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CC 10-06-2026
#11
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Written Communications
From:Santosh Rao
To:City Clerk; Tina Kapoor
Subject:Fw: Questions Regarding City Financial and Legal Exposure in RISE Block 5 Financing
Date:Tuesday, October 6, 2026 4:50:06 PM
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Dear City Clerk,
Please include the below in written communications for the 10/06/26 city council meeting for
agenda item 11.
Thanks,
Santosh Rao (myself only as a Cupertino resident)
Begin forwarded message:
On Tuesday, October 6, 2026, 7:27 AM, Santosh Rao <santo_a_rao@yahoo.com> wrote:
(Writing on behalf of myself only as a Cupertino resident)
Dear City Attorney Andrews, City Manager Kapoor, Finance
Director Orosco,
I have several questions regarding the proposed City participation
in CMFA financing for RISE Block 5. Given the potential
financial and legal implications for the City, could staff please
clarify the following for the public record:
1. Capital structure: Please provide the proposed capital
stack, including the relative seniority and priority of CMFA
financing compared with senior and junior debt and equity
from other institutional or private sources.
2. City liability: What direct or contingent financial, legal, or
other liabilities could the City incur if the borrower defaults
on its obligations?
3. TEFRA notice: Was a TEFRA hearing and notice
conducted as required? If so, when and where was the notice
published, and how were Cupertino residents notified?
4. Financing structure: Is this structured as pooled conduit
financing? If so, are draft organizational or LLC structures
available showing the relationships among the City, CMFA,
borrower, and other entities, including any potential
obligations or liabilities?
5. Construction financing: What is the rationale for using this
financing structure for construction financing rather than
permanent financing? What risks, if any, would the City
assume during the construction period?
6. Bond counsel: Has bond counsel reviewed the proposed
financing? If so, are any legal opinions, memoranda, or
other supporting materials available for public review?
7. Bond documents: Are draft bond documents, including a
bond indenture or equivalent financing documents, available
for review? These would help the public understand the
respective obligations and protections of the borrower,
bondholders, CMFA, and City.
8. Default or restructuring: If the borrower defaults, what
remedies and restructuring mechanisms would apply?
Would the City have any financial obligation, decision-
making role, or other exposure in that process?
9. Environmental liability: Has the City evaluated whether
existing or potential future environmental claims, including
claims related to soil contamination or remediation, could
create any direct or indirect exposure for the City, CMFA,
bondholders, or other parties?
10. Oversight: Will there be any ongoing oversight of the
financing or project? If so, who will conduct that oversight,
who will receive the findings, and what authority will the
oversight body have?
11. Rationale for City participation: Finally, what public
benefit does the City receive from participating in this
financing structure, and why is City involvement preferable
to the applicant obtaining financing directly through private
capital markets without City participation?
My intent is to better understand the City’s potential exposure
and the protections in place for Cupertino residents and taxpayers
before the Council takes action.
Thank you for providing the supporting documentation and
responses for the public record.
Thanks,
Santosh Rao (writing on behalf of myself only as a Cupertino
resident)