, and I lived there till 200 uh 19 until he got sick and he died.

Um I had to move out of his house.

I was on a low fixed income, 73 years old.

Um I was homeless.

I went into the uh program.

Uh the with during the COVID environment thing, and I was put in the wrong program by the police department.

I should have received the tenant-based section eight housing voucher with all the people.

I'm 78 years old on a small fixed income.

And I'm still insulted by Stephanie Garcia, who says I have no ties to Huntington Beach.

Thank you.

Next speaker.

Hi, I'm Michelle Kearns.

I'm a 25-year city resident and homeowner.

I'm also part of the Jesus Project HB that houses seniors who've been homeless that have ties to Huntington Beach.

Um, many of them are now housed at the uh Jamboree Pelican Harbor.

I also am an alumni from Jamboree, worked there for uh quite a while and managed three properties.

They are the Nordstrom of affordable housing.

Okay, the state of Sacramento would not approve them as they do if they were not doing things right legally, ethically, and to the most cost-efficient dollar that you could possibly get to.

So I understand having questions about bond timing.

I understand every question that you've had, but I know you have good hearts because you were put here by the almighty, and so I'm here to just say I'm in support of it.

Um I know that we had some issues with COVID, but you know what?

We're here now, right?

The building is here now, the people are here in the complex, and it's doing a good thing.

The churches are all part partnered with.

Next speaker.

Thank you.

Thank you.

No more speakers.

No more speakers.

All right, all right.

The public hearing is now closed.

Uh council discussion.

Well I've given this a lot of thought myself, and I'm still trying to, and I want to understand how this the place is built, it's there, and now we're supposed to somehow coordinate and repair some mistakes that the Jamboree has made in their timing of their bonds.

I still, after two meetings with January this, I mean Jamboree this last week, I'm still not entirely uh convinced that they need our signatures, but I'm still open.

I want to hear discussion on how this is supposed to help the citizens of Huntington Beach and the really the government of Huntington Beach.

Try to be responsible, try to be ethical and uh compassionate too, but this is a business.

And every council meeting, we get people coming up here and telling us that we're fiscal knuckleheads and that we need to pay attention and take care of our infrastructure.

But if we keep on granting these kind of jobs, I worry that our our whole system will collapse at some point at a socialist type uh form of taking care of so many people, and it worries me.

It's uh but I'm I'll open this up for discussion.

Don?

Thanks, Mayor.

Um, what I'd like to do first uh before I ask staff some questions is just kind of uh uh give a rundown for the public who may not be aware how how these projects come to fruition.

So there's a 20 million dollar tax exempt bond issued by CMFA.

There's a 15-year tax credit period that uh is awarded to the developer at 1.5 million dollars per year over 10 years that they're able to speed up and liquidate at basically 90, 85 to 90 percent on the dollar.

So they take that 13.6 million dollar tax credit and they use that to pay down the debt that's come from public funds from there.

What happens is the sweet spot for the developer is really year 15, and and that's the year where the tax credits have now expired.

So the U.S.

bank who was the buyer of the tax credits basically will then have the ability to sell the asset not back to the city but to the developer for a nominal fee of as low as one dollar.

So there is that aspect of it.

Uh there would still be some debt on the uh the project, but current NOI on the project is three hundred and fourteen thousand dollars a year.

There will be uh CPI increases.

So by the time they take that asset, free and clear, uh well, not free and clear, but with minimal debt, uh, because there's an additional NOI, they've now inherited a project that's probably gonna be worth 30, 35 million.

I think the construction estimation is 35 million, uh, but whatever the case may be uh for a nominal fee of a dollar, in addition to that, they'll have the NOI, the net operating income to to service the debt and continue to build some profitability that they can put into their fund.

Beyond that, uh the tax subsidies are incredible on these projects.

I mean, this sounds like the best type of business to be in.

The rents are 2300 a month.

Um, and the state subsidizes two thousand that and the tenants pay three hundred dollars.

So it's guaranteed income for the developer that uh basically really has almost no risk capital.

Um so let me ask you a couple questions.

Staff, uh, are you aware that uh, or maybe you can let me know.

How many affordable homes have we built here in Huntington Beach?

So uh well, the city doesn't build housing, but we currently have a portfolio of approximately three thousand affordable units.

And how does that rank among let's just say cities in Orange County in regards to who has the most affordable housing built?

It's it's it's in the top five, okay.

So we are building affordable housing, in other words, at a rate more than the majority of every city here in Irvine is the highest at like five grand, and we're at 3,000 as uh Jennifer alluded to.

Okay, and so it's clearly Huntington Beach uh allows affordable housing, no question about it.

So that misnomers out the door.

Um was staff aware uh the fact that Jamboree the developer has the ability to buy the asset in year 15 when the tax credits have expired for a fee as low as a dollar.

Are you aware of that?

Um, no.

Okay, well, Mr.

Massey, he was the one that actually substantiated that, so it's a fact.

Um so they're not going broke, and also do you realize staff when when we're negotiating, or you guys were this was never brought before the majority of the council.

Maybe there was some some negotiation or some consideration.

Um, but when we add an additional 39 years, are you guys aware of the tax loss resulting in a burden uh for 39 years additionally?

So basically a hundred years without property tax.

Were you guys aware of that?

Was it factored in at all?

Yeah, I mean, so we know that affordable housing is tax property tax exempt, so extending the affordability would extend that property tax exemption.

Right.

So you guys are aware of that.

So 60 years is a generous, generous exemption, in my opinion, for a city to go without property tax on one property.

You might say, well, it's just one property.

Well, let me ask you this, staff.

If if we were to agree to a 99-year extension on tax-free uh or loss of property tax, what do you think the next developer is going to say that wants to come in here and build a tax exempt uh affordable housing?

Uh, do you think they may ask for 99 years as well?

You gave it to those guys.

We want it too.

So if we would have the the compounding of multiples to uh property tax loss, so if you lose four or five million on this project over the uh 39 years times one times five times ten, next thing you know, we're talking about you know fifty million dollars a year in lost proper or 50 million dollars in it as an aggregate as we continue to compound the multiples of these these buildings.

So we did you guys contemplate that?

Well, it depends on the type of project.

So a lot of our units come through the inclusionary requirement, meaning the city imposes the affordability restrictions on the project, and the project is not necessarily proposing affordability.

In that case, it's a mixed income project market rate with some affordability.

The city imposes a 55-year restriction, and generally they wouldn't ask for additional time.

Um they want to just probably have less time.

Now, if it's an affordable housing developer, that could be different, and it would probably depend on what the proposal is at the time.

Right.

So once it's granted to one, the next affordable housing builder that that's in the same tax exempt uh position, why would they not ask for the 99 years?

We've given it to one, the the expectation is there.

What you allow you encourage?

Well, right now the affordability is set at 60 years.

The 99 years was part of uh proposal to request this TEFRA.

So it's completely up to the council whether or not the 99 years is granted.

We don't know what the next project would propose.

Well, I would imagine if if we set a precedent of 99 years that everybody that follows in their footsteps is going to be asking for the same type of thing.

Um but that's my question is for now.

I maybe somebody else.

One thing I just want to in our discussions with Mr.

Massey and Jamboree, it was I know a big issue was that the seniors would be curbed should we not sign this, that they would get evicted.

And he's pretty much assured us that it is very, very unlikely that would occur.

That the senior and I know that was a major concern with a lot of people out in the audience and a lot of people up here on the dais.

And if not all of us, but he has assured us that is not one of the options that are the priority.

So anybody else?

Could we get Mr.

Massey maybe to come down and just verify that?

And would we be able to ask him some more uh questions?

Mayor, yes.

Evening, Mayor, Council members, my name is Mike Massey.

I'm the Chief Development Officer and Executive Vice President at Jamboree.

I also have our vice president of business development and government relations, Kelsey Brewer and Pete Mitchell, our consultant to make sure we're answer able to answer all of your questions.

Alright, so uh thank you, Mr.

Massey.

Uh, just to the the Mayor's point.

So our understanding was after a meeting with you yesterday that uh no seniors are gonna get curbed or go to the streets if this TEFRA doesn't go through.

Is that correct?

We anticipate that what would happen if the TEFRA weren't approved is there would be a uh gigantic hole in the capital structure.

Uh Jambury has uh the wherewithal to uh to fund that um and our board has expressed a willingness in the past to do something like that.

Okay, and then just to verify by way of refresher, you know, last week it really was the first time for I think the majority of the council up here that we were hearing anything uh about this TEFRA issue.

And it's my understanding that you guys have gone through a series of extensions where it had expired in December of 2024, and then at some point later in 2025, you applied for an extension and that was granted, and then that expired, and you applied for another extension, that was granted, then that expired, and then you applied for another extension, that was granted, and now we're coming up on the deadline October 31st.

So we had one council meeting prior to that deadline, regularly scheduled council meeting, uh, for us to make a decision of whether or not we're going to grant approval to the tax exempt bonds.

Is that correct?

We came here in July, but the city instructed us to renegotiate and get more terms.

So it wasn't one council meeting, council member Williams.

We were here in July.

Uh, yeah, thank you.

And just to my point, was that the majority of the council up here?

We weren't a part of those meetings, we weren't aware of those meetings, and so it's not really brought before the city council.

Maybe it was something that was being brokered between one or or two other council members.

No, this the city staff told us to work with your representative from the council on the EDC, and we did.

We were just complying with what was asked in good faith.

And then I'm trying to understand why going from 60 years of locking in affordable housing would be something to be considered, you know, a carrot, you know, that this council would want to go for to then lock in a century essentially, 99 years of affordable housing, which would really be locking in Section 8 taxpayer subsidized uh payments as well for a century, and that's on the back of the taxpayer to be paying that.

So I don't understand why that was a leverage point or something that was considered to be a deal point in the negotiations.

We have two answers.

One is that we were asked to do that and we were trying to negotiate in good faith, and we did so.

Do you have anything else to add, Kelsey?

Yeah, I don't want to speak for city council, and we welcome kind of any direction you want to take on it, but I think one perspective is that it can maintains the affordability, which requires the city to potentially have to build less affordable housing because those units remain affordable over the long term.

Okay, and so that would be, I mean, if if our goal, our aim was to satisfy the state mandates, and that's what our priority was, this would be one way to satisfy that.

If we could just kind of back step a little bit to kind of get a 30,000 foot view of of really just how this project came to be.

Um, so my understanding is that uh the location uh was picked out and there was a loan that came from the city approximately three million dollars to be able to get that ground and break ground.

And the idea is is that the payment back on that will start into year 16.

Uh but once you have the you know taxpayer funded property, uh, then you go out and you look for more funding elsewhere, and that comes in the form of uh low-income tax credits.

Uh so if you're looking for 20 million dollars, you can get a voucher that comes from the feds through the state, it trickles down from HUD, and now you have this $20 million tax credit just by way of example, and it's like a voucher.

It's almost like you're standing outside of a stadium and somebody's gonna go into the game and they're like, hey, are you gonna go buy the ticket?

Are you going in?

And they're like, Yeah, I'm going in.

Well, why pay full price when I can give this to you for a discounted price?

And so that's kind of like these big companies that they owe 20 million dollars, say, in taxes, you know, but you could take this voucher and say this is worth 20 million dollars, and I'll give it to you for 18 million dollars.

And that's essentially how you get your eighteen million dollars.

Now you can fund the development of the project.

Is that illustration about accuracy?

See your heads nodding, yes.

So it can be.

I will tell you, um, I've been doing uh real estate development and advocacy for decades as a background for many of you that don't know.

I was the political director statewide of the California Association of Realtors and the chief Consultant for the building Industry association.

This is a product that people and developers tend to not want to do.

It's the least profitable, and as you can tell, we're at a loss.

Number two, people look for lucrative, creamy things to do, and this serves.

Number three, the underserved.

And so I took this in the last three and a half, four months because they're a noble company, they have a legendary CEO.

She apologized for anything she said inappropriately, and I commend them for stepping up and doing a business model and the product when it's already cost them money.

What was that in reference to?

What did she maybe say inappropriately?

She said something that may have offended some of you.

So one of the items when we were speaking with the city staff is she apologized.

She's not a political person, and sometimes people, when they're sad or they're normal, they may say something that's politically incomplete.

I guess for the benefit of the public.

I mean, I wasn't there, so what I mean, what was it that she said?

We were told that she said if it wasn't approved that she might go to something I'm paraphrasing, might just deal with a future council or something like that.

Okay.

That's not something I would have said.

And and I understand, you know, wanted to help out, you know, the needy, the elderly, the disabled, and and that's great, you know, to prop that up.

Um, you know, trust but verify, right?

And, you know, when I when I look into this, you know, my understanding is the way it seems is there's a little bit of profiting going on off of property.

Uh, we've found kind of a gravy train in terms of these subsidies that come down from the state.

You know, when we were campaigning, we campaigned on the fact that look, there's 24 billion dollars that are essentially unaccounted for.

We can't figure out really where that went in the state that's supposed to go towards, you know, housing, you know, homeless and and needy folks, but these are some of the programs that can apply for this.

And so when we're looking at, say, this 20 million dollar voucher that gets sold for, say, 18 million dollars, now you've got the eighteen million dollars to do the build, you do the build, uh, and then there's a little bit of a remainder left over that you need to finance somehow.

That's where the TEFRA comes in, and that's why we're here.

We're looking to finance the remaining 4.8, you know, million dollars, and we want to do it with tax exempt bonds.

Meanwhile, though, these folks are paying a couple few hundred dollars, you know, in in rent, and the lion's share of this rent is being covered by section eight funding.

And so it seems as though we found a way to sort of convert this trickle down of this $24 billion is supposed to be spent on homelessness to then bring about this development from the dirt all the way up, subsidized then further by the section eight housing, and turn this into a three point billion dollar enterprise, and that's one of the things that was brought up in the last council meeting is that you guys have amassed $3.2 billion while you know top executives are, you know, you say that there's not a lot of margin there, but top executives, I could just look at the top two, just between the two of them, their salary is amassed to one point one million dollars.

So it doesn't really feel like this is one of those nonprofits where everyone's kind of suffering and struggling and trying to help out the needy.

It seems as though we're taking people that are in poverty.

We found a way to sort of hide behind them or use them as shields and profit on the executive side of things.

Yeah, they're not.

Um, they're a very good company that does hundreds of projects around the state and does an underserved product that people will not do generally.

Number two, in this case, this project is not profitable, and yet they're still sticking by their word.

Number three, when they uh lined up to do this project many years ago, that was always part of the equation to receive the financing they are.

Number four, they're sorry they missed the window, but COVID did wreck a lot of things.

Number five, at the last council meeting, it also said that there was better other uses of the project and property taxes, and that's not true.

Number six, cities and counties have restricted funds, and they have to use those funds for certain things, not for anything, and they were used properly.

What else did we not cover in that?

Okay.

It's kind of a cute little summary, but you know, nevertheless, again, a cute summary.

It's answering that that with accuracy and respect.

It's not cute.

There's funds that might be locked up in a bucket that cannot be spent otherwise, but they they do not have to be spent in that particular way.

They your staff did a good job answering the port the report for those of you that don't know development, that they used it appropriately for things and put it to use.

So you created jobs and you and you house people that are needy.

This is an important thing.

The larger comments about your arguments with the state, you can have those.

That's not us.

This is a good company that's a non-profit and it's doing exactly what it's supposed to do.

Would it be accurate to say that the top two are collecting over 1.1 million dollars in compensation just for the year 2023?

Um I do not know.

Uh if I did, everybody knows my reputation, I would disclose it.

I do not know what the top two executives make, but if they're doing a good job, I'm assuming their nonprofit board would reward them with bonuses based on tiers, and if they're not, I assume they would get paid very little or be dismissed.

I guess what I don't understand is if margins really are so tight, how is it that we're paying some of these executives over half a million dollars?

Well, it's a good thing you're not paying the executives those money.

This project is at a loss, and they're stepping up because others that are more profitable and don't go through some of this laborious process that they're actually making money and hitting the targets.

So I would just ask your kind indulgence to please support the original deal here.

You're not giving away money, is by your own um acclamation.

Other council did this project.

Maybe you wouldn't have, but it's here.

They carried the project out in good faith.

They've housed people, these are good people in need, and you're not paying for their salaries at all.

This is still a loss.

They could be much more punitive and they're not.

That's why I joined it.

I find them to be a good company with people in very good character.

Their salaries are paid by taxpayer dollars.

It's all the people in front of you and behind you and everybody watching right now.

Is that not accurate?

Um, I really don't know how to answer that because I think maybe Mr.

Mike Mass Massie can answer that.

How is it that you guys pay your salaries?

I think you mentioned it in the last council meeting, Mr.

Mike Massey.

I think if there's a profit, then the board approves a salary and they generate a check in the accounting department and pay the the staff their money.

You're not Mr.

Mike Massey is asking a question directly to this.

So J.

Ray has a a number of ways of of uh earning revenue.

The primary sources through developer fee, which is structured into the capital structure of the development.

If we are successful in delivering what we say we're we're going to over a number of years, we receive a developer fee for uh taking the risk associated with with the development and executing on it.

And so that developer fee is paid by subsidized taxpayer dollars, correct?

The primary components of the ta of the capital structure are from public sector funds.

And then the primary capital from paying of the rent is from what?

It varies from from project to project.

Sometimes it's subsidized through uh Section 8 vouchers, sometimes it comes strictly from the residents.

What's the lion's share of it coming from in this particular project?

In this project, the majority of the units have Section A vouchers, and the vast majority of the of the revenue and uh income that comes from that goes to service the debt that was used to build the building.

So again, it just seems to me that if we want to get a project off the ground, we have a way of getting funding through taxpayers in Huntington Beach.

We start that way, then we go out, we get these low uh low income uh housing tax credits, and we you know print money almost out of thin air, you know, out of that one is the taxpayer again, and then we keep it afloat with the Section 8 housing, and somehow we convert you know the 24 billion dollars that's going down to the states, it gets converted into a $3.2 billion enterprise where topp's executives are making hundreds and hundreds of thousands of dollars but hiding behind you know elderly disabled people as human shields and acting like we don't really make much of a margin, and this isn't a racket, even though it might seem like one.

That's my take.

Andrew Nair.

I just want to change it up a little bit.

So I on the plus side, right?

I think that it's important that we have this conversation because I think generally speaking, people in California, Southern California, don't realize that so many seniors are actually struggling and are trying to break the cycle of homelessness.

So just like outside of all of this, that's important.

It's brought up.

I mentioned it in the last meeting: 177 unsheltered seniors, specifically in Huntington Beach.

Now you mentioned 4344 right now, are being being housed, or perhaps even more, it's just one per unit, right?

Is it?

Um, so one of the things one of the questions, and once again, I'm I'm digressing a little bit, and I'll come back to another question.

One of the questions I have is is that in the process of having this conversation, and which otherwise may have been kind of pushed through consent calendar, we are talking about that.

So that's positive because I think people don't realize that.

But some of the local residents here in Huntington Beach have asked me, you know, we have this opportunity and we have seniors that are being housed, but then also, you know, they'll they'll look at things, the optics.

They'll say, you know, I drove down the street and I saw somebody else who was living in a camper or who was unhoused.

On a go forward basis with this, what are the opportunities to continue housing any more residents of Huntington Beach who meet the senior standards?

Is that part of the kind of the strategic plan for this property?

Yeah, I can take that one.

We do have a preference on this development.

As we mentioned at the last meeting, over 87% of the residents have a connection to Huntington Beach.

That preference does not disappear anytime a resident moves on to a different housing location.

So as we replace that unit, that preference will still be in place, and we hope to maintain that same level of focus on Huntington Beach residents over the course of the regulatory agreement.

So the kind of the mechanics of the the project, how how long do, and once again, I'm just setting the table so there's more information here.

How many how long do the residents that are currently there?

Do they move on to um subsequent housing throughout the county or do they stay there for is there other a certain lease period?

It's a great question.

It really does depend on the type of population.

I think since we're dealing with disabled seniors, we're gonna see this as a last place that a lot of folks are in before they need a higher level of care.

We don't have a way to force people out.

Folks do sign a lease, so they have to renew their lease every year with us, but they can stay in the program for as long as they're eligible for the program and can maintain all of the house rule rules requirements and make the rental commitments as well too.

And then so for those people who are watching and understand and perhaps they need to be able to communicate this to other people, what's the process and the procedure by which somebody who is either perhaps on the verge of suffering being unhoused, being unsheltered, or somebody who is currently in that situation to go through either the application process or how can or or is it city resources?

The city of Huntington Beach has done excellent job on homelessness outreach.

You heard from some speakers today that residents that they had worked with on those projects have ended up in Pelican Harbor or Pelican Harbor.

Um so what I would say to anybody that's watching this, has a relative, a friend, somebody that they pass at the grocery store, it's first connecting folks to those homelessness services so that we can do immediate interventions, and then you'll be placed on a list and become eligible for housing at Pelican Harbor if and when units are available.

So there is a there is kind of a waiting list that exists right now.

You don't necessarily maintain an ongoing waiting list because these are referred to to the um development through the coordinated entry system.

Um so you once you are connected with homelessness services, whether it's through um interactions with your police department, interactions with nonprofits on the street, you're assessed for your compatibility with permanent supportive housing, and then depending on a variety of factors on this particular project, there's a need for a disability of some sort, you're then matched to that housing opportunity there at Pelican Harbor.

And then within Jamboree, how much of your portfolio is senior um senior housing versus just generally affordable?

I am not the math person, but we have about 3,000 units of senior housing out of about 11,000 units um throughout the state.

Do you think that that's in is that going up?

I hope it can.

There's not a lot of funding available specifically to address senior affordability or senior homelessness, but it is one of the fastest growing populations that we see in homelessness.

And there was one of the state not having dollars.

We're struggling with finding sites where real estate costs are through the roof.

We're struggling with time and permits and cleanup and processes always it's a challenge to get anything built.

Uh one of the one of the speakers, I think her name was Michelle.

She had mentioned that she works outside with the church organization.

Um, so in the event that there were uh residents living at Pelican Harbor who were unable to pay the monthly rent or the fees, is that where some of these outside services churches who who cut who does cover that in the event where is that money come from?

Yeah, I can address that.

Um, as council member Williams pointed out, most of these units, especially the homeless disabled units are covered by vouchers.

Um so that rent is paid through mostly through the voucher, and then the resident pays a small remainder.

As Pete's mentioned, we're a non-profit which means that all the money that we make and goes back into the developments and so one of the things that we self-support is an emergency rental assistance fund if and when residents run into those issues we find generally speaking at our senior properties it's not an issue because most folks are connected to some sort of social security benefit that they can utilize for their rent so then so it if the project was cash flowing that would go into an emergency fund that then would be used in in the event that somebody was unable to pay their rent the emergency funds separate from the cash flow of the development it's something that we fund through our corporate oh okay oh so you have that separately and you're not managing the property right you mentioned I think last time it was another group that was managing it third party property manager QMG who's the on site property management they do the staffing and all of the maintenance and then we oversee from an asset management perspective.

Okay thank you yeah I mean my goal was really just to kind of like fill in some of these blanks here so that everybody understands the n the entire nature of the project um we've obviously like we can't go back and relitigate the decision making process that was put in place in 2020 or 2021.

I think that administratively we're faced with a uh you know a a question that's specific to the extension of the California municipal finance authorities tax exempt status um you know I don't necessarily look at this as uh once again I'm looking at through the filter of 43 people the majority of which are Huntington Beach residents who are unhoused unsheltered we know the numbers 177 who are put into place in I and I know that perhaps Casey's gonna allude to this from the developer side that this property is undevelopable I guess from the commercial sector right Jennifer would you agree with that that there's not people knocking down the door for this property to put a big lots in.

Yeah I mean from the for a commercial development I don't think we had any proposals since I've been with the city since two thousand six we did have three residential proposals two never came in for an application it was just preliminary and then one was denied.

Okay so I think you know kind of my overall message though from having this conversation is is that if there are people who are watching this and there are Huntington Beach residents who fall within the framework of senior disabled residents and I know that you said they're at full occupancy but I think that we do need to encourage people to go through and utilize these resources because if we have them here and we're making a difficult decision then we need to make sure that those resources are fully utilized.

Alright I got a couple real quick the it cost almost 36 million to build right that that's correct yes yes so that's about 8000 per unit okay and you guys collect roughly about eighty-six thousand a month in rent uh I don't have the numbers in front of me but I can confirm see that I don't know how you can come to a meeting like this this important of a meeting and we've talked about these figures and you can there's always voids in your answers that I I think are kind of like basic questions but I'll I'll take your answer but and that being almost 36 million dollars conservatively that's 3600 a year in property taxes that aren't coming in right I don't agree with that mayor because we you can't do a normal property for pro property taxes as staff said so there's it's non sequitur you can't put something on that site that would be but there is something on that site now isn't it so say say something happened where you did default you just you did abandon the building somebody probably take over that bill and live there.

You just said that we weren't probably going to default.

Oh I know what I said and I know what Mr.

Massey said but it is there is something there.

There's apartments there.

I'm just trying to ask basic questions so the citizens understand that what's the whole all the figures?

Nobody's getting curbed.

Nobody's it's built, the people are in there.

I'm just how does this hurt or help Huntington Beach the finances for the city of Huntington Beach.

Mr.

Massey, I'd like you to answer that.

No, it's fine.

The the project is is built.

We are going to continue to operate it.

We are not asking for anything additional from the city other than approval and recognition of the TEFRA.

That's it.

But how does that help or hurt the city of Huntington Beach in its finances or our infrastructure or any of that?

The staff put funds that were earmarked for housing to use.

And they stepped up and built a project that was difficult to build, and that helps the city with a blighted or a project being proved.

It also housed people that are needy.

How does that help the finances of our city?

At this point, I'm I'm just I'm trying to understand this more.

I want this, I want to help, but I really don't understand how this really's built, people are there, nobody's getting curbed.

It's really this is really when it gets down to it, from what I understand, a jamboree problem that you're coming to us and asking for us, but we got a few fiduciary duty to do what's right to the citizens of Huntington Beach.

And that's kind of just where I'm at.

I just want to be able to justify getting into this agreement and why you guys can't get it maybe another uh extension.

Uh, Mayor Burns, we're not doing another extension.

Number two, we've apologized for being late.

I've been on the project for three and a half months.

They've apologized during COVID.

They're doing their best.

Number three, um, this was always envisioned in all of the documents when this project was built.

It didn't say anything to me.

That's okay.

Yeah.

That did not add where the how it hurts or helps us financially in this city.

It doesn't hurt us.

From what I understand, it doesn't help us, and it doesn't hurt us.

I don't have a really convincing message why we should help you out of this bind.

I hear you.

And I don't know if this will be convincing, but you did ask a question at the last meeting about calls for service, and the police department responded that there's been no increase.

I'd be more worried about uh fire medic paramedics.

Absolutely, and we can well we can also provide that information, and it's extremely minimal.

And the only thing that I would add is that all of these folks were part of your community prior to this development being built.

Your streets, and that costs between 46,000 and 50,000 a year in calls for service, time from your EMTs, time from your fire department, time from your police department.

Those folks are now housed.

That's an ongoing savings that'll happen every year that we keep that person housed and off of the street.

I understand that's not the same as property taxes, but that is a value to the city in terms of savings.

Butch.

Hello, everybody.

Thank you for coming.

Thank you for present presenting.

Um, I might be all over the place in my comments, but I won't take too much time.

Um, I had a local historian send me a picture uh a couple days ago of the intersection of Beach Boulevard and Main Street, where the Denny's and the four-day tire store are currently.

This picture is 70 years old, and we're not really allowed to put up um slides at the at this hearing.

So I can just tell you 70 years ago, it's a big vacant lot, with the exception of four-day tire and Denny's, it looks exactly the same way it did 70 years ago.

So if somebody was going to develop that with market rate units, it would have happened sometime in the last 70 years.

It wasn't gonna happen.

I was the person that the CEO of Jamboree quasi-insulted uh at the grand opening.

I went to the grand opening.

She apologized to me, and I accept it and move on.

So I know that's somebody was wondering who she said that to.

I don't like bypassing property taxes any more than any of the other six people up here.

We like our property taxes.

We rely on our property taxes and our sales taxes to fund a huge portion of the uh of the city revenues, I mean city costs.

A few months ago that was going to be built right across the street here called the Mirasol.

And it was a relatively well capitalized developer out of Chicago, and they came and had several meetings with us, and they knew that we knew they knew that we knew that they were a nonprofit, and they could take that whole property over there right across the street from City Hall and not pay us one dime of property tax.

But they said there's this program and we know how sensitive you are to given property away for no property taxes.

We're gonna do a pilot program payment in lieu of taxes, and we're gonna give you 350,000 bucks a year.

My eyes lit up.

I said, that's fantastic.

Because I knew it was I I knew Pelican Pelican Harbor was you know basically wasn't really uh uh developing any taxes, you know, property taxes for the city.

They were supposed to break ground in May.

Have you looked over there lately?

Nothing.

Guess what?

They couldn't get their bonds, they couldn't do it, they couldn't afford it.

So now we still have a vacant lot over there with no hope that I've heard that they're gonna come back, but I can guarantee you they're not gonna come back with a with a uh a uh offer of three hundred and fifty thousand dollar pilot program uh to the city.

It then it just doesn't work.

So I while I hate and I understand what my colleagues are talking about, I totally get it.

Um I like what Pelican Harbor is.

It's got 43 senior low-income, mostly handicapped, mostly Huntington Beach residents in there.

Um everybody says, some have asked, well, how does that benefit Huntington Beach?

Well, they're not on our streets, they're not being contacted, they're not being contacted by our HTF or our homeless task force constantly.

Um they probably use some of the services around there, maybe they get their tires from Ford A tire, or they go eat their eggs over my hammy at Danny's like I do.

Um, so I look at this as it's already there.

This can't, you know, the Pelican Harbor's already there.

It's I'm I'm again, I'm looking at a picture from 1955.

I think in my 70 years ago, still nothing.

There was nothing there, the project the property and and and councilman McKean and I were in the development business.

He still is, I'm retired now.

That property was not developable other the in my estimation for anything more anything more or less than what's there right now, and it's actually serving a purpose, and so I could keep going on, you know.

Can I ask a question to staff, Mayor?

Yeah.

Um JV, is there any reason why a private developer couldn't have essentially built the exact exact same framework that they built?

Were they given any kind of special privileges or allowances that a private developer wouldn't have gotten in terms of setbacks or zoning?

Um I think they had some parking considerations.

They used uh because they were proposing affordable, they can take advantage of some state um parking requirements that are less than the city's code for a market rate project.

Okay, so if a private developer decided they'll make like a 20% inclusionary rate of, you know, affordable, would they be able to get some of those parking credits?

It's just a parking thing, that's it.

Um I think it was just a parking thing.

I'd have to go back and see if there was anything else, but um, yeah, so depending on what level of affordability or what percentage of affordability, um, developers are eligible for waivers and development um development standards and also state parking allowances, um, but you'd have to have a minimum number of affordable housing units, which the site required anyway, because we had identified it for affordable housing as part of our fifth cycle housing element settlement I I guess I just wanted uh you know strike down this misnomer that this was some type of undevelopable land or things that private developers have just deemed they can't develop on um there's a scarcity of property uh that we have in let uh butch finish up yeah 70 years vacant lot right there this is 1955 somebody would have come in there and developed it I happen to know that it's a very difficult uh ingress and egress and I think you guys know that for fire.

I hate some people in here might know that I've actually gone on a couple of fire runs uh in my career and we've actually responded to uh two calls at Pelican Harbor uh they are both false alarms though your your alarm uh panel there needs help I just want you to know that so uh but it it was it was not easy for the truck to get in and it was doubly hard for that truck to get out and when you're gonna develop you know say multifamily apartments market rate they look at that kind of stuff and I'm not sure if it would have passed the mustard if we were you know if our planning department was looking at it before I don't know I just know that you have 20 22 parking spots right there right now you got 43 units that's a half a parking spot per unit they would have had to go I believe you know Jennifer correct me if I'm wrong but I think they would have to do 50% uh low income there to be able to get their parking uh number down to one per unit right isn't usually 1.5 per unit normally it depends on the number of bedrooms but it's anywhere from 1.5 to 2.5 right parking spaces per unit for a market rate and it sounds like you know the state uh parking requirements better than I do right so they would have needed if they were gonna if they were gonna put you know regular old apartments in there they would have needed between you know 80 and 120 parking spots or not I should say between 60 and 80 parking spots and they are only able to squeeze 22 in there which I think 16 of them are underground which when you have to start going subterranean and I think uh councilman uh McCann will tell you this the cost of construction gets enormously expensive and that's probably one of the things that's scared um uh most uh regular you know uh developers away from that site at least that's my opinion and I think that you make you know some some pretty valid points there it's while you've been on two calls for service just to that location alone which I think it's kind of a two-edged sword I mean it takes calls for service off the streets but at the same time there's calls for service that are going to the location I I saw the stats 23 calls for service in the last 10 months over the course of this covenant at that rate it'll be 2,732 calls for service to that location.

Good thing they got two fire departments that are real close so and a couple extra oh I'm not gonna say they have any ambulance but uh it was there but it was there it was their um their alarm panel that their fire alarm panel that was malfunctioning and the second time we went there we told we told the property manager you gotta get this fixed so anyway that's that's all I gotta say I will be supporting this I believe it does provide benefit to Huntington Beach if it's not you know the dollars you know directly in our into our general fund I think it it it saves dollars uh by having these these individuals uh off the streets and and uh living productive lives thank you yeah no I totally appreciate uh my colleagues council member Kennedy Burns and Williams um dissatisfaction with this business plan as uh developer using tax-free financing to build projects.

I myself, as I've said many times, am a private sector developer.

I would never pursue a project like this, nor will I ever.

Um it goes against my DNA of the free market and taking risk to uh create a profit and then make money through that project by selling it.

This is the way they make money is through development fees.

I would never go through the brain damage of doing a project just for development fees.

I would imagine the reason why they can pay their CEOs that money, that amount of money is because they were probably working on a large number of projects that they then obtain developer fees and then can pay those salaries and and meet their thresholds.

Again, these affordable housing projects are razor thin.

You're not you're not, you know, making uh spread on your cash flow that you can then sell as a as a net least investment, so so that's one.

Um if you if my colleagues would indulge me just on answering a question um that might Pat may answer your question is, and well before I ask it though, so so there's that.

So I understand where you guys are coming from.

If this was like a vacant lot or like a new project coming before us, but it's not, it's built, it's open, it's a 100% occupied by very low-income seniors with disability.

So I totally agree, like willing to have that conversation globally with the state and the tax refinancing, and again, that's abnormal to me on on new projects projects going forward, but this project's already built, it's already occupied, it's already stabilized.

So my question I think will get back to you, Pat, is like what do we accomplish by voting no?

I mean, any one of you guys can answer that.

I don't know what we accomplish by voting yes, other than I mean, it's easy to build these projects when it's 100% financed on tax dollar business.

It's very easy.

And that's the part of the problem is where does this stop?

Where do we where do we again to borrow a uh from the left?

Uh where why don't they pay their fair share?

Uh with this is on the taxpayers' back.

This is 100% on the our quality of life for our residents are paying the price, and that's why I have a big issue with supporting and encouraging these kind of projects.

Sure.

Again, if that was a new project on a vacant lot or again a new project ground up, this one's not.

It's fully stabilized, it's open, it's operating, it's housing, very low income seniors with disability.

So what do you accomplish by voting no?

Uh no vote would keep the margins, I guess, narrower on their end, whereas a yes vote would open up the margins even more so that they can pay themselves even more.

So now we're participating and taking more taxpayer money and subsidizing their salaries.

I'll give you the numbers.

So one of their top earners, 2023.

It's six hundred and thirty-five thousand dollars they're compensated for the year.

One of them standing here today, 526,624.

That's just for the year 2023.

Did they get a raise in 24?

Did they get another raise in 25?

So this thin margins and we're just scraping by.

I don't buy it.

It's a 3.2 billion dollar enterprise.

And how is it paid for?

They're converting taxpayer money into this 3.2 billion dollar enterprise where they have these enriched salaries.

They're profiting off of poverty.

They've turned a gravy train into these subsidies.

So it's gonna happen whether we vote no or yes.

I guess why would we vote yes and enrich them more?

Why would we vote yes and put our name on it when we campaign to the public saying that we're opposed to government subsidies?

We're less government, more capitalism.

You don't have to put your name on this right now, and it will go forward, it'll be fine, or you could put your name on it and you're blowing wind into their sales and backing it.

I didn't approve this project, but I can answer my own question.

So by voting no, you just increase exponentially the risk profile that they could default.

I understand they say they won't, but that's not a guarantee.

So they could default.

By what magnitude is your risk increased?

So I'm just saying, like there's no ceiling on it.

Like you guys don't control that.

They could default, they lose their tax refinancing.

They're telling you they won't, that's not a guarantee.

But what is a guarantee is if we vote yes and approve this, it will remain affordable.

They guarantee they will not default, because if the default wipes out the city's three million dollar loan, so that's gone.

The risk is the seniors that are the most vulnerable of our society that are disabled with very low income, probably get evicted.

And so by voting yes, you guarantee that does not happen.

You also guarantee that we get the concessions.

Okay, for this.

I'm still going if you don't mind.

So if we vote yes, we guarantee we still get the concessions that staff negotiated for this said TEFR hearing tonight.

So the interest rate on our loan goes from three to five percent.

That's five million dollars or more to the city over the life of the loan, which has to go into the home funds, H O M E all caps for affordable housing projects.

It does not go to the general fund.

But again, that's more money.

This has all got really tight strings attached, which again we all disagree with.

I would as well on a future project.

That's not relative to this one.

So we lose that three to five percent interest rate.

We lose a five thousand bucks a year when this that they were willing to pay.

When this was vacant, we were only getting based on that appraised value, $3,000 a year in property tax.

All right, the affordability covenants.

I know you guys disagree with going to 16 to 99, but at the end of August, the um five-point senior villas across from five points.

They were only gonna give us a one-year extension on our affordability covenants.

And we voted then to say, hey, can you guys come back and give us more affordability covenants to protect those seniors that are in there?

And we voted on that one in the first meeting in September to go from one to three.

So I don't understand the aversion.

I get it from going from 60 to 99, but the private sector, as Butch said, has already told us this cannot be developed.

It's a very small property, it's awkward shape, like a Tetris piece.

It's got a flag like going to Beach Boulevard.

There's very limited few properties on beach ball over to one of the busiest in you know streets in Orange County that has not been developed.

The only guy is on the on the east side on Slater because he wants to build high density housing, he's he's holding out.

I'm sure you guys will not all that that lot I'm talking about.

So to build it's underparked.

Every private sector development housing, whatever it's underparked.

Only way to do it is you can do a wrap.

So you build a units around a parking structure.

The property's too small to do that, you can't get enough units.

So you go subterranean.

Butch touched on it.

Subterranean parking is 50, 60, 70,000 per parking space to build.

No project will pencil.

So again, the private sector said it can't be developed.

So let's say after 60 years, the affordability covenants burn off.

JB, can you kind of walk through that state law that would be triggered once the affordability covenants are set to expire in year 60?

What happens?

So there's a current state law that requires the owner to do some notifications.

It's it's actually a notification law for when you have an affordable um covenants that expire to notify all the tenants of a project.

In 2024, the state law was strengthened, um, that it basically put some uh pieces in place so that uh there would be a greater attempt at preserving affordability at the end of those um covenant periods, and so there's really kind of two choices that you have when you're about to have um expired covenants, you're supposed to uh as an owner, a uh a project owner, they have to uh put the property out to market to affordable housing providers, and um they either have to accept one of those offers, which then would uh preserve the affordability term for another 30 years.

Um, and if they decide not to and they want to let the covenants expire, they have to commit to maintaining the affordability for another five years.

So I guess no matter what, at the end of the affordability term, whatever it is, at a minimum, there has to be another five years of affordability on this project.

Thank you.

So then it's 60 or 99 or whatever, that whoever owns this will have to go through that exercise to do whatever they can to keep it affordable.

We just went through the exercise at the end of August for five points to extend the affordability covenants.

But let's say it burns off and you guys property tax analysis.

Some you know private sector owner comes in and tries to I guess convert it to multi-family, it doesn't park.

So who's gonna live there in a in a in an apartment complex that you can't park?

So I but I guess that's a possibility.

So there's that there's that scenario.

But I think Meredith to answer your question is like what does this cost us?

Yes, on a new project, 100% agree with you guys.

Like this is a great conversation to have and this type of business plan.

But on this project, voting yes doesn't cost us anything.

In fact, it gets us concessions that they've offered three to five five thousand a year so three to five percent interest rate five thousand a year the affordability covenants but more importantly it guarantees that they will not default it guarantees they will not evict seniors that are very very low income with disabilities I'm not willing to take that risk by voting no hoping they don't do that I'd rather take the guarantee and the certainty knowing they won't by voting yes to extend their affordability covenants I mean expand their tougher hearing and their tax refinancing so I'm a yes on this without a doubt you're gonna are you gonna willing to since it's so guaranteed would you be willing to put your personal guarantee on that they could never fail to me personally yeah it's guaranteed that they will never fail you can't say that it's as guaranteed as they're gonna fail if we don't sign it that's the thing they've they've told us that it will not fail that's what I'm going with and that's just I don't I think it's a misrepresentation or you're not listening to what the man has said and we gotta believe we got to filter this and if he tells us that it's not gonna fail believe me it's in his interest to tell us it would but it's it's Gracie you got I'll be very short um I think I'll just about almost everything's been said so um that lot's been sitting there vacant for over 70 years.

If somebody was going to develop they would have done it already um I have a question who can I'm not sure who can answer this how much were we uh receiving on taxes prior to the development of this land do you know?

Um it's based upon the 4500 that was uh when it was sold in I think two thousand six so it was like three grand by the time um you know we over the years and everything so currently the latest um assessment was um in 1920 right before it was sold to jamboree um the value the the amount of taxes only amounted to I believe uh nineteen thousand dollars um which excuse me which let me make sure I get it right because I don't want to get it wrong and while you're pulling that up is that based off of the assessing it off in an empty lot yeah the the um I'm sorry that question again I was just saying while you're pulling that up is that based off of assessing it on an empty lot uh yeah well they said how many uh the dollars that were paid prior to the acquisition by Jamboree was 18,052 that's what their tax that the property taxes were for 2018-19 uh which would approximately be a little over three thousand dollars for the city's share of the one percent tax levy that was prior to the development yeah that's prior to development and now that it's developed how much would the city be receiving taxes as I think stated earlier because it's it's an affordable project we kind of looked at the pilot program that's been talked about and uh regarding the Marisol project um we looked at it and the the assessed valuation because of the covenants and everything was around eight point five million so if you use that and the city tax is the one percent a little over one percent the city's rate or share of that um at 8.5 million was around 1800.

Okay so um we the majority of us and I can speak for a majority of us we're biased towards single family for sale homes.

We want families to move into Huntington Beach and invest in the community.

This lot was not useful for that purpose.

So I do remember while we were campaigning, I dropped off and delivered at least eight to ten signs to vote for us in that area.

So I reached out to three of those people.

I asked him one of them is adjacent to that property.

I said, How do you feel about this development?

And how would you feel if we go ahead and vote to extend this?

She said, Well, prior to that, it was an empty lot full of garbage and homeless people.

She said, now it's developed, it's clean, there's security, and it's very quiet.

I asked our PD if there was there were any calls, crime.

Um, they said no.

The other residents said they kept calling for people to just come and clear out the that lot.

I asked her, I said, would you support us if we go ahead and do this?

She said, absolutely.

So we're not breaking our promises.

The building is built, um, there's no more junk, there's no more homeless people.

Um people who were homeless are actually in there now.

And I just don't see a reason why we would not support it now that it's there, and to even insinuate that we're breaking our promise.

No, everyone knows pro single family homes, pro for sale, but this is here now.

And like I said, I'm sensitive to um housing and people who are not on unsure about whether they're going to have a home the next day or not.

It's a horrible feeling, especially the seniors who can't go out there and generate revenue.

So after taking all that into consideration and speaking to our actual voters and explaining the situation, they don't have a problem with it.

I don't see why we wouldn't do this.

Uh councilman, uh councilwoman uh Vandermark, if I could too.

Um, no matter how we vote, it's gonna stay there.

You can go no vote, it's still gonna be there.

So we're not voting to try and evict people or take people out.

I guess really what's in the balance right now is how much margin is the 3.2 billion dollar jamboree going to make.

It's not a question of are they gonna make, it's how much are they going to make?

And so, really, the only thing it doesn't the only thing it'll cost us uh, you know, with a yes vote, I guess essentially would be our integrity because we wouldn't be doing what we told people we campaigned on that we that we would not you know be going for government subsidies for low-income housing.

But no matter how we vote, this place is gonna stay, and the people are going to stay in there.

So we're not kicking anybody out.

Councilmember Vandermark, the without the yes tax vote, we are unprofitable, and our city partners are unprofitable.

A yes vote will make us all profitable over time together.

Yeah, and um part of the reason I actually went out and I call those residents because they live there, they supported us, they know that we always said um we would not push forward with high density, that would affect their communities in a negative way.

That's why I asked what are the police calls.

We know I know like the Lucci apartments and many other buildings, one of them, which one of my stepdaughters lived in, they had tons of calls for crime and cars being burglarized.

There aren't any issues, which is why it was really important for me to get the opinion of our supporters.

I said, What do you think?

They are perfectly fine with it.

I'm not, I don't believe we're going back on our word.

We didn't approve this project, as Casey said, if this was brought in front of us, it'd be a totally different conversation.

But um, we are where we are.

I've done the research that I felt I needed to do.

I've made the phone calls I felt I needed to do to make, I talked to the people I needed to talk to, and I'm very comfortable with my decision.

So what's on the table right now, just to be crystal clear, is it's not ending this project or making the project go away.

It's going to remain no matter what.

It's just a question in terms of how profitable will it be.

There's a version where it goes forward and it goes forward without your name on it, and there's a version where it goes forward and it goes forward with your name on it.

I would suggest that when we put our names on it, we are violating our integrity in terms of what we said we would do.

It does not need us to remain, but you can put energy behind it and widen their margin, and I mean, I I I keep belaboring the same point.

These guys are making a ton of money in compensation, and it's all from taxpayer funds.

It all comes from taxpayer funds.

All right.

So I'll just I'll just say one thing because I know that we're kind of like poaching this in a political pot of uh of liquid or broth here.

Um there's there's simply a couple points on the table right now.

One thing that is being missed in the cost-benefit analysis, and we talked about this, is that we do have a three million dollar loan that's subordinate to three or four layers of funding.

In the event that we do, let's just say hypothetically we all said no.

There's the risk of default, which we have no idea how they're gonna operate, especially after this meeting, and in that default situation, an unsecured loan would get tossed out the window by virtue of the first, second, perhaps even the third position.

That's a risk.

We can talk about it, but we have not brought that risk up.

That goes into my calculation.

I'm looking at this.

Maybe I'm not as intelligent as all of you.

I'm looking at this from a very simple perspective, 43 house 43 unsheltered seniors that are from Huntington Beach housed here right now.

We're not spending any more extra money in order to maintain the status of this project and the risk of perhaps even defaulting on the loan, I think makes makes it pretty clear for me.

Yeah, I just I just reject wholeheartedly, Councilmember Williams' assertion that a yes vote is that we're doing this to line the pockets of these developers.

It's quite the contrary.

We're doing this to a yes, what it ensures the stability that these seniors will remain in this facility.

These affordable housing projects with these capital stacks, they only work.

Again, I will I would not do this project.

We can debate, you know, this if a new project like this came forward the merits of it, but affordable housing projects, there are no profit, and then the way this capital stack works and the cost of construction, it only works with tax refinancing.

So I don't want to take the risk that they may or not default.

I'd rather give more a surety.

I'll retract my guarantee claim, uh, Mr.

Mayor.

I'd rather than give them more surety that they can maintain their tax refinance and convert their construction loan to permanent financing, maintain their business plan and provide an affordable units, and therefore protecting our seniors.

I'd much rather be on the record voting for that as a yes vote.

My yes vote in no way is to lie in the pockets of the profit margin of affordable housing developer.

So I reject that assertion wholeheartedly.

No, maybe, Mayor.

I want to go before after Butch.

Well, let me go because he had a long uh run there for a bit.

He talked a long time.

You know, uh what I'd like to address, uh what a yes vote does is number one, it sets a precedent that um we're willing to forsake property taxes, not for 60 years, but for a for a century.

Uh, sets the table for other developers to come in and ask uh for the same thing, and if they weren't granted that they would say, why not us, why them?

Let me ask the um the applicant a question.

Um what do you do with your proceeds after debt service?

Once you've serviced all your debt and all your expenses, there's money left over.

What do you do with that money?

So the the small amount of cash flow, because the vast majority of the revenue from the operations of the property go to service the existing debt of the cash flow that's left over that's used to pay uh an asset management fee and then to pay the subordinate debt.

Right.

So when you have 115 projects, you said Mr.

Massey.

Yes.

And you've been extremely successful with 114.

So if you have a little hiccup here, um you you're you're batting one little hiccup against a hundred and fifteen on the total portfolio, correct?

I mean, not all of our projects are are successful.

So my next question would be is um we went back and forth in the meeting yesterday.

Uh I was curious, you said you said you know, in public there was only $3.7 million worth of outstanding debt, and I called you out on that and you said no, it's five and in Mr.

Um get his name right now.

Pete Mitchell, Mr.

Mitchell, you both jumped in and said, No, we didn't say that.

You you did say that, so I found that disingenuous.

I've got it right here on the on the U.S., yes, I did I did misspeak in the original uh uh hearing.

And you were adamant yesterday that you didn't say that, so was Mr.

Mitchell.

And you said no.

What when I when I first met with you uh this week, I said I had misspoken.

I want to make sure that I'm absolutely clear that the amount was 4.8 million dollars.

And I left you documentation that represented that number.

So I did misspeak, I I tried to uh keep it tabs on deals, uh all of our projects in in my head.

I I made a mistake of not referring to my notes and staff.

Fair enough.

So I did I did address that when you're on our own.

So the the other things that I wanted to address is yeah, I've been around real estate for a long time.

Work for two very successful real estate investors who have a massive portfolio, it's all private capital, their own capital.

They put it at risk.

Um the fact that somebody can say here that because it's vacant now means it's not sellable is the biggest misnomer I've ever heard.

That would mean that every vacant property here in Huntington Beach is, hey, it's been vacant since the inception of the city, and if it hasn't been developed, that means it's not developable.

So let me ask you a question, uh Jennifer.

Um, an affordable housing builder could have come to this site and not, you know, with some density bonuses.

Like, for example, is is the York going to be parked appropriately?

Now they're not tax exempt.

Is that correct?

Let's not talk about projects that are well, it's about the parking.

It's about the miss the statement of fact that that they're making here that nobody could develop that.

Well, an affordable housing uh builder could do that and take the density bonuses and forsake the parking.

So, you know, I just want to be on record accurately.

That property could have been sold to anybody else at some point because it hasn't been sold yet, would basically be meaning that every vacant lot is not uh for sale.

It's just a statement I want to address.

Okay, the other thing I wanted to address that uh one of my council members made is if it's hard to get out and you have at risk seniors there.

Isn't that counterintuitive when time is of the essence and saving a life that you're gonna have to have a difficult exit plan?

So that's just something to contemplate.

But what is a yes vote mean that it also supports the fact that uh the responsible party was not able to meet the deadlines uh in in regards to being responsible to get this TEFRA hearing done, like I said in the council meeting should be banging your fists on the table, say we got to get it done.

I'm not sure if we're gonna get it approved in the first week.

We might have to have a secondary meeting.

The reason this meeting is at four o'clock because we sped it up on behalf of the applicant because if we waited to the next scheduled meeting, we would have been beyond their deadline, they're responsible.

So that's why it's at four o'clock today.

Uh, out of the goodness of the council, we met special circumstance so we can render a decision.

So, what does a yes vote mean?

It means we're supporting irresponsible behavior on a uh developer and saying don't worry about it, you missed the mark, but come back banking.

And for um all the members here on the dias.

I can assure you the tax creditor, the person that owns the tax credit, there will not be a default.

There will not be one senior evicted.

Mr.

Massey's also said that, and what we're really talking about is if we don't approve it, that jamboree has to put in a one million dollar uh write a check for a million dollars uh to bridge the delta.

And at this point, because they failed to miss these marks.

I mean, I don't think that's too much to ask.

So that's all that's at risk at risk.

Not one senior will be displaced.

All right, but then I'd like to call the question.

I think we need to vote on this.

This is gone on for three hours.

All right, call the question, please.

Make a motion to adopt the recommended action.

Second.

Well, do we want to substitute with the change to 99 back to 60?

Are we are we locking in with the original the 99 years of section eight subsidize?

That's where we're signing up our taxpayer to pay for 99 years now, a century of it.

Okay.

If you guys want to make a substitute for 60, go for it.

I mean, you know, that's not gonna move the needle for me.

It's like again, we just agreed in end of September or August to extend affordability covenants.

I mean, 60 years, I hope we're all still here.

We probably won't be.

Did we agree to extend somebody 39 years or three years?

So make a substitute to take it from 9960.

Yeah, I'd like to make a substitute motion to take it from 99 tax-free years to 60 tax-free years uh and take the burden off our residents for uh say them 39 years of uh tax burden.

Second, yeah.

That was a substitute motion, everything else is as recommended, correct?

That's the only substitute.

Item.

Correct.

Okay.

Nothing else really to change.

All right.

Okay, so we are voting on the substitute motion.

Everything else is recommended.

Substitute motion is ninety-nine years substituted to 60 tax-free years.

It's not tax-free, it's affordability covenants.

Affordability.

So the current affordability covenants are 60 years.

The concession they gave was extended in 99.

The substitute motion takes it back to the original 60 years of affordability covenants.

Okay.

Councilman Twine.

Since the only difference is I'll be either 130 years old or 160 years old.

Councilman Kennedy.

Yes.

Councilman uh Mayor Pro Tem McKeon.

Yes.

No.

Councilwoman Vandermark.

Yes.

May I back up?

We're voting on lowering, we're lowering the uh the term from ninety-nine years to sixty years.

Yes.

And everything else that was as recorded.

Granting the TEFRA.

Granting the TEFRA to them too.

Yeah.

Okay.

I I want to revote.

I misunderstood.

Actually, I'm a no vote.

I'm sorry.

Even though I made the motion for the years, no.

I mean, yes.

No.

Excuse me for the mis mishab.

McKean, yes.

Yes.

Burns, no.

Vandermark, yes.

Okay.

Yes.

No.

No.

Motion passes.

Four three.

I can adjourn the meeting.

Second.

Okay, there's a first and sec to adjourn next regularly scheduled meeting of the Huntington Beach.

Public financing authorities, Tuesday, November 4th, 2025, at City Council Chambers, 2000 Main Street, Huntington Beach, California.