HomeMy WebLinkAboutR11-Economic Development Agency
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DEVELOI'MENT DEI'ARTMENT
OF THE CITY OF SAN BERNARDINO
ECONOMIC DEVELOPMENT AGENCY
REOUEST FOR COMMISSION/COUNCIL ACTION
FROM: BARBARA L. LINDSETII
Acting Executive Director
sUBmcr: INLAND PLAZA-
INDUSTRIAL DEVELOPMENT
BOND REFINANCING
DATE: November 2,1994
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Svnopllls of Prflvloll!ll Commhilllon/Coundl/Commtttf!e Adton(s):
On February 24, 1994, the Redevelopment Committee recommended that staff pursue, with Miller & Scbroeder,
Financial, Inc., the refinancing of the Inland Plaza IDB without an Agency guarantee.
(Synopsis continued on next page...)
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Recommfmded Motlonls):
(Mavor and Common Council)
MOTION:
That tbe Mayor and Common Council set a T.E.F.RA. bearing for November 21, 1994 at 8:00
a.m., for the $2.35 million refinancing of the Inland Plaza project by the issuance of Industrial
Development Bonds by the City of San Bernardino.
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Contact Person(s): Stafford W. Parlcer/John M. Wood
Phone:
5081
Project Area(s):
Central Citv (CC)
Ward(s): Three (3)
Supporting Data Attached: Staff Report: Mem"rnnrlnm
FUNDING REQUIREMENTS: Amount: $2.35 miIlion Source: Loan Guarantee
Budget Authority: Obtained 10/3/94
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Comml~~lon/Councll Notes:
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JMW:d1e:inlandcdc
COMMISSION MEETING AGENDA
MEETING DATE: 1l/07/1994
Agenda Item Number:
II
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REQUEST FOR COMMISSION/COUNCIL ACTION
Inlaod Plaza Industrial Development Bond Refinancing
November 2, 1994
Page Number ..2-
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Svnopsls of Pn:vlous Commhlslon/Councll/Commltt@@ Ad'aufs) Continued:
On March 7, 1994, the Mayor and Common Council held a public hearing to approve an IDB extension for
Inland Plaza from Octoher 15, 1993 to October 15, 1994; the Community Development Commission considered
a $2.2 million loan guarantee request, but deferred action until Inland Plaza could raise the occupancy rate of tbe
subject property to 85%.
On April 18, 1994, the Mayor and Common Council held a public hearing to approve an IDB extension for
Inland 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 guaralllee to Inland Plaza to facilitate the refinancing of its $2.2 million lOB.
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 Inland 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 Inland Plaza
IDB.
On October 3, 1994, the Community Development Commission approved a $2.35 million standby loan agreement
for Inland Plaza and the Mayor and Common Council set November 7, 1994 as the date for a T.E.F.R.A. Public
Hearing.
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JMW:dle:inlandcdc
COMMISSION MEETING AGENDA
MEETING DATE: 11/07/1994
Agenda Item Number:
II
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E~)NOMIC DEVELOPMENT AGEN8
STAFF REPORT
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Inland Plaza - Industrial Development Bond Refinancinl!
In 1983, the City of San Bernardino (the "City") issued its $2,200,000 City of San
Bernardino, California, hldustrial Development Revenue Bonds, Series 1983A (Wand Plaza
Project) to fmance a shopping center (the "Project") on behalf of the Wand Plaza Partnership
("Inland Plaza"). The Bonds were secured by a lO-year note (the "Note") executed by Inland
Plaza for the benefit of the City.
The Note came due on October 15, 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 financing for Wand 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 vacancy rate of the retail space is 27%,
although there is also 4,872 square feet of warehouse space which is vacant. The partners of
Inland Plaza are confident that the vacancy rate can be reduced relatively quickly. In
addition, these partners, from which the Agency would receive personal warranties, each have
substantial net worths. Finally, 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 Wand 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.
At its meeting of October 3, 1994, the Community Development Commission approved a
standby loan agreement to guarantee the $2.35 million bond refunding. The Mayor and
Common Council set a T.E.F.R.A. public hearing for November 7, 1994 at 8:00 a.m.
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JMW:d1e:inIand.cdc
COMMISSION MEETING AGENDA
MEETING DATE: U/07/1994
Agenda Item Number:
II