TO: HONORABLE MAYOR
AND CITY COUNCIL
FROM: Erik L. Soliván
SUBJECT: See Below DATE: June 13, 2025
Approved Date:
6/16/25
CO
UNCIL DISTRICT: 5
SU
PPLEMENTAL
S
UBJECT: Approval of the Issuance of Multifamily Housing Revenue Notes and the Loan of the Proceeds Thereof for the Financing of the 525 North Capitol Development and Other Related Documents
RE
ASON FOR SUPPLEMENTAL
Thi
s supplemental memorandum provides a modification to the subsection City Loan for the 525 North Capitol Avenue development (Development) in the Background section and Attachment B: Sources and Uses of the original City Council memorandum dated May 27, 2025, due to a change in financing sources for the Development located at 525 North Capitol Avenue.
BACKG
ROUND
U
nder the Housing Director’s Delegation of Authority as granted under section
5.06.340(A)(4) of the San José Municipal Code, the Housing Director approved a $5,000,000 increase to the City’s construction loan for the Development located at 525 North Capitol Avenue. The additional funding was necessary due to the unexpected last-minute withdrawal of financing from the Housing Trust of Silicon Valley, which had committed a $5,000,000 construction-permanent loan to the Development. To fill this gap and ensure progress towards construction for the Development, the City has increased its total funding from $26,500,000 to $31,500,000. Additionally, Citibank, the senior permanent lender, has also increased its loan from $21,010,000 to $25,790,000 to replace the Housing Trust of Silicon Valley’s permanent loan portion of funding for the Development.
COUNCIL AGENDA: 6/17/25
FILE: 25-717
ITEM: 3.6
HONORABLE MAYOR AND CITY COUNCIL
June 13, 2025
Subject: Approval of the Issuance of Multifamily Housing Revenue Notes and the Loan of the Proceeds Thereof for the Financing of the 525 North Capitol Development and Other Related Documents
/
s/
Erik L. Soliván
Housing Director
F
or questions, please contact Banu San, Deputy Director, Housing Department, at [email protected].
AT
TACHMENT:
Revised Attachment B: Sources and Uses
Revised Attachment B: Sources and Uses
Uses Permanent
Acquisition Costs/Land $ 7,273,732
Construction 79,253,652
Architect & Engineering 3,542,253
Hard and Soft Cost Contingency 6,617,735
Construction Interest and Fees 11,463,745
Other Project Costs 3,558,911
Reserves…. 1,931,734
Financing and Soft Costs…. 1,407,982
Developer Fee 14,976,918
Total $ 130,026,662
City of San José – 525 N. Capitol
Plan of Finance – Sources of Funding
Source Construction Permanent
First Citizens Tax-Exempt Note $ 62,535,038 $ 0 First Citizens Taxable Note
Citibank Tax-Exempt Note
4,588,341
0 0
25,790,000
City of San José Loan 25,000,000 20,000,000
City of San José Land Purchase
County of Santa Clara Loan
6,500,000
8,000,000
6,500,000
8,000,000
Housing & Community Development Infill
Infrastructure Grant
4,000,000 4,000,000
Department of Developmental Services Loan 1,000,000 1,000,000 Solar Credit 0 213,159
Federal Tax Credit Equity 2,574,829 51,496,585
Deferred Costs
Accrued Interest - Soft Loans
15,828,454
0 0
250,000
Deferred Developer Fee 0 4,883,158
Contributed Developer Fee 0 7,893,760
Total $ 130,026,662 $ 130,026,662