Supporting Growth Without Risk: The Master's University and Seminary's $65 Million Bond Request

On Tuesday, August 26, 2025, the City of Santa Clarita City Council will discuss a significant public hearing: The Master's University and Seminary Tax Equity and Fiscal Responsibility Act (TEFRA) Hearing. This meeting was crucial for The Master's University and Seminary (TMU), a prominent non-profit religious corporation in our community, as they sought a key approval for their future development.

The Core of the Request: Tax-Exempt Bonds for Key Projects

TMU requested the California Municipal Finance Authority (CMFA) to issue tax-exempt revenue bonds in an aggregate principal amount not to exceed $65 million. The CMFA, an entity designed to assist non-profits and local governments with financing, would be the issuer.

The proceeds from these bonds are intended for several vital projects, demonstrating TMU's commitment to enhancing its campus and providing housing for its community:

• Residential Refinancing and Acquisition (Approximately $38.2 Million Total):
  • ~$21 million will refinance the costs of purchasing and improving several single-family residential properties on various streets (Cleardale, Meadview, Oak Orchard, Placerita Canyon, Placeritos Boulevard, Quigley Canyon Road). These properties were initially acquired to serve as temporary housing for TMU students.
  • ~$7.2 million is allocated to refinance the purchase, improvement, and equipping of an apartment complex at 22710 8th Street.
  • ~$10 million will fund the acquisition, improvement, and equipping of one or more additional apartment complexes located within a half-mile radius of the 22710 8th Street complex.
  • It's important to note that these residential properties are designated for campus housing for faculty, staff, and temporary housing primarily for upperclassmen. Critically, bond proceeds will not be used to acquire additional single-family residential housing in the Placerita Canyon area.
• Educational Facilities Enhancement (Approximately $13 Million):
  • This amount will finance or refinance the acquisition, construction, improvement, renovation, and equipping of various academic, student support, and related facilities on TMU's main campus at 21726 Placerita Canyon Road.
• Operational and Issuance Costs:
  • Funds will also cover capitalized interest on the bonds and the costs associated with their issuance.

All facilities financed and refinanced through these bonds must be used for TMU's exempt educational purposes, be owned and operated by TMU or a related subsidiary, and align with the University's Campus Master Plan, as approved by the City.

The City's Role: An Approval, Not a Financial Burden

While the CMFA is the bond issuer, the City of Santa Clarita's approval is legally mandated under Section 147(f) of the Internal Revenue Code. This is because the projects are located within the City's jurisdiction.

However, this approval does not create any financial obligation or liability for the City. The City's credit and bond ratings are not at risk, and no City revenues will be used for this bond issuance. Furthermore, this resolution of approval does not grant any other City regulatory approvals, such as planning permits.

As a direct benefit of its participation, the City will receive 25% of a one-time issuance fee from the CMFA, estimated to be approximately $13,000, which will be deposited into the General Fund.

Public Transparency and the Path Forward

A public hearing was conducted on August 26, 2025, allowing community members the opportunity to comment on the proposed project and bonds. Property owners and occupants within a 1,000-foot radius of the project site were notified by mail, and a public notice was published in The Signal newspaper on August 19, 2025.

The City Council's recommended action was to conduct the public hearing and adopt a Tax Equity and Financial Responsibility Act resolution approving the issuance of tax-exempt obligations by the California Municipal Finance Authority in an aggregate amount not to exceed $65 million for The Master's University and Seminary. This action is essential for TMU to move forward with its strategic developments while maintaining the City's compliance with federal regulations without incurring financial risk.