NVF:JGH:CEG
7/23/2025
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Council Agenda: 08-12-2025
Item No.: 3.8
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
RESOLUTION NO. _____
A RESOLUTION OF THE C ITY OF SAN JOS E (A)
AUTHORIZING THE ISSUANCE OF TAX-EXEMPT
MULTIFAMILY HOUSING REVENUE REFUNDING BONDS
DESIGNATED AS “CITY OF SAN JOSE MULTIFAMILY
HOUSING REVENUE REFUNDING BONDS (LA MORAGA
APARTMENTS) SERIES 2025C” (THE “2025C BONDS”), IN
AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED
$44,856,000; (B) APPROVING THE LOAN OF 2025C BOND
PROCEEDS TO LA MORAGA SAN JOSE L.P., A
CALIFORNIA LIMITED PARTNERSHIP, TO REFINANCE
THE OUTSTANDING MULTIFAMILY HOUSING REVENUE
BONDS ISSUED BY THE CITY IN 2012 THAT FINANCED
ACQUISITION, CONSTRUCTION, AND DEVELOPMENT
OF A 275-UNIT MULTIFAMILY DEVELOPMENT KNOWN
AS LA MORAGA APARTMENTS LOCATED AT 5822
CHARLOTTE DRIVE IN SAN JOSE; (C) APPROVING IN
SUBSTANTIALLY FINAL FORM A TRUST INDENTURE, A
FINANCING AGREEMENT, AN AMENDED AND
RESTATED REGULATORY AGREEMENT AND
DECLARATION OF RESTRICTIVE COVENANTS , AN
ASSIGNMENT AND INTERCREDITOR AGREEMENT , A
BOND PURCHASE AGREEMENT AND A PRELIMINARY
OFFICIAL STATEMENT , AND RELATED DOCUMENTS
(COLLECTIVELY, THE “2025C BOND DOCUMENTS”);
AND (D) AUTHORIZING AND DIRECTING THE CITY
MANAGER, DIRECTOR OF HOUSING, DIRECTOR OF
FINANCE, ASSISTANT DIRECTOR OF FINANCE, DEPUTY
DIRECTOR – DEBT & TREASURY MANAGEMENT, OR
THEIR DESIGNEES, TO NEGOTIATE, EXECUT E AND
DELIVER THE 2025C BOND DOCUMENTS, TOGETHER
WITH ANY DOCUMENT ANCILLARY TO THE 2025C BOND
DOCUMENTS OR NECESSARY OR CONVENIENT FOR
ISSUANCE AND SALE OF THE 2025C BONDS AND LOAN
OF THE PROCEEDS THEREOF
WHEREAS, the City of San José (the “City”) is a municipal corporation and charter city duly organized and existing under a charter pursuant to which the City has the right and power to make and enforce all laws and regulations with respect to municipal affairs and T-24222.005 / 2230129_3 2
Council Agenda: 08-12-2025
Item No.: 3.8
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
certain other matters in accordance with and as more particularly provided in Sections 3, 5 and 7 of Article XI of the Constitution of the State of California and the Charter of the City (the “Charter”); and
WHEREAS, Chapter 7 of Part 5 of Division 31 (commencing with Section 52075) of the Health and Safety Code of the State of California (the “Act”) authorizes cities to incur indebtedness for the purpose of financing or refinancing the acquisition, construction and development of multifamily rental housing facilities; and
WHEREAS, the City Council hereby finds and declares that it is necessary, essential and a public purpose for the City to engage in a program (the “Program”) of incurring indebtedness to finance the acquisition, construction, rehabilitation, refinancing or development of multifamily rental housing facilities, and has determined to borrow money for such purpose by the issuance of revenue refunding bonds as authorized by the Act; and
WHEREAS, the City Council hereby finds and declares that this resolution is being adopted pursuant to the powers granted by the Act; and
WHEREAS, the City previously issued its multifamily housing revenue bonds captioned “$52,440,000 City of San Jose Multifamily Housing Revenue Bonds (La Moraga Apartments) Series 2012E” (the “2012E Bonds”) and loaned the proceeds thereof (such loan, the “2012 Loan”) to La Moraga San Jose L.P., a California limited partnership (the “Borrower”), to finance the costs of acquisition, construction and development of a 275- unit (including three unrestricted manager’s units) qualified multifamily rental housing project located at 5822 Charlotte Drive in the City, known as “La Moraga Apartments” (the “Project”); and
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Council Agenda: 08-12-2025
Item No.: 3.8
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
WHEREAS, the Borrower has requested that the City issue the 2025C Bonds (as defined below) in an aggregate principal amount not to exceed $44,856,000 for the purpose of refinancing the 2012 Loan and refunding the outstanding 2012E Bonds; and
WHEREAS, the 2025C Bonds will not be paid from or secured by the general taxing power of the City nor any other asset; and
WHEREAS, the issuance, sale and delivery of the 2025C Bonds will be conducted in accordance with the City’s policies related thereto, and the City Council finds that the public interest and necessity require that the City at this time make arrangements for the sale of the 2025C Bonds; and
WHEREAS, the 2025C Bonds shall be issued pursuant to a Trust Indenture (the “Indenture”), by and between the City, as issuer, and Computershare Trust Company, National Association, as trustee (the “Trustee”), and the proceeds of the 2025C Bonds shall be loaned to the Borrower pursuant to a Financing Agreement, by and among the City, the Borrower and the Trustee (the “Financing Agreement”); and
WHEREAS, the Trustee is authorized to receive, hold, invest and disburse 2025C Bond proceeds and other funds established under the Indenture, authenticate the 2025C Bonds, apply and disburse payments to the bondholder(s) and pursue remedies on behalf of the bondholder(s); and
WHEREAS, the 2025C Bonds will be credit enhanced by a direct pay credit enhancement instrument (referred to as the “Credit Facility” under the Indenture) issued by Fannie Mae (the “Credit Provider”) as described in the Indenture; and
WHEREAS, the City has determined that it is in the City’s best interests to issue the 2025C Bonds through a negotiated public sale with Stifel, Nicolaus & Company, Inc., as underwriter for the 2025C Bonds (the “Underwriter”); and T-24222.005 / 2230129_3 4
Council Agenda: 08-12-2025
Item No.: 3.8
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
WHEREAS, the California Debt Limit Allocation Committee (“CDLAC”) adopted a resolution on July 18, 2012, authorizing the City to use $52,440,000 of State of California ceiling on private activity bonds for the Project under section 146 of the Internal Revenue Code of 1986, as amended (the “Code”), and as required pursuant to section 146(i) of the Code, the principal amount of the 2025C Bonds will not exceed the outstanding principal amount of the 2012E Bonds refunded thereby; and
WHEREAS, it is the intent of the City to enter into bond documentation to govern the 2025C Bonds being issued (collectively, the “2025C Bond Documents”), including: (1) the Indenture; (2) the Financing Agreement; (3) an amended and restated regulatory agreement and declaration of restrictive covenants, by and among the City, the Trustee and the Borrower, which will amend and restate the existing regulatory agreement and declaration of restrictive covenants relating to the 2012E Bonds; (4) an Assignment and Intercreditor Agreement, by and among the City, the Trustee and the Credit Provider; (5) a Bond Purchase Agreement, by and among the City, the Underwriter, and the Borrower (the “Bond Purchase Agreement”); and (6) a Preliminary Official Statement and final Official Statement with respect to the 2025C Bonds; and
WHEREAS, the Preliminary Official Statement, an informational disclosure document, will be released prior to the sale of the 2025C Bonds and followed by the final Official Statement after pricing of the 2025C Bonds; and
WHEREAS, all conditions, things and acts required to exist, to have happened and to have been performed precedent to the implementation of the Program and the consummation of the transactions contemplated by this resolution and the documents referred to herein now exist, have happened and have been performed in due time, form and manner as required by the Charter and laws of the City, and laws of the State of California, including the Act;
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Council Agenda: 08-12-2025
Item No.: 3.8
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of San José that:
1. The City Council hereby finds and declares that the above recitals are true and correct.
2. In accordance with the Act and pursuant to the Indenture, the City authorizes the issuance and sale of tax-exempt bonds to be designated as the “City of San José Multifamily Housing Revenue Refunding Bonds (La Moraga Apartments) Series 2025C” (the “2025C Bonds”) in an aggregate principal amount not to exceed $44,856,000 with interest rates, maturity dates and other terms as provided in the finally executed Indenture. The 2025C Bonds shall be executed and delivered on behalf of the City by the manual or facsimile signature of the City Manager, the Director of Housing, the Director of Finance, the Assistant Director of Finance or the Deputy Director – Debt & Treasury Management or the designee or authorized deputy of any of them (each, an “Authorized Officer”), in the respective forms set forth in and otherwise in accordance with the Indenture.
3. The 2025C Bond Documents, in substantially the respective forms posted on the Agenda webpage for the City Council meeting, are hereby approved. Each Authorized Officer, acting alone, is authorized to execute the 2025C Bond Documents in substantially said forms, with such additions thereto and changes therein as such Authorized Officer may approve or recommend in accordance with Section 5 hereof. The date, maturity date or dates, interest rate or rates, interest payment dates, series designations, denominations, form, registration privileges, manner of execution, place of payment, terms of prepayment, and other terms of the 2025C Bonds shall be as provided in the Indenture as finally executed. This resolution hereby authorizes the 2025C Bonds to be sold to the Underwriter pursuant to the terms of the Bond Purchase Agreement. This resolution also hereby authorizes, requests and directs the Trustee to authenticate the 2025C Bonds, by executing the certificate of authentication T-24222.005 / 2230129_3 6
Council Agenda: 08-12-2025
Item No.: 3.8
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
attached to the 2025C Bonds, and deliver the executed and authenticated Bonds to the Underwriter when directed by an Authorized Officer to do so.
4. The Preliminary Official Statement, in substantially the form posted on the Agenda webpage for the City Council meeting, is hereby approved. The Underwriter is hereby authorized to distribute the Preliminary Official Statement to persons who may be interested in the purchase of the 2025C Bonds and to deliver an Official Statement in final form to the purchasers of the 2025C Bonds, in each case with such changes as any Authorized Officer, in consultation with bond counsel and the City Attorney, deems desirable, necessary or appropriate.
5. Any Authorized Officer executing a document approved herein, in consultation with bond counsel and the City Attorney, is authorized to approve and make such modifications, changes or additions to the 2025C Bond Documents or any other ancillary documents and certificates related to the issuance of the 2025C Bonds as may be necessary or advisable, and the approval of any modification, change or addition to any of the aforementioned agreements, documents and certificates shall be evidenced conclusively by the execution and delivery thereof by such Authorized Officer upon consultation with bond counsel and the City Attorney.
Further, without limiting the foregoing, any Authorized Officer, acting alone, is authorized to execute any assignment of deed of trust, any endorsement, allonge or assignment of any note or other document related to the loans made to the Borrower from the proceeds of the 2025C Bonds.
6. All actions heretofore taken by the officers, employees and agents of the City with respect to the issuance of the 2025C Bonds and the execution and delivery of the 2025C Bond Documents are approved, confirmed and ratified, and the officers, employees and agents of the City are authorized and directed, for and in the name and on behalf of the City, to do any and all things and take any and all actions and execute and deliver any and all certificates, agreements and other documents, including, but not limited to, those documents described in the T-24222.005 / 2230129_3 7
Council Agenda: 08-12-2025
Item No.: 3.8
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
2025C Bond Documents and the other documents herein approved that they, or any of them, may deem necessary or advisable in order to consummate the lawful execution, issuance and delivery of the 2025C Bonds and to effectuate the purposes thereof and of the documents herein approved in accordance with this resolution and resolutions heretofore adopted by the City Council.
7. All consents, approvals, notices, orders, requests and other actions permitted or required by any of the documents authorized by this resolution or otherwise appropriate in the administration of the 2025C Bonds and the Program financed thereby, including without limitation any of the foregoing that may be necessary or desirable in connection with any amendment of such documents, any transfer of the Project, any substitution of security for the 2025C Bonds, or any prepayment of the 2025C Bonds may be taken or given by the Authorized Officers, and the City Manager, the Director of Housing or the Director of Finance are hereby authorized and directed to give any such consent, approval, notice, order or request and to take any such action which such officer may deem necessary or desirable to further the purposes of this resolution; provided such action shall not create any obligation or liability of the City other than as provided in the 2025C Bond Documents and other documents approved herein.
8. If any section, paragraph or provision of this resolution shall be held to be invalid or unenforceable for any reason, the invalidity or unenforceability of such section, paragraph or provision shall not affect any remaining sections, paragraphs or provisions of this resolution.
9. This resolution shall take effect upon its adoption.
NVF:JGH:CEG
7/23/2025
T-24222.005 / 2230129_2 8
Council Agenda: 08-12-2025
Item No.: 3.8
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
ADOPTED this ___ day of ___, 2025 by the following vote:
AYES:
NOES:
ABSENT:
DISQUALIFIED:
MATT MAHAN
Mayor
ATTEST:
TONI J. TABER, CMC,
City Clerk