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Home My WebLink AboutR08-Economic Development Agency . . . .. . . DEVELOPMENT DEPARTMENT OF THE CITY OF SAIl' BBRlWIDINO REOUEST FOR COMMISSION/COUll'CIL ACTION From: KENNETH J. HENDERSON Executive Director Subj ect: FAIlAlI INVESTMENT INTERNATIONAL, INC. Date: February 10, 1992 ------------------------------------------------------------------------------- SvnoDsis of Previous COMMission/Council/Committee ActionCs): On February 6, 1992, the Redevelopment Committee reviewed the Farah Investment International (Farah) proposal and recommended that the Community Development Commission approve the $64,400 loan to Farah for offsite improvements to the AM/PM Market in the North West Project Area. ------------------------------------------------------------------------------- Recommended MotionCs): CCommunitv DeveloDlDent Commission) MOTION That the Community Development Commission authorize the Executive Director to execute a loan agreement between the Redevelopment Agency and Farah Investment International Inc. for the off-site improvements to the AMlPM mini-market located at the Southwest corner of Highland Avenue and California Street. Admi-:[i;ator ------------------------------------------------------------------------------- Contact Person(s): Ken Henderson/Art Hassel Phone: 5081 Project Area(s): North West (NW) Ward(s) : Six(6) Supporting Data Attached: Staff ReDort: Exhibits FUNDING REQUIREMENTS: Amount: $ 64.400 Tax Increment Source: Budget Authority: Beirut Souaht ------------------------------------------------------------------------------- Commission/Council Notes: ------------------------------------------------------------------------------- KJH:AJH:lag:055lE COMMISSION MEETING AGENDA Meeting Date: 2/17/1992 Agenda Item Number: L . . . . . DEVELOPMENT DEPARTMENT OF THE CITY OF SAR BERNARDINO STAW REPORT Farah Investment International. Inc. Staff has received a request for $64,400 from Farah Investment International, Inc. (Farah) to provide off-site improvements for an AM/PM Market (Mini-market and Gas Station) that Farah is developing in the Northwest Project Area. The project is located at the Southwest corner of Highland Avenue and California Street. While funding was made available from Mechanics Bank, there is a current $92,000 shortfall in monies necessary to complete the project. Mechanics Bank has also agreed to provide the permanent loan for seventy percent (70% - $705,236) of the total estimated development cost of $1,007,480, but this funding is insufficient to cure the shortfall. The above referenced situation was caused by an unforeseen increase in the cost of off-site improvements. Highland Avenue is California State Highway Route 30 and the State Department of Transportation (CalTrans) has very rigid requirements. More specifically, the deficit is in the following areas: (a) CalTrans requirements for traffic signal modifications increased from $30,000 to $92,000; and (b) the City required plan check and permits increased from $26,000 to $38,000. The developer is only requesting assistance in the amount of $64,400 which represents seventy percent (70%) of the deficit. The project is a $1,300,000 development which will help to increase commercial activity on the west side of the City of San Bernardino. The AM/PM Mini-markets are very successful throughout the State of California and this is the first such unit to be placed on the west side. The AM/PM Mini-market benefits the community in the following manner: (1) The project provides for approximately three hundred and ninety-two (392) hours of employment per week. This equates to approximately ten (10) full time employees. (2) The project will generate approximately $39,897 in sales tax accruing to the City and approximately $13,000 in tax increment, resulting in $52,897 annually. ------------------------------------------------------------------------------- KJH:AJH:lag:055lE COMMISSION MEETING AGENDA Meeting Date: 2/17/1992 1 Agenda Item Number: . . . . . , . DEVELOPMEl'lT DBPAR'.L'l'II5lu STAFF IlBPORr Farah Investment International, Inc. February 10, 1992 Page Number -2- (3) The AM/PM Mini-market will beautify the area by replacing an older rundown dwelling with a new facility. It will exceed landscaping standards required by the Department of Parks, Recreation and Community Services Department. (4) The proposed development will add a needed Mini-market and Gasoline Station to the west side of San Bernardino. There are only two (2) similar services located west of Interstate 215 and both are located on Highland Avenue. Staff has reviewed the developer's proposal and finds that it is a feasible and sound project. The project is approximately eighty percent (80%) complete. Essential reimbursement elements of the loan agreement are as follows: Loan Origination Fee Interest Rate, compounded daily Monthly Payments Amortization Period: Note: Payment due immediately if title to property passes, either voluntary or Collateral 1.5% 9% interest only Two (2) Years involuntary. (a) 2nd Deed of Trust (b) Personal Guarantee On February 6, 1992, the Redevelopment Committee reviewed Farah's proposal and recommended that the Community Development Commission approve the $64,400 loan to Farah for offsite improvements to the AM/PM Mini Market. On February 10, 1992 the Northwest Redevelopment Project Area reviewed the subject proposal and recommended approval to the Community Development Commission. The Committee also recommended that, to the extent possible, prospective employees be hired from the immediate surrounding area. Based upon the foregoing, staff recommends adoption of the form motion. lUU'lftlSUl J. IIBBDB ON, Executive Director Development Department ------------------------------------------------------------------------------- KJH:AJH:lag:055lE COMMISSION MEETING AGBNDA Meeting Date: 2/17/1992 Agenda Item Number: ~ '- Ii. ~ '- . '- .... '- u. '- u. ..... u. ..... u. ..... u. ..... .... ~ .... '..... IU. ..... I.....~ L~ LU LU L.J L- LJ i . ... Farah . " Investments . ~, International, Inc. 10.~ E. Grand Blvd., Corona, Ca. 91719 (714) 278-0816 The proposed project is an ARCO AM/PM Minimarket. A minimarket and gas station at the same time. This project is about three weeks from completion. This project would require in the neighborhood of 392 hours of employment per week which would account to about ten full time employees. This project would also beautify the area by replacing the old broken down houses on the lot. The project conformed to all the conditions that were required of it, with red tile roof all around and landscaping as required by the parks and recreation department. Farah Investments International, Inc. (FII, Inc.) is a small and closely held corporation doing most of its real estate business in the Riverside and San Bernardino counties. Reason for the additional loan: As you could see from page 3, the estimated cost for the total project was about $1.3 million. Our bank required that our contribution for the project be 30%. This amounted to about $400,000. Therefore the bank loan was $900,000. As we progressed in the construction of the project, we encountered some obstacles that were not foreseen. All of these obstacles, except for one, have been in the offsite improvement of the project. Highland Avenue!s an old designed street under CalTrans jurisdiction, and since CalTrans does not keep strict records of its streets, the obstacles that I forementioned were not foreseen. Therefore our offsite improvements( item #61), excluding the traffic signal modification, grew from $30,000 to about $92,000, and our plan checks and permits(item #1) grew from $26,000 to $38,000. In consequence, our funds were short by about $72,000. We ask from you the same treatment we had from the bank, 70% of the needed money to finish the project. This amounts to $64,400. ~