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Home My WebLink AboutRS01-Economic Development Agency o o DEVELOPMENT DEPARTMENT OF THE CITY OF SAN BERNARDINO ECONOMIC DEVELOPMENT AGENCY REOUEST FOR COMMISSION/COUNCIL ACTION FROM: BARBARA L. LlNDSETII Acting Executive Director SUBJECT: INLAND PLAZA. INDUSTRIAL DEVELOPMENT BOND REFINANCING DATE: September 29,1994 SynODS'S of Prf!vlou~ Commtl'l!don/Councll/Commlttee Actlon(s): On February 24, 1994, the Redevelopment Committee recommended that staff pursue, with Miller & Schroeder, Fmancial, Inc., the refinancing of the Inland Plaza IDB without an Agency guarantee. (Synopsis continued on next page...) Recommf!nd@d Motionls): (Communltv Deve.DDment Commission) MOTION A: RESOLUTION OF TIlE COMMUNITY DEVELOPMENT COMMISSION OF TIlE CITY OF SAN BERNARDINO, CALIFORNIA, APPROVING A CERTAIN STANDBY LOAN AGREEMENT ON BEHALF OF TIlE INLAND PLAZA PROJECT. lMavor and Common Council) MOTION B: That the Mayor and Common Council set a T.E.ER.A. hearing for November 7, 1994 at 1l:00 a.m., for the $2.35 million refinancing of the Inland Plaza project by the issuance of Industrial Development Bonds by the aty of San Bernardino. A- ;1 ~ 5 (- ,,--.~ .lie fro-< (( C'~7 ",/.51. I BARBARA L. LINDSETH Acting Executive Director Contact Person(s): Barbara lindseth/John M. Wood Phone: 5081 Project Area(s): Ceutral City (CC\ Ward(s): Three (3\ Supporting Data Attached: Staff Report: Memorandum: Miller & Schroeder Fax: Resolution FUNDING REQUIREMENTS: Amouut: $2.35 milliou Budget Authority: Source: Loan Guarantee Requested Commlsslon/CoundT Noh~!'Il: JMW:dle: I 0-03-0 I.cdc COMMISSION MEETING AGENDA MEETING DATE: 10/03/1994 Agenda Item Number:fS "" J 1- REQUEST FOR COMMISSQ/COUNCIL ACTION Inland Plaza Industrial Development Bond Refinallelllg September 28, 1994 Page Number -2- o .~._------------------------_........_.._.__.._-.....---------------...............------..----------------------------..----..............------------------------- SvnODS's of Previous Commlsslon/Counetl/Commlttee Adlon(!'II) Continued! On March 7, 1994, the Mayor and Common Council held a public hearing to approve an IDB extension for lnIand Plaza from October IS, 1993 to October IS, 1994; the Community Development Commission considered a $2.2 million loan guarantee request, but deferred action unti1ln1and Plaza could raise the occupancy rate of the subject property to 85%. On April 18, 1994, the Mayor and Common Council held a public hearing to approve an IDB extension for lnIand Plaza from October 15, 1994 to April 15, 1995. On August 25, 1994, the Redevelopment Committee recommended that the Community Development Commission approve a loan guarantee to lnIand Plaza to facilitate the refinancing of its $2.2 million IDB. On September 6, 1994, the Community Development Commission granted conceptual approval of a $2.2 million standby loan agreement to assist with the refinancing of lnIand Plaza, subject to a review by staff of updated financial documentation. On September 29, 1994, the Redevelopment Committee recommended that the Community Development Commission approve a $2.35 million standby loan agreement to assist with the refunding of the lnIand Plaza IDB. JMW:dle:10-03-01.cdc COMMISSION MEETING AGENDA MEETING DATE: 10/03/1994 Agenda Item Number:!?5-/ DERLOPMENT DEPART~NT ECONOMIC DEV2LOPMENT AGENCY STAFF REPORT Inland Plaza - Industrial Develooment Bond Refinancinl! In 1983, the City of San Bernardino (the "City") issued its $2,200,000 City of San Bernardino, California, Industrial Development Revenue Bonds, Series 1983A (Inland Plaza Project) to finance a shopping center (the "Project") on behalf of the Inland Plaza Partnership ("Inland Plaza"). The Bonds were secured by a 10-year note (the "Note") executed by Inland Plaza for the benefit of the City. The Note came due on October IS, 1993. However, the sole Bondholder, Bank of California, agreed to an extension until April 1995, in order to allow Inland Plaza additional time to obtain fmancing to pay the Note. At its September 6, 1994 meeting, the Community Development Commission conceptually approved the structure of fmancing for Inland Plaza in the form of a bond issue secured by a stand-by loan agreement provided by the Agency. This conceptual approval was subject to a staff review of documentation supporting the creditworthiness of both the project and its owners. the documentation evidences that the project itself suffers from a relatively high vacancy rate of 35%, but that the partners of Inland Plaza, from which the Agency would receive personal warranties, each have substantial net worth. Moreover, there appears to be adequate cash flow from the center to service the new fmancing. The debt coverage ratio is 1.35, quite good by current lending standards. The attached staff memorandum explains in greater detail the relative strengths and weaknesses of this proposal. In addition to the personal guarantees of the partners, who will be jointly and severely liable for the full amount of the standby loan agreement, the Agency will also receive a first trust deed against Inland Plaza. The property was appraised at $3.8 million in November of 1993. Given that the standby loan agreement is for $2.35 million, the loan-to-value ratio for the project would be 62%, a very good ratio by current lending standards. The Agency will also receive a one and one half percent (1.5%) guarantee fee, amounting to $35,250. If the standby loan agreement is approved by the Commission at its October 3, 1994 meeting, staff, Sabo & Green and Miller & Schroeder Financial, Inc., may then begin to prepare the requisite agreements and other documents for the issuance of the bonds. Those documents would also be subject to approval by the Commission at another meeting. At its September 29, 1994 meeting, the Redevelopment Committee recommended that the Community Development Commission approve the subject $2.35 million standby loan agreement. JMW:d1e:lO-03-01.cdc COMMISSION MEETING AGENDA MEETING DATE: 10/03/1994 Agenda Item Number:~.1 DEVELOPMENT DEP9TMENT/EDA STAFF REPORT 0 RE: Inland Plaza - Industrial Development Bond Refinancing September 28, 1994 Page 2 Also attached for your reference is a tentative fmancing timetable prepared by Miller & Schroeder Financial, Inc., as well as a copy of the resolution approving the standby loan agreement. Staff recommends adoption of the attached resolution. ~;{~ 0 CU-~ c_~c L;-;: BARBARA J. LINDSETH, Acting Executive Director Development Department JMW:dle:IO-03-01.cdc COMMISSION MEETING AGENDA MEETING DATE: 10/03/1994 Agenda 1Iem Number:M o o DBVBLOPMBIIT DBPARTMBIIT OF THE CITY OF SAIl BBRlWIDIBO MEMORABDUM ------------------------------------------------------------------------------- TO: Stafford W. Parker, Deputy Director FROM: John M. Wood, Project Manager SUBJECT: IBLAIID PLAZA IlIDUSTRIAL DBVBLOPIIENT BORD RBFIIIAIICIRG DATE: September 26, 1994 COPIES: Agency Administrator, Acting Executive Director, Ms. Alexis Crump, Esq. - Sabo & Green, Mr. Vic Dhooge, Esq. - Miller & Schroeder Financial, Inc., File ------------------------------------------------------------------------------- Stafford, I have reviewed the most recent document submission from Inland Plaza and, at Alexis Crump's urging, have prepared this memorandum to discuss the results of my analysis. First, there are several items that were either missing from the package submitted by Inland Plaza or that will require some clarification. They are as follows: 1. The preliminary title report shows three trust deeds against the property - two for $2,050,000 each and one for $2,200,000. Though all of these should be removed through escrow, we will need to have it clearly understood with Inland Plaza that the Agency will hold a first trust deed (prior to any others) on the property. 2. Vic Dhooge of Miller & Schroeder has reviewed Inland Plaza's income/expense statement to verify that there is sufficient cash flow to meet the new debt service. There appears to be a 1.35 debt coverage ratio, which is quite adequate by most lender's standards. 4. We did not receive any tax returns or a current financial statement for one of Inland Plaza's partners, Mr. Rod Chamberlain. Mr. Leonard Porzio, an associate of Inland Plaza's partners, stated that Chamberlain was going through a divorce and could not release this information. Porzio will attempt to get a signed statement from Chamberlain to the effect that his net worth has not changed substantially since the last time we reviewed it. 5. We have not received the $500 application fee nor the $10,000 TEFRA fee which were requested. Mr. Porzio was reminded that these fees should be submitted as soon as possible. ------------------------------------------------------------------------------- JMW:0252g ~~-/ 1- o o DEVELOl'tIEBT DEPAllTPmnr tmMOlWmUM INLAIm PLAZA IlUlUSTRIAL DEVELOl'tlEBT BORD REFIHARCIBG September 26. 1994 Page Number -2- ------------------------------------------------------------------------------- The following are some additional comments which arose from my review of the materials that were submitted by Inland Plaza: 1. Based upon an appraisal at $3.8 million and a bond refunding of $2.35 million, the loan-to-value ratio for the project is 62%, very good by lending standards. This also assumes that the above-referenced trust deeds are removed from the title chain. 2. Approximately half the land upon which the project improvements lie is on a long-term ground lease. It would certainly be preferable for all the land to be owned in fee because, in the event of a default under the ground lease, the the ground lease would be senior to the Agency's first trust deed. Thus, it is possible that the value of our collateral could be diminished. 3. The personal net worths of Inland Plaza's partners (from personal financial statements), with the possible exception of Chamberlain, are all substantial. 4. A number of Inland Plaza's leases expire during 1994, 1995 or 1996. If difficulties are encountered in reletting some of the spaces, the project's cash flow, and its ability to service debt. could be negatively impacted. 5. A Phase I Environmental Assessment concluded that the building is suspected of haVing been at least partially constructed with asbestos containing materials. The exact magnitude of the cost to remediate this condition is presently unknown. 6. The current vacancy factor for Inland Plaza is approximately 35%, high by lending standards. Some months ago, when the Community Development Commission originally considered a loan guarantee for this project, it stated that it would like to see a vacancy rate no greater than 15%. I would be pleased to answer any questions concerning this memorandum. \IV: M. Wood; Project Manager elopment Department ------------------------------------------------------------------------------- JMW:0252g ifS-/ '. FROY MILLER & SCHROEDER . o (THU) 09. 22' 94 llc:rST. 11: 25/NO. 3560670954 P 115 FACSIMILE COVER SHEET ... Dale: SepCember 22, 1994 To: JoIm Wood, Project MlInllger Fax Number: (909) 384-5135 RE: San Bernardino Joint Powers Authority From: Victor P. Dhooge Miller & Schroeder Financial, Ino. (619) 481-5894 TEL (619) 481-8677 FAX Messal!'e: Please review the List of Participants and Tentative Financing TImetable aod advise me of any additions, deletions, or changes Number of Pages including Cover Sheet: ~ I~I Miller & Sdu:oeder Financial, Inc. 1ls. I FROM J.l] 1LER &: SCHROEDER . o (THU) 09. 22' 94 I ~/ST. 11: 25~O. 3560670954 P 4/5 11,950,000 San BernardliuJ JoIN Puw.n Fl1umcIng Authority IndastriDlDevel8pmart Revenue Rqilnding Botuls Series 1994.4 (TtIJ(,-Exempt) S150, 000 San Bernardino Joint Puwers Financing AuOlDr~ Industrial Develt!pmart Revenue RejiuuIJng Bonds Seria 1994B (TamlJle) TENTATIVE FINANCING TIMETABLE DRAFT I Date Responsible I Item party Thursday September 29th StalfCommittee of Economic & Community Developmen1 Stat( BCD Agency meets in preparation tlftheir recommendation to proceed with the loan guaranty Cor the Inland PIa.t.a project Monday October 3rd Commission approves loan,guaranty for the Inland Piau Commission project Week of' October 10th: CDAC notified ofrefunding i&sue Bond Cotmsd. F"1I'St draft oflegal documents disttibuted to issue Bond Counsel participants Week of October 17th: First draft ofPrcliminary OOicial Stateml:ut (p.O.S.).M. Undel:writu's Bond Purchase Agreement distributed. to issue pacticiplUltll Cou!Isel Monday October 24th First notice ofTEFRA Hearing published Bond Counsel Tlu:nday October 27th: Agenda deadline Cor City Council meeting An 1.S-1 Stzn &m/1rdi1JD Joinl PtTWeTS Frntmcfng A.lllhorfty Tmtattw F1nDncIng llmetable Pup :J FROIl MJ LLER &. SCHROEDER . I Date Tuesday November 1st: Monday Novcmbcr7tb: Wadnesday Ncmmbet 9th: Thursday November 10th: Week of November 14th: Week of Nowmber 21st 1:00 p.m.: Tuesday November 22ndl Weclnesday November 23td o (THU) 09. 22' 94 IO/ST. 11: 25/NO. 3560670954 P 5/5 DRAFT '" . . I:', ,f'i, , " . ...... . .. Item ~lel Second notice ofTBPltA Hearing published Bolld Couosel TEFRA Belting, CiI)' CollllCil approves bond doc:um~ Official Statement aod Bond ~ A.~ (1III to fimn) P.O.S. printed and diwibuted fssuer Underwriter Price and market the bonds Underwriter Bonds printed Bond CoUDBel Official Statement printed and distn"buted Underwriter'. Counsel Pre-CIow Close (Ofiices ofSabo & Green) 23 801 Calabasas Jload, Suite 203 S Calaba!lU, Califumia 91302 All ~ Udde.1T~;~: MiUc:r &: Sc:hRlcdcr J'i"'''''~~1, Jm:. City ofSaa BemaaIIDD Bml::of Ammca Trust &: SaYiDss Associatillll Sa&o &: GnlaI r.lrdge Rose Gul:IJMJtI~d..... &: FenfoD IDIaad Plam Commissicm of the: Redewlopmem Agt::ncy of& City ofSlIIllbmrdiDo Juaer: TnrItee: Bolld ColIDSd: UDdec1rriter, Coausd: Bm.aon~: Commissioll: .' --I" Miller& Sclttoeder F.1nancial, Inc. RS~I '. FROM MILLER & SCHROEDER . o (THU) 09. 22'94 11~St 11:25/NQ 3560670954 P 215 DRAFT S1,950,OOO San Bernar4lM Joint POWI!I7 F'IIItDrdng Authority lndustrllll DevelDp1lWlt Revenue ~ Bonds SerJa 1991..4. (Ta-Exempt) 1150,000 San BernardIno JoUd Powus FInancing Autlto,lI, lndustrkd Deve/Dpment RevDUle Rt:ftuuIlng Bo_ Sena 1991B (T1fXll.b14) List of Participants, 13SrTF.R Sad Bemardfno ZoIat Powers P'maaclng Aadloril7 201 North "E" Street. Third Floor San Bcmacdino, Cllifbmia 92401-1507 . Fred Wllron, Assistant City AdministTator . John WDllI( Project ManaF (909) 384-5W FAX (909) 384-5641 City of Sad JletIW"lllno - Economic: Devdopmmt Agmq 201 North "E'" Street. nirdFloor San Blll1IlIl'IIiI1o, Califomia 9240 1-1507 . 1imothy C 8teinhazts, Agency AdmfntsilrJtoI' (909) 384-5081 PAX (909) 384-5135 UNDERWRITER MiIIu & Sr.hroeder FInandaJ, Ine:. 50S LotllllS Santa Fe Drive, Suite 100 Solana Beach, CaJifomia 9207S . Victor p, Dhocge, Jru:e President (61') "1-5894 FAX (619) 481-&617 UNDERWJU:J'ER'3 gJUNSEL Mlldge Rose Gutllrfe Aleunder &: Ferdon 333 South Gamd Aveaue. Suite 2020 Los Angeles, CaIiimJia 90071 . Donald HIITlI, Esquire . Fred [{ghlman, Esquire (213) 229-2304 FAX (213) 680-1358 BOND COUNSEL Sabo &I Greed 201 North "s" Street. Suite 206 San Bernardino, California 92401 . Tim Sabo, Esquire (909) 313-9373 FAX (909) 383.9378 23801 Ca1abasas Road, Suite 2039 Calabaszs, ClIIifornia 91302 . A/ais Oump. Esquire (118) 704-0195 l'AX(818) 704-4729 ~s', FROM YlLLER & SCHROEDER (TOOl 09. 22' 94 'ld/ST. 11: 25;NO. 3560670954 P 3/5 I-I, I '. . . r . san Beml1rdJno Joint Powel'1 FinarlCltrg ~. .. .' lnImuJ Plaza Dew1Dpmml List O/PlITticlptm16 Przg.1 o DRAFT BORROWER Tnhnd J!'Jaza DenIopmeat do Tract Mertpp IDe. 1601 Dove Sueer, Sake 105 Newport Beach, CaIifomia 92660 . Mr. Sam W'atwm TRUSTEE BBllk of America NatlolLll Tnllt BIId SavinI' AsIodatkna Corporate Trust Department, Dept. 8S10 333 South Beaudry Avenue,. 25m Floor Los Angeles, CaIifbrnia 90017 . Us. ~ Chon TRU,'lTF.F..S COUNSEL Balik of Amerb National Trust and Samllp Auadatioa Legal Department - No. 4017 555 South Flower Street. 8th Floor Los Angeles, C8IiC0mia. 90071 . Ms. Debra Glasser I ~I Miller & Sduoedet FmanclaI. Inc. (714) 133-0225 FAX (714) 833-3843 . (%13) 345-"52 FAX (213) 345-7596 (%13) 2211-4981 FAX (213) 228-2530 ~~., , 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Item: Action to be Taken: o o COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO, CALIFORNIA AGENDA October 3, 1994 RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO, CALIFORNIA, APPROVING A CERTAIN STANDBY LOAN AGREEMENT ON BEHALF OF THE INLAND PLAZA PROJECT Adopt Resolution Certified copy of Resolution to be returned to Sabo & Green, A Professional Corporation. SBEO/0132/2 9/28/94 1230 1w l."~l 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 o o RESOLUTION NO. RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO, CALIFORNIA, APPROVING A CERTAIN STANDBY LOAN AGREEMENT ON BEHALF OF THE INLAND PLAZA PROJECT WHEREAS, the Community Development Commission is the governing board of the Redevelopment Agency of the City of San Bernardino (the "Agency"), a public body, corporate and politic, organized and existing pursuant to the Community Redevelopment Law (Section 33000 of the Health and Safety Code of the State of California); and WHEREAS, in 1983 the City of San Bernardino (the "City") issued its $2,200,000 Industrial Development Revenue Bonds, Series 1983A (Inland Plaza Project) (the "Prior Bonds"), which Prior Bonds are now due and payable; and WHEREAS, it has been determined that the only feasible means to refund the Inland Plaza Project is through a bond issue of either the City or the San Bernardino Joint Powers Financing Authority, which bond issue which would be secured by a standby loan agreement provided by the Agency; and WHEREAS, the Inland Plaza Project is located within the Agency's Central City Redevelopment Project Area (the "Project Area"); and 1/1 /1/ - 1 - l.SJ \ o o WHEREAS, the owners of the Inland Plaza Project have requested that the Agency provide a standby loan on behalf of the Inland Plaza Project in order to refund the Prior Bonds; and WHEREAS, the Agency deems it to be desirable to assist the owners of the Inland Plaza Project by providing said standby loan in the interests of (i) retaining jobs, (ii) maintaining economic growth, and (Hi) preventing the spread of blight within the Project Area; and WHEREAS, the amount of the standby loan shall not exceed Two Million Five Hundred Thousand Dollars ($2,500,000) and shall be repaid upon the terms and conditions as provided in the Loan Agreement (as hereinafter defined); and WHEREAS, the Agency at this time deems it desirable to approve the Loan Agreement (as hereinafter defined) in the fo~ on file with the Secretary of the Agency. NOW, THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION ACTING ON BEHALF OF THE REDEVELOPMENT AGENCY OF THE CITY OF I SAN BERNARDINO DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS: Section 1. The Agency hereby finds and determines that the provision of a standby loan to the owners of the Inland Plaza Project will assist redevelopment within the Project Area and result in benefits to the City. - 2 - RS~I 1- o o 1 Section 2. The Agency hereby approves the form of 2 standby loan agreement presently on file with the Secretary of 3 the Agency (the "Loan Agreement") with any changes as may be . authorized by the Agency Administrator or Acting Executive 5 Director upon recommendation of Agency Counsel. The Agency 6 hereby authorizes the execution of the final form of Loan 7 Agreement by the Chairman, Agency Administrator and Acting 8 Executive Director, and the Acting Agency Secretary is hereby 9 authorized to attest to the signatures thereof. 10 11 Section 3. The Agency hereby authorizes the 12 Chairman, Agency Administrator, Acting Secretary and Acting 13 Executive Director to execute the Loan Agreement and any and all 14 related documents necessary to carry out the transaction 15 contemplated thereby on behalf of the Agency with any such 16 changes as may be approved by the Agency Administrator or Acting 17 Executive Director and Agency Counsel. 18 I I I 19 I I I 20 /II 21 /I I 22 /II 23 /II 2f /I I 25 /II 26 /II 27 /II 28 /II - 3 - 'Ks--t 1 2 3 . 5 6 7 8 9 10 11 12 13 11 15 16 17 18 19 20 21 22 23 2! 25 26 <,n 28 o o RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO, CALIFORNIA, APPROVING A CERTAIN STANDBY LOAN AGREEMENT ON BEHALF OF THE INLAND PLAZA PROJECT Section 4. The findings and determinations herein shall be final and conclusive. This Resolution shall take effect upon the date of its adoption. I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Community Development Commission of the City of San Bernardino at a meeting thereof, held on the day of 1994, by the following vote, to wit: Commission Members: NAYS ABSTAIN ABSENT AYES NEGRETE CURLIN HERNANDEZ OBERHELMAN DEVLIN POPE-LUDLAM MILLER Secretary day of The foregoing resolution is hereby approved this , 1994. Tom Minor, Chairman Community Development Commission of the City of San Bernardino Approved as to form and legal content: By: Agency Counsel SBEO\0132\OOC\2 - 4 - t~/I I~ 1 2 3 4, 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 --- o o STATE OF CALIFORNIA ) COUNTY OF SAN BERNARDINO) ss CITY OF SAN BERNARDINO ) I, Secretary of the Community Development Commission of the City of San Bernardino, DO HEREBY CERTIFY that the foregoing and attached copy of Community Development Commission of the City of San Bernardino Resolution No. is a full, true and correct copy of that now on file in this office. IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the Community Development Commission of the City of San Bernardino this day of , 1994. Secretary of the Community Development Commission of the City of San Bernardino 'R~/\