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Home My WebLink About2003-222 " , , . c' RESOLUTION NO. 2003-222 2 3 A RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO APPROVING AN AMENDMENT TO THE 2000 COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM SECTION 108 PROJECT DEVELOPMENT LOAN AGREEMENT, DATED AS OF SEPTEMBER 18, 2000 BY AND BETWEEN 303, L.L.C., AND THE CITY OF SAN BERNARDINO 4 5 6 7 WHEREAS, 303, L.L.C., a California limited liability company (the "Borrower") and the City of San Bernardino (the "City") have previously entered into that certain loan agreement entitled "2000 Community Development Block Grant Program Section 108 Project Development Loan Agreement", dated as of September 18, 2000, as amended (the "Agreement"); and WHEREAS, the City has previously disbursed to the Borrower the sum of One Million Six Hundred Four Thousand Seventy Four Dollars and Six Cents Dollars ($1,604,074.06), exclusive of funded interest under the terms of the Agreement for the acquisition of the "303 Third Street Property" and for the construction and installation of the "Borrower Improvements 8 9 10 11 12 13 14 15 (Phase I)", as these terms are defined in the Agreement; and WHEREAS, the Borrower and the City believe it is appropriate to further amend the 16 17 Agreement as set forth in this Amendment. 18 NOW, THEREFORE, IT IS HEREBY RESOLVED, DETERMINED AND ORDERED BY THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO, AS FOLLOWS: 19 20 21 Section I. The Mayor and Common Council hereby approves the form of the 22 Amendment to 2000 Community Development Block Grant Program Section 108 Project Development Loan Agreement and Loan Forbearance Agreement (303 Third Street Project), 23 24 dated as of July 1, 2003 (the "Amendment") by and between the Borrower and the City in the form attached hereto as Exhibit "A". The Mayor, City Clerk and the Executive Director of the 25 Economic Development Agency are hereby authorized and directed to execute the Amendment -1- P:\Agenda5\Resolutions\Re~olutions\2003\03-08-04 303 W Third St MCC Reso.dot " 2003-222 . on behalf of the City together with such technical and conforming changes as may be approved 2 by the Mayor upon the recommendation of special legal counsel to the City and the Executive 3 Director of the Economic Development Agency. 4 Section 2. This Resolution shall take effect upon its adoption and execution in the 5 manner as required by the City Charter. 6 //1 7 /II 8 /II 1/1 9 /II 10 /II 11 1/1 12 /II 13 /II 14 1/1 15 /II 16 1/1 17 /II 18 /II 19 /II 20 /II 21 1/1 22 /II 23 /II 24 /II 25 1/1 -2- P:\Agendas\Resolullons\Resolutions\2003\03.08-04 303 W Third St MCC Rcso.doe ", ~ 2003-222 2 A RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO APPROVING AN AMENDMENT TO THE 2000 COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM SECTION 108 PROJECT DEVELOPMENT LOAN AGREEMENT, DATED AS OF SEPTEMBER 18, 2000 BY AND BETWEEN 303, L.L.C., AND THE CITY OF SAN BERNARDINO 3 4 5 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and 6 Common Council of the City of San Bernardino at a j t. regular meeting thereof, held on the 7 4 th day of August, 2003, by the following vote to wit: 8 Council Members: Aves Navs X - X ---1L ---1L X --1L X - Abstain Absent 9 ESTRADA LONGVILLE MCGINNIS DERRY SUAREZ ANDERSON MC CAMMACK ~kJ~ Racli G. Clark, City Clerk 10 II 12 13 14 15 16 17 The foregoing resolution is hereby approved this rhl> ,2003. August 19 -<' 18 20 APprove(d as to~rm and Le al:rntent: By. . ,/-, '" . Special Counse 21 22 23 24 25 -3- P;\Agendas\Resolutlons\Resolutlons\2003\03-08-04 303 W Third St :\'ICC Reso.doc .- 2003-222 .. AMENDMENT TO 2000 COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM SECTION 108 PROJECT DEVELOPMENT LOAN AGREEMENT AND LOAN FORBEARANCE AGREEMENT (303 Third Street Project) THIS AMENDMENT TO 2000 COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM SECTION 108 PROJECT DEVELOPMENT LOAN AGREEMENT AND LOAN FORBEARANCE AGREEMENT ("Amendment") is dated as of July 1, 2003, by and between 303, L.L.c., a California limited liability company (the "Borrower") and the City of San Bernardino, a municipal corporation (the "City") is made and executed in light of the following facts: -- RECITALS -- The Borrower and the City have previously entered into that certain loan agreement entitled "2000 Community Development Block Grant Program Section 108 Project Development Loan Agreement", dated as of September 18,2000, as amended (the "Agreement"). The City has previously disbursed to the Borrower the sum of One Million Six Hundred Four Thousand Seventy Four Dollars and Six Cents ($1,604,074.06), exclusive of funded interest, under the terms of the Agreement for the acquisition of the "303 Third Street Property" and for the construction and installation of the "Borrower Improvements (Phase I)", as these terms are defined in the Agreement. The Borrower and the City believe it is appropriate to further amend the Agreement as set forth in this Amendment. NOW THEREFORE AND FOR GOOD AND VALUABLE CONSIDERATION THE BORROWER AND THE CITY AGREE AS FOLLOWS: Section 1. Unless the context of the usage of a particular term or phrase may otherwise require, the meaning of terms and phrases as used in this Amendment shall be the same as set forth in the Agreement. Section 2. Subject to the terms and conditions of this Amendment, Section 5.0(a) of the Loan Agreement is hereby amended to read as follows: "(a) The Section 108 Loan shall be in an amount not to exceed the principal sum of One Million Eight Hundred Forty Thousand Dollars United States currency ($1,840,000.00), and the Section 108 Loan shall bear interest on so much ofthe principal sum as shall be drawn by the City under its HUD Section 108 Loan Agreement for disbursement to the Borrower from time-to-time. The outstanding principal balance of the Section 108 Loan shall bear interest payable to the City by the Borrower from the date of each disbursement of principal under the HUD Section 108 Loan Agreement at the variable rate of interest specified in the Borrower Section 108 Loan Promissory Note 1 P:\Clerical Services Dept\Margarel\Agreemenls-Amendmellls\Agrmt~Amend 2003\0)-08-19 108 Loan Agr Amend 303 3rd St.DOC " 2003-222 " until such time as such variable rate of interest may be reset as a permanent rate of interest following the "Conversion Date" as this term is set forth under the HUD Section 108 Loan Agreement and the Borrower Section 108 Promissory Note. The City shall notify the Borrower as promptly as feasible of such notification as the City may receive, if any, from the Secretary of HUD, that the Secretary of HUD intends for a Conversion Date to occur under the "HUD Note", as set forth in subparagraph number six of Paragraph LA. of the Borrower Section 108 Promissory Note. The City agrees to exercise best efforts, if directed by the Borrower, to request the Secretary of HUD not to cause a Conversion Date to occur; provided however, that the Secretary of HUD reserves its sole discretion under the HUD Note and the HUD Section 108 Loan Agreement to cause a Conversion Date to occur. Payments of interest on the Section 108 Loan shall be due and payable by the Borrower to the City in installments at the times set forth in the Borrower Section 108 Loan Promissory Note. Installments of principal disbursed to the Borrower shall be payable to the City prior to maturity or the acceleration of the Section 108 Loan, (assuming that the Borrower has received disbursements of the aggregate principal sum of $1,840,000.00) from and after the close of Escrow on the dates and in the amounts scheduled for payment as follows: Date of Principal Amount of Date of Principal Amount of Installment Principal Due Installment Principal Due August I, 2001 $ -0- August 1,2011 $100,000.00 August 1, 2002 -0- August 1,2012 100,000.00 August 1, 2003 -0- August 1, 2013 100,000.00 August 1,2004 100,000.00 August 1,2014 100,000.00 August 1,2005 100,000.00 August 1,2015 100,000.00 August 1, 2006 100,000.00 August 1,2016 100,000.00 August 1, 2007 100,000.00 August 1,2017 100,000.00 August 1,2008 100,000.00 August 1, 2018 100,000.00 August 1, 2009 100,000.00 August 1,2019 100,000.00 August 1,2010 100,000.00 August 1,2020 240,000.00" Section 3. Subject to the terms and conditions of this Amendment, the City hereby agrees to forbear from the collection of the principal sum of One Hundred Thousand ($100,000) which would otherwise be due and payable by the Developer to the City on August 1, 2003, under the terms of the Borrower Section 108 Promissory Note, to a new date of August 1, 2020, at which time pursuant to this Amendment, the Borrower shall pay to the City the total principal sum of Two Hundred Forth Thousand Dollars ($240,000), together with all accrued and unpaid interest on the Borrower Section 108 Promissory Note. The Executive Director of the Economic 2 P:\Clcrical Services Dept\Margaret\Agrccments-Amelldments\Agnnts-Amcnd 2003\03-0S-19 108 Loan Agr Amend 303 3rd St.DOC 2003-222 Development Agency is hereby authorized and directed to deliver to the Borrower a loan forbearance letter in a form approved by Special Legal Counsel to the City which includes a notice to Borrower that the "Commitment Schedule" (page 12 of the Borrower Section 108 Promissory Note) is hereby amended to read as follows: "COMMITMENT SCHEDULE PrinciuaI Due Date Commitment Amount August 1,2001 August 1,2002 August 1, 2003 August 1,2004 August 1, 2005 August 1, 2006 August 1, 2007 August 1, 2008 August I, 2009 August 1,2010 August I, 20ll August 1,2012 August 1,2013 August 1,2014 August 1,2015 August 1,2016 August 1, 2017 August 1, 2018 August 1,2019 August I, 2020 $ -0- -0- -0- 100,000.00 100,000.00 100,000.00 100,000.00 100,000.00 100,000.00 100,000.00 100,000.00 100,000.00 100,000.00 100,000.00 100,000.00 100,000.00 100,000.00 100,000.00 100,000.00 240,000.00 Maximum Commitment Amount $1,840,000.00" The Executive Director of the Economic Development Agency is further authorized and directed to include in the loan forbearance letter referenced in the preceding paragraph, a notice to the Borrower that the "Schedule P&f' (page 15 of the Borrower Section 108 Promissory Note) is hereby amended to read as follows: 3 P:\Clerical Services Dept\Margaret\Agre=ts-Amendments\Agrmtii-Amend 2003\03-08-19 108 Loan Agr Amend 303 Jrd 51.DOC 2003-222 "SCHEDULE P & I Principal Amount Available Principal Interest Rate Optional Redemption Due Date YES NO $ -0- August 1,2001 X -0- August 1, 2002 X -0- August 1, 2003 X 100,000 August 1, 2004 X 100,000 August 1, 2005 X 100,000 August 1, 2006 X 100,000 August 1, 2007 X 100,000 August 1,2008 X 100,000 August 1,2009 X 100,000 August 1,2010 X 100,000 August I, 2011 X 100,000 August 1,2012 X 100,000 August 1,2013 X 100,000 August 1,2014 X 100,000 August 1,2015 X 100,000 August I, 2016 X 100,000 August I, 2017 X 100,000 August 1,2018 X 100,000 August 1,2019 X 240,000 August 1,2020 X $1.840.000 = Aggregate Principal Amount Principal Amounts for which Optional Redemption is available may be redeemed, subject to the terms contained herein and in the Loan Agreement, on any Interest Due Date on or after August 1,2010." The Executive Director of the Economic Development Agency shall transmit such loan forbearance letter to the Borrower concurrently upon the satisfaction of the conditions set forth in Section 4. Section 4. This Amendment shall take effect when it has been approved and fully executed by the Borrower and the City and when each of the following conditions have been satisfied: (i) the City and the Secretary of the United States Department of Housing and Urban Development have entered into an appropriate amendment to HOD Section 1 08 4 P:\Clerieal Service's Dept\Margarct\Agreements-Amcndment!\Agrmts-Amend 2003\03-08-19108 Loan Agr Amend 303 Jrd St.DOC 2003-222 Loan No. B-94-MC-06-0539-A in a form satisfactory to the Mayor and the Executive Director of the Economic Development Agency which provides that the principal sums payable by the City to HUD under HUD Contract Loan No. B- 94-MC-06-0539-A, shall be due and payable by the City to HUD in the amounts and on the dates as follows: August 1,2001 August 1, 2002 August 1, 2003 August 1, 2004 August 1, 2005 August 1, 2006 August 1, 2007 August 1, 2008 August 1, 2009 August 1,2010 August 1,2011 August 1,2012 August 1,2013 August 1,2014 August 1,2015 August 1,2016 August 1,2017 August 1, 2018 August 1,2019 August 1, 2020 $ -0- -0- -0- 100,000.00 100,000.00 100,000.00 100,000.00 100,000.00 100,000.00 100,000.00 100,000.00 100,000.00 100,000.00 100,000.00 100,000.00 100,000.00 100,000.00 100,000.00 100,000.00 240,000.00 Maximum Commitment Amount $1,840,000.00" (ii) the Borrower and the Redevelopment Agency of the City of San Bernardino have entered into an appropriate amendment to that certain agreement entitled "2000 Owner Participation and ED! Loan Agreement" dated as of September 18,2000, as amended (the "OP A"), which provides that: (A) the maturity date of the ED! Loan Promissory Note shall be modified to a new date of November 1, 2005; and (B) due date for the payment of the sum of Two Hundred Thousand Dollars ($200,000) by the Borrower to the Agency under Section 5 of the OP A shall be modified to a new date of November 1, 2005; provided however that in the case of both subparagraphs (A) and (B), such obligation of the Borrower to the Agency shall be payable sooner upon the occurrence of a default or event of prepayment (sale or refinancing of the 303 Third Street Project) under the ED! Loan Promissory Note; (iii) Wells Fargo Bank National Association, as custodian for HUD under the terms of that certain "Financial and Document Custodian and Trustee Agreement" dated June 6, 2001 by and between Wells Fargo National Association and the City, shall 5 P:\Clerical Services DcptlMargaret\Agreements-Amendments\Agnnts-Amend 2003\03-08-19 I08lAlan Agr Amend 303 lrd 5t.DOC ., 2003-222 have accepted the receipt of the collateral assignment of this Amendment by the City of this Amendment for the benefit of HUD; (iv) the Executive Director of the Economic Development Agency shall have issued a loan forbearance letter in form approved by Special Legal Counsel to the City which acknowledge to Borrower that so long as no Event of Default exists under the Agreement as hereby amended (and further provided that no other event of prepayment has occurred under any of the Section 108 Loan Collateral), that the initial installment of principal due the City under the terms of the Borrower Section 108 Promissory Note shall be the new date of August I, 2004. Section 5. The City shall exercise best faith efforts to obtain the release, subject to the requisite approvals from HUD of the Borrower Letter(s) of Credit that has been obtained by certain principals of the Borrower as soon as practicable after both: (i) the County of San Bernardino has approved and executed a binding sale and purchase agreement for the 303 Third Street Property, and (ii) the Construction Loan has been duly executed by the Borrower and recorded to fund the amount of the additional core and shell construction costs requested by the County of San Bernardino; provided, however, that after condition (i) above has been satisfied, the City will additionally exercise best faith efforts to obtain the approval from HUD to allow the Borrower Letter of Credit principal reduction to occur equal to the amount the Borrower expends for the preparation of architectural and engineering plans and drawings. Section 6. Except as modified by this Amendment all other provISIons of the Agreement and Section 108 Loan Collateral remain in full force and effect and all of the representation, warranties and covenants of the Borrower under the Agreement and the Section 108 Loan Collateral remain true and correct as of the date of execution of this Amendment by the Borrower. Section 7. This Amendment may be executed by the parties in counterparts and when fully executed, each counterpart shall be deemed to be one original instrument. 11/ III /11 /11 11/ III 6 P;\Clerical Services Dept\Margll'Cl\AgrttmcIIls-Amcndmenlll\Agrm1s-Amend 2003\03-08-19 108 Loan Agr Amend 303 3rd SI.DOC '. . 2003-222 . . THIS AMENDMENT is executed by the authorized officers and members of the parties whose signatures appear below. CITY City of San BernardijlO, a municipal corporation By: h~ Date: By: By: APPROVED AS TO FORM \~.~~ Special Legal ounsel BORROWER 303, L.L.C., a California limited liability company By: JUAAJ ~ qd~1Li-b ,/~ Martin A. Matic ,Manager Date: APPROVED AS TO FORM Attorney for Borrower 7 P:\Clerlcal Seoices Dept\Margaret\Agra:ments-Amendments\Agnnis-Amend 2003\03-08-19 108 wan Agr Amend 303 3rd St.DOC