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HomeMy WebLinkAbout1990-035 SBEOOIOO-47/3347S/1w 01/12/90 0230 RESOLUTION NO. 90-35 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO, CALIFORNIA, APPROVING THE TERMS OF A CERTAIN SUBORDINATION AGREEMENT TO BE ENTERED INTO IN CONNECTION WITH THE ISSUANCE OF THE SAN BERNARDINO JOINT POWERS FINANCING AUTHORITY, TAX ALLOCATION BONDS, 1990 SERIES A (SOUTH VALLE REDEVELOPMENT PROJECT) WHEREAS, the City of San Bernardino, California (the "Ci ty") and the Redevelopment Agency of the City of San Bernardino, California (the "Agency"), a public body, corporate and politic, being a redevelopment agency, duly created and existing pursuant to the laws of the State of California, have previously undertaken actions preparatory to the incurring of certain obligations in connection with the construction, financing and acquisition of certain facilities within the City; and WHEREAS, the Agency has previously entered into a certain financing transaction with the City with respect to the execution and delivery of the $3,200,000 1987 Refunding Certificates of Participation (South Valle Public Improvements Project) (the "Certificates"), said Certificates evidencing proportionate interests of the holders thereof in certain base rental and additional rental payments to be made by the City to the Agency as the rental for certain property under a certain lease agreement (the "Lease Agreement"); and -1- WHEREAS, in connection with the execution and delivery of the Certificates the Agency and the City entered into a certain Reimbursement Agreement dated as of April 1, 1987 (the "Reimbursement Agreement"), whereby the Agency agreed to reimburse the City for the base rental payments and additional rental payments paid by the City under the Lease Agreement from certain tax increment revenues available for such purpose from the South Valle Redevelopment Project located within the City of San Bernardino, California (the "Project Area"); and WHEREAS, the San Bernardino Joint Powers Financing Authority (the "Authority") proposes at this time to issue its Tax Allocation Bonds, 1990 Series A (South Valle Redevelopment Project) in an aggregate principal amount approximately equal to $3,700,000 (the "Bonds") for the purpose of providing funds to make a certain loan (the "Loan") to the Agency in an aggregate principal amount approximately equal to $3,700,000 to finance certain public capital improvements of the Agency in the Project Area; and WHEREAS, the Loan to the Agency from the Authority shall be made pursuant to and in accordance with a certain loan agreement with respect to the Project Area (the "Loan Agreement"); and WHEREAS, the Mayor and Common Council have previously adopted its resolution entitled "RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO, CALIFORNIA, APPROVING THE -2- ~_n , ' ISSUANCE OF CERTAIN TAX ALLOCATION BONDS, 1989 SERIES B THROUGH 1989 SERIES G, INCLUSIVE, OF THE SAN BERNARDINO JOINT POWERS FINANCING AUTHORITY AND THE BORROWING BY THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO OF THE PROCEEDS THEREFROM PURSUANT TO CERTAIN RELATED LOAN AGREEMENTS"; and WHEREAS, pursuant to said resolution, the Mayor and Common Counci 1 have approved the issuance of the Bonds for the purpose, among others, of providing moneys for the financing of various redevelopment projects in the Project Area; and WHEREAS, Section 2 pursuant to of the Reimbursement Agreement, prior to the issuance of any bonds, loans or other indebtedness secured by tax increment revenues of the Agency (such bonds, loans or other forms of indebtedness being referred to herein and therein as "tax allocation bonds"), the City may amend the Reimbursement Agreement to provide that the pledge thereunder may be released or the Reimbursement Agreement shall be made subordinate to the rights of the holders of any such tax allocation bonds to receive the tax increment revenues attributable to the Project Area; and WHEREAS, pursuant to said Section 2, any such amendment or subordination must be duly approved and executed by the Agency and the City; and -3- WHEREAS, it is the intent and desire of the City that the Agency's obligations to the City under the Reimbursement Agreement be subordinate to the Agency's obligation to the Authority under the Loan Agreement entered into with respect to the Project Area; and WHEREAS, at this time the Agency has requested that the Mayor and Common Council consent to the subordination of the Reimbursement Agreement and the obligations of the Agency thereunder to the obligation of the Agency to make certain loan payments to the Authori ty pursuant to the Loan Agreement, such loan payments to be used to make debt service payments on the Bonds, and that the Mayor and Common Council approve the prior pledge of the tax increment revenues available from the Project Area and a lien thereon for the payment of such loan payments; and WHEREAS, the Mayor and Common Council deem it desirable at this time to authorize the execution of a certain Subordination Agreement in connection with the issuance of the Bonds to facilitate and finance the transaction contemplated by the Loan Agreement. NOW, THEREFORE, THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO, CALIFORNIA, DO HEREBY FIND, RESOLVE, DETERMINE AND ORDER AS FOLLOWS: -4- Section 1. The Mayor and Common Council hereby consent to the subordination of the obligations of the Agency under the Reimbursement Agreement and approve the form of the Subordination Agreement, by and between the City and the Agency substantially in the form as on file with the City Clerk. The Mayor and Common Council further authorize the execution of the final form of the Subordination Agreement when the same shall be presented for execution by the Mayor and the City Clerk or such other appropriate City official, subject to such changes, additions or deletions as may be recommended by Hawkins, Delafield & Wood ("Bond Counsel") and approved by the City Attorney for the intended transaction contemplated therein. The execution thereof by the Mayor and City Clerk or such other appropriate City official shall be deemed to be conclusive as to the approval thereof by and on behalf of the City. Section 2. The officers of the City are hereby authorized and directed, jointly and severally, to do any and all things to execute and deliver any and all documents which they may deem necessary or advisable in order to consummate the issuance, sale and delivery of the Bonds; and otherwise to effectuate the purposes of this Resolution and any actions as previously taken by such officers in connection with the issuance of the Bonds are hereby ratified and confirmed. -5- Section 3. This Resolution shall take effect upon adoption. I HEREBY CERTIFY that the foregoing adopted by the Mayor and Common Counci 1 San Bernardino at an ndinllrnp.d reaular held on the 29th day of January the following vote, to wit: resolution of the meeting was duly Ci ty of thereof, 1990, by AYES: NAYS: ABSENT: .#dZ//7/7!a~/ City Clerk day of The foregoing January resolution is hereby approved , 1990. ;'';)'Ick ~ ~----~ e City of ino Approved as to form and legal content: By: /1---- ~J&~ ) /~ir:~~y -6- SBEOOIOOB-45/3345S/vd 01/17/90 - 2: 30 SUBORDINATION AGREEMENT SOUTH VALLE REDEVELOPMENT PROJECT This Subordination Agreement (the "Agreement") entered into this 1st day of January, 1990, by and between the City of San Bernardino, California, a municipal corporation and a charter city (the "City"), and the Redevelopment Agency of the City of San Bernardino, a pUblic body, corporate and pOlitic duly organized and existing pursuant to the Community Redevelopment Law of the State of California (the "Agency"), is entered into by the parties hereto with reference to the fOllowing facts: RECITALS WHEREAS, the City has approved and adopted a Redevelopment Plan for the redevelopment project area known and designated as the South Valle Redevelopment Project (the "Project Area"), which Redevelopment Plan is to be implemented by the Agency for a portion of the City characterized by stagnant, improperly utilized and unproductive land which requires redevelopment in the interest of the health, safety and general welfare of the people of the City; and WHEREAS, the City and the Agency have previous ly entered into that certain Reimbursement Agreement dated April 1, 1987 (the "Reimbursement Agreement"); and - 1 - J , WHEREAS, the Reimbursement Agreement restated and amended a certain 1984 Reimbursement Agreement; and WHEREAS, the Reimbursement Amount to be paid by the Agency to the City under the Reimbursement Agreement was less than or equal to the Agency's obligation under the 1984 Reimbursement Agreement; and WHEREAS, under Section 1 of the Reimbursement Agreement, the Agency has agreed to pay the City certain tax increment revenues allocated and paid the Agency from the Project Area defined therein as the "Revenues"; and WHEREAS, pursuant to the terms of the Reimbursement Agreement, the Agency agreed to reimburse the City for the annual Base Rental and Additional Rental Payments made by the City under the Lease Agreement in connection with the Certificates from such Revenues of the Agency; and WHEREAS, in accordance with Section 2 of the Reimbursement Agreement, prior to the issuance of bonds, loans or other forms of indebtedness of the Agency (referred to herein and therein as "tax allocation bonds"), the City and the Agency may amend the Reimbursement Agreement to provide that the pledge thereunder be subordinated to the obligation of the Agency to pay debt service payments with respect to such tax allocation bonds; and - 2 - j I . WHEREAS, it is the intent of the Reimbursement Agreement that the Agency's agreement to pay the Revenues thereunder shall be subordinate to any agreement to pay tax increment revenues in connection with the Loan of the 1990 Series A Bond proceeds by the Agency pursuant to the South Valle Loan Agreement dated as of January 1, 1990, by and among the San Bernardino Joint Powers Financing Authority (the "Authority"), Security Pacific National Bank, as trustee (the "Trustee") and the Agency (the "Loan Agreement"); and WHEREAS, it is the intent and desire of the City and the Agency to enter into this Subordination Agreement to provide for the amendment of the Reimbursement Agreement and the subordination of the obligation of the Agency to pay the Revenues to the City under the Reimbursement Agreement to the obligation of the Agency to pay loan repayments from tax increment revenues attributable to the Project Area to the Authority under the Loan Agreement. NOW, THEREFORE THE PARTIES IN CONSIDERATION OF THE MUTUAL COVENANTS HEREIN CONTAINED, AGREE AS FOLLOWS: Section 1. Incorporation of Basic Documents: Amendment of Reimbursement Aoreement. The Reimbursement Agreement is by reference incorporated herein and made a part of this Agreement as though set forth in full herein. This Subordination Agreement shall restate and amend certain of the provisions in the Reimbursement Agreement for the purpose of clarity and in order to provide for the - 3 - superior lien and prior pledge of the tax increment attributable to the Project Area for the payment of payments to the Authority pursuant to the Loan Agreement right of the owners of the Bonds to receive debt service derived therefrom. All capitalized terms used herein otherwise defined shall have the same meaning as used Reimbursement Agreement. revenues the loan and the payments and not in the Section 2. Subordination. The City hereby agrees to amend Section 2 of the Reimbursement Agreement to provide that the pledge thereunder be made subordinate to the right of the owners of the Bonds to receive debt service payments derived from loan payments made by the Agency from tax increment revenues attributable to the Project Area; and by the execution hereof the City does so subordinate any and all rights of the City to the receipt of the Revenues pledged by the Agency to the City under the terms of the Reimbursement Agreement, which Revenues have been pledged by the Agency for the payment of the amounts borrowed under the Loan Agreement in connection with the San Bernardino Joint Powers Financing Authority, Tax Allocation Bonds, 1990 Series A (South Valle Redevelopment Project) (the "Bonds"). The City hereby further agrees that any rights of the City to receive any Revenues shall be junior and subordinate to the Bonds and to the obligation of the Agency to make loan payments to the Authority from any Revenues so pledged in connection with the Bonds pursuant to the Loan Agreement whereby the Agency has agreed to pledge certain tax increment revenues in connection with repayment of the Loan. - 4 - J The City hereby recognizes that the amendment of the Reimbursement Agreement and the subordination of the obligations of the Agency thereunder may result in the inability of the Agency to pay all or a portion of the Reimbursement Amount to the City due to the insufficiency in the Revenues available to the Agency after the payment of loan payments to the Authority under the Loan Agreement, which loan payments are to be used for the payment of debt service on the Bonds. Section 3. Interpretation. The interpretation, validity and enforcement of this Agreement shall be governed by and construed under the laws of the State of California. Section 4. Entire Aareement. This Agreement contains the sole and entire agreement and understanding between the parties with regard to the subject matter of this Agreement, and where the terms or provisions hereof are inconsistent with any term or provision of the Reimbursement Agreement, the terms hereof shall supersede any and all other oral or written agreements pertaining thereto by and among the parties. Section 5. Effect. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, executors, administrators, legal representatives, successors and assigns. - 5 - Section 6. Counterparts. This Agreement may be executed in any number of counterparts, each of which, when so executed and delivered, shall be an original. IN WITNESS WHEREOF, the parties hereto have executed this agreement as of the day and the year first above written. CITY OF SAN ATTEST: c~/~,N// City Clerk By: BY: REDEVELOPMENT AGENCY CITY OF SAN BERNARDI By: ATTEST~ By: Q.~~L Secretar APPR~OVED AS 0 ORM: BY: ~~JPt... j ~Agency C nsel /SBEOOlOOB-45/3345S - 6 -