HomeMy WebLinkAboutR52-Economic Development Agency
ECONOMIC DEVELOPMENT AGENCY
OF THE CITY OF SAN BERNARDINO
FROM:
Maggie Pacheco
Executive Director
ORI6INA~JECT:
California Mobile Home Park Corporation
request for loans modifieation - Tropieana
and Orangewood Estate Mobile Home
Parks
DATE: June 13,2006
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Svnonsis of Previous Commission/CounciVCommittee Action(s):
On June 6, 2006, Redevelopment Committee Members Estrada and Johoson unaniroously voted to recommend that the
Community Development Commission consider this action for approval.
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Recommended Motion(s):
(Community Develonment Commission)
Resolution of the Community Development Commission of the City of San Bernardino approving and
authorizing the Executive Director of the Redevelopment Agency ofthe City of San Bernardino ("Agency")
to execute Amendment No. I to that certain 2001 Acquisition, Working Capital and Homebuyer Grant
Assistance Loan Agreement and Release of the 2001 Regulatory Agreement and cancellation of the
Promissory Note related thereto between the Agency and The California Mobile Home Park Corporation
(Tropicana and Orangewood Mobile Home Parks) (Low/Mod Housing Fund)
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Contact Person(s):
Maggie Pacheco
Phone:
(909) 663- 1044
1,2&3
Project Area(s):
Mt. Vernon Corridor & IVDA
Ward(s):
o Staff Report 0 Resolution( s) 0 Amendment( s)/ Agreement( s )/Contract( s)
Supporting Data Attached: 0 Map( s) 0 Letters
See Fiscal
FUNDING REQUIREMENTS: Amount: $ Impact Source: Low/Mod Housing Fund
2005-2006 EDA Budget
o Budget Authority:
~:.L~
^
SIGNATURE:
7Z:;C
cte tl-<-"
bara Lindseth, Admin.
---c-ommis-.i;;DiCiW.~ciTNOtes:----ks\r:_mrJJ:rxT89--------------------------------------
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P:\Agendas\Comm Dcv Commission\COC 2006\06-19-06 CA Mobile Home. Tropicana Final SR .doc
COMMISSION MEETING AGENDA
Meeting Date: 06/19/2006
Agenda Item Number:
/G,'7:2..
,
ECONOMIC DEVELOPMENT AGENCY
STAFF REPORT
CALIFORNIA MOBILE HOME PARK CORPORATION REQUEST FOR LOANS
MODIFICATION - TROPICANA AND ORANGEWOOD ESTATE MOBILE HOME PARKS
BACKGROUND:
Staff has received a letter from The California Mobile Home Park Corporation (the "Corporation")
requesting authorization to: (1) sell the Tropicana Mobilehome Park ("Tropicana") to a market rate
buyer; (2) forgive a portion of the outstanding $2 million loan to the Corporation for Tropicana and
other properties owned by the Corporation by the Agency; (3) transfer a portion of the unpaid balance
of a separate $550,000 loan made by the Agency to the Corporation for Tropicana and Orangewood
Mobile Home Parks; and (4) release all of the restrictive covenants on Tropicana.
The Agency acquired Tropicana and seven (7) other Mobile Home Parks (collectively, the "Parks")
with funds loaned to the Agency from the proceeds of the San Bernardino Joint Powers Financing
Authority's mortgage revenue bonds (the "Bonds") issued for each Park between July 1995 and March
1996. Prior to the purchase of the Parks, the Agency expended Agency funds on behalf of the mobile
home park conversion program for various pre-acquisitions, due diligence and consultant expenses, at
an estimated cost of $4 million.
In May 1996, the Agency was instrumental in the formation of the San Bernardino Mobilehome Park
Corporation, a California non-profit corporation with IRS designated 501(c)(3) tax-exempt status,
currently existing as The California Mobile Home Park Corporation (the "Corporation"). The Agency
then transferred its ownership interest in each Park to either the Corporation or one of its subsidiaries.
In an attempt to recoup a portion of its expenditures incurred prior to the purchase of the Parks,
Agency officials at that time acting on behalf of the Corporation, as controlled by the Agency through
representation on the Board of Directors, required the Corporation to execute eight (8) Promissory
Notes (the "Park Reimbursement Obligations") and eight (8) Deeds of Trust securing the Park
Reimbursement Obligations for the benefit of the Agency (the "Deeds of Trust").
In 1999 after an RFP process, control of the Corporation and its subsidiaries was transferred to an
independently appointed non-profit board of directors to alleviate the fiscal impact on the Agency. In
1999, in connection with the issuance by the Housing Authority of the County of San Bernardino
("County Authority") of its $27.1 million mortgage revenue notes (the "1999 Notes") for seven (7) of
the Parks, the Agency reconveyed the Deeds of Trust upon receipt of a new deed of trust securing the
Park Reimbursement Obligations, which new deed of trust was not to be recorded against the
respective Parks until the 1999 Notes were refunded with GNMA secured bonds. The Ninth Street
Mobile Home Park was never municipal bond financed, but was tax-exempt financed with a privately
placed carry-back financing arranged with the prior owner.
The County Authority issued refunding bonds to refund six (6) of the seven (7) Parks financed by the
1999 Notes with GNMA Collateralized Bonds (the "Refunding Bonds"). Due to vacancy issues, credit
and cash flow reasons and ongoing reconstruction in Tropicana at that time, Tropicana did not qualify
for inclusion in the Refunding Bond program. The Corporation applied a portion of the proceeds of
the Refunding Bonds to pay the Park Reimbursement Obligations in full for each of the six (6)
financed Parks totaling $4,187,296 upon the issuance of each series of the Refunding Bonds.
P:\Agcndas\Comm Dev Commission\CDC 2006\06-19-06 CA Mobile Home - Tropicana Final SR.doc
COMMISSION MEETING AGENDA
Meeting Date: 06/1912006
Agenda Item Number:
Economic Development Agency Staff Report
Tropicana - Loan Modifications
Page 2
Upon the closings for the Refunding Bonds, the Agency loaned funds to the Corporation totaling
$4,187,296 from the low- and moderate-income housing funds ("Housing Fund") of the Agency. To
evidence the $4,187,296 loan, the Corporation executed a Note (the "2001 Note") and 2001 Regulatory
Agreements (the "2001 Regulatory Agreements") which are recorded against each park subordinate to
the Bonds
A. 2002 $2,000,000 Loan Secured Bv the Trollicana Park
In order to repay the portion of the 1999 Notes attributable to Tropicana, the Corporation obtained
private lender conventional financing. In connection with this conventional financing, to secure the
Corporation's outstanding debt to the Agency, $2,000,000 of the $4,187,296 loan was secured solely
by Tropicana. The $2,000,000 loan is evidenced by a 2002 Note and 2002 Deed of Trust to the
Agency and a 2001 Regulatory Agreement ("Covenant"), which had previously been recorded against
Tropicana. The balance of the 2002 Note, in the amount of$2,187,296 and the Regulatory Agreement
is recorded against the other Parks. Tropicana Park currently contains 149 housing units.
B. $550,000 Loan
In 2001, a $550,000 loan was made to the Corporation by the Agency to assist with upgrades and
repairs to both Tropicana and the Orangewood Estates Mobile Home Park ("Orangewood"). The
$550,000 loan is secured by a Note and Deed of Trust, which is due on January 1, 2013. These funds
were used as follows: $154,270 of the $550,000 loan proceeds were applied to the payment of
upgrades and repairs to Tropicana and the remainder of $395,730 was applied to Orangewood.
Orangewood currently contains 151 housing units.
CURRENT ISSUE:
The primary conventional loan on Tropicana came due in January 2006, and the terms of this
conventional loan has been temporarily extended to prevent default and the initiation of foreclosure
proceedings against Tropicana. The proposed buyer of Tropicana is Santiago Communities or a
related party subsidiary, the current manager of Tropicana. In late 2005, the Corporation requested
that the Agency consider the forgiveness of a portion of the $2 million loan attributed to Tropicana.
Agency Staff and Agency Counsel prepared calculations of the amounts, which could legally be
forgiven in the event that the Commission desired to approve such forgiveness and such calculations
were shared with the Corporation. In March 2006, the Corporation forwarded a request to the Agency
to: (i) forgive a portion of the $2 million loan equal to the amount calculated by Agency Counsel; (ii)
repay a portion of the existing $550,000 loan attributable to the amount of said loan expended on
Tropicana and transfer the balance of said loan to other property owned by the Corporation; and (iii)
release the Covenant on Tropicana and permit the sale of Tropicana.
The Corporation provided documentation to demonstrate that the amount of the $550,000 loan
expended on Tropicana totaled $154,270 and will repay said amount to the Agency, and the amount
expended on Orangewood is $395,730. Thus, the Corporation is requesting that the balance ofthe loan
in the amount of $395,730 be transferred and secured by Orangewood Park or another Corporation
property.
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P:\Agendas\Comm Dcv Commissioll\COC 2006\06-19-06 CA Mobile Home ~ Tropkana Final SR_doc
COMMISSION MEETING AGENDA
Meeting Date: 06/19/2006
Agenda Item Number:
Economic Development Agency Staff Report
Tropicana - Loan Modifications
Page 3
The calculation that was used to justify the forgiveness of the $2 million loan is based upon the number
of days since 1995 that a Covenant has been a lien against Tropicana and the original assumption by
the Agency that Covenant would continue on Tropicana for thirty (30) years from the date of issuance
of the 1995 bonds issued to buy Tropicana. The credit was calculated from June 1, 1999 to June 30,
2006, which represents the period of time that the Corporation, through its independent non-profit
board of directors, assumed control after it was transferred from Agency control and maintained the
Covenant. The calculation is illustrated in Exhibit "A" attached hereto. Staff has also prepared
Exhibit "B" which is a chronology of events that has evolved related to the Mobile Home Conversion
and Financing Program.
In conclusion, although it is not likely to occur, because the primary conventional loan has, or will,
come due while this request of the Corporation is being processed by the Agency and being considered
by the Commission, there is a possibility that the primary conventional loan would be foreclosed and
the Agency's junior interests would be lost. However, it is likely that the Corporation would "work
out" financing terms in order not to lose its asset or the Agency may seek to assume the private
conventional loan to protect its financial interests in Tropicana of $2,550,000. Consequently, Agency
Staff attempted to work with the Corporation to refinance the loan upon agreeable terms, thus allowing
the Agency to recapture a significant amount of its investment while at the same time enabling the
Corporation the ability to continue to enhance it operations and management of the remaining seven
(7) Parks, and to continue making improvements to the Parks and maintain and provide housing for
more than 959 households of which 727 of the units are affordable to low and moderate income
households.
ENVIRONMENTAL IMP ACT:
None.
FISCAL IMPACT:
The Agency will receive a total of $1,714,747 in loan repayment ($1,560,477 payment on the $2
million loan and $154,270 payment on $500,000 loan) and $395,735, deferred loan payment
transferred to Orangewood, or comparable Corporation owned property.
RECOMMENDATION:
That the Community Development Commission adopt the attached Resolution.
/YL.
~
Maggie Pacheco, xecutive Director
P:lAgendas\Conun Dev Commission\COC 2006\06.-19-06 CA Mobile Home - Tropicana Final SR .doc
COMMISSION MEETING AGENDA
Meeting Date: 06/19/2006
Agenda Item Number:
EXHIBIT" A"
Tropicana is currently valued at $6,100,000 based upon a current MAl appraisal for the
property but assuming that the affordability Covenant is released. I
Calculation for the release of the affordability Covenant is computed as follows:
June I, 1999 to June 30, 2006 = 4,047 days (period of time that the independently controlled
Corporation complied with the applicable Covenant)
Initial term of the 1995 Regulatory Agreement securing the 1995 Bonds was 30 years or 10,958
days.
4,047/10,958 = 36.9319% (represents the period of time as a % of the entire 30-years that the
independently controlled Corporation was in compliance with the applicable Covenant)
$2,474,274.40 (Principal of$2M plus Interest of $474,274.40) x 36.9319% = $913,797.09
Original Loan Amount
Accrued Interest to 6/30/06
Less Credit
$2,000,000.00
$474,274.40
($913.797.09)
Total Amount Due from Corporation to Agency
$1,560,477.31
Plus Repayment of a portion of $550,000
$154.270.00
TOTAL PAID TO AGENCY AT CLOSING/Sale
$1,714,747.31
I Property Value Issues: The Tropicana Park value is $6.1 million in its then "as is" condition, and $6,270,000
with stabilized operations per an MAl Appraisal dated March 16, 20001. The primary conventional loan on
Tropicana is approximately $2,145,000, which is personally guaranteed by Richard Simonian and Santiago
Communities, the management company for the Parks. There is a Promissory Note owed by the Corporation to
Santiago Communities in the amount of $1.7 million, which was a requirement of the Agency when the Park
was sold until the operations of the Corporation were stabilized. The total amount of encumbrances is
$6,395,000 of which $2,550,000 are Agency loans.
The value of the Orangewood Park is estimated in its "as-is" condition is approximately $4,170,000, or the value
upon stabilized operations is about $4,350,000; the only encumbrance on Orangewood are the Bonds in the
amount of $3.6 million and the Agency 200 I Regulatory Agreement. There is sufficient equity in Orangewood
Park to secure the balance of the $550,000 loan (in the amount of $395,730), which would be junior to the first
lien, thus allowing the release of the debt on Tropicana. Should HUD not authorize the recordation of the
Agency subordinate debt of $395,735 on Orangewood Estates Park, the debt would be recorded against another
property owned by the Corporation located in Los Angeles County. The Corporation has provided evidence
supporting that this Park has sufficient equity to secure the Agency's debt of $395,735, which may occur within
24 months and allowing the Corporation the ability to repay the Agency the $395,735 loan sooner than 2013.
P:lAgcndaslAgenda Attaclunents\Exhibits\2006\06-19-06 Tropicana Loan Modifications (Exhibit AI_doc
July 1995
1993 to 1999
June 1999
June 1999
September 1999
2000 through
September 2002
February 2001
September 2002
September 2002
EXHIBIT "B"
Background Information and Fiuancing Time Line
Acquisition by Agency of fee title to Tropicana Mobile Home Park.
Agency expended $4,187,296 in furtherance of the San Bernardino mobile home
park conversion program; Agency Finance Department booked a loan for each of
the 8 mobile home parks on the Agency's records to allow for the possibility of a
repayment in the future.
Control of Non-profit corporation board of directors transferred to an
independent Board of Directors; Santiago Management is retained as the new
management company for the 8 Agency owned mobile home parks.
Management company commits in writing to loan up to $150,000 for each of 3
years to assist and stabilize the operations of the 8 mobile home parks; said
amount is now approximately $1,700,000 due to additional recreation center
construction work at Tropicana and other extraordinary repairs and
improvements at the other mobile home parks.
County Housing Authority acts as issuer for the 1999 Notes to refinance 7 of the
8 mobile home parks to reduce annual debt service and to allow new
management to stabilize operations. Ninth Street Mobile Home Park was
privately financed with a seller take-back tax-exempt financing upon its initial
acquisition by the Agency.
County Housing Authority issues "AAA" rated federally insured mortgage
revenue bonds for 6 of the 7 mobile home parks refinanced with the 1999 Notes.
Agency expected to receive $2,000,000 of the total $4,187,296 if all 7 of the
mobile home parks had been successfully refinanced with "AAA" rated
refunding bonds.
Agency loans $550,000 to the Non-profit Corporation to assist in funding
improvements to Tropicana Mobile Home Park and Orangewood Estates Mobile
Home Park. $154,270 is allocated to Tropicana and $395,730 is allocated to
Orangewood.
Tropicana debt owed to Agency is restructured so that the expected $2,000,000
will be a debt obligation of Tropicana; the difference of$2,187,296 will continue
to be a general debt of the Non-profit Corporation payable from surplus revenues
and residual receipts.
Non-profit Corporation obtains private commercial financing to provide for the
repayment of the debt owed by Tropicana under the 1999 Notes; Agency defers
$2,000,000 of funds that it was entitled to receive and secures such repayment
solely against Tropicana. $2,000,000 was held by the 1999 Notes Trustee and
was required to repay the final portion of the 1999 Notes.
I
P:\AgcndaslAgenda Attachmc:nts\fuhibitsl2006\06-19-06 Tropicana Loan Modificalions (Exbibil B).doc
EXHIBIT "B"
Background Information and Financing Time Line
January 2006
Non-profit Corporation requests Agency Staff to either assist in the refinancing
of Tropicana or to develop a financing scenario to allow Tropicana to be resold
to a private party free and clear of the restrictions of the Regulatory Agreement
upon remitting a prepayment amount.
June 30, 2006
Anticipated closing date on the partial repayment of the $550,000 Loan and the
repayment of the $2,000,000 Loan for a discounted prepayment amount.
2
P:\Agendas\Agenda Attacbmcnts\Exhibitsl2006\06-19-Q6 Tropicana Loan Modifications (Exhibit B)_doc
RESOLUTION NO.
2
RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION
OF THE CITY OF SAN BERNARDINO APPROVING AND
AUTHORIZING THE EXECUTIVE DIRECTOR OF THE
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
("AGENCY") TO EXECUTE AMENDMENT NO.1 TO THAT CERTAIN
2001 ACQUISITION, WORKING CAPITAL AND HOMEBUYER GRANT
ASSISTANCE LOAN AGREEMENT AND RELEASE OF THE 2001
REGULATORY AGREEMENT AND CANCELLATION OF THE
PROMISSORY NOTE RELATED THERETO BETWEEN THE AGENCY
AND THE CALIFORNIA MOBILE HOME PARK CORPORATION
(TROPICANA AND ORANGEWOOD MOBILE HOME PARKS)
(LOW/MOD HOUSING FUND)
3
4
5
6
7
8
9
WHEREAS, the Community Development Commission of the City of San Bernardin
10
(the "Commission") is the governing body of the Redevelopment Agency of the City of S
11
Bernardino (the "Agency"), a public body, corporate and politic, organized and existing pursuan
12
13
to the California Community Redevelopment Law (Health and Safety Code Section 33000, e
14
seQ.); and
15
WHEREAS, the Agency expended Agency funds on behalf of the mobile home par
16
conversion program for the initial analysis, due diligence and administrative and consultan
17
expenses in connection with the purchase of the Tropicana Mobile Home Park and seven (7
18
other mobile home parks (the "Parks") between July, 1995 and March 1996; and
19
WHEREAS, in May 1996, the Agency caused the formation of the San Bernardin
20
Mobile Home Park Corporation currently existing as the California Mobile Home Par
21
Corporation and then transferred its ownership interest in each Park to either the Corporation 0
22
one of its subsidiaries; and
23
WHEREAS, in an attempt to recoup a portion of its expenditures incurred prior to th
24
25
purchase of the Parks, Agency officials at that time acting on behalf of the Corporation,
controlled by the Agency, required the Corporation to execute eight (8) notes and eight (8) deed
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P:\Agendas~lolutiocu:\Resolutjow\2006\06-19-06 CA Mobile Home Pad. Tropicllllil Final CDC Rcso.doc
of trust (the "Park Reimbursement Obligations") securing the Park Reimbursement Obligation
2
for the benefit of the Agency; and
3
WHEREAS, in 1999, control of the Corporation and its subsidiaries was transferred to
4
independent non-profit Board of Directors to alleviate the further costs and time associated wit
5
Agency administration of the Corporation and also in 1999, in connection with the issuance b
6
the County of San Bernardino Housing Authority ("County Housing Authority") of it
7
$27,195,000 mortgage revenue notes (the "1999 Notes"), the Agency reconveyed the deeds 0
8
9
trust upon receipt of a new deed of trust securing the Park Reimbursement Obligations; and
10
WHEREAS, the County Housing Authority refunded all of the Parks included fo
11
financing in the 1999 Notes, except for the Tropicana Park, with GNMA Collateralized Bond
12
("Refunding Bonds"), and the Corporation applied a portion of the proceeds of the Refundin
13
Bonds to pay the Park Reimbursement Obligations in full upon the issuance of each series of th
14
Refunding Bonds; and
15
WHEREAS, the Agency then loaned low- and moderate-income housing funds to th
16
Corporation totaling $4,187 and executed a Note (the "2001 Note") and 2001 Regulato
17
Agreements (the "2001 Regulatory Agreements") which are recorded subordinate to
18
documents for each of the Refunding Bonds and recorded against the Tropicana Park; and
19
WHEREAS, the Tropicana project did not possess the financial strength to support th
20
21
issuance by the County Housing Authority of Refunding Bonds, and instead the Corporatio
22
obtained conventional financing to repay the portion of the 1999 Notes attributable to th
23
Tropicana Park; and
24
WHEREAS, III order to secure the Corporation's outstanding debt to the Agency
25
$2,000,000 of the original $4,187,296 Agency Loan was secured solely by the Tropicana Park
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P:\,AJcndalI\JlesolutioN\JWolurtol\$\20061ll6-19-06 CA Mobile Home Park. - Tropicana final CDC R.cso.doc
evidenced by a 2002 Note and 2002 Deed of Trust to the Agency in the amount of $2,000,000'
2
and
3
WHEREAS, the Agency loaned the Corporation $550,000 in 2001 (the "$550,000 Loan"
4
pursuant to a 2001 Acquisition, Working Capital and Homebuyer Grant Assistance Lo
5
Agreement dated February 8, 2001 ("2001 Loan Agreement"), to assist with upgrades an
6
repairs to both the Tropicana Park and the Orangewood Estates Park; and
7
WHEREAS, the Corporation now desires to sell the Tropicana Park and has offered t
8
9
pay the Agency $560,477.31 in full satisfaction of the outstanding balance of $474,274.4
10
(principal of$2M plus interest of $474,274.40) on the $2,000,000 Loan; and
11
WHEREAS, in connection with the sale of the Tropicana Project, also the Corporatio
12
has represented to the Agency that it intends to pay $154,270 of the $550,000 Loan and h
13
requested that the Agency agree to transfer the remaining balance of $395,730 to th
14
Orangewood Estates Park (in the event that HUD approves such transfer) and another propert
15
owned by the Corporation located in Los Angeles County (the "LA County Property") as
16
modification to the $550,000 Loan; and
17
WHEREAS, the Commission has duly considered the terms of such transactions as
18
contemplated herein and finds that approval of said transactions at this time is in the best
interests of the Agency.
19
20
NOW, THEREFORE, THE COMMUNlTY DEVELOPMENT COMMISSION OF THE
CITY OF SAN BERNARDINO DOES HEREBY RESOLVE, DETERMINE AND ORDER, AS
FOLLOWS:
21
22
23
Authorization of Full Satisfaction of 2 000 000 Loan and Authorizatio
Section 1.
24
of Amendment No. I to $550.000 2001 Loan Agreement. The Commission hereby authorize
25
and approves the forgiveness of a portion of the $2,000,000 Loan, as follows:
.3.
P:\AgmdaslJlesokations\Resolutioosl2006\06-I9-06 CA Mobile Home Park - Tropicana Fuw CDC Ite$o,doc
2
Original Loan Amount $2,000,000.00
3
Accrued Interest to 6/30/06 $474,274.40
Less Credit ($913.797.09)
Total $1,560,477.40
4
5
6
The Commission further approves acceptance of a partial payment on the $550,000 2001
7
Loan in the amount of $154,270 and the transfer of the balance of $395,730 thereon to th
8
Orangewood Estates Park (in the event that HUD approves such transfer) and the LA Count
9
Property in accordance with Amendment No. I to the 2001 Loan Agreement (the "Amendmen
10
No. I") between the Corporation and the Agency substantially in the form attached hereto
11
together with any changes therein or additions thereto as may be approved by the Executiv
12
13
Director of the Agency and Agency Counsel. The Executive Director or his/her designee, ar
14
hereby authorized and directed to execute said Amendment No.1.
15
The authorizations as granted herein shall remain in full force and effect for ninety (90
16
days from and after the date of this Resolution and the approval hereof by the Commission.
17
the event that the Tropicana Park has not sold, together with the remittance of the required fund
18
to the Agency, on or before September 19, 2006, the approvals as granted herein shall expire an
19
be of no further force or effect after said date; provided, further, that the amount to be paid to th
20
Agency upon such sale of the Tropicana Park shall be not less than the amount set forth abov
21
which is equal to $1,560,477.40 should the sale occur after June 30, 2006, but prior to Septembe
22
19,2006.
23
Section 2. Official Action. The Executive Director of the Agency and Agency Counse
24
25
are hereby authorized and directed, on behalf of the Agency, to do any and all things and to tak
any and all actions, including execution and delivery of reconveyances, certificates, agreements
-4-
P:\Aa;mdas\ResGlutioDl\Rcsolulions\2006\06-19-06 CA Mobile Home Park - TropK:ana Final CDC Reio,dol;
notices, consents, instruments of conveyance and other documents as may be approved b
2
Executive Director and Agency Counsel and as may be reasonably necessary or advisable i
3
connection with transactions contemplated hereby.
4
Section 3.
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The Resolution shall become effective immediately upon its adoption.
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P:\Agendas\Resolutions\Rc:llOlutioos\20061,()6..19..06 CA Mobile"()fl1e Park. Tropicana FirnU CDC Rao.dcx;
2
RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION
OF THE CITY OF SAN BERNARDINO APPROVING AND
AUTHORIZING THE EXECUTIVE DIRECTOR OF THE
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
("AGENCY") TO EXECUTE AMENDMENT NO.1 TO THAT CERTAIN
2001 ACQUISITION, WORKING CAPITAL AND HOMEBUYER GRANT
ASSISTANCE LOAN AGREEMENT AND RELEASE OF THE 2001
REGULATORY AGREEMENT AND CANCELLATION OF THE
PROMISSORY NOTE RELATED THERETO BETWEEN THE AGENCY
AND THE CALIFORNIA MOBILE HOME PARK CORPORATION
(TROPICANA AND ORANGEWOOD MOBILE HOME PARKS)
(LOW/MOD HOUSING FUND)
3
4
5
6
7
8
I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the
9
Community Development Commission of the City of San Bernardino at a
meeting
, 2006, by the following vote to wit:
Navs
Abstain
Absent
Secretary
20 The foregoing resolution is hereby approved this
day of
,2006.
21
22
23
Patrick J. Morris, Chairperson
Community Development Commission
of the City of San Bernardino
24 Approved as to Form and Legal Content:
By: C/~M j
Agency C~ f/ 1-
25
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P:\Agendas\Rcsolutions\Rcsolutlol\$\2006\06-19-06 CA Mobile HOlm 'ark - Tropicana Final CDC Reso.dox:
AMENDMENT NO.1
TO THE 2001 ACQUISITION, WORKING CAPITAL AND HOMEBUYER GRANT
ASSISTANCE LOAN AGREEMENT
AND ACKNOWLEDGEMENT OF SATISFACTION OF A 2001
$2,000,000 LOAN AND RELEASE OF REGULATORY AGREEMENT
THIS AMENDMENT NO. 1 TO THE LOAN AGREEMENT ("Amendment") made and
entered into as of June 19,2006, by and between THE CALIFORNlA MOBILE HOME PARK
CORPORATION, a California public benefit corporation (the "Corporation") and the
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, a public body,
corporate and politic duly organized and existing under the laws of the State of California (the
"Agency") hereby modifies and amends that certain 2001 Acquisition, Working Capital and
Homebuyer Grant Assistance Loan Agreement dated February 8, 2001 (the "$550,000 Loan")
and acknowledges satisfaction of that certain 2002 Agency Note and the release and
reconveyance of a certain Regulatory Agreement (the "$2,000,000 Note"), as follows:
WIT N E SSE T H:
WHEREAS, the Agency expended Agency funds on behalf of the mobile home park
conversion program for the initial analysis, due diligence and administrative and consultant
expenses in connection with the purchase of the Tropicana Mobilehome Park and seven (7) other
mobilehome parks (the "Parks") between July 1995 and March 1996; and
WHEREAS, in May 1996, the Agency caused the formation of the San Bernardino
Mobilehome Park Corporation currently existing as the California Mobile Home Park
Corporation and then transferred its ownership interest in each Park to either the Corporation or
one of its subsidiaries; and
WHEREAS, in an attempt to recoup a portion of its expenditures incurred prior to the
purchase of the Parks, Agency officials at that time acting on behalf of the Corporation, as
controlled by the Agency, required the Corporation to execute eight (8) notes and eight (8) deeds
of trust (the "Park Reimbursement Obligations") securing the Park Reimbursement Obligations
for the benefit of the Agency; and
WHEREAS, in 1999, control of the Corporation and its subsidiaries was transferred to an
independent non-profit Board of Directors to alleviate the further costs and time associated with
the Agency administration of the Corporation and also in 1999, in connection with the issuance
by the County of San Bernardino Housing Authority ("County Housing Authority") of its
$27,195,000 mortgage revenue notes (the "1999 Notes"), the Agency reconveyed the deeds of
trust upon receipt of a new deed of trust securing the Park Reimbursement Obligations; and
WHEREAS, the County Housing Authority refunded all debt previously recorded against
the seven (7) Parks refinanced with the 1999 Notes, except for the Tropicana Park, with GNMA
Collateralized Bonds (the "Refunding Bonds"), and the Corporation applied a portion of the
proceeds of the Refunding Bonds to pay the Park Reimbursement Obligations in full upon the
issuance of each series of the Refunding Bonds; and
4815-1966-6689.3
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P:lAaendaslAgmda Attachmmt$\Agrtth-Amcnd 2006\06-19-06 Amendmenl No. 110 Loan Agreements - Tropicana<kx:
WHEREAS, the Agency then loaned low and moderate income housing funds to the
Corporation totaling $4,187,296 (the "2001 Loan")and executed a 2001 Loan Agreement (the
"2001 Loan Agreement"), a Note (the "2001 Note") and 2001 Regulatory Agreement (the "2001
Regulatory Agreements") which are recorded subordinate to each of the GNMA Collateralized
Bonds documents and recorded against the Tropicana Park as well; and
WHEREAS, the Tropicana Park was unable to evidence the financial strength to support
the issuance by the County Housing Authority of GNMA Collateralized Bonds, and instead the
Corporation obtained conventional financing to repay the portion of the 1999 Notes attributable
to the Tropicana Park; and
WHEREAS, in connection with the conventional financing, in order to secure the
Corporation's outstanding debt to the Agency, $2,000,000 of the original $4,187,296 Agency
Loan was secured solely by the Tropicana Park as evidenced by a 2002 Note and 2002 Deed of
Trust to the Agency in the amount of $2,000,000 plus a Regulatory Agreement continued to be
recorded against the Tropicana Park; and
WHEREAS, the Agency loaned the Corporation $550,000 in 2001 (the "$550,000 Loan")
pursuant to a Loan Agreement dated February 8, 2001, to assist with upgrades and repairs to both
the Tropicana Park and the Orangewood Project; and
WHEREAS, the Corporation now desires to sell the Tropicana Park and has offered to
pay the Agency $1,560,477.31 in full satisfaction of the outstanding balance of $2,474,274.40
(principal of $2,000,000.00 plus interest of $474,274.40) on the $2,000,000 Loan; and
WHEREAS, also in connection with the sale of the Tropicana Park, the Corporation has
represented to the Agency that it intends to pay $154,270 of the $550,000 Loan (representing the
amount thereof expended on the Tropicana Park) and has requested that the Agency agree to
transfer the remaining balance of $395,730 to the Orangewood Project (in the event that HUD
approves said transfer) and certain property owned by the Corporation located in Los Angeles
County (the "LA County Property"); and
WHEREAS, the Agency has duly considered the terms of such transactions as
contemplated herein and finds that approval of said transactions at this time is in the best
interests of the Agency.
NOW, THEREFORE, THE CALIFORNIA MOBILE HOME PARK CORPORATION
AND THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO HEREBY
AGREE, AS FOLLOWS:
Section 1. Covenants and Duties of the Corporation.
A. The Corporation hereby agrees to pay the Agency $1,560,477 .31 (representing the
amount of the $2,000,000 Loan plus accrued interest calculated through and including June 30,
2006, equal to $474,274.40 less the Agency forgiveness amount which is equal to $913,797.09)
on the Closing Date which date shall be the date escrow closes on the sale of the Tropicana Park
which amount shall represent the full payment of the $2,000,000 Loan.
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P:\AactJdas\Agenda Attachrnents\Agrnu-Amcnd 2006\06-19-00 Amendment No. 110 Loan Agreements " Tropicana.dol;
B. The Corporation hereby agrees to pay the Agency $154,270 (representing the
amount of a partial payment on the $550,000 Loan) and the Corporation shall execute and
deliver a 2006 Note to the Agency in the amount of $395,730 which note shall be secured by a
2006 Deed of Trust and 2006 Regulatory Agreement. The Corporation shall cause the 2006
Deed of Trust and 2006 Regulatory Agreement each dated as of June I, 2006, to be recorded
against the Orangewood Project (as herein provided) and the LA County Property. Said 2006
Note shall only secure the amount of $395,730 and the Agency shall release and remove the lien
of the 2006 Deed of Trust and Regulatory Agreement on both parcels of property when the said
note is paid in full.
C. The amount to be paid to the Agency from subsections A and B above are further
described, as follows:
$1,560,477.31
Representing the amount of the $2,000,000 Loan plus accrued and
unpaid interest less the Agency forgiveness amount of$913,797.09
$154,270
representing the amount of a partial payment on the $550,000 Loan
$1,714,747.31
Total
The forgiveness amount with respect to the $2,000,000 Loan shall be calculated on the
basis of the percentage figure derived from (i) the total number of days that the Corporation
through its ownership of the Tropicana Park was in compliance with the original Regulatory
Agreement recorded against the Tropicana Park upon its acquisition by the Agency (i.e., 4,047
days), divided by (ii) the total number of days for which the Regulatory Agreement as recorded
against the Tropicana Park upon the Agency acquisition thereof was intended to be in effect (i.e.,
30 years or 10,958 days). Such resulting percentage figure of36.9319% shall then be multiplied
against the principal balance of the $2,000,000 Loan, plus accrued and unpaid interest, to
determine the forgiveness amount applicable as of any date of calculation.
Such accrued interest and forgiveness figures shall be recalculated by the Agency in the
event the actual final payment date as contemplated herein is a date earlier or later than June 30,
2006.
Section 2. Covenants and Duties of the Al!encv. Upon receipt of the amounts set forth
in Section I hereof, the Agency shall:
1. Release and reconvey the 2001 Regulatory Agreement and the 2002 Deed of
Trust and cancel the 2002 Note, thereby releasing all liens and encumbrances of the Agency on
the Tropicana Park related to the $2,000,000 Loan.
2. Release and reconvey the 2001 $550,000 Note and the 2001 $550,000 Deed of
Trust upon the (i) delivery of the funds set forth in Section 1(2) above, (ii) the execution and
delivery of the 2006 Note in the amount of $395,730 and the 2006 Deed of Trust and 2006
Regulatory Agreement securing the 2006 Note and (iii) the recording of the 2006 Deed of Trust
and 2006 Regulatory Agreement in the official records of the County of San Bernardino and the
County of Los Angeles.
48IS-1966-{)689.3
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P:\Agendas\Agenda Attachrncms\Agrnu-Amend 2006\06.19-06 Amendment No. I to Loan AgTcemcnts. Tropicana.doc
Section 3. Entire Al!reement: Amendment. This Amendment represents the entire
agreement between the parties in connection with the $2,000,000 Loan and $550,000 Loan
except as evidenced in the 2006 Note, 2006 Deed of Trust and 2006 Regulatory Agreement;
provided, however, that this Amendment does not effect the terms and conditions of the 2001
Loan evidenced by the 2001 Loan Agreement in connection with the obligations, duties and
covenants of the Corporation with respect to property or Parks other than the Tropicana Park.
This Amendment may be amended by the parties hereto by a writing signed by both parties.
Section 4. Pavment of Business Davs. Whenever in this Amendment any amount is
required to be paid on a day which is not a Business Day, such payment shall be required to be
made on the Business Day immediately following such day.
Section S. Notices. All written notices to be given under this Amendment shall be given
by first class mail or personal delivery or by telecopier and promptly confirmed by mail, to the
party entitled thereto at its address set forth below, or at such address as the party may provide to
the other party in writing from time to time. Notice shall be effective forty-eight (48) hours after
deposit in the United States mail, postage prepaid or, in the case of any notice to the Trustee or in
the case of personal delivery to any person, upon actual receipt at the address set forth below:
To the Agency:
Redevelopment Agency of the City of San Bernardino
201 North "E" Street, Suite 301
San Bernardino, California 92401-1507
To the Corporation:
The California Mobile Home Park Corporation
1551 North Tustin Avenue, Suite 550
Santa Ana, California 92705
Section 6. Partial Invalidity. If any Section, paragraph, sentence, clause or phrase of
this Modification Agreement shall for any reason be held illegal, invalid or enforceable, such
holding shall not affect the validity of the remaining portions of this Amendment.
Section 7. Governinl! Law. This Agreement shall be construed and governed in
accordance with the laws ofthe State.
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4815-1966-6689.3
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P:\Apldas\Aaenda AttacIunmts\Agnm-Amend 2006\06.19-06 Amendment No. I to Loan Agn:cments _ Tropicana.doc
IN WITNESS WHEREOF, the Redevelopment Agency of the City of San Bernardino
and the California Mobile Home Park Corporation have caused this Amendment to be signed by
their respective officers, all as ofthe day and year first above written.
REDEVELOPMENT AGENCY OF
CITY OF SAN BERNARDINO
Dated:
By:
Maggie Pacheco, Executive Director
Approved as to Form and
Legal Content:
\ j~1--
Agency Counsel
THE CALIFORNIA MOBILE HOME
PARK CORPORATION
Dated:
By:
President
4815-1966-<;689.3
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P:\Agendas1Agcnda Attachmcnts\AgmU-Amend 2006\()6...19-06 Amendment No. 110 Loan Agreemenu _ Tmpicana,doc
IN WITNESS WHEREOF, the Redevelopment Agency of the City of San Bernardino
and the California Mobile Home Park Corporation have caused this Amendment to be signed by
their respective officers, all as of the day and year first above written.
REDEVELOPMENT AGENCY OF
CITY OF SAN BERNARDINO
Dated:
By:
Maggie Pacheco, Executive Director
Approved as to Form and
Legal Content:
A~~
THE CALIFORNIA MOBILE HOME
PARK CORPORATION
Dated:
By:
President
4815-1966-6689.3
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P:\Agendas\Agenda Attaclunents\AgmU-Amcnd 2006\06-19-06 Ameodment No. 110 Loan Agreemenl$ - Tropicanadoc
IN WITNESS WHEREOF, the Redevelopment Agency of the City of San Bernardino
and the California Mobile Home Park Corporation have caused this Amendment to be signed by
their respective officers, all as of the day and year first above written.
REDEVELOPMENT AGENCY OF
CITY OF SAN BERNARDINO
Dated:
By:
Maggie Pacheco, Executive Director
Approved as to Form and
Legal Content:
c/~
Agency Counsel
THE CALIFORNIA MOBILE HOME
PARK CORPORATION
Dated:
By:
President
4815-1966-6689.3
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