HomeMy WebLinkAboutR47-Economic Development Agency
ECONOMIC DEVELOPMENT AGENCY
OF THE CITY OF SAN BERNARDINO
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FROM: Maggie Pacheco
Executive Director
SUBJECT: Tuscany Apartments located at 2225 East
Pumalo - Consent to sale of Property (Multi-
Family Housing Revenue Bond Program)
DATE:
June 27, 2006
Svnopsis ofPrevions Commission/Council/Committee Action(s):
On April I, 1996, the Community Development Commission authorized the Agency to issue approximately $7 million in
multi-family housing revenue bonds on behalf of Magellan Silverwood Partners to purchase and rehabilitate the Silverwood
Park Apartments located at 2225 East Purnalo, San Bernardino.
On September 17, 2001, the Community Development Commission authorized the sale of Silverwood Park Apartments to
San Bernardino 328/AF XXX, LC, an affiliate of Van Dae1e Communities, LLC.
On April 21, 2003, the Community Development Commission authorized and approved San Bernardino 328/AF XXX, LLC,
sale of the Tuscany Apartments (formerly known as Silverwood park) to MG Tuscany Apartments, L.P.
On June 6, 2006, the Redevelopment Committee recommended that this item be forwarded to the Community Development
Commission for approval.
Recommended Motion(s):
(Communitv Develonment Commission)
Resolution of the Community Development Commission of the City of San Bernardino (I) approving the
sale of Tuscany Apartments (the "Property") to Capital Foresight Limited Partnership and (2) approving
and authorizing the Executive Director of the Redevelopment Agency of the City of San Bernardino
("Agency") to execute an Assumption Agreement related to the sale of the Property
Contact Person(s):
Project Area(s):
Maggie Pacheco
Phone:
(909) 663-1044
Four (4)
IVDA
Ward(s):
Supporting Data Attached: 0 Staff Report 0 Resolution(s) 0 Agreement(s)/Contract(s) 0 Map(s) 0 Letters
FUNDING REQUIREMENTS: Amount: $
N/A
Source:
N/A
l1J ~:iliori' ~'" (pUJu N~LIr;
aggie Pachaco, Executive Director arbara J. Lindseth, Admin. Services Director
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SIGNATURE:
P:\A&enduIComm Dev CommlulonlCDC 2006\07-10-06 Tusuny Apts.doc
COMMISSION MEETING AGENDA
Meeting Date: 07/10/2006
Agenda Item Number: ~
ECONOMIC DEVELOPMENT AGENCY
STAFF REPORT
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TUSCANY APARTMENTS
LOCATED AT 2225 EAST PUMALO - CONSENT TO SALE OF PROPERTY
(MUL TI-FAMIL Y HOUSING REVENUE BOND PROGRAM)
BACKGROUND:
On April 1, 1996, the Community Development Commission of the City of San Bernardino
("Commission") authorized the Agency to issue approximately $7 million in multi-family housing
revenue bonds (the "Bonds") on behalf of Magellan Silverwood Partners ("Magellan") to purchase
and rehabilitate the Silverwood Park Apartments located at 2225 East Pumalo, San Bernardino (the
"Property"). The Property consists of 328 housing units of which 66 of the housing units are set-
aside for households whose incomes do not exceed 50% of the median income pursuant to an Agency
Regulatory Agreement.
In August 2001, the Commission authorized and approved the sale of the Property by Magellan
Silverwood Partners to San Bernardino 328/AF XXX, LLC, an affiliate of Van Daele Communities,
LLC, who assumed the bonds and obtained secondary financing (approximately $4.2 million) to
perform multiple improvements and repairs to the Property.
In September 2003, the Property was sold by San Bernardino 328/AF XXX, LLC to MG Tuscany
Apartments, L.P. ('Tuscany"). Now, Tuscany has entered into a Purchase and Sale Agreement dated
April 28, 2006, with The Capital Foresight Limited Partnership, a Nevada Limited Partnership for the
sale of the Property, as amended by a First Amendment to the Purchase and Sale Agreement and Joint
Escrow Instructions dated as of May 15, 2006 (as so amended, the "Purchase Agreement").
CURRENT ISSUE:
The Capital Foresight Limited Partnership is proposing to purchase the Property for approximately
$24,600,000 payable by (i) the assumption of the bond financing, which is outstanding in the
approximate amount of $6,750,000; (ii) assumption of a second deed of trust in the amount of
$6,218,000; and (iii) cash in the amount of $11,282,000. The closing date is scheduled for July 31,
2006. The Buyer has a right to extend the closing until August 31, 2006.
The principal in this transaction is Netanel "Naty" Saidoff and his two primary entities. Those
entities are The Capital Foresight Limited Partnership and SaidoffEnterprises, LLC. Mr. Saidoffwill
form two single purpose entities to hold title to the Property, as tenants-in common, Capital Foresight
Tuscany I, L.P. and Capital Foresight Tuscany II, L.P. (collectively, "Buyer"). Mr. Saidoffhas been
involved in the acquisition, development and rehabilitation of real estate projects for almost twenty
years. His entities are closely held real estate investment partnerships and limited liability companies
which owns a number of commercial and residential properties throughout the western and south
western United States. He estimates that his entities make acquisitions of $ I 00-$250 million per year
P:\ACtndUIComm Dcv CommwioalCDC 2006\01-10-06 T".lo(".n~- Apts.doc
COMMISSION MEETING AGENDA
Meeting Date: 07/10/2006
Agenda Item Number: E91-
Economic Development Agency Staff Report
Tuscany Apartments
Page Number -2-
and will continue to do so for the next five years. Currently, the Property is in good condition. The
Buyer does not plan to make any immediate improvements to the Property except for some roof
repairs because the Property is in relatively good condition. The Buyer employs Cannon
Management (Cannon) to manage all of its Inland Empire apartment units. Cannon currently
manages a portfolio of 14,000 apartment and condominium units; 10,000 plus of the units are in the
Inland Empire. Out of the 10,000 units managed in the area, approximately 7,000 units are multi-
family communities. Both the Buyer and Cannon have extensive experience in dealing with bond-
financed housing projects; thereby, affording them the opportunity to administer the on-going
monitoring requirements associated with the Affordable Housing Units (see attachment). Tuscany
has been a participant in the Crime Free Rental Program in the past, and the new manager has
requested enrollment in the program. The Agency is required by the Regulatory Agreement to
monitor the compliance of the Buyer to ensure that certain units within the Property are made
available to low income tenants at affordable rents.
On or prior to December 31, 2007, the Buyer desires the right, in its sole option and election, to admit
a non-profit entity (a "Non-Profit") as a general partner in each of the partnerships which comprise
the Buyer (Capital Foresight Tuscany I, L.P. and Capital Foresight Tuscany II, L.P.) and has therefore
requested a provision in the assumption documents in which the Agency will grant prior approval of
the admission of the Non-Profit general partners.
In accordance with the documents executed in connection with the issuance of the Bonds, the Agency
must consent to the sale of the Property from Tuscany to the Buyer and approve the Assumption
Agreement to confirm assumption of the bond debt. The Agency must also consent to the subsequent
admission of the Non-Profit general partners. The Agreement for Legal Counsel Services with Lewis
Brisbois Bisgaard & Smith, LLP ("Agency Counsel"), dated May 1,2006, requires the Commission
to direct Agency Counsel to provide bond counsel services in accordance with its standard schedule
of professional services fees. Hence. it is recommended that Agency Counsel provide services as
Agency Bond Counsel for this transaction and said expenses shall be paid by the Buyer.
The documents that the Buyer will assume include the Loan Agreement. Regulatory Agreement and
Note.
ENVIRONMENTAL DETE&'\1INATION:
Not applicable.
FISCAL IMP ACT:
None. The Bonds are not a liabilitv or debt of the Agencv or the Citv because the Bonds are secured
~ ...."'"'
by the Property revenue and a letter of credit provided on behalf of the Buyer by FANNIE MAE.
The Buyer will be required to pay all of the Agency's legal expenses and administration expenses for
work associated with the sale of the Property.
P:\Altnd:u\ClJmlft De_ Commi..ion"CDC l0Q6\O'.IG.G6 Tusuny '\ph.d~
COMMISSION MEETING AGENDA
Meeting Date: 0711012006
Agenda Item Number: It tJ ,_
Economic Development Agency Staff Report
Tuscany Apartments
Page Number -3-
RECOMMENDATION:
That the Community Dev
ment Commission adopt the attached Resolution.
y~
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P:'ACtndu\Comm Dto. Comminion.CDC 2006\01.10..06 Tlllun) Apls.doc
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COMMISSION MEETING AGENDA
Meeting Date: 07/1012006
Agenda Item Number: R Cf1_
~G PROPERTIES
lUJ.!!J INVESTMENT REAL ESTATE
May 5, 2006
via e-mail and regular mail
Ms. Maggie Pacheco
Executi ve Director
Economic Development Agency
City of San Bernardino
201 North "E" Street, Suite 30l
San Bernardino, CA 92401
,
Re: TUSCANY APARTMENTS - 328-Units, San Bernardino, CA
Variable Rat.e Demand Multifamily Housing Revenue Bonds
(Silverwood Apartments Project) - Series 1996
Request for Assumption/Assignment
Dear Ms. Pacheco:
MG Tuscany Apartments, L.P.has entered into a contract to sale the Tuscany Apartments
located at 2225 E. Pumalo Street in San Bernardino, CA. The prospective Buyer, Capital
Foresight, would like to assume the eXisting city-issued bonds mentioned above.
Pursuant to the Bond's Regulatory Agreement, we are requesting the City's approval of
a Bond Assumption/Assignment to the Buyer.
Capital Foresight, based in Bel Air, CA and headed by Naty SaidotT, has been one of the
most active apartment investors in the Inland Empire region. Capital Foresight employs
Cannon Management to' manage all of their Inland Empire apartment properties, one of
which is the Lido Apartments (540 units) on Kendall Drive in San Bernardino. Both
Capital Foresight and Cannon Management are very experienced in the ownership and .
. management of apartment properties encumbered with tax-exempt bonds and regulatory
agreements, and they should do an excellent job with the Tuscany Apartments. Attached
for your reference is a corporate profile for Capital Foresight, which highlights their
organizational structure and acquisitions since 2002.
Cannon Management (Cannon) will handle management operations for the Buyer, and
their corporate resume is attached. Cannon, based in Riverside, is recognized as on\: of
the very best third party management companies in the Inland Empire region. Cannon
currently manages a portfolio of approximately 14,000 apartment and
condominiums units, with approximately 75% of these units located in the greater Inland
Empire. Within the City of San Bernardino, Cannon currently manages Cresthaven (300
units), Ridgeline (160 units), and Lido (540 units).
10505 SorrenlO Valley Road. Suite 300. San Diego, California 92121-1608
Ph (858) 658-0500 . Fax (858) 526-0800. www.mgproperties.com ~
Assumption/Assignment of Bonds - Buyer Profile
Tuscany Apartments
Page 2
Cannon also has extensive experience with the management and operation of apartment
properties with bonds, regulatory agreements, and affordability restrictions. Cannon
currently manages 4 properties with regulatory agreements, and in the past has managed
the subject property for Van Daele Development, when it was known as Silverwood
Park. Cannon is extremely familiar with the property, the regulatory agreement, and the
requirements of the City of San Bernardino.
Please do nol ho:sitato: to contact me if you need further information or if you have any
questions.
~in E. th
Vice President - Acquisitions
Attachment
cc: Mark Gleiberman - MG Properties
Paul Runkle - Hendricks & Partners
Corporate Structure
Business Profile
Introduction
Capital Foresight
Progress through Integrity
Capital Foresight is a closely-held holding company with special interests in real estate
investment, real estate development and redevelopment, asset management,
condominium conversion, tenant-in-common facilitation, and debt and equity finance.
The principal and founder of Capital Foresight is Mr. Netanel "Naly" Saidoff. Mr.
Saidoff began investing in real estate in 1989 with a vision of preserving capital and
increasing net worth. Over almost two decades, Capital Foresight has grown into a
well-diversified real estate investment company with a vast portfolio of commercial,
residential and special purpose properties throughout the Western and Southwestern
Regions of the United States.
Capital Foresight takes pride in its distinct transaction record. Capital Foresight has
a sterling reputation for judging markets and properties, for timely execution and
performance, and for achieving greater than expected returns on its major investments.
Capital Foresight places a strong premium on quality, enduring business relationships.
Core business ethics of integrity, dependability, and loyalty stand at the base of these
relationships, and at the base of Capital Foresight's growth and continued success.
Capital Foresight's key real estate investment classes include residential income,
assisted living, retail, office and industrial properties in major submarkets throughout the
United States. Principal value-added strategies include condominium conversion,
tenant-in-common formation, land entitlement and development. Primary assets are
currently held in California, Texas and Colorado. The firm now possesses a significant
portfolio of whole and majority interests in real estate with a total value well into the nine
figure range. Capital Foresight's vision is to expand its holdings of large properties in
strong Southern California submarkets and to establish a presence in emerging
domestic markets that exhibit escalating demographic and economic trends.
Opportunities in overseas markets are also being explored.
Future real estate activity will continue to include exchanges and acquisitions of $100-
to $250-million per year over the next five years. Individual real estate transactions
typically range from $5- to $50-million.
Constant exposure to a variety of real estate assets, with an eye focused on under
utilized and idle resources across the country, positions Capital Foresight to quickly
respond to new investment opportunities. Identifying, acquiring and repositioning idle
resources enable Capital Foresight to realize exceptional performance.
.. CAPITAL
BlIJUI FORESIGHT
'.i..II'..I..,.,. ".'41_"
Corporate Structure
Business Profile
Creating opportunities for individual home ownership remains a core business focus.
Proactive entitlement and renovation efforts enable tenants to become home owners.
Capital Foresight's goal is to support strong families; vitalize communities; and.
enhance prospects for individuals to obtain the American Dream.
Capital Foresight's outstanding performance and steady long-term growth spanning
multiple business cycles has attracted the attention of major institutional investment
firms. New partnership opportunities with institutional and major account customers
propel Capital Foresight along new avenues of investment activity. Capital Foresight
is now positioned to strategically transform itself from an exclusive private real estate
owner into a corporate facilitator oriented toward large. co-equity transactions.
With a long track record of success and an internal structure of checks and balances.
Capital Foresight is an ideal investment partner for institutions that wish to place funds
in real estate ventures. Proprietary contractual and financial models may be offered to
add value. boost operations. mitigate some of the potential risks associated with volume
transactions and maximize total profits.
Sensing Opportunity
Applying New Perspectives
Performing Every Time
Agility and speed help Capital Foresight scale hurdles. navigate around unforeseen
obstacles. and consistently stay ahead of the market. Focused core management keeps
the organization on course. Independent profit centers and wholly-owned subsidiaries
facilitate top performance. With a clear focus on the finish line. Capital Foresight is
racing toward new possibilities.
Capital Foresight's Core Management Group consists of six principal offices. All
divisions report to the Office of the President. Strategic divisions include the Office of
Legal Affairs. the Office of Corporate Finance. the Office of Development Services. the
Office of Asset Management and the Office of Client Services. Each office is led by a
director with the knowledge. expertise and dedication to implement fluid strategies and
achieve maximum success.
Idealism and Capitalism
Align Here, Where People Are Empowered
To Achieve Their Greatest Potential
.. CAPITAL
IIl1llUl FORESIGHT
'.'4.11 e..II...I. ....41...
Corporate Structure
Business Profile
Office of the President
Naty Saidoff. President and Principal
Naty Saidoff is the Founder, President, and Principal of Capital Foresight. Naty is
responsible for presenting strategic plans, directing all negotiations and investments,
providing management oversight, and developing business models and profit centers
intended to fulfill all short- and long-term goals of the company.
Naty founded Capital Foresight, a closely-held real estate investment and holding
company in 1991. His early investments were localized in Austin, Los Vegas, and
Salinas. Utilizing exclusively his own, private equity, Naty expanded Capital Foresight
into several major domestic housing markets to include a portfolio valued well into the 9-
figure-range. Naty's personality and vision is evident both in Capital Foresight's office
culture and in the quality relationships Capital Foresight maintains with lending
institutions, contractors, and consultants.
Prior to founding Capital Foresight Naty was the Founder and Principal of N. Said off &
Co., a diamond importing company with offices in Los Angeles and Tel Aviv. Naty is
highly involved with several communal and political non-profit organizations.
Naty was born and raised in Israel and came to the United States post army. Attended
UCLA where he received a BS with high honors in economics.
Scott W. Gray, Director of Operations
Scott W. Gray is a 25-year real estate veteran who joined forces with Capital Foresight
in 2005. Scott is responsible for the creation, monitoring and execution of individual
property and portfolio performance reviews. Scott utilizes his understanding of the real
estate market, demographic and economic trends to make acquisition and disposition
recommendations and to formulate strategic plans to maximize property performance
and investment on returns.
Scott's experience includes real estate valuation, investment analysis, business
management, project entitlement and land use planning. During the three years prior to
joining Capital Foresight, Scott facilitated the listing and sale of $900,000,000 worth of
residential income property, in which over 9,000 apartment units were exchanged. Scott
managed a $680,000,000 mixed-use real estate portfolio while holding the position of
Vice President and Chief Appraiser of Hemet Federal Savings, which was ultimately
acquired by Guaranty Bank, a subsidiary of the Temple-Inland Corporalion. As a private
consultant, Scott assists a variety of private and institutional clients with their real estate
purchase, sale and finance decisions throughout California, Arizona, Nevada, Texas,
Florida and Maryland.
.. CAPITAL
IIl1lllD FORESIGHT
1.14..,. 1..11,1.,. ".14.-,.
Corporate Structure
Business Profile
Scott obtained his Bachelor of Arts degree from San Jose State University in 1981, with
a major in Political Science, concentration in Public Administration, and a minor in
Urban Studies.
Ravital Katz, Corporate Secretary
Ravital Katz, Corporate Secretary, has been with Capital Foresight since its inception.
Ravital oversees office management, security and human resources. Ravital reviews
and analyzes insurance policies, maintains banking relations, and authorizes vendor
payments. Ravital is chiefly responsible for overseeing private accounts. She executes
and issues check and wire payments, and assists the Office of Finance in overseeing
accounts, payments and book keeping. In addition, Ravital assists with administrative
tasks and operational duties including, but not limited to phone and filing support.
Ravital brings many years of executive support experience to Capital Foresight. She
also has extensive organizational leadership experience. Prior to the formation of
Capital Foresight, Ravital held similar positions at N. Saidoff & Co. and various other
organizations.
Efrat Grimberg, Office Administrator
Efrat Grimberg is Capital Foresight's Office Administrator. Her work includes file system
management, clerical duties, telephone operations, and completion of special projects.
Efrat works closely with all members of the office and provides back-up support to the
firm's principals.
Efrat brings her experience both in banking and as a personal assistant to her position
in Capital Foresight. Efrat is presently studying Business Management at California
State University, Northridge.
.. CAPITAL
III.lllUl FORESIGHT
.. I ~. II ... I ....,. ",I ~,...
Corporate Structure
Business Profile
2004 Transactions
1. Readcrest - House in Beverly Hills
Location:
Terms:
Broker:
Beverly Hills, CA
Cash
DBL Realtors - Barry Fields (310) 888-3740
2. 701 Technology Partners
Purchased 10% interest in Class A 200,000 sf office building. Seller was Daimler-
Benz of Germany.
Location:
Reference:
Terms:
Pittsburgh, PA
Doug Engel (713) 963-0963
Cash
3. Apple Ridge Associates, LLC - Senior/Assisted Living
Location:
Reference:
Terms:
Denver, CO
Gil Berkovich (303) 534-2377
Cash
4. Valencia Studios
Bought note from Laurus Master Fund for $7.4 million cash.
5. Valencia Studios
Movie Studios in Valencia.
Location:
Terms:
Valencia, CA
Cash at auction
6. Franklin - 91-Unit Apartment Building
Location:
Terms:
Broker:
Los Angeles, CA
Cash
RE/MAX COMMERCIAL Ziv Kozaski (818) 205-2129
.. CAPITAL
IlUJij] FORESIGHT
1....11 '..11...,. "014io,.
Corporate Structure
Business Profile
7. Castroville
8,700 sf building with Texas State lease
50,000 sf building with Texas State lease
Location:
Terms:
Broker:
San Antonio, TX
Cash through loan at closing
Michael Hoover, DB Harrell Co, (210) 222-2424
8. Lakeshore Villas - 56-Unit Apartment Building
Location:
Terms:
Broker:
Lake Elsinore, CA
Cash through loan at closing
Marcus & Millichap - Alex Mogharebi (909) 605-1800
9. New Territory - parcel 20,000 square feet
Location:
Terms:
Broker:
San Antonio, Texas
All Cash
Mike Hoover (210) 222-2424
10. Willowwood Park - 84-Unit Apartment Building
Location:
Terms:
Broker:
Colton, CA
All Cash
Marcus & Millichap - Alex Mogharebi (909) 605-1800
11. 5th Street, Los Angeles - Hotel/Apartments
Location:
Terms:
Broker:
Los Angeles, CA
All Cash
N/A
.. CAPITAL
BllJUI FORESIGHT
l.i,.III..1 ..1.'. "."10'_
Corporate Structure
Business Profile
2005 Transactions
1. Aventerra Apartments - 272-Unit Apartment Building
Location:
Terms:
Broker:
Fontana, CA
Loan at closing
Marcus & Millichap - Alex Mogharebi (909) 605-1800
2. Albertson's/Bandera/Loop 1604 - Vacant shopping center
Location:
Terms:
Broker:
San Antonio, TX
All Cash
Mike Hoover (210) 222-2424
3. Citrus Breeze - 52-Unit Apartment Building
Location:
Terms:
Broker:
Fontana, CA
All Cash
Marcus & Millichap - Alex Mogharebi (909) 605-1800
4. Bulverde & Marshall Road - Land - 12.15 acres
Location:
Terms:
Broker:
San Antonio, TX
All Cash
Mike Hoover (210) 222-2424
5. Parkview Plaza I - 130-Unit Apartment Building
Location:
Terms:
Broker:
Indio, CA
Cash to new loan
Paul Runkle (951) 506-2616
6. Parkview Plaza II - 60-Unit condos
Location:
Terms:
Broker:
Indio, CA
Cash to new loan
Paul Runkle (951) 506-2616
.. CAPITAL
Bll..IUI FORESIGHT
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Corporate Structure
Business Profile
2006 Transactions
1. Vacant Land - 12.1 Acres
Location:
Terms:
Broker:
San Antonio, TX
Cash
Mike Hoover (210) 222-2424
2. Albertson's/Guilbeau - Vacant shopping center
Location:
Terms:
Broker:
San Antonio, TX
Cash
Mike Hoover (210) 222-2424
3. Frederic Residence - Single-family House in Burbank
Location:
Terms:
Burbank, CA
Cash
4. Albertson'sl Nacogdoches - Vacant shopping center
Location:
Terms:
Broker:
San Antonio, TX
Cash
Mike Hoover (210) 222-2424
5. Albertson'slFM 78, Walzem - Vacant shopping center
Location:
Terms:
Broker:
San Antonio, TX
Cash
Mike Hoover (210) 222-2424
.. CAPITAL
II1llUl FORESIGHT
1.,ot.1I _.,II.t,., ",14Ie..
RESOLUTION NO.
2
RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION
OF THE CITY OF SAN BERNARDINO (1) APPROViNG THE SALE OF
TUSCANY APARTMENTS (THE "PROPERTY") TO CAPITAL
FORESIGHT LIMITED PARTNERSHIP AND (2) APPROViNG AND
AUTHORIZING THE EXECUTIVE DIRECTOR OF THE
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
("AGENCY") TO EXECUTE AN ASSUMPTION AGREEMENT
RELATED TO THE SALE OF THE PROPERTY
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7 WHEREAS, the Redevelopment Agency of the City of San Bernardino (the "Agency'') is
8 authorized Wlder Health and Safety Code Section 33000, et seq., to issue bonds to be used to make loans
9 to finance certain activities within the City of San Bernardino; and
10
WHEREAS, the Agency and U.S. Bank National Association, successor by merger to U.S.
Bank Trust National Association formerly knom! as First Trust of California, National Association (the
"Trustee"), entered into that certain Indenture of Trust, dated as of May I, 1996 (the "Indenture''), in
connection with the issuance of the Agency's $7,000,000 Variable Rate Demand Multifamily Housing
Revenue Bonds (Silverwood Apartments Project) Series 1996 (the "Bonds"); and
WHEREAS, the Agency loaned the proceeds of the Bonds to Magellan Silverwood Partnership,
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16 an Arizona general partnership (the "Original Borrower''), pursuant to a Loan Agreement, dated as of
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May I, 1996 (the "Loan Agreement"), among the Agency, the Trustee and the Original Borrower; and
WHEREAS, proceeds of the Bonds were used, in part, to construct and pay other costs
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associated with the construction and development of a multifamily residential rental housing project
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originally knom! as Silverwood Apartments and is now knom! as Tuscany Apartments (the "Property'')
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located in San Bernardino, California; and
WHEREAS, the Property was sold to San Bernardino 328/AF XXX, LLC, a California limited
liability company in 2001; and
WHEREAS, at that time, the Indenture was amended by that certain First Supplemental
Indenture dated as of September I, 2001, because San Bernardino 3281AF xxx, LLC caused the
delivery to the Trustee of a Wells Fargo Bank. National Association letter of credit to replace the existing
"
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letter of credit issued by Bank One, Arizona, NA; and
WHEREAS, in September 2001, the Property was acquired by MG Tuscany Apartments LP., a
California limited partnemup ("Tuscany'), and in connection therewith certain amendments were made
to the Indenture, Loan Agreement and Regulatol)' Agreement and Declaration of Restrictive Covenants
dated as of May I, 1996, the fonns of which amendments are on file with the Secreta!)' of the Agency
(the "Bond Docwnents''); and
WHEREAS, Tuscany has entered into a Purchase and Sale Agreement and Joint Escrow
Instructions dated as of April 28, 2006, for the sale of the Property to The Capital Foresight Limited
Partnemup, a Nevada limited partnership ("Buyer''), as amended by a First Amendment to the Purchase
and Sale Agreement and Joint Escrow Instructions dated as of May 15, 2006 (as so amended, the
"Purchase Agreement"); and
WHEREAS, Buyer shall assign the Purchase Agreement to Capital Foresight Tuscany I, LP
and Capital Foresight Tuscany II, LP (collectively, "Borrower"), who shall acquire ownership of
the Property as tenants-in-common; and
WHEREAS, Borrower desires the right, in its sole election, on or before December 31,2007 to
add a non-profit entity (a ''Non-Profit'') as a general partner in each of the borrowing partnemups
(Capital Foresight Tuscany l, L.P. and Capital Foresight Tuscany II, L.P.); and
WHEREAS, the Agency has considered the terms of the sale of the Property and the assumption
of the Bond Docwnents by the Borrower and the admission, at Borrower's election prior to December
31, 2007, to add a Non-Profit general partner to each of the Partnerships comprising Borrower, as
contemplated herein and desires at this time to approve the terms of said transaction in the public
interests of the Agency.
NOW, THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION OF
THE CITY OF SAN BERNARDINO DOES HEREBY RESOLVE, DETERMINE AND
ORDER, AS FOLLOWS:
Section 1.
The Community Development Commission ("Commission") on behalf of
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the Agency hereby approves the sale of the Property to The Capital Foresight Limited Partnership,
a Nevada limited partnership and lor its assigns, Capital Foresight Tuscany I, LP, and Capital
Foresight Tuscany II, LP. The Agency further approves the admission of a Non-Profit general
partner into each such partnership on or before December 31, 2007, at the sole option and
election of such partnerships, so long as the Agency is provided prior written notice of such
admission, which notice shall be accompanied by copies of the documentation therefor. The
Commission on behalf of the Agency acknowledges and agrees that Borrower is under no
obligation to so admit a Non-Profit as a general partner in each of the partnerships, which
comprise Borrower.
Section 2. The Commission on behalf of the Agency hereby approves the form of
Assumption Agreement and execution thereof between Agency, Trustee and the Borrower
attached hereto as Exhibit "An together with any nonsubstantive changes therein or
nonsubstantive additions thereto as may be approved by the Chairman or Executive Director,
with the concurrence of Agency Counsel, as necessary, to incorporate certain terms and
conditions when such terms and conditions have been ascertained.
Section 3. The Chairman or the Executive Director, or their designees are hereby
authorized and directed, for and in the name and on behalf of the Agency, to do any and all
things and take any and all actions, including execution and delivery of any and all assignments,
certificates, requisitions, agreements, notices, consents, instruments of conveyance, warrants
and other documents, which they, or any of them, may deem necessary or advisable in order to
consummate the transaction contemplated herein.
Section 4. The Commission on behalf of the Agency hereby appoints Lewis
Brisbois Bisgaard & Smith LLP as bond counsel for the Agency in this matter. The fees of
Lewis Brisbois Bisgaard & Smith LLP shall be paid by the Borrower.
Section 5. The Resolution shall become effective immediately upon its adoption.
III
-3-
P:\A&Uhli.RnollltlolUlJtnobolioJu\llMHi\D'7-IG-46 Tuc..y Apart.'''ll CDC Ruo.doc
2
RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION
OF THE CITY OF SAN BERNARDINO (1) APPROVING THE SALE OF
TUSCANY APARTMENTS (THE "PROPERTY") TO CAPITAL
FORESIGHT LIMITED PARTNERSHIP AND (2) APPROVING AND
AUTHORIZING THE EXECUTIVE DIRECTOR OF THE
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
("AGENCY") TO EXECUTE AN ASSUMPTION AGREEMENT
RELATED TO THE SALE OF THE PROPERTY
3
4
5
I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Communi
6
Development Commission of the City of San Bernardino at a
meetin
, 2006, by the following vote, to wit:
Navs
Abstain
Absent
Secretary
18
19 The foregoing resolution is hereby approved this
day of
,2006.
20
21
Patrick J. Morris, Chairperson
Community Development Commission
of the City of San Bernardino
22
23
Approved as to Form and Legal Content:
24
A;:~no/fL
By:
25
-4-
r:\Alelldu\RnIJ.'iofulJln....rie..I\lOO6\01-ID-e6 Tuu.., Ap..,mflll1 CDC .....doc
ASSUMPTION AGREEMENT
$7,000,000
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
Variable Rate Demand Multifamily Housing Revenue Bonds
(Silverwood Apartments Project)
Series 1996
This Assumption Agreement is entered into this lOth day of July 2006, by and between
the Redevelopment Agency of the City of San Bernardino (the "Issuer"), U.S. Bank National
Association, successor by merger to U.S. Bank Trust National Association, formerly First Trust
of California, National Association, as trustee (the "Trustee") under that certain Indenture dated
as of May I, 1996, as amended by that certain First Supplemental Indenture dated as of
September I. 2001, and that certain Second Supplemental Indenture dated as of May 1, 2003 (the
"Indenture") and Capital Foresight Tuscany I, L.P., a California limited partnership, and Capital
Foresight Tuscany II, L.P.. a California limited partnership (collectively, the "Borrower")
pursuant to Section 7 of the Regulatory Agreement and Declaration of Restrictive Covenants
dated as of May 1. 1996 and recorded in the Official Records of the County of San Bernardino,
as Document No. 19960251735 on July 16, 1996 as amended by that certain Amendment to
Regulatory Agreement and Declaration of Restrictive Covenants dated as of May 1, 2003 (the
"Regulatory Agreement"). Capitalized terms used herein which are not defined herein shall have
the meanings assigned thereto in the Regulatory Agreement.
RECITALS
WHEREAS. the Issuer has previously issued the above-captioned bonds (the "Bonds")
the proceeds of which were loaned by the Issuer to Magellan Silverwood & Cross Creek General
Partnership, an Arizona general partnership (the "Original Borrower") pursuant to a Loan
Agreement dated as of May 1, 1996 (the "Original Loan Agreement") by and among the Issuer,
the Trustee and the Original Borrower to finance the acquisition. rehabilitation and equipping of
a multifamily residential housing project facility located in San Bernardino, California (the
"Project"); and
WHEREAS. in connection with the issuance of the Bonds, the Original Borrower, the
Trustee and the Issuer entered into the Regulatory Agreement; and
WHEREAS, the Original Borrower sold the Project to San Bernardino 328/AF XXX,
LLC. a California limited liability company ("San Bernardino 328/AF XXX''), San Bernardino
328/AF XXX sold the Project to MG Tuscany Apartments, LP, and MG Tuscany Apartments,
LP has now sold the Project to the Borrower; and
582003:14138.1
1
P.'....gendu\".\genda AnachmentsAgnnl5-Amend 2006,07.10-06 Tuscany As.umplion Agreemen!.doc
WHEREAS, Section 7 of the Regulatory Agreement provides that a transferee of the
Original Borrower who acquires the Project prior to the termination of the Rental Restrictions
and Occupancy Restrictions provided in the Regulatory Agreement shall assume all duties and
obligations of the Original Borrower under the Regulatory Agreement and the Original Loan
Agreement, as amended by the First Amendment to Loan Agreement dated as of September I,
20'03 and Second Supplemental Loan Agreement dated as of May 1, 2003 (collectively the
"Loan Agreement").
NOW, THEREFORE, for good and valuable consideration, the receipt of which is hereby
acknowledged, the Borrower. Issuer and Trustee hereby agree as follows:
Section L Borrower's Assumption of Duties and Obligations under the Regulatory
Agreement and Loan Agreement.
The Borrower hereby fully accepts and assumes all of the duties and obligations of MG
Tuscany Apartments, LP under the Regulatory Agreement and under the Loan Agreement
(collectively, the "Assumed Obligations") and agrees to perform all Assumed Obligations in
accordance with the terms of the Regulatory Agreement and the Loan Agreement
Notwithstanding any1hing herein or in the Regulatory Agreement or the Loan Agreement, the
Borrower shall not be held responsible for or be subject to duties or obligations arising under the
Regulatory Agreement and the Loan Agreement before the date of this Assumption Agreement
From and after recording of the Grant Deed transferring ownership from MG Tuscany
Apartments, LP to Borrower, MG Tuscany Apartments, LP shall have no further liability under
the Regulatory Agreement and Loan Agreement. and shall be relieved of all of its obligations
thereunder.
Section 2,
Admission of a Non- Profit General Partner.
The parties hereto acknowledge and agree that the Borrower may elect in its sole option
and discretion, on or before December 3 L 2007 to admit a non-profit entity (a "Non-Profit") as a
general partner in each of the partnerships which comprise Borrower (Capital Foresight Tuscany
I. L.P. and Capital Foresight Tuscany II. L.P.) to qualify the Project for a non-profit exemption
from property taxes. The parties hereto approve the subsequent admission of a Non-Profit as a
general partner in each of the partnerships which comprise Borrower, at the sole option and
election of Borrower. so long as the parties are provided prior written notice of such admission,
which notice shall be accompanied by copies of the documentation therefor. The parties further
acknowledge and agree that Borrower is under no obligation to so admit a Non-Profit as a
general partner in each of the partnerships which comprise Borrower.
Section 3,
Miscellaneous Provisions,
(a)
Notices to be provided to the Borrower shall be provided to the following address:
SB2003].H3S1
2
P Ag:endas"AgendJ Anachmcnls A;:rmls.Amend 100607.10-06 Tuscany ASiUmp!ion Agrcemcnl.doc
Capital Foresight Tuscany I, L.P.,
a California limited partnership,
and Capital Foresight Tuscany II, L.P.,
a California limited partnership
clo The Capital Foresight Limited Partnership,
a Nevada Limited Partnership
2780 Beverly Glen Circle, Suite 300
Bel Air, California 90077
Attn.: Naty Saidoff
Telephone No.: (3 I 0) 234-9598
Facsimile No.: (310) 234-9589
(b) The Borrower represents and warrants to the Issuer and the Trustee that, to the
best of its knowledge, as of the date hereof, there exists no event of default under
the Regulatory Agreement, the Loan Agreement and the other documents
assumed by the Borrower in connection with the Bonds (the "Borrower
Documents") and there is no event that, with the giving of notice, the passage of
time, or both, would constitute an event of default under the Borrower
Documents.
(c) The Borrower agrees to pay the reasonable costs of the Issuer associated with this
Assumption Agreement, including attorneys fees.
(d) This Assumption Agreement may be executed in several counterparts, each of
which shall be deemed an original and all of which together shall constitute but
one and the same instrument.
(e)
O/!
IIII
IIII
IIII
:/1/
II11
'/:1
',,",
IIII
IIII
582003\4138\
This Assumption Agreement shall be governed exclusively by and construed in
accordance with the laws of the State of California.
p.l.;;endas'Agenda :\nachmcnl~_.I,g;rmts-:\mcnd 200607-10-06 Tl1scany .-\ssumplion Asrccmcntrloc
"
~
** FOR OFFICE USE ONLY - NOT A PUBLIC DOCUMENT **
RESOLUTION AGENDA ITEM TRACKING FORM
CDC(JOOIo-J-7
~bsent ~
Meeting Date (Date Adopted): ~ Item #
Vote: Ayes~"\-lNays ce
Change to motion to amend original documents 0
R 41 Resolution #
Abstain ~
Companion Resolutions
Null/Void After: days /
Resolution # On Attachments: 0 Note on Resolution of attachment stored separately: 0
PUBLISH 0
POST 0
RECORD W/COUNTY 0
By:
D." "",,,_, 7f'i~~
Date of Mayor's Signature: '7 . DID
Date of Clerk/CDC Signature:
Reso. Log Updated: ~
Seal Impressed: 0
Reso. # on Staff Report ~
Date Memo/Letter Sent for Signature:
I" Reminder Letter Sent:
Date Returned:
2nd Reminder Letter Sent:
Not Returned: 0
Request for Council Action & Staff Report Attached:
Updated Prior Resolutions (Other Than Below):
Updated CITY Personnel Folders (6413, 6429, 6433,10584, 10585, 12634):
Updated CDC Personnel Folders (5557):
Updated Traffic Folders (3985, 8234, 655, 92-389):
Yes No By_
Yes No By_
Yes No By_
Yes No By_
Yes No By_
Copies Distributed to:
Animal Control
City Administrator
City Attorney
Code Compliance
Development Services
Others:
o EDA
o Facilities
.t& t7cL \\C'v Finance
o Fire Department
o Human Resources
lO l.JelbLl"Vlc:Jnformation Services
o Parks & Recreation
o Police Department
o Public Services
o Water Department
o
o
o
o
o
Notes:
Ready to File: _
Date:
Revised 12/18/03
r";:Ct-I'\I,=i)' -::1"'( f:', E';'
"_ . _, '. I , ..... _ "
CITY OF SAN BERNARDINO
ECONOMIC DEVELOPMENT AGENCY 2006 DEe 15 PH 4: 13
INTER-OFFICE MEMORANDUM
SUBJECT:
Margaret Fedor, Senior Confidential Secretary, City Clerk's Office
I '
Wasana A. Chantha, Executive secretary~
Executed Agreement - CDC/2006-27
TO:
FROM:
DATE:
December 15,2006
Enclosed for your records is the fully executed Amendment that was approved by the
Community Development Commission of the City of San Bernardino on July 10, 2006
pertaining to the following resolution:
CDC/2006-27 Resolution of the Community Development Commission of the City of San
Bernardino (1) approving the sale of Tuscany Apartments (the "Property") to
Capital Foresight Limited Partnership and (2) approving and authorizing the
Executive Director of the Redevelopment Agency of the City of San
Bernardino ("Agency") to execute an Assumption Agreement related to the
sale of the Property
Should you have any questions, I can be reached at (909) 663-1044.
Thank you.
Enclosure
cc: Barbara Lindseth (with Copy of Executed Agreement)
Lisa Connor (with Copy of Executed Agreement)
File (with Copy of Executed Agreement)