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HomeMy WebLinkAboutCDC/2004-31 RESOLUTION NO. CDCj2004-31 2 3 A RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO APPROVING THE AUGUST 2004 AMENDMENT TO THE 2000 OWNER PARTICIPATION AND EDI LOAN AGREEMENT AND EDI LOAN FORBEARANCE AGREEMENT, DATED SEPTEMBER 18, 2000, BY AND BETWEEN 303 L.L.C., AND THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO 4 5 6 7 8 WHEREAS, 303, L.L.c., a California limited liability company (the "Owner") and the Redevelopment Agency of the City of San Bernardino (the "Agency") have previously entered 9 10 into that certain agreement entitled "2000 Owner Participation and EDI Loan Agreement," dated as of September 18, 2000, (the "Agreement") and concurrently therewith the Owner entered into a separate agreement with the City of San Bernardino entitled "2000 Community I] 12 Development Block Grant Program Section 108 Project Development Loan Agreement," dated September 18, 2000, amended (the "City Section 108 Loan Agreement"), pursuant to which the Owner completed its acquisition of the "303 Third Street Parcel", as this term is defined in the 13 14 15 Agreement; and 16 WHEREAS, the Agency has previously disbursed the sum of Three Hundred Forty Four 17 Thousand Dollars ($344,000) to the Owner for the acquisition of the 303 Third Street Parcel as 18 provided under the Agreement; and 19 WHEREAS, on August 4, 2003, the Community Development Commission of the City 20 of San Bernardino approved an Amendment to the 2000 Owner Participation and EDI Loan 21 Agreement, by and between the Owner and the Agency to defer the repayment of the scheduled 22 HUD Section ] 08 Loan in accordance with the terms of the 2003 City Section ] 08 Loan 23 Agreement; and 24 WHEREAS, the Owner has negotiated a purchase and sale agreement with the 25 County of San Bernardino ("County") for improvement and sale of the 303 Third Street Parcel for which the County will acquire the 303 Third Street Parcel ("Sale") upon completion of -1- 1':\Cn8G Ut'pl\,\laggil'\l)rllfll}ucs\U.f-07-") 3113 \V Third SI COC n.e~(J vel" .\II>.doc CDC/2004-31 certain tenant improvements ("Tenant Improvements") by the Owner in order to accommodate 2 the relocation ofthe Superior Court of California; and. 3 WHEREAS, in order to facilitate the Owner and County Sale, the Owner has requested 4 that the Agency take certain actions to enable the Agency and the City to subordinate its HUD 5 Section 108 Loan in the amount of $1.R to a Senior Construction Loan in the approximate 6 amount of $15 million of which the Owner will use a portion of said Senior Construction Loan 7 to accomplish the Tenant Improvements to the 303 Third Street Parcel and furthermore the 8 Owner has requested that the Agency and City consider deferring the Section 108 Loan 9 repayment due date of August I, 2005 and August I, 2006; and 10 WHEREAS, the Owner and the Agency believe it is appropriate and necessary to amend the 11 Agreement as set forth in the August 2004 Amendment to the 2000 Owner Participation and 12 ED! Loan Agreement and ED! Loan Forbearance Agreement ("2004 Owner/Agency 13 Amendment"). 14 NOW. THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION OF THE 15 CITY OF SAN BERNARDINO DOES HEREBY RESOLVE, DETERMINE AND ORDER, AS 16 FOLLOWS: 17 Section I. The Commission hereby approves the 2004 Owner/Agency Amendment 18 dated as of August 16, 2004 by and between the Owner and the Agency in the form attached as 19 Exhibit "A". The Chair of the Commission and the Agency Secretary are hereby authorized and 20 directed to execute the 2004 Owner/Agency Amendment on behalf of the Agency, together with 21 such technical and conforming changes as may be recommended by the Executive Director of 22 the Agency in consultation with Agency special legal counsel. Section 2. The Resolution shall become effective immediately upon its adoption. 23 /1/ 24 25 -2- P:\CDBG Dcpt\Maggie\Drafl Do(s\04-07-19 303 W Third St CDC Reso vcr MP.doc CDC/2004-31 2 A RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO APPROVING THE AUGUST 2004 AMENDMENT TO THE 2000 OWNER PARTICIPATION AND EDI LOAN AGREEMENT AND EDI LOAN FORBEARANCE AGREEMENT, DATED SEPTEMBER 18, 2000, BY AND BETWEEN 303 L.L.C., AND THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO 3 4 S I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the 6 Community Development Commission of the City of San Bernardino at a j t. reg. meeting 7 thereof, held on the 16th day of August , 2004, by the following vote to wit: 8 Abstain Absent 17 ~~~/ Se 7Y I 18 19 The foregoing resolution is hereby approved this I ~ 111" 20 ,2004. August 21 J c!' h alles, Chairperson Co munity Development Commission ~f he City of San Bernardino 22 ')' -j Approved as to form and Legal Content: 24 ~f~ AgencyJ=ou el Sf",c"GI 2S By: -3- P:\CDBG Depl\l\hggie\Dnlrt Docs\04-07-19 303 W Third 51 CDC Reso ver MP.doc CDC/2004-31 AUGUST 2004 AMENDMENT TO 2000 OWNER P ARTICIP A TION AND ED! LOAN AGREEMENT AND EDI LOAN FORBEARANCE AGREEMENT (303 Third Street Project) THIS AUGUST 2004 AMENDMENT TO 2000 Owner Participation and ED! Loan Agreement (the "2004 Amendment") is dated as of August 16, 2004, by and between 303, L.L.C., a California limited liability company (the "Owner") and the Redevelopment Agency of the City of San Bernardino, a public body corporate and politic (the "Agency") and is entered into in light of the following facts: - - RECITALS -- The Owner and the Agency have previously entered into that certain agreement entitled "2000 Owner Participation and ED! Loan Agreement," dated as of September 18, 2000, as amended by an instrument entitled "Amendment to 2000 Owner Participation and ED! Loan Agreement and ED! Loan Forbearance Agreement," dated as of July I, 2003, (collectively referred to herein as the "Agreement") and the Owner has entered into a separate agreement with the City of San Bernardino entitled "2000 Community Development Block Grant Program Section 108 Project Development Loan Agreement," dated September 18, 2000, as amended ("City Section 108 Loan Agreement"), pursuant to which the Owner: (i) completed its acquisition of the "303 Third Street Parcel", as this term is defined in the Agreement; and (ii) thereafter undertook certain asbestos abatement and environmental remediation work and remarketing of the 303 Third Street Parcel for occupancy by commercial business tenants; and The Agency has previously disbursed the sum of Three Hundred Forty Four Thousand Dollars ($344,000) to the Owner for the acquisition of the 303 Third Street Parcel as provided under the Agreement; and The Owner has entered into an agreement for the improvement and sale of the 303 Third Street Parcel to the County of San Bernardino, or its assignee, in accordance with the terms of an agreement entitled, "Agreement for Purchase and Sale of Real Property" dated as of June 29, 2004, (the "County Purchase Contract") by and between the County of San Bernardino and the Owner. A true and correct copy of the County Purchase Contract is on file with the Agency Secretary; and The terms of the County Purchase Contract provide for the Owner to finance, construct and install certain improvements to the 303 Third Street Parcel prior to the transfer of the 303 Third Street Parcel, as further improved by the Owner, to the County of San Bernardino in accordance with the terms and conditions of the County Purchase Contract; and In order to accommodate the further improvement and disposition of the 303 Third Street Parcel to the County of San Bernardino for its use and occupancy as an annex to the Superior Court facilities on Arrowhead Avenue, certain provisions of the Agreement need to be modified 4815-8450-4320.2 I P:lAgendaslAgreements-AmendmentslAgrmts-Amend 2004\04-08-16 Amendment to 2000 OP A and ED! Loan Forbearance Agrmt.doc CDC/2004-31 in order to assist the Owner to complete its obligations under the terms of the County Purchase Contract; and The Owner and the Agency believe it is appropriate to further amend the Agreement as set forth in this August 2004 Amendment. NOW THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION THE OWNER AND THE AGENCY HEREBY AGREE AS FOLLOWS: Section 1. Unless the context of the usage of a particular term or phrase in this 2004 Amendment may otherwise require, the meaning of terms and phrases as used in this 2004 Amendment shall be the same as set forth in the Agreement. Section 2. (a) At the time when this 2004 Amendment is fully executed by the parties, the parties mutually acknowledge and agree that no default exists under the Agreement and the parties mutually acknowledge and agree further that neither party is aware of any facts or circumstances which, with the giving on notice to the other party under the Agreement, and the passage of the applicable cure period, would constitute a default under the Agreement. (b) At the time when this 2004 Amendment is fully executed by the parties, the Owner hereby a'Cknowledges and represents to the Agency, that the County Purchase Contract has been fully executed by the parties thereto, and that the County Purchase Contract is in full force and effect and that no condition precedent for the performance of the obligations of either party under the County Purchase Contract has failed to occur and to the actual knowledge of the Owner, no default has occurred or is in effect under the County Purchase Contract. (c) The Owner shall not materially modify or amend the County Purchase Contract without first obtaining the written consent of the Agency, which consent shall not be unreasonably withheld, conditional or delayed by the Agreement. (d) The Owner shall promptly provide the Agency with a copy of any written correspondence or notice to the Owner issued by the County of San Bernardino under the County Purchase Contract, in which the County of San Bernardino asserts the Owner is in default under the County Purchase Contract, or that the County of San Bernardino has elected to terminate the County Purchase Contract. Section 3. Subject to the terms and conditions of this 2004 Amendment, Section 4(c) of the Agreement is hereby further amended to read as follows: "(c) The ED! Loan shall be evidenced by ED! Loan Promissory Note in the form attached as Exhibit "C." The ED! Loan Promissory Note shall be dated by the Escrow Holder on the day when the conditions for the State Sale Agreement and Section 7.0 of the City Section 108 Loan Agreement have been satisfied by the parties and when the fee title interest of the State in the 303 Third Street Parcel is transferred to the Owner and thereafter, the ED! Promissory Note shall mature on August 1, 2006 and shall bear no interest prior to its maturity or 4815-8450-4320.2 2 P:lAgendaslAgreements-AmendmentslAgnnts-Amend 2004\04'{)8-16 Amendment to 2000 OPA and EDl Loan Forbearance Agnnt.doc CDC/2004-31 prepayment (except in the case of a default as provided in the ED! Loan Promissory Note). The EDI Loan Promissory Note shall be secured by the ED! Loan Performance Deed of Trust in the form attached as Exhibit "D", which affects the 303 Third Street Property, or such portion thereof as HUD may authorize and approve. The ED! Loan Performance Deed of Trust shall be subject only to: (i) the senior security interests of the City in the 303 Third Street Property under the terms of the City Section 108 Loan Agreement, (ii) the security interest of Arrowhead Credit Union or such other lender approved by the Executive Director, for its loan to Owner in an amount not to exceed Eight Hundred Thousand Dollars ($800,000) which shall be used and applied by the Owner solely for the purpose of payment for interim design work for and interior building shell construction work to be undertaken by the Owner under the County Purchase Contract to the 303 Third Street Property (iii) such other non-monetary lien exceptions to title in the 303 Third Street Property as approved by the Executive Director, in consultation with special legal counsel, as permitted or consistent with all applicable provisions of the HUD Section 108 Loan Agreement." Section 4. Subject to the terms and conditions of this 2004 Amendment, the Agency hereby agrees to forbear from the collection of the principal amount of $344,000 as now due the Agency under the EDI Loan Promissory Note until a new date of August 1,2006, at which time the Owner shall pay the Agency the sum of $344,000 under the ED! Loan Promissory Note, provided, however, that the EDI Loan Promissory Note shall subordinated to any Construction Loan and shall be payable sooner upon the occurrence of a default or event of prepayment under the Agreement, the ED! Loan Promissory Note, or the ED! Loan Performance Deed of Trust or upon the occurrence of a default of the Owner under the terms of the County Purchase Contract. Upon the request of the Owner, the Executive Director of the Agency is hereby authorized and directed to deliver to the Owner an EDI Loan Promissory Note forbearance letter in a form approved by Special Legal Counsel to the Agency, which forbearance letter shall include a notice to the Owner that the maturity date of the ED! Loan Promissory Note has been modified by this 2004 Amendment to be a new date of August 1, 2006. Section 5. The third (3rd) paragraph of Section 5 of the Agreement is hereby further amended by this 2004 Amendment to read as follows: "The Participation Fee shall be due and payable to the Agency by the Owner on August 1, 2006, or sooner upon the acceleration or prepayment of the Construction Loan and shall be subordinated to any Construction Loan and payable as provided herein. Provided that the Participation Fee is paid to the Agency when due, no interest shall be payable by the Owner to the Agency on the Participation Fee prior to the time when it is due and payable. If not paid to the Agency in full when due, the outstanding balance of the Participation Fee shall bear interest at the maximum rate per annum permitted by law, until paid to the Agency in full." 4815-8450-4320.2 3 P:lAgendaslAgreements.AmendmentslAgrmts.Amend 2oo4\04.()8-16 Amendmenllo 2000 OP A and EDI Loan Forbearance Agrml.doc CDCj2004-31 Section 6. The provisions of Section 5 of the amendment to the Agreement, dated as of July 1, 2003, are hereby declared to be of no further force or effect under the terms and conditions of this 2004 Amendment. Section 7. (a) The provisions of Section 6 of the amendment to the Agreement dated as of July 1, 2003 are hereby repealed and replaced with the provisions of Section 7(b) of this 2004 Amendment. (b) Section 8 of the Agreement provides for the payment by the Owner of certain tax increment revenues or a fee in lieu of annual payment of property taxes to the Agency for a limited period of time. Notwithstanding any other provision of the Agreement or the Notice of Memorandum of Agreement to the contrary, such obligation to pay a fee in lieu of annual payment of property taxes on the part of the Owner shall be deemed to by fully satisfied upon (i) payment to the Agency by the Owner of the cash amount equal to $250,000 and (ii) the close of escrow for the sale of the 303 Third Street Parcel by the Owner to the County of San Bernardino, in accordance with the provisions of the County Purchase Contract. Such obligation of the Owner shall only be satisfied if the 303 Third Street Parcel is actually sold to the County of San Bernardino, the required amount under this 2004 Amendment Section 7(b) is paid to the Agency, and title to the 303 Third Street Parcel has transferred to the County of San Bernardino. When the conditions set forth in the preceding section have been satisfied, the Agency shall cause to be delivered to the County of San Bernardino for recordation concurrently upon the close of the escrow and the transfer by the Owner of the fee title interest in the 303 Third Street Parcel to the County of San Bernardino under the County Purchase Contract an instrument in recordable form in which the Agency quitclaims to the County of San Bernardino all of its right, title and interest in the covenant of the Owner to pay property taxes or an annual in lieu fee to the Agency as otherwise set forth in Section 8 of the Agreement. In the event that the sale to the County of San Bernardino of the 303 Third Street Parcel does not occur on or before August 1, 2006, then Section 8 of the Agreement shall remain in full force and effect and this Section 7(b) of this 2004 Amendment shall be of no further force and effect from and after the earlier date of August 1, 2006 or such earlier date on which the County Purchase Contract may be terminated by the parties thereto. Section 8. The Agency hereby acknowledges that the Owner has substituted one of its former managing members, J. Kevin Brunk, for another managing member, CJJ, Inc., a California Corporation. Subject to the delivery by the Owner to the Agency of an approving legal opinion of the attorneys for the Owner addressed to the Agency in a form reasonably satisfactory to the Agency Counsel stating that the substitution of such former managing member by CJJ, Inc., has been duly authorized by the Owner and that the obligations of the Owner as arise in favor of the Agency under the Agreement are in full force and effect and are enforceable in accordance with its terms, the Agency hereby acknowledges its acceptance of CJJ, Inc., a California Corporation as a managing member of the Owner. 4815-8450-4320.2 4 P:lAgendaslAgreements-AmendmentslAgnnts-Amend 2004\04-08-16 Amendment to 2000 OP A and EDI Loan Forbearance Agnnt.doc CDC/2004-31 Section 9. This 2004 Amendment shall take effect when it has been approved by the governing board of the Agency and fully executed by the Owner and the Agency and when each of the conditions set forth in Section 16 of that certain August 2004 Amendment to the Section 108 Loan Agreement by and between the Owner and the City of San Bernardino of even date herewith, have been satisfied. Section 10. Except as modified by this 2004 Amendment all other provisions of the Agreement and the EDI Promissory Loan Note and the EDI Loan Performance Deed of Trust and the Notice of Memorandum of Agreement remain in full force and effect and all of the representations, warranties and covenants of the Owner under the Agreement remain true and correct as of the date of execution of this 2004 Amendment by the Owner. Section 11. This 2004 Amendment may be executed by the parties in counterparts and when fully executed, each counterpart shall be deemed to be one original instrument. (signature page to follow) 4815-8450-4320.2 5 P:\Agendas\Agreements-Amendments\Agrmts-Amend 2004\04-08-16 Amendment to 2000 OP A and ED! Loan Forbearance Agrmt.doc CDC/2004-31 THIS 2004 AMENDMENT is executed by the authorized officers and members of the parties whose signatures appear below. AGENCY Redevelopment gency of the City of San Bernard' 0, a ublic body corporate and politic evelopment Commission ;7 Date: APPROVED AS TO FORM: By. V~ Agenc ounsel s~,.1 OWNER 303, L.L.C., a California limited liability company Date: ~5 joy BY.~~ Ct. ~JN Martin A. Matich, Manager - and - By: cn, Inc., a California Corporation, Manager APPROVED AS TO FORM: Attorney for Owner By: 4815-8450-4320.2 6 P:lAgendaslAgreements-AmendmentslAgrrnts-Amend 2004\04-08-16 Amendment to 2000 OPA and ED! Loan Forbearance Agrrnt.doc