CC Resolution 11598RESOLUTION NO. i i s9R
BEING A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CAMPBELL AUTHORIZING THE EXECUTION AND DELIVERY OF
A SUBORDINATION AGREEMENT RELATING TO THE
REGULATORY AGREEMENT AND DECLARATION OF
RESTRICTIVE COVENANTS AFFECTING THE SAN TOMAS
APARTMENTS PROJECT AND AUTHORIZING THE EXECUTION
AND DELIVERY OF AND APPROVING OTHER RELATED
DOCUMENTS AND ACTION IN CONNECTION THEREWITH
WHEREAS, the City of Campbell (the "City") is authorized and empowered by the
provisions of Chapter 8 of Part 5 of Division 31 of the Health and Safety Code of the State of
California (the "AcY'), to issue and sell mortgage revenue bonds for the purpose of making loans or
otherwise providing funds to finance the acquisition, construction, rehabilitation and development
of multifamily residential rental housing projects, including units for households meeting the income
limits set forth in the Act; and
WHEREAS, the City has heretofore issued its Housing Facility Revenue Bonds, Series
1994A (GNMA Collateralized -San Tomas Gardens Project) and its Taxable Housing Facility
Revenue Bonds, Series 19946 (GNMA Collateralized -San Tomas Gardens Project) (collectively,
the "1994 Bonds") and lent the proceeds thereof fo San Tomas/Charities Housing Corporation (the
"Corporation") to finance the acquisition and rehabilitation of a 100-unit multifamily rental housing
project (the "Project"); and
WHEREAS, the City, the Corporation and Bank of America National Trust and Savings
Association, as succeeded by U.S. Bank National Association, as trustee (the "Trustee"), entered
into a Regulatory Agreement and Declaration of Restrictive Covenants dated as of September 1,
1994 (the "1994 Regulatory Agreement") in connection with the issuance of the 1994 Bonds and
the City's lending of the proceeds thereof to the Corporation; and
WHEREAS, the Corporation has heretofore caused the redemption of all of the 1994 Bonds
and, as a result thereof, the Trustee has no further rights or obligations under the 1994 Regulatory
Agreement; and ,
WHEREAS, notwithstanding the redemption in whole of the 1994 Bonds, the stated term of
the 1994 Regulatory Agreement does not terminate until on or about September 29, 2024; and
WHEREAS, the Corporation now intends to sell the Project to San Tomas Gardens, L. P.
(the "Purchaser") and, in connection therewith, the California Municipal Finance Authority (the
CMFA) has proposed to issue tax exempt obligations (the "2013 Obligations") and to loan the
proceeds thereof to the Purchaser to finance its acquisition and rehabilitation of the Project (the
"2013 Loan"); and
WHEREAS, the CMFA and the Purchaser are entering into a Regulatory Agreement and
Declaration of Restrictive Covenants (the "2013 Regulatory Agreement") setting forth, among other
things, the affordability restrictions required in order to maintain the federal income tax exemption
on the 2013 Bonds, the terms of which shall in all cases be at least as restrictive with respect to the
operation of the Project as a "qualified residential rental property", within the meaning of the
Internal Revenue Code of 1986, as the terms of the 1994 Regulatory Agreement; and
City Council Resolution Page 2
Approving a Subordination Agreement for San Tomas Apartments
WHEREAS, the Purchaser will execute a deed of trust securing its obligations under the
2013 Loan (the "2013 Deed of Trust"); and
WHEREAS, it is a condition precedent to the 2013 Loan that the 2013 Deed of Trust be and
remain prior and superior to the 1994 Regulatory Agreement; and
WHEREAS, the Purchaser has requested that the City subordinate the 1994 Regulatory
Agreement to the 2013 Deed of Trust; and
WHEREAS, the City has agreed to subordinate the 1994 Regulatory Agreement to the
2013 Deed of Trust pursuant to a subordination agreement, the form of which are on file with the
City; and
WHEREAS, the Purchaser will be assuming the obligations of the Corporation under the
1994 Regulatory Agreement, and the City intends to approve such assumption.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Campbell, State
of California, that:
Section 1. The City Council hereby finds and declares that the above recitals are true and
correct
Section 2. A subordination agreement subordinating the terms of the 1994 Regulatory
Agreement to the 2013 Deed~of Trust (the "2013 Subordination Agreement") between the City and
the purchaser of the 2013 Obligations, in substantially the form on file with the City, is hereby
approved. The Mayor, the City Manager and Finance Director of the City (the "Designated
Officers") are, and each of them acting alone is, hereby authorized, for and in the name and on
behalf of the City, to execute and deliver the 2013 Subordination Agreement, in substantially said
form, with such additions thereto or changes therein as are recommended or approved by any
Designated Officer upon consultation with counsel to the City, including such additions or changes
as are necessary or advisable in accordance with Section 4 hereof, the approval of such additions
or changes to be conclusively evidenced by the execution and delivery by the City of the 2013
Subordination Agreement.
Section 3. The City hereby approves the sale of the Project from the Corporation to the
Purchaser, and hereby approves the assumption by the Purchaser of the rights, duties and
obligations of the Corporation under the 1994 Regulatory Agreement, and authorizes the
Designated Officers to execute an assumption agreement with the Purchaser.
Section 4. All actions heretofore taken by the officers and agents of the City with respect to
the matters contemplated by this Resolution, are hereby approved, confirmed and ratified, and the
proper officers of the City, including the Designated Officers, are hereby authorized, 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 which they, or any of them,
may deem necessary or advisable in order to consummate the transactions contemplated by this
Resolution and resolutions heretofore adopted by the City, including but not limited to those
certificates, agreements, and other documents described in the 2013 Subordination Agreement
herein approved and any certificates, agreements, or documents as may be necessary to further
the purpose hereof.
Section 5. This resolution shall take effect from and after its adoption
City Council Resolution Page 3
Approving a Subordination Agreement for San Tomas Apartments
THEREFORE, BE IT RESOLVED that the City Council authorizes the execution and delivery of a
subordination agreement relating to the regulatory agreement and declaration of restrictive
covenants affecting the San Tomas Apartments project and authorizing the execution and delivery
of the approving other related documents and actions in connection therewith.
PASSED AND ADOPTED this 17th day of September , 2013, by the following roll call
vote:
AYES: COUNCILMEMBERS:
NOES: COUNCILMEMBERS:
ABSENT: COUNCILMEMBERS:
ABSTAIN: COUNCILMEMBERS:
Kotowski, Cristina, Baker, Waterman, Low
None
None
None
APPROVED:
Evan D. Low, Mayor
ATTEST:
Anne Bybee, City Clerk