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HomeMy WebLinkAboutR31-Economic Development AgencyECONOMIC DEVELOPMENT AGENCY OF TILE CITY OF SAN BERNARDINO FROM: Maggie Pacheco SUBJECT: Low- and Moderate-Income Housing Fund Executive Director Loan -North Arden Guthrie Area DATE: February 27, 2007 Svnoosis of Previous Commission/CounciVCommittee Action(s): On February 22, 2007, the Redevelopment Committee recommended approval of a loan from the Low- and Moderate Income Housing Fund for the North Arden Guthrie Area. Recommended Motion(s): (Community Development Commission) Resolution of the Community Development Commission of the City of San Bernardino approving and authorizing a loan from the Low- and Moderate-Income Housing Fund in the amount of $7.5 million for property acquisition and demolition costs related to the redevelopment of the North Arden Guthrie Area (IVDA Redevelopment Project Area) Contact Person(s): Maggie Pacheco Phone: (909)663-1044 Project Areas: IVDA Redevelopment Project Area Ward(s): 7 Supporting Data Attached: ~ Staff Report D Resolution(s) ^ Agreement(s)/Contract(s) ®Map(s) ®Other(s) FUNDING REQUIREMENTS: Amount: $ 7.5 Million Source: Low- and Moderate-Income Housing Fund Budget Authority: Requested ,~ t~_- SIGNATURE: / ~1~ /~ Maggi/e Pacheco, Executive Director Commission/Council Notes: i i^ ' ~' h Barbara Lindseth, Administrative Services Director P:1AgcnJ~slCnmm 4v Commissim~LnC xpMt-0S-0'11mY.Mnd Ian ~ XMt nepu $R.dIL NMISSION MEETIIYG AGENDA Meeting Date: 113/OS/20U7 Agenda Item Number: ~ ECONOMIC DEVELOPMENT AGENCY i STAFF REPORT LOW- AND MODERATE-INCOME HOUSING FUND LOAN - NORTH ARDEN GUTHRIE AREA BACKGROUND: The Redevelopment Agency of the City of San Bernardino ("Agency") is the owner of 47 vacant lots ("Agency Property") in the area bounded by Highland Avenue, Arden Avenue, 20`h Street and Guthrie Avenue commonly known as the North Arden Guthrie Area (the "Site"), as depicted in Exhibit "A" attached. Recently, the Agency acquired additional four-plexes within the Site, leaving 10-14 parcels remaining in private ownership ("Private Property") to be acquired. The entire Site is approximately 17 acres in size. Recognizing that the Site has become severely blighted, and therefore the need for the Agency to acquire the remaining Private Property, demolish and cleaz the four-plex structures and combine it with the Agency Property in order to make the Site suitable for development, the Mayor and Common Council of the City of San Bemardino ("Council") in July 2003, authorized an application for a HUD Section 108 Loan in the amount of $7.5 million ("Section 108 Loan"). After much detailed work by Agency Staff to tailor the Section 108 Loan to the Site, Staff submitted the application to HUD, which • was finally approved by HUD in May 2006: On July 24, 2006, the Council approved a HUD Section 108 Loan Contract with HUB, and authorized the City of San Bemardino ("City") to loan the funds to the Agency for the purchase of the Private Property on the Site, while at the same time, the Community Development Commission of the City of San Bemardino ("Commission") authorized Staff to proceed with the purchase of the Private Property. On November 21, 2006, the Commission authorized the execution of a Redevelopment Project Study and Exclusive Right to Negotiate ("Agreement") with Home Depot, Inc., (the "Developer"), to acquire the Site. The Developer would utilize 11 acres for the purpose of building a new 139,000 squaze foot Home Depot, while Mr. Scott Beard and Mr. Mazk Sandoval (the "Co-Developers") could potentially develop the remaining 6 acres, with the Soccer complex in mind, to include youth oriented retail and restaurants. However, the Developer will guarantee that the entire Site is fully developed. CURRENT ISSUE: At this time, the proposed budget for the completion of the acquisition of the Private Property within the Site, the demolition of the remaining four-plexes and other related costs amounts to approximately $15 million. Taking into consideration that the Agency has received $7.5 million from the Section 108 Loan, the shortfall to complete the necessary acquisition and demolition is $7.5 million. to order to fund this shortfall, it is proposed that funds be loaned from the Low- and Moderate-Income Housing Fund ("Low-Mod Loan") at the current Local Agency Investment Fund ("LAIF") rate of interest (presently at approximately 5%) and that the loan term will be for a period of 5 years or sooner • depending on when the sale of the Site occurs. Repayment of $7.5 million to the Low-Mod Loan will ----------------------------------------------------------------------------------------------------------------------------------------- - P `AgcnEss.Camm Dcv Commlsvon~CDC?OOTUlASO] Iuw~MaG W:m ~ Mumc Dcpx SR.Att COMMISSION MEETING AGENDA Meeting Date: 03Kn/05/2007 Agenda Item Number: "~ L. J Economic Development Agency Staff Report Low-Mod Loan -Home Depot Page 2 be from the land sale proceeds received from the Developer for the Site and any remaining balance will need to be repaid from IVDA tax increment pledged to the Agency and other legally available funds to the Agency. ENVIRONMENTAL IMPACT: None. FISCAL IMPACT: As described under Current Issue. RECOMMENDATION: That the Community Development Commission adopt the attached Resolution. Maggie Pacheco, Executive Director P Ngenda\Comm Der Cosnmissan\CDC'OOTOJ~OS-Ot Low-Nod Won - Homc Depq SR doc COMMISSION MEETING AGENDA Meeting Date: 03/05/2007 Agenda Item Number: EXHIBIT "A" anuand uap~y laa~;S any;n~ i ~ ~a ~ ~ .q ee n r ' ~~ ~ • • i Y~~~ A W F PG z N D Z g Q W Z _ ~ W _ w ~~ S ~ v M li O Q ~ ~ 0 ~ 2 1 2 3 4 5 6 7 8 9 10 11 ', 12 13 14 151 16 17 18 19 20 21~ 22 23 24 ZS 26 27 28 RESOLUTION NO. RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO APPROVING AND AUTHORIZING A LOAN FROM THE LOW- AND MODERATE- INCOME HOUSING FUND IN THE AMOUNT OF $7.5 MILLION FOR PROPERTY ACQUISITION AND DEMOLITION COSTS RELATED TO THE REDEVELOPMENT OF THE NORTH ARDEN GUTHRIE AREA (IVDA REDEVELOPMENT PROJECT AREA) WHEREAS, the Redevelopment Agency of the City of San Bernardino ("Agency") is the owner of property ("Agency Property") in the azea bounded by Highland Avenue, Arden Avenue, 20'h Street and Guthrie Avenue, commonly known as the North Arden Guthrie Area ("Site"), within the Inland Valley Development Agency ("IVDA") Redevelopment Project Area, which Site is approximately seventeen (17) acres in size; and WHEREAS, recognizing that the Site has become severely blighted, there is a need for the Agency to acquire the remaining privately held property ("Private Property") within the Site in to demolish and cleaz the entire Site and to make the Site suitable for development; and WHEREAS, in July 2003, the Mayor and Common Council of the City of San Bernardino ("Council"), authorized an application for a HUD Section 108 Loan ("Section 108 Loan") in the amount of $7,500,000 for the purchase of the Private Property within the Site; and WHEREAS, in May 2006, HUD approved the Section 108 Loan; and WHEREAS, on July 24, 2006, the Council approved a HUD Section 108 Loan Contract authorized the City of San Bernazdino ("City") to loan the funds to the Agency; and WHEREAS, the Community Development Commission of the City of San ("Commission"), authorized Agency Staff to proceed with the acquisition of the Private and WHEREAS, the estimated total Agency budget for acquisition and demolition of the Property is $IS million, of which $7.5 million will be funded by the Section 108 Loan leaving shortfall of $7.5 million; and -1- P ~Agcndu!Rnolmiom~ROOlmromd00T03-OS-0) Loa-MOC loan-Home Depot CDC Rcso doc I• 1 2 3 4 .WHEREAS, it is proposed that the anticipated shortfall of $7.5 million be funded through a loan from the Low- and Moderate-Income Housing Fund. NOW, THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO DOES HEREBY RESOLVE, DETERMINE AND ORDER, AS FOLLOWS: Section 1. The Commission hereby desires to authorize a $7.5 million loan from the Low- and Moderate-Income Housing Fund, bearing interest at the current Local Agency Investment Fund ("LAIF") rate at the time of funding, repayable from the anticipated land sales proceeds to be received from the Developer, from those IVDA tax increment revenues received by the Agency and other legally available funds of the Agency, with a final maturity date of March 5, 2012. Section 2. The Commission hereby approves and authorizes a $7.5 million loan from the Low- and Moderate-Income Housing Fund for acquisition of the Private Property and demolition costs within the North Arden Guthrie Area, and authorizes execution of the Agency Promissory Note as attached hereto by the Executive Director of the Agency. Section 3. The Resolution shall become effective immediately upon its adoption. 5 I/// /// /// /// /// !// /// /// /// /// /// /// /// /// -2- P Ngendac'.Remlpians~Rnsolpionsv00T0J-OS-O) Ww~MOd Wan ~ Ilp~e Deep [D[ Rao Ooc I• I 2 3 4 5 6 RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO APPROVING AND AUTHORIZING A LOAN FROM THE LOW- AND MODERATE- INCOME HOUSING FUND IN THE AMOUNT OF $7.5 MILLION FOR PROPERTY ACQUISITION AND DEMOLITION COSTS RELATED TO THE REDEVELOPMENT OF THE NORTH ARDEN GUTHRIE AREA (IVDA REDEVELOPMENT PROJECT AREA) I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Community Development Commission of the City of San Bernazdino at a meeting thereof, held on the day of , 2007, by the following vote to wit: Commission Members: Aves Nays Abstain Absent ESTRADA BAXTER BRINKER DERRY KELLEY JOHNSON MC CAMMACK Secretary The foregoing Resolution is hereby approved this day of 2007. Patrick J. Moms, Chairperson Community Development Commission of the City of San Bemazdino Approved as to Form: By: l~L- Agency ou sel -3- P Agendss'0.esolu~ions.RpsoWSroni :OOl Ol OS-0) e.ow-MOE loan ~ Home Depot Cq(' Reso doc • REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO AGENCY PROMISSORY NOTE (Low- and Moderate-Income Housing Fund Loan -North Arden Guthrie Commercial/Retail Project -NDA Project Area) THIS PROMISSORY NOTE IS A SPECIAL LIMITED OBLIGATION OF THE AGENCY PAYABLE SOLELY FROM THE SOURCE OF AGENCY FUNDS DESCRIBED HEREIN AND NEITHER THE FAITH NOR CREDIT NOR TAXING POWER OF ANY OTHER LOCAL AGENCY, INCLUDING THE CITY OF SAN BERNARDINO, IS PLEDGED HEREUNDER Initial Principal Amount $7,500,000.00 Date of this Note: March 5, 2007 Variable Rate of Interest: LAIF Rate of Interest on Funds Invested for One (1) Year Determined as of the Date of Note, and Thereafter Such Interest Rate In Effect on Each Succeeding March 5 During Term of this Note THIS AGENCY PROMISSORY NOTE is dated March 5, 2007 (this "Note"), and evidences an indebtedness of the Redevelopment Agency of the City of San Bernazdino (the "Agency") to the Low- and Moderate-Income Housing Fund (the "Low-Mod Housing Fund"). For value received, the Agency hereby promises to pay to the order of the Low-Mod Housing Fund at such address as the Agency shall designate, the principal amount of this Note at the times specified herein, together with interest thereon in accordance with the terms hereof. This Note is hereby tendered in accordance with and as approved by Agency Resolution No. , dated Mazch 5, 2007 with respect to the facts set forth in such Community Development Commission staff report concerning the North Arden Guthrie Commercial/Retail Project -NDA Project Area (the "Project"): THE AGENCY HEREBY AGREES TO PAY THIS NOTE IN ACCORDANCE WITH THE FOLLOWING TERMS: SECTION 1. This Note is tendered by the Agency to the Low-Mod Housing Fund as evidence of the indebtedness of the Agency to the Low-Mod Housing Fund incurred in connection with an advance (the "Advance") made by the Low-Mod Housing Fund to the Agency in furtherance of the Project. The terms and provisions of the Project are hereby incorporated into this Note by this reference. Capitalized terms used herein and not otherwise defined shall have the meaning assigned to them in the Project. SECTION 2. Interest on the outstanding principal balance of this Note, together with any accrued and unpaid interest thereon, shall accrue from the date of each Advance, at the Variable Rate of Interest until paid in full. The Variable Rate of Interest shall be initially established at a rate per annum equal to the rate of interest offered by the Local Agency 562003:11888.1 P Upcndss~Agenda Anxhmenu'.Exhibns~'WT03-OS-07Iow~MOd Loan Promissory Noce - Henic Dcpot doc • Investment Fund of the State Treasurer of California on local agency funds invested for one (I) year (the "LATE Rate of Interest") in effect on the date of this Note, and thereafter such interest rate shall be adjusted on each Mazch 5, commencing on Mazch 5, 2008 to be equal to the LAIF Rate of Interest on each such interest rate adjustment date (e.g.: Mazch 5) for so long as any sum is payable under this Note. SECTION 3. Payments of principal and interest under this Note shall be made by the Agency to the Low-Mod Housing Fund no later than Mazch 5, 2012, from land sales proceeds attributable to the Project, and/or from IVDA tax increment revenues remitted to the Agency and other legally available funds. It is anticipated that the Advance, plus accrued interest, will be repaid to the Low-Mod Housing Fund by the Agency on or before Mazch 5, 2012. SECTION 4. The Agency hereby pledges to make payments hereunder from those sources listed in Section 3. The pledge of the Agency under this Section 4 of this Note shall at all times be subordinate to any and all other outstanding, or as hereafter may be outstanding, bonds, notes or other forms of indebtedness of the Agency payable by the Agency in whole or in part from tax increment revenue or other legally available funds of the Agency and shall not constitute a prior lien on such revenues or other legally available funds of the Agency. This Note is a special and limited obligation of the Agency •and the sole source of funds as pledged for the repayment thereof as is provided in Section 3 and in this Section 4. Neither the taxing power of the Agency or any other agency is pledged to repay the principal or accrued interest hereunder. SECTION 5. This Note shall mature as of Mazch 5, 2012, unless prepaid in full before such date. The outstanding principal balance of this Note, together with all accrued and unpaid interest thereon, shall be immediately due and payable upon the Maturity Date of Mazch 5, 2012, and the Agency shall tender to the Low-Mod Housing Fund such amount on or before Mazch 5, 2012. SECTION 6. The Agency may prepay the principal amount of this Note and accrued interest thereon, at any time, from time-to-time without penalty. SECTION 7. There shall be authority or power to transfer or assign from the Low-Mod Housing Fund any right to receive the payment of principal and payments of accrued interest under this Note unless the Agency has first granted written approval for such a proposed assignment from the Low-Mod Housing Fund in the sole and absolute discretion of the Agency. Executed this day of , 2007 at San Bernazdino, California. REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO ,,, Maggie Pacheco, Executive Director 2 P'~.lgendas~AgeMa Anxhmenu~Ea~bi~sU00T03-05.0) Lor-Mad Lean Peomusory Nole ~ Nome Depq doc