Title
[Housing Authority] Authorize the Issuance of 501(c)(3) Bonds for the Financing of the Creek at 2645 Apartments
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FileID
File ID: 2026-01053
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Location
Location: 2645 Stonecreek Drive, District 3
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Recommendation
Recommendation: Adopt a Housing Authority Resolution authorizing the Interim Executive Director or designee to: 1) issue, execute, and deliver 501(c)(3) bonds of up to $125 million for the financing of the Creek at 2645 Apartments Project (Project); 2) to execute and deliver necessary documents relating thereto and approve all actions taken by officers and agents of the Housing Authority deemed necessary or advisable to issue and deliver the bonds; and 3) make related findings.
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Contact
Contact: Christine Weichert, Director, Development Finance, (916) 440-1353, cweichert@shra.org; Kecia Boulware, Deputy Executive Director, (916) 440-1353, kboulware@shra.org; Sacramento Housing and Redevelopment Agency
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Presenter
Presenter: Christine Weichert, Director, Development Finance, (916) 440-1353, cweichert@shra.org, Sacramento Housing and Redevelopment Agency
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Attachments
Attachments:
1-Description/Analysis
2-Housing Authority Bond Resolution
3-Exhibit A to Resolution (Public Disclosure Relating to Conduit Revenue Obligations)
4-Attachment 4 - Vicinity Map
5-Attachment 5- Project Rendering
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Description/Analysis
IssueDetail
Issue Detail: On April 28, 2026, the City Council held the required Tax Equity and Fiscal Responsibility Act (TEFRA) regarding the Housing Authority’s intent to issue tax-exempt 501(c)(3) bonds to provide acquisition and rehabilitation financing for Creek at 2645 Apartments (Project). This report requests approval by the Housing Authority to issue 501(c)(3) bonds of up to $125 million for the financing of the Project.
Background: In January 2026, ArtHaus Partners (Project Administrator) approached the Sacramento Housing and Redevelopment Agency (SHRA) to discuss the issuance of a 501(c)(3) bond to fund the acquisition of a 368-unit multifamily development known as the Creek at 2645 Apartments (Project).
SHRA has historically brought forth transactions involving the issuance of Tax-Exempt Mortgage Revenue Bonds that are subject to the State’s volume cap, administered by the California Debt Limit Allocation Committee. Under that typical scenario, the City Council holds the TEFRA Hearing and the City, acting as the Housing Authority of the City of Sacramento, approves the bond inducement. This practice is due to the highly competitive nature of the CDLAC approval process and the associated 18 month plus lead times needed to bring forward these types of affordable housing developments.
The City Council and Housing Authority adopted SHRA’s Multifamily Lending and Mortgage Revenue Bond Policies (Policies) in 2019. These policies provide for the issuance of both Mortgage Revenue Bonds and Tax-Exempt 501(c)(3) Bonds. Both varieties of bonds are subject to the same Policies, excepting variations related specifically to the relevant bond program. SHRA has not issued 501(c)(3) bonds in several decades, but as the competition for Mortgage Revenue Bonds and paired low-income housing tax credits has become more difficult, affordable housing developers are turning to other financing mechanisms.
Project Description - The Project Administrator, Art Haus Partners, is proposing to utilize the 501(c)(3) bond funds to acquire and rehabilitate the Creek at 2645 Apartments. Rehabilitation will occur over time and restrict 277 units as affordable to households’ earning 60-80 percent of Area Median Income (AMI). The remaining 91 units will continue to be rented at market rate.
The Creek at 2645 development is located at 2645 Stonecreek Drive in Sacramento, was originally constructed in 1986, and includes 368 units on a 7.98 acre parcel. The development consists of 72 one-bedroom, 224 two-bedroom, and 72 three-bedroom apartments. Units at the Project are currently rented at market rate. The proposed rents and current market rate rents are provided in the table below. Current market rate rents are one-bedroom at $1,691 monthly and two-bedroom at $1780 -$1,808 monthly which are similar to 80 percent AMI rents.
|
Unit Size |
Number of units |
Area Media Income (AMI) Target |
Proposed Monthly Rent Amount |
|
1-Bedroom/1-Bath |
30 |
60% AMI |
$1544 |
|
2-Bedroom/2-Bath |
89 |
60% AMI |
$1737 |
|
3 Bedroom/2-Bath |
29 |
60% AMI |
$1929 |
|
1-Bedroom/1-Bath |
25 |
80% AMI |
$1668 |
|
2-Bedroom/2-Bath |
79 |
80% AMI |
$1907 |
|
3 Bedroom/2-Bath |
25 |
80% AMI |
$2212 |
|
1-Bedroom/1-Bath |
17 |
Market Rate |
$1664 |
|
2-Bedroom/2-Bath |
56 |
Market Rate |
$1896 |
|
3 Bedroom/2-Bath |
18 |
Market Rate |
$2266 |
|
Total |
368 |
|
|
A vicinity map and project photo are included as Attachments 4 and 5.
Property Rehabilitation Plan - The Project Administrators anticipates completion of the exterior and common area capital improvements within the first 12 months of ownership. Exterior improvements will include upgrades to recreation and gathering areas, balcony repairs, exterior paint, roof replacement, stucco repair, fencing, repaving of asphalt, replacement of sidewalk area, and landscaping improvements. For interior unit renovations, units will be renovated as they turn over, bringing those units up to the standard of the already renovated units over time which will minimize resident disruption. Consistent with the bond financing structure, all bond-funded capital improvements will be completed within the required 36-month period following bond issuance.
A portion of the interior renovation scope is being funded upfront with bond proceeds, with the balance expected to be completed over time through property operations and reinvestment of cash flow. SHRA staff have inspected the property and have reviewed the proposed scope of work for the development. ArtHaus will complete comprehensive renovations of classic/unrenovated units and select unit upgrades on renovated units as units naturally turnover. Units will receive, as needed, new appliances, bathroom fixtures, kitchen cabinets, doors, upgraded electrical, flooring, paint, heating and cooling, plumbing, and windows.
Project Administrator - ArtHaus Partners is a Bay Area-based multifamily developer, owner, and operator, that focuses on addressing the changing housing needs of the California workforce. ArtHaus has 4,000 units under management and development and has extensive experience across a range of public-private partnerships and middle-income executions.
ArtHaus Partners’ role in the project will be Project Administrator/Asset Manager for the first ten years of operations, with responsibility for organizing and executing the acquisition and financing and the operational oversight of the property, pursuant to agreed-upon terms with Integrity Housing. In that role, ArtHaus will be involved in capital planning, rehabilitation, asset management, and operational performance. As part of the financing structure, ArtHaus and its investors will provide funding for the most subordinate bond(s), which is repaid after all senior and subordinate bonds have been satisfied. This will be ArtHaus’ first participation in a 501(c)(3) bond transaction.
Non-Profit Partner - Integrity Housing (Integrity) is a 501(c)(3) non-profit affordable housing development company established in 2010. Integrity's current portfolio consists of 71 properties and 8,308 units, created using Low-Income Housing Tax Credits, 501(c)(3) bonds and conventional financing. To date, Integrity has completed 10 projects using a 501(c)(3) bond financing structure similar to the proposed financing for Creek at 2645 Apartments. Integrity will serve as the borrower and property ownership entity for this project and has offices in both Texas and in Irvine, California. Integrity has one affordable project in Sacramento which is Creekside Village Senior Apartments.
Property Management - AMC Management will serve as property managers for the development. SHRA has reviewed the proposed property management plan and has determined that it meets the requirements as outlined in the Policies. It is proposed that the staffing level be increased to include a total of 8 full-time staff which is one additional full-time equivalent position than what was provided previously.
Resident Services -Resident services will be provided by Project Access, an experienced provider who is currently providing services at the property. SHRA has confirmed that they will provide the required 20 hours a week of resident services which will include 8 hours of after-school care.
Affordability Restrictions - The 501(c)(3) Bonds require that at least 40 percent of units are for households with incomes 
60 percent of AMI or below. Proposed affordability restrictions on the property are outlined below.
|
Affordability Restrictions (55 years) |
Units |
% of Units |
|
Low-Income (60% AMI) |
148 |
40 |
|
Low-Income (80% AMI) |
129 |
35 |
|
Market Rate |
91 |
25 |
|
Manager’s Unit |
2 |
|
|
Total |
368 |
|
Project Financing - The table below outlines the proposed sources and uses of the bond funds.
|
Tax Exempt Bond Project Uses |
Budgeted Amount |
|
Acquisition |
$76,500,000 |
|
Capital Expense Fund |
$2,768,665 |
|
Cost of Issuance |
$2,694,665 |
|
Bond Debt Service Reserve Fund |
$923,650 |
|
Working Capital |
$250,000 |
|
Project Administrator Bond Allocation |
$4,000,000 |
|
Project Administrator Upfront Fee |
$1,750,000 |
|
Operating Reserve |
$946,430 |
|
Property Tax Reserve |
$1,272,140 |
|
Insurance Escrow |
$620,296 |
|
Total Uses |
$91,725,846 |
|
Tax Exempt Bond Project Sources |
Budgeted Amount |
|
Senior Tax-Exempt |
$61,200,000 |
|
Senior Taxable |
$1,250,000 |
|
Subordinate Class A |
$17,468,554 |
|
Subordinate Class B |
$11,807,292 |
|
Total Sources |
$91,725,846 |
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PolicyConsiderations
Policy Considerations: The actions are consistent with the 2021-2029 City of Sacramento Housing Element Policy H-2.3 “Assist in the Development of Affordable Housing.” The City Council/ Housing Authority SHRA Multifamily Loan and Mortgage Revenue Bond Policies were followed except for the sections noted below and for sections that only applied to projects utilizing state tax credits, which does not apply to this project. The sections that do not meet the Policies include:
• Section 9.1.10 related to fees
• Section 9.1.5 related to transfer of bonds and denomination amount
• Section 4.12 related to minimum construction standards
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EconomicImpacts
Economic Impacts: None.
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EnvironmentalConsiderations
Environmental Considerations:
California Environmental Quality Act (CEQA): Pursuant to Cal. Code Regs., tit. 14., section 15061(b)(3), the recommended action is exempt as it does not have the potential to have a significant effect on the environment. National Environmental Policy Act (NEPA): There is no federal funding involved in this action and NEPA does not apply.
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Sustainability
Sustainability: Not applicable.
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Commission/Committee Action
Commission/Committee Action: Sacramento Housing and Redevelopment Commission: At its May 20, 2026 meeting, it is anticipated that the Sacramento Housing and Redevelopment Commission will recommend that the City Housing Authority consider approval of the recommendations in this report. In the event the Commission does not take the anticipated action, staff will advise the City Housing Authority at the meeting.
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RationaleforRecommendation
Rationale for Recommendation: The actions recommended in this report support SHRA’s ability to fulfill its mission of providing a range of affordable housing opportunities in the City of Sacramento.
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FinancialConsiderations
Financial Considerations: SHRA will receive a one-time issuance fee which will be a deviation from the adopted Multifamily Guideline standard. The Fee is 18.75 basis points on the first $20 million, and $37,500 plus 5 basis points on amounts over $20 million. In addition, per the Policies, SHRA will receive an annual administrative fee equal to 5 basis points (0.05%) of the outstanding bond amount as compensation for the monitoring of regulatory restrictions and the administration of outstanding bonds. The annual amount shall not be less than $15,000. The law firm Orrick, Herrington and Sutcliffe, LLP, is acting as bond counsel for the Housing Authority.
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LocalBusinessEnterprise
LBE - M/WBE and Section 3 requirements: The items discussed in this report have no M/WBE or Section 3 impact; therefore, M/WBE and Section 3 considerations do not apply.
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