If you’re buying or owning a home in Costa Mesa, the proposed financing for Fire Station No. 2 does not by itself tell you that your property tax bill will increase. The city’s staff report describes lease payments from the General Fund. It does not mention a new tax, assessment or parcel charge, but it also does not promise that there will be none.
To answer the question for your property, read the direct charges on its county property tax bill and check with the city if a line is unclear.
This is general information and not legal advice.
What is the current status of the project and bonds?
The Fire Station No. 2 financing item was on the October 20, 2026 agenda, but the city’s minutes were not final as of November 4, so the recorded vote is not confirmed here.
The city’s agenda report, File #26-437, sets out the proposed financing.
The Daily Pilot’s headline reports that the council approved the rebuild using bond financing, amid pushback on the financing.
Bond pricing and sale were tentatively set for November 4, with closing and receipt of funds tentatively set for November 19, 2026. Those are tentative dates, not confirmation that either step occurred.
What is Costa Mesa rebuilding at 800 Baker Street?
Costa Mesa is replacing Fire Station No. 2, a station at 800 Baker Street that was built in 1966.
The report says the existing station has exceeded its useful life and is not compliant with current standards and specifications. It describes a new station of approximately 9,445 square feet that would meet Leadership in Energy and Environmental Design Gold standards.
The estimated construction cost is $14.8 million. The anticipated duration is three years, including activities before and after construction. The report identifies AMG & Associates, Inc. as the apparent lowest bidder.
The design contract was approved on February 15, 2022. A community meeting followed on August 27, 2024, and the project was presented to the council on October 15, 2024.
How does the city intend to pay for the rebuild?
The city intends to combine lease revenue bond proceeds with available cash reserves and other city sources.
According to the report, the proposed bonds would total approximately $14 million and could not exceed $16 million. Costa Mesa expects to receive approximately $14 million for the project from the bond sale. Remaining costs would come from other city sources, including the Capital Improvement Fund, also called Fund 401.
The report says this financing approach makes future generations that benefit from the station responsible for a share of its cost. That is the city’s stated reason for spreading repayment over time, not a finding about how the project will affect individual properties.
How would the lease revenue bonds work?
The Costa Mesa Financing Authority would issue the bonds, while the city would make lease payments from legally available city funds.
The Financing Authority was created by the city in 2017, and its governing board is the City Council. Under the proposed Site Lease, Costa Mesa would lease the sites and facilities for Fire Station No. 1 and Fire Station No. 2 to the authority. The authority would make an upfront site lease payment to the city that would be used for the project.
The authority would then lease the sites and facilities back to Costa Mesa. The city would make semiannual payments under that lease. Once reconstruction of Fire Station No. 2 is complete, Fire Station No. 1 would automatically be released from the leases.
The city’s obligation to make lease payments would be a General Fund obligation. The lease would include a covenant requiring the city to budget enough each year to make those payments. The obligation would be subject to limits, including abatement if the leased assets are damaged, destroyed or condemned.
The proposed bonds have a 20-year term and level annual debt service of approximately $1.13 million. Interest begins April 1, 2027, principal begins October 1, 2027, and final maturity is October 1, 2046.
The bonds include a ten-year call. That means the city could prepay them without penalty after 10 years rather than leaving them outstanding until their final maturity.
Stifel Nicolaus & Company, Inc. would serve as underwriter in a negotiated sale.
Where would the annual payments come from?
Costa Mesa would budget the bond repayment annually in its General Fund and account for it through transfers connected with Fund 401.
More specifically, the city would deduct the debt service amount from annual allocable funds otherwise due for transfer to the Capital Asset Need Fund under the CAN Ordinance. The report identifies that fund as Fund 401.
Amounts have been budgeted for the semi-annual lease payments for Fiscal Year 2026-27, and the lease payments are semi-annual.
Does this mean your property tax bill will change?
The report does not establish that the Fire Station No. 2 financing will add a new charge to your property tax bill.
It says the lease payments are a General Fund obligation and mentions no new tax, assessment or parcel charge. It also does not say that there will be no such charge.
Read the direct charges listed on the county property tax bill for the property you own or may buy. Review the entries under direct charges rather than treating the bill’s overall amount as evidence that this project created a property-specific charge. If an entry is unfamiliar, check with the city before connecting it to the station financing.
Separate questions may also call for separate reading, including the guides to Mello-Roos and a supplemental property tax bill in California.
The timing matters as well. Tentative pricing and closing dates do not prove that a sale or receipt of funds occurred. Confirmation of those steps should come from the city.
A Costa Mesa owner asked us whether rebuilding Fire Station No. 2 meant a new charge would appear on her property-tax bill. She assumed that any major city construction project had to be funded through a neighborhood assessment. We checked the project’s stated funding sources instead of using the construction cost to guess how individual homeowners would pay for it.
What else can buyers and owners conclude from the report?
Buyers and owners cannot use this report to determine an effect on property values, rents or sale prices because it does not analyze those subjects. If you’re preparing to sell, keep the financing separate from the figures in the cost to sell a house in California; if the property belongs to an association, use the California HOA disclosure guide for questions about association documents.
For the financing itself, use the city report. For a confirmed vote, completed bond sale or unexplained bill entry, check with the city.
The short version
The staff report describes a public-building project financed with approximately $14 million in lease revenue bonds, available cash reserves and other city sources.
Costa Mesa would make approximately $1.13 million in annual debt-service payments through the General Fund over a 20-year term. The report mentions no new property tax, assessment or parcel charge, and it does not say there will be none. The item appeared on the October 20, 2026 agenda, the Daily Pilot reported approval, and the city’s minutes were not final as of November 4, so the recorded vote is not confirmed here.
Pricing was tentatively set for November 4 and closing for November 19, 2026. Check with the city for confirmation, and read the direct charges on the property’s county tax bill before deciding what the financing means for that address.
For a separate estimate of what your property may be worth, use the home value tool.
Common questions
Does the Fire Station No. 2 report propose a new property tax?
The report describes repayment from the city's General Fund and mentions no new tax, assessment or parcel charge.
How much does Costa Mesa expect to borrow for the project?
The report describes approximately $14 million in lease revenue bonds, with a limit of $16 million, and expects approximately $14 million in project proceeds.
How long would the lease revenue bonds remain outstanding?
The bonds would have a 20-year term, with final maturity on October 1, 2046. The city could prepay them without penalty after 10 years.
When were the bonds expected to be sold?
Pricing and sale were tentatively set for November 4, 2026, with closing and receipt of funds tentatively set for November 19, 2026.
