Jesus commanded his followers to love their neighbors as themselves, but residents living near The Masters University (TMU) 33 miles north of Los Angeles say they aren’t feeling the love.

The resulting acrimony resulted in 13 residents asking the city of Santa Clarita, California, to block TMU’s request to approve a $65 million tax-exempt bond allowing the university to expand in Placerita Canyon. They succeeded.

“Masters College is a Christian organization,” said Placerita Canyon resident Sandra Cattell at a Santa Clarita City Council meeting Tuesday. “I expect certain higher-level responsibility on their part.”

TMU’s former chancellor John MacArthur was the embattled pastor of Grace Community Church in Sun Valley, California, until his death last month.

Neighbors said that juniors and seniors who live in the single-family residences clog traffic and add to the noise level. During school breaks, TMU has rented out the houses on Airbnb and VRBO, which violates their educational purpose, residents said.

Students at the growing Christian university can live in houses near campus with big yards and up to six bedrooms that are named after famous Christians like John Calvin and Hudson Taylor. Local homes with similar living space sell for more than  $1.5 million or more.

TMU or its affiliates have already bought up about 45 or 10% of the Canyon’s homes, outbidding other families, according to the Placerita Canyon Property Owners Association (PCPOA). It gave a statement at the city’s public hearing criticizing TMU.

The Canyon’s homeowners are trying to maintain a rural and equestrian lifestyle, including guarding its environment and public safety needs, according to the PCPOA. Meanwhile, TMU, a nonprofit, pays only a small fraction of property taxes that other residents have to pay, residents said.

“Because it’s a religious organization. . . that’s money that’s costing us,” Cattell said.

Recently, TMU has requested the issuance of tax-exempt bonds worth up to $65 million, explained Michael Villegas, assistant to Santa Clarita’s city manager. At the meeting, he said the money would allow TMU to refinance costs related to TMU’s houses and other properties and purchase apartments for students.

Based on IRS rules, the city council was required to hold a public hearing and vote on the bond, but residents were clearly irritated with TMU.

“We believe this public hearing is scheduled solely because it is legally required,” said Tracey Bruckner, a PCPOA board member.

TMU didn’t respond to The Roys Report’s (TRR) request for comment.

A history of tensions

This is not TMU’s first controversy. From 2018 to 2020, TMU’s accrediting organization Western Association of Schools and Colleges Senior College and University Commission (WSCUC) placed the university on probation. One stated reason was TMU’s management had “a climate of fear, intimidation, bullying, and uncertainty.”

Santa Clarita residents have had their own concerns. Sandra Cattell told the city council this week that while she was serving on a local board, TMU promised to remain a small, local college.

“’No more than 800 students,’” Cattell recounted TMU saying. “That was the first lie.”

This fall, TMU has an enrollment of 1,200 traditional undergraduate students on campus. When it began buying up local properties to accommodate the extra students, those properties were largely removed from the city’s tax base. In one case, the 2024 property tax bill for a student house was reduced from $20,305 to $900, Bruckner said.

“(That’s) a 96% discount,” she said. “By contrast, families pay full property taxes who reside in our area.”

Brian Walters, a Placerita Canyon resident, said his neighbor sold her house to TMU believing faculty would move in. Instead, Walters said Airbnb tenants circulated through there throughout the summer.

Teresa Todd, PCPOA’s president, said that the out-of-town visitors added fire-risk to the dry area over the July 4 holiday.

“We are a fire-prone, tinderbox canyon and we had people coming in from all areas with fireworks, not having any idea just how flammable California is,” Todd said. “It seems disingenuous, given the reduction in property tax that (TMU is) able to make profits on these same properties that they’re asking for the bond funds for.”

Villegas told TRR that the city has no laws against residents renting out their houses on Airbnb. But since the canyon is not a tourist destination, residents rarely do so, and short-term rentals change the neighborhood dynamic.

In 2022, a religious nonprofit, GCC Real Estate Corp, was formed to “hold property” for Grace Community Church, according to its articles of incorporation. This is the entity that is buying houses, the PCPOA stated.

Todd said the PCPOA reached out to GCC Real Estate Corp and TMU to try to engage TMU in a community conversation about the bond.

“Our goal was to really see if there was common ground, extend an olive branch, smoke a peace pipe. . . to see where are the things that we can agree upon,” Todd told the city council.

But the communication with TMU turned “very disrespectful” and “not in the interest of the canyon,” Todd said, adding that meeting between TMU and PCPOA never happened.

She also asked whether TMU still plans to follow its 2009 master plan, which was approved by the city but only includes plans for expansion on campus, according to Villegas.

“We haven’t seen exactly what that’s going to be,” Todd said. “What’s most important to me, on a personal note, is the lack of genuine communication.”

The city council’s decision

Last year, TMU announced its plans to build a cathedral-style chapel adjacent to its campus in time for TMU’s centennial in 2027, the Signal reported. The bond project includes plans for apartment purchases off campus, Villegas said.

TMU’s off-campus expansion plans aren’t technically illegal, but it doesn’t follow the “spirit of the law,” Villegas said.

For these expansions, a tax-exempt bond, which is a type of loan, gives the lenders a more financially profitable way to buy the bonds, according to the California Association of Nonprofits. It makes the investment attractive because the lender doesn’t have to pay taxes on the income of the loans’ interest, the association stated. But if nonprofits issue them, the money must go toward furthering their charitable activities and not for a for-profit enterprise, according to the association.  

The city of Santa Clarita has no financial responsibility in the tax-exempt bond, Villegas explained at the meeting. However, the Tax Equity and Financial Responsibility Act requires approval by the government with jurisdiction.

But in the meeting, Councilmember Marsha McLean said she’s in the dark about what kind of changes TMU may have in mind for its master plan. And she said she’s reluctant to give TMU more advantages when the university doesn’t seem to keep its promises to residents.

“Approving this bond issuance would effectively reward these unfair, unethical, and questionable acquisition practices,” McLean said.

Councilmember Patsy Ayala said she’s been knocking on residents’ doors to ask their opinions. She asked TMU’s representative at the meeting—John Russell, TMU’s director of finance—whether TMU has also talked to its neighbors.

Russell demurred, apologetically saying he wasn’t authorized to answer that question.

Ayala was clearly disappointed with Russell’s answer.

“The general feeling is the lack of communication,” Ayala said. “At the end, you are sharing the canyon.”

Councilmember Jason Gibbs made a half-hearted motion to approve the tax-exempt bonds this time around, adding that if TMU doesn’t cooperate with PCPOA in the future, he might nix further changes to TMU’s master plan.

However, the vote failed with a tie 2-2, with Gibbs and Mayor Bill Miranda in favor, and Ayala and McLean against. (Mayor Pro Tem Laurene West recused herself because she owns property near TMU.)

This was despite Miranda honoring John MacArthur during the awards and recognitions section of the meeting. Miranda, who said he knew MacArthur personally, also recently posted a similar statement  on the city’s website.  

“His visionary leadership at Grace Community Church and The Master’s University touched countless lives and uplifted generations,” Miranda wrote.

TMU has one more chance, Villegas told TRR, to request approval of the bond from the California state treasurer’s office.

Rebecca Hopkins is a journalist based in Colorado.