When the Santa Clarita City Council returns Tuesday, they’ll also be asked to consider a request by The Master’s University for help financing a major campus expansion TMU is planning with $65 million in tax-exempt revenue bonds.
In coordination with plans to celebrate TMU’s centennial, the campus is looking to add the “first cathedral-scale university chapel built on a Protestant university campus since the Great Depression” and living accommodations for hundreds of students.
City and college officials said the issuance of the Tax Equity and Financial Responsibility Act bonds does not place any financial liability on the city.
“The bonds would be tax-exempt private activity bonds for purposes of the Internal Revenue (Service) Code and, as such, require the approval of the elected body of the governmental entity having jurisdiction over the area where the project to be financed is located,” according to the city’s agenda. “The approval and adoption of the resolution authorizing the issuance of the bonds will not require the city to be financially obligated, liable or provide any financing.”
The city of Santa Clarita has yet to approve a revised master plan for the university, with city planning saying that would be necessary before any new construction is completed.
“Securing tax-exempt bonds is a common practice for nonprofit organizations when funding capital projects. These bonds place no financial responsibility on the city of Santa Clarita — the university alone is responsible for repayment,” according to Mason Nesbitt, spokesman for TMU. “The TEFRA hearing is a required step in the process of accessing the bond market at the lower rates available to nonprofit institutions, helping us steward resources wisely as we continue serving our mission and our students.”
City officials said even in a worst-case scenario for TMU with the bonds — a default — the city’s AAA rating would be unaffected, according to Michael Villegas, assistant to the city manager.
The university has been very quiet about its plans so far with the community, declining to comment until TMU goes in front of the city with its formal request.
But previous city records and the TEFRA financing request provided some insights on the university’s plans, as well as its real estate activity in the canyon.
According to The Master’s University and Seminary request, approximately $21 million is to refinance the costs for its residential property purchases. The city has let dozens of students live in homes purchased by TMU through the use of high-occupancy residential permits, which allow as many as 12 students or more to live in a home, according to records.
Several of those properties were previously identified in a Signal story on TMU’s student housing in the area. They’re located within the 21600 block of Cleardale Street, between 24806 and 24864 of Meadview Avenue, within the 21700 block of Oak Orchard Road, within the 21300 and 21600 blocks of Placerita Canyon Road, and between 21900 and 22040 of Placerita Canyon Road, between 21705 and 21759, and 21804 and 21926 of Placeritos Boulevard, and within the 24700 block of Quigley Canyon Road, all of which were previously acquired for temporary housing of TMU students.
In addition to the homes already purchased, approximately $7.2 million is being spent to refinance the costs to purchase, improve and equip an apartment complex located at 22710 8th St., and approximately $10 million to finance the acquisition, improvement and equipping of one or more apartment complexes located within one-half mile of the 22710 8th St. complex all located within the territorial limits of the city; and approximately $13 million to finance or refinance the acquisition, construction, improvement, renovation and equipping of certain educational facilities and amenities including capital improvements and expenditures to academic, student support, and related facilities on the TMU main campus generally located at 21726 Placerita Canyon Road.
Mayor Pro Tem Laurene Weste, who has recused herself from similar conversations involving TMU, lists property she owns just blocks away at 22216 Placerita Canyon Road, according to the most recent city property disclosures.
