HomeMy WebLinkAboutRS01-Economic Development Agency
-
o JEVEID1IIIBNr DEPARDIDl1' 01' .mP
CI'1Y 01' AN .........:mD
~ lOR lYWMTlIUITtW.flYW1M"TT. N:l'l'ICII
Fran: mmEIH J. ~
Executive Director
SUbject: IaIIID .............-,
Dl.~_.""". BJR!'-IfBIII
'mill UIUI ItIQ IRA\:'
Date: May 17, 1991
8yJIcpIIis of PNriOWl n-~ -icm/--'"'<:l11/OcIIIIIittee action:
Hale.
..= -F""IAd. JIo'tiCIIU
(nw..m"tyo DMrel.--.-'i.~t 1'nIWII....iOll)
'!HAT '!HE CXHIlNITll IE\IElDHIENT CXHIISSIC>>r APFRJ\IE A I01lN IN '!HE >>r:an' OF $200,000
'IO KIMflO INIIlS'mIES, INC:Xm'C1WIm, Wl'IH SAID I01lN 'IO Jla:HJE Il'f~"T AT 'lW) AND
'lHREE-<llARl'ERS (2-3/4) 1OINl'S OIlER NESf YCRK PRIME, BE P<R A '1'.EHI OF NINEl'lC (90)
D!\YS Wl'IH KIMflO INIIlS'mIES, INC:Xm'C1WIm 'IO PAY A QQ; ~ eU) I01lN
auGINATI~ FEE. lI\JKuu:;K, '!HAT AGI!NCY <XXlNSEL BE ~.LlW 'IO ImaRE '!HE APIR-
0BUA1'E I01lN AGREIH!Nl' AND SEaIRl'l'l!' IXlalM!NlB AND '!HE EXECI11'IVE w..I<I!A.:.I.UI( OF '!HE
I:lE.'V.EIOEMEN IEPARDU!Nl' BE All'1HJaZED 'IO EXECIJ1'E SUCH I01lN AND SI:u.ltuTI! tx:lCXHNl'S.
_~........ft _
DlMIl.__t.
Contact Persal:
Ken ~,....,.....,n:b""""" T.im......h
:Alale:
5065: 5081
Five (51
Project Area:
state Q:)lleae (SCl
Wlmi(s) :
~ Data AttadIed:
FUNDIN:; ~:
staff Reoort
Amount: S 200.000
SC:uroe:
&ldget Authority:
ClaIIIIissicm,/---il Notes:
KlH: lab: 4359
SUR;llemental Aqen:3a
CXIIIISSIClf IIEB'l'DU
Jl8eti.DqI OS/20/1991
~ ItemNoI ~- ,_
u
o
o
IB9BID1'III!Hl' J:mIARlHBNl'
BTUI' ~
(....m'lr-l"ll 'hvtt..afo9"l... TftIV'Il'ftV'll....+....
IDlnrt"""'""" IDlm 1lanI_
Kimko Imustries, Inoolporated (Kimko), was tounded in 1973 by wayne S't:.tlIPIenS,
President and sole stoc:Jcholder. Kimko is a 1IIlU1Ufac1:uri.n;J, industrial.
fabrication, erectia1 and IIIed1anical bJs!ness. Its prhmy ~tors are QlK
<l:nItJ:uctors, a New Mexioo-llased ~, 'ltIe Industrial ~"'lY located in
Sprin;JI:loat, COlorado and nmcan Fabricators lcx:ated in Bl~, california.
In 1988, Mr. stepIens IIlllde the decisicn to lcx:ate to San Bemardino and l::W.1d a
new facility. 'Ibis facility is lcx:ated at 5455 Industrial Perkway in the state
COllege Industrial Park. Almost i--iately, Kimko began experiencin;J certain
prcblEIIIS, as follows:
1. Mr. stepIens elected to be his am General Q:lntractar, micil. ......,~ a nega-
tive iDpct on the bJsiness cperaticn.
2. 'ltIe l::W.1din;J took talr (4) Da1ths lcn:J8r to o..h.U:\lct than ariginally anti-
cipated.
3. After CCIlStruct:icn began, scutbern california W1illtW1 requested the under-
grournin;J of utilities ClC:IIItin) &aII8 $200,000. 'ltIe original scutbern
califomia W1illtW1 apptaval was anticipated to cost $14,000.
BIlsed upcn the foregom;, and related matters, it was not until April, 1990 that
Kimko was able to reacn levels of prcx1uct:ivity and efficiency that allowed it to
attract MOef1S'ftry tinancinq. 'ltIe tim's a11IUll sales have daJbled CNer the last
two (2) years frail $3,000,000 to $6,000,000. As indicated in the attactled docu-
ment:aticn, Mec:tIanics Naticna1 Bank, a smau Business Administraticn preferred
lender, has appttJYed a $600,000 8M loan with Kimko.
'ltIe pn:pose of this Depertment'. short-teJ:m loan wculd be to assist the fim's
i....-'li..te cash-flow needs ($80,000jweek payroll) . As lIOCI'1 as the 8M rums the
loan, the Depertment's loan will be paid off, inc1ud1n3 accrued.interEt. 'ltIe
ocn:U.tions related to the DBpert:ment'. loan are as follows:
1. IDan AIla.mt:
2. Interest Rate:
3. Term:
4. Collateral:
5. Oriqinaticn Fee:
$200,000
2-3/4 ~ints CNer New York Prime
Ninety (90) D!lys
B.lsiness and PersaIal P.t._ty totalling $1,779,755
Cae Percent (1%)
BIlsed upon the foreqoin;, staff rec' ....-rxis adqltion of the fom mticn.
-~~a--ft-
DlMtlcpll8Dt t
lOH: lab: 4350
~lemental 1lgen:2
l'I"Mft'aazcIf ~.L..u.G
IIII8ti.Dq Date: OS/20/91
II
-
--- .-
o
o
W.B. JEFFERSON AND ASSOCIATES
BUSINESS AND Jl"INANCIAL SERVICES
444 It. FOOTHILL. STE. "C"
RIALTO. CA. 82378
(714' 875-4840
May 16. 1991
Mayor W. R. <Bob> Holcomb
City of San Bernardino
300 North "D" Street, 6th Floor
San Bernardino, California
RB: Kimko Industrie., Incorpor.ted
$200.000.00 Interim gO-Day Loan Request
Honorable Mayor Holcomb:
Enclosed is a copy ot the SBA Loan Approval by
Bank for 8600.000.00: copy of th summary of
copy of a letter from the RDA dated August 8.
the history of Kimko Industries. Incorporated.
Mechanics National
loan application;
1991 and a copy of
Mayor Holcomb. Mr. Wayne J. Stephens, President, of Kimko
Industries. Incorporated has obtained an SBA loan approval for
S600,OOO.00 to provide much needed working capital which will
enable him to get his business back on track.
Mechanics National Bank has ordered updated
real property where the appraisal reports
them for another three weeks or so.
appraisals on all the
won't be received by
Although Mechanics National Bank is a Preferred SBA Lender <which
means SBA approval is automatic if all the regulations are
tollowed> they can't fund the loan until the appraisal reports
are in hand.
Kimko Industries. Incorporated has a pressing neet to pay-off
some debts by May 24. 1991 at the very latest.
Therefore. Mr. Wayne J. Stephens, President, of Kimko Industries,
Incorporated is requesting that the City of San Bernardino
Redevelopment Agency provide him an interim 90-day loan of
S200,000.00. The loan will be repaid as soon as Mechanics
National Bank funds the SBA loan.
I would suggest that a pay-off with loan papers be sent to
Mechanics National Bank because they will handle their own
escrow. I have already discussed this procedure with them.
I would also recommend that the interest rate charged be 2 3/4
percent above New York Prime per annum simip1e interest with a no
pre-penalty payment clause. This would be the same as the SBA
loan.
l
o
o
Page #2
Mayor W. R. <Bob> Holcomb
Additionally, I would recommend charging a one percent orgination
fee by the RDA.
Mr. Stephens has equity in real estate of $1,185,000.00 and in
business personal property of $594,755.00 for a total equity of
51,779,755.00 to offer as collateral for the loan <see analysis
in Summuary of Loan Application attached>. Both the real estate
and business equipment has appraisals. The updated appraisal.
are going to be even higher. The old appraisal was comuted at
52.00 per square foot for the facility where the updated
appraisal was computed at $3.50 per square foot.
I would recommend that the RDA secure all real estate and
business personal property.
Mr. Ken Henderson, Director, Development Department,
of the SBA business loan application package with all
and has communicated with Mechanics National Bank to
loan approval and process to funding.
has a copy
appraisals
verify th
Kimko Industries, Incorporated
State College Industrial Park and
million in sales. Your immediate
retention as an employer in our
business.
employs over 70 people in our
is currently grossing over $6
help will insure this company's
area. Without it he's out of
Being that time is of
consideration to the
appreciated.
the essence, your earliest attention and
enclosed matters would be greatly
Yours Truly,
;or ~~) -:>
W. B. J fferson
President
WBJ:sj
Enclosures ................................... a. s
u
...,
.
,
Mechanics
National
Bank
May 1. 1991.
Mr. Waync J. Slcphcns
Kinlko lIlduslrics Incorporated
5455 Industrial ParkwIY
San BctDardino, CA 9Z407
Rc: Lou Appliealioa
Dear Mr. Stephens,
I am pleased 10 Infonn you our loan comminee has Ipproved your requC5l for I loan in
the amounl of 5600.000.00 In accordance with the enclosed Business Loan AgreemenL
Our approval is subJecl10 receiving I guarantee from SBA.
The: loan wlII be packaged by Wes Jefferson for submission 10 SBA. Any
arrangements for paymenl of I packaging fee should be made directly with Wes Jefferson.
Such arrangemenlS do nOI include the COSI of appraisal. which if required. mUSI be paid
directly to the appraiser.
In addition to the packaging fee, you also agree to reimburse Mechanics National Bank
for all out of pocket expenses incurred, which may include, but are not limited to, credit
repons. title policies and recordations. The Banlc requires a deposit of $500.00 to cover
lhese out-of-pocket expenses. Should you cancel your loan request, the deposit is subject
to a refund of any unused ponion.
Please sign the enclosed Business Loan Agreement and return it along with your check
for the deposit directly to us.
This loan approval Is valid for the next ten (10) calendar days. Failure to return the
enclosed Business Loan Agreement within the prcscribed time frame, could, at the banlcs
sole discretion, result In the cancellation of the loan COnunltlllenL
Sinc~, ~
~~~
Vice President
Enclosure
S"^ f'Jf\1$k.ts @
tt:."!oAll'Iol:ltt<Af'I.\'f>
1.......t('lIN1. CA ..11:, rt':l.
.:11) ~1I.4:!"" IIf;Ii
"A~ f;t,)1 ~'H~\l
-..
-
Jl
DUSIN1'6 LOAN AGREEMENT
-
;.,.... .
o
Thi. A'IUUlenl cnLered into on )oily 1. 1991 between MCl.;)I&"its. N.\i(.nll Flank (MNU) and Kimk~ JnduUtiCI
Inompu...ed 101. 10'" in 1110 amounl 01 Si. Hundlld Thuu.and Doll." (S600.000.00l. lor a pr.i"" or EiJlI1 (~)
,.ous ..... initial int.,,,. ro~ or Elovon and nu.. QUUI.,S I't....nl (J 1.7S~). Tilt irotl.1 illln... .... shall be
adjusled ba.ocIllJ"tn Ihe low N.w yo.k Prime kll' IS 01 1hc c1a1. 01 ....ipl or Ill. In... l\u.....1)' '1'I'IIe"ion b)'
SRA plus Two and Th... Quano.. PI..enl (2.7S,"). 111;' Is . vari.b1. inlrTtltu.. loan. Comm.ndn. on lit. r..1I
busine.. d.,. or Ill. calenclu qu..lc. lollowu., nUl dl.bursem.nt and qUUI.rI)'lller.all.r. die in....st rol. sh.1I
ir....... 0. d""'....1O 'two and nu.. Qu.._ P..<~nl (2.7S") 01>0.. Ill. lowesl N.w yo.k Prime R... in .lIeel on
lb. r..1I business ell)' or o..h calendu quule. '* published in Ill. Mon.)' R.II Stction 01 lit. West COal. Uition or
TIlt W.U $,,_ JOlll1lod.
Thio A~..cment is a.NaD)' an orIn b)' MNB 10 Inter In", a bU"eral tontr.et with ,ou. I. olhc. ..oub. on.1 )'ou
,"d MNll si,n "'i. Ap_ MNB ..,.... '" lencl and you .pee 10 I><>now. on !ho IIMIS oncl condition. specified
h..ei.. This clots nol COlUlllllle . co.lII1llnl... 10 lo.n 1..leas all panill 'i,n IlIb A....m.nl. nlis doos m,1
consll.ule . cwnmilmen' 10 loan ...liI MNB Is in 11..11'1. or Ihe tI"uI,d o,I,lnal or dli. Alrccm,.I. U!hl
cueutc4 A"umenlls nOl received on 0' bero,1 May II. Il/lIl, .. 1Il1 .01. di","tion or MNB. litis on., sh.1I
upirc.
J<EPkE.SENTAnONS A WAIUlANTIES
.. Bonowor", Corpar.Uon duly "'...i.... and .air~ .._. IN I.WI 01 Ibo 5..10 of Calli""".. I,
properl)' licawed. In .ood .Iand.... '1u1lU11<l _. hu ",,"plied WIlli Ill. /lcUIlous name ......... all
Olh.. I.w, and SIlIU. In IN S.... of Caliloml..
1>. Bono_r. i. conneelion with 1Il1. 10.... Is r.pr...nled 1>)' thel. own .nomt)'. or h.. h.d lb.
Opportunil)110 be and i& nol r.l)'inJ on MNJI 0' III .nom., ro, .dvlcl.
c. The ....ulion and p."o'm.... or !hit A~'T.cmenl u. willlin Bonow.,'. pow... h.., been dul,
.ulhorlzad and .... nOI in conflict wllll 1Il1 \er1ft of ")' chuler. b)'.I.ws 0' o!her OfS...i:.aliollal
p.p... or Bonuw...
d. Th. ....ulion. cIcliy.". and pcrlorm.... or litis AJlu01ml Ol. nul b. ""..lli.t ;"ilh an, l.w 0' ...,
Indc:nlurc. IJl_t or uncllnakin& 10 which bonowcr Is I PU1)' or by WhiCh Jlorrower II bound or
.nlClOd.
.. All r.....ialWorm.lion 'U!>milled by Bonower k> MNJI wh,lII., pr"iou.l)' 0' In Ill. rUlu.. .. and
wW be lnIo and lOnocllIt IU m,'erill ,..pecll upon ,ubmisslon. and is and will be compl... upon
.ubmlllion inoorN II m.)' be nocllsuy 10 .Ivo MNB . trUO and .ICWIII knowledl' of lb. .ubj""l
mlucr Ihc:rcor.
f. Bonowor i& entilied 10 \ransfer . IOCwh)' inl....t in .11 p,op.n)' Ind equlpm.nl lisled und., III.
CQU..\ TERAL sacllon ol.'d. AS'........L
S. Bonow., Is c....enl on all 5..11 and Fedual ...... .'''pI .. nu.,d belo""
COLl.A11:JW..
'.ymlnll and perfo'm..... of all ,ums and all ollltf Obl1,.tions un"', 1111, AI.....en. sh.1I be ...u,ed b, I
.eeorll)' inll'lI. .... lien in I.vor of MHB In 01 on !he rOIlOWInS'
.. Th,,4 Ii~n DOtilion aft properrv Ioc:.~d ~I ~45!i Indu!ClTill Park"'lv. San Bernardino CA 4n.07'
b. SeMnd 1it"n nnsilion an nr~'sy loeJted 81441 W P.mrnnn lJpJ.nd CA 91'86'
C. Sc~nd hen polilion Oft prON:{tY lnrlled I.' ~:\O Weltl I SlJ'eI!!L 01114110. CA 91762:
d. Sr(Qnd IIrn pndlinn on bu'linru I."~l!: or "\Jv\tp IndU!th'lr!l. Int
CONDITIONS OF DISB1)RSEMENT OF TIlE LOAN
Il,'nrl MNO is obli,llo<I ., dllbu,," the kI.n. MHO o1u.. ,oc.l.. .11 ul li.. 10Ito,,'ln,. ..oh or whi.h mu.1 he In
lUlIh :\l'(I Juhllance IIlisfKLClI)' III MNR.
-
-
......
.,.~ Wrillen eu.,anl)' from Sml)l\ulin... Adminil.l~un. Ind cOnlplianu I. all "'OUN !he,e'o
b. 1,.. orieinal ....uled No", ~ncinllhc loan
c. Ori.inll. UCC\llod S.cwilY A~r""..nl m1d Deedl or Trull co..rln, coll...nl dc.cribod lbov..
d. Eviden<< "'oJ lhc aceuril)' Inlert.... and Iitns in favor ot MNO Ole valid. enrolccablc and prior 10 IIIe
ri~h.. and Inwell ot o!hen e.cepC 1I10lc con>cnled 10 in "'ilin, by MNB. Sajd evidence 10 be in th.
lorm of !ill. insuranc., .llIono..... ..pen... 11011\ a liOc compan)' 01 MNB'I .hoic. Iho..in, Lide 10
III. leewil)' lI...fscIOry 10 MNB and .ivin, MNB a li.n po.ilion II described in !hi. As.eemcnl
under COI.lA11iIW.
a. C...,anl)' In InOl of MNII. ....uled by Wayn.l. SlepheN and ''''''Iueline V. ''''phm.s.
I. Evidence IIIIlI11c ClIC.lion. deUv.ry and pulonnant. by Jlono.... 01 W. ^poomenl and ",rport\e
....anlDr Of corpor'le IUbardinllin, c.cclil<>. 01 any "1"010111 r.quil.d Ilftdet lllil AI'..m.n~ II
approprlllc, h.ve boon lIul)' ..lhorlud and ..t~lIed.
COVENANTS
L Bono_ OpOOI 10 conduct IIIe "'"inell in . manner oolllllllnl wiLlI .U IaWI and '.'.....10.
app\Jcable !her.... 10 malalalll III Ilcctloca and pentllll _us&l)' ., adviaablo . opel'" 1M
...~ and JlI7 aU .wan 1Nlr........_ whM .....
to. .......... .&r_ 10 1eep boob ..... r..orda .. .._d..... ..I'" &......11' ....,..1I ._"'int
prinelplu ..... will deUv.r 10 MNB a..h financial ..... prOnl and loll a"_1l1t (in . f_
oali.l_ry 10 MNlI) u MHS may req"'l rro... lim. ... lime and ..Ul po.1IlIt a raprellnlaliva Oil
bellall ot MNS 10 ...mln. ..... auelll "'" boo... of .... "".Ine... Sonow" wlU promplly WOrm MNII
Ia wrilin, 01 lilY 11I1,.llon Involvln, 80rlo"" or any "enl which mi,hl .dv..llly .rreel
B OITOwcr', ."1111)110 rop.y II.. loan.
c. Burruw., will nOI Inc.. any oth" ind.bledn.... or .....m. 11.101. U lu.el)'. ,uaranlo,.
eoe.:mulludl.iun emJun. or odlcr wl.c lor III)' obJlaallon of olbas. or lend money. 01 mon,.,.,
uJi,n. hypol/l_ or .ncurnbe, an)' Bonow."1 ...... ....p11O MNll. \lnle.. MNB .hall conlOnl
lbcr. 10 In wrilina. For lb. purpose hereof, . lal. of ".ounl& ,...ivable lhall be deem.d IIIc
ineurrin, 01 indoblcdneJl.
d. Borro".r wUl IIOr ..II. uanlfe, 0. ...1", ony ...e... ....pt fOl laI. in lbc o,din.ry ",urs. of
lMlaineJl. willloul wrillcn .uthorlution f,om MNB.
Co BOlTowor..iII mlirll.in . Iif. insuran.. polle')' On lb. lire Dr W,yne 1. Sltphelll In lb. amounl 01
5500,000.00 1IIr0uaholll 1/1. cour.. of lIIe loon and ...i,n 10 MHO III .blolulO COUII"a1 uSi,nmen!
o/ahal policy.
f. JlOfTO..cr wUI ...lnltin r". ..... publl. Iiablllll illl\lron... II 1111 coU....a1 II d.letrninod 10 be In .
fIoocI huard 11M, II)' \he J)cp&nrnenl of Hou.In, and Urban Uev.lopmOllI . bolTOw., will Ilk. oUI and
",&lnlaln fJood inaur&nC'. 80no".. fWIhu .....1 10 like 0111 and kup in lorce ,ueh inso.an.. U
.. MNIl may require from lime 10 lime and "IU upon requut d.live, 10 MNB \he policlu 01 . Ichedule 01
all In&IWancc In foroo U MNIl mlY delennint f.u... lime 10 Iim.. and will Uli,n lb..e pollc'.. 10
MN8 upon requttl of MNB. All poll.... ..v..ine real or p."ona' properl)' .iv.n 10 MNB II
...Ualcral for tho loan Ihall nam. MNB al "'.. po,.. or morl,..... MNB r.lerv., tho ri,~ II ill
IDle diocrOlIon. 10 oceeps or "joe. lilY of \he aforemenlioned poli.ies priOl 10 dilbuu.m.nl ot fwlda.
MNIl may, .. ill ",'e lIi.eretion. ,..,." \he required ..vcr..c. .tlll. Bonowe"1 "pense. lhoold \he
Bonower fall 10 oblaln lbe reqlliftd -".,e.
I. The ..oou1.ion of MHO'J ltandard SOA 10... docwnmls, includin~ lbe SRA Aulhoriution. PrOmil'Ory
NOlO. Deed 01 Trus~ S..,wl1y A,re.m...~ Buildin, Loan A~'''nlen~ any required OIerow inslrll.tiolll
ond olhc, docurnenll MN8 d..... .......If}' .hall be dun,." yuur ..,ee""",c., 11I.1: TilE TERMS OF
SUOt DOCUMENTS WIU.PREVAlL 10THEEXmlTllIATTIlEY A1tEINCONSIS'IENTWn1l1lllS
AOIlUMENT. EXCEPT AS EXPRESSLY STATEOnroRElN.
I~ A.luan ~iu.ln" 80""we, OJ'''' '0 r.imb.... MNIl for oot.of.pock.. "pon.e. ",verin, .ppr.llaIl.
."'".... of lilla 01 oU,c, ,eeu.d I_.h... c,cdil rtpo.... S8A ,uoranly Ic. and for other .horse. ClI
.OpolI'" ill~..n'" ... ,.,tonned 0111I. requell of lhc DOlTowc,. or requilt" lor ",.per dncumcnllllon
Ind fundina of ~ loan.
;. lIor.owe. .II~ au nentry MNR or 11'I)' mAlc.rillJ advC!flc C'han,c in 11'I(': financial cnndiUClA or "'.
.....iM". ",in.ip" 0' ,UoronlClr. ClI in W val.. Dr any .esl 0. I....unal pmperl, III" will be held by
MNR u mll...,a!, If allY luch chID,c necura prior 10 Illy di.hu'..mcn~ MNIt Ib.1I nOI be nbli,'led
10 eonl;nuc di.~~aemcnlJ.
-
.'
.
j..Anl r.ilwc on &he PUI of lh~nowCl' to pI)' 1lTl)' Iwn uf inter('~l ur princip.1 af ~oln "'.hen dllc. OJ
any bluch or dtllull b)' .. Jower of OJ under an)' Itrm, "(llldilion. pf~n. "'&I1'AnI)' or
rcprcsenllllon made Oft lhJs Ifun,ent. any appolnuuenl flf . ItC'tivrr Or lIu~ltf as 10 . lubuuuiaJ
porlion of Ihe UK" of Bunuwcr. Dr any In)' of IIIICNnt'nt.. rlccutl('ln or IlmU., proc;~ss. any .rl on
Ille pin 01 lb. Bonow., ot inJoJv.nry. ,eneral ISsit:M1en. (tll lJ,t bt-ntfit of CftdilUfl, ~oJunlJ"ily
Iilin, of . pe....on lIIldtl any banl:tuplCY In' or O~I" I.., for ~I' b....n. ..r <rcdilo". or Ill. min, of
an Involunlal)' peLiLion undcr any banl:tuplcy 1,01 '" oth., I.... (or U,' benefil ..r c,cdi"". w/rich
,.mains undi.miu'" ro, a p<riod or .iaty (60) day.. or IIlc mlltin, or any ......menl 0' .....
.,aln.,the Bonower. other Ihan ..... on ,n! ",oPO'I)'. by Ill. r.<I...1 01 .tal. &OVtmmm~ ..r any
dtpanmm. "'.....r. .holl II Ihe opllon of MNB. milt. inuncdillCly duo and ply.bl. aU .wn. loan...
hcraunder. ..,ardl... or tht terms of any promi..ory nolC ,vid.n.in, th. loan.
II. BonowlI.,._ 10 additional proviaiona u rollow:
.ubjto.1O awraioal or...h ,..I propony U.lCd undor COLLATERAL
I. 'IlW Al'ccmcnt conlalno all or "'. lenn. and OOndidollS a,rNd upon berween you and MNIl. and no
Dlh.. a"ccm.n.. or ..prooonlltion.. whethtr oral 0' w,in.n, "~lIdill* Ihe lubj..,1 Jnall<J heroor have
been lIIode. 'IlW Ap......." ....1 ....t be ...i",... by 80rrow.r. and any aUenlplad u.i~Mlent will be
VOID. NO MODIFICATION OR CHANCE IN THIS ACREEMEI'(J' SHALL BE VAllO UNLESS
APPROVED IN WIlI1NC IY AN OfJ'IC'EIl Of 1lfE &ANK.
Macbllll...}'a~ Illllk~, /
4'/1 w~
~
. Jolin DoM.... Vice -;:::-denl
acmower :
Klmko lndu._ Inoorpo,_
fly'
Wayne J. Sltp/>tllI. .....id..... CUllan""
OliO: Mall. 1991
lIy:
Jacqueline J. 5lCflh..... 5,:"""",, " CUIllll'"
L
L" Ji" -""""-"-- :J:..~""""",-~~.,"",""" "~""'~~"'...<.'" _,."...'-~" '.'
.
APPLICANT:
BUSINESS:
TYPI or BUSINISS:
.
rolX or IUSINISS:
SIZI or IUSINISS:
ILIGUILln:
LOAN AKOIlll'l'
aIOUESTED:
TIlXS aIOUISTID:
INTlallST UTIl
aIOUESTID:
puaposl or LDAK:
DIlIT/IOUITY UTIOS:
A.Tlla LDAN APPROVAL:
'UST YEAK:
SIlCOND YEAK:
THIRD YEAK:
LOAN UPAYIIEN'I':
-
"""....."'~";';A.."'"";,'.1''''"'~
,......
-"'.'
'.
SUMMARY O. LOAN APPLICATION
Wayne J. Stephen.
..1 Weat Emerlon
Upland, Ca 91786
(7HI 946-0616
Kimko Induatriaa. Incorporat.d
5455 Induatrial Parkway
San I.rnardino, C. 92407
(7H I 880-3224
Manuf.cturing: Induatrial 'abrication. Ir.ction
and M.chanical
California Corporation
ADnual .al.. bav. b..n about '4.347,10'. wbicb
...t. th. SaA d.finition of ...11 bu.i.....
Applicant i. .ligibl. for 'aA 7-& 1... rand. .. to
ai.. and ..1.. yoluaae 0' bu.i.....
$600,000.00
Eight <.) y.ara, witb no preparaeDt penalty.
11 3/4' int.r.at or SBA a.all bu.in.a. rat..
'1'0 .nabl. applicant to pay down d.bt. and provide
working capital which will .ffectiv.ly .nh.nc. ca.h
flow. S.. U.. of 'unda Stat...nt attach.d to thi.
..ction.
1,223,'30 I 1'8,814 . 6.5:1
1,540.958 I 296.7'5 . 5.2:1
1,524,737 I 550,063 . 2.8:1
1.358,9'0 I '30,'45 . 1.4:1
'I'h. loan will b. r.paid fro. the bu.in..... ca.h
flow. 'I'h. proj.ction of .al... co.t of ..1...
.xp.n... and ca.h flow indicat. that there i.
.uffici.nt .arning pow.r to provid. ad.quat. loan
cov.rag.. .Al.o ... Curr.nt a.payablility Analyai.
r.port in &xhibit C and Hi.toricial a.payablility
ADaly.i. in &xhibit G.
CASH SOURCIS 1ST YIlAR 2MD YEAR 3aD YI!AI.
I.gining Caeh .H2,457 00 00
Nat Profit <BIT> 107,971 ~53,271 380,182
Daprachtion 56.400 56. .00 56.400
Total 306,828 309,678 437.282
....... ....... .......
CASH USIS
Long-Tar. Debt . 217,405 15,637 8.777
SIAl Bank Kopay . 75.000 75.000 '5.000
Total 292.405 90.637 83.777
....... ....... .......
. Int.r..t portion of loan pay..nt. wa. includ.d a. .. .xpen.. b.for.
D.t profit.
'l'b. c... cov.rage for the fir.t year i. 1.0 <306,828/292.405/ the .econd
y.ar i. 3.4 <30'.67'/90.637>/ and the third y.ar i. 5.2 <437.282/'3.777>
whiCh i. ad.quate to a..ure repayment of the loaD. ". the bu.in...
grow., ~b. e..b coverage baeo... even atronger.
-
-.. _ '.-A. ........t>:
..~,~
-
"
"';'"
,...... . - ~ ......~-- ._.~, ..~'" '_'a ,... J.. .
".
'."
o
o
Pag. .2
Suam.ry of Lo.n Applic.tion
Ki.ko Induatri.., Incorporated
COLLATERAL:
1.
S.curity int.r..t und.r C.liforni. UCC-l on .11
bu.in... ....t..
2. '.r.on.l gu.r.nt... of W.yn. J. St.ph.n..
3. 2nd Tru.t D..d on the ho.. of W.yn. J. St.ph.n.
.quity of 8210.000.00.
t. 3rd Tru.t D..d on au.in... 'roperty. linto
Indu.tri... .quity of 8181.000.00.
5. 2nd Tru.t De.d on 8ingl. ...ily a.nt.l 'roperty
Of W.rn. J. .t.pb.... equity Of 8128.000.00.
.. ,1.\ .,.arut...
aaJLUtnal
AllALYlU:
~. break-eveD analrat. aho.. ~h. ..1.. projactloDa
upon .hicb r.p.r-.nt .bility i. c.lcul.ted .r.
r...oDable.
Total Coat of Sal.., Total Expen... aDd Total debt
Princip.l p.ym.nt.:
Firat V..r .
Second V..r .
Third V.ar .
5.3..,515 I 5..33."6 _ ,.,
6.551.6'1 I 6.1'2.35' - '"
'.12'.161 I ...'0.... - '6'
Th. ..1.. l.v.l n..d.d to br..k-.v.n on thi. b....
i. 5.3...515 or ,., of proj.ction for th. fir.t
y.ar; 6.551.6'1 or '" of ..1.. for th. ..cond y..r
.nd '.12'.161 or '6' of ..1.. for th. third y.ar.
Thi. provid.. ..pl. l....y for ...ting .11
oblig.tion. inClUding inco.. t.x...
NARRATIVIl
Hr. Wayne J. St.ph.n.. 'r..id.nt .nd
Indu.tri... Incorpor.t.d i. r.qu..ting .
provide .uch n..d.d .orking capit.l
flo.. by p.ying-off .0.. tr.d. p.yabl..
tr.ck.
.01. .tockhold.r. of linto
lo.n of 5600.000.00 .hich .ill
.nd .n.bl. hi. to incr.... c..h
.nd g.t hi. coapeny b.ck on
Hr. Staphena atarted Xi.ko Induatrl.. eight.aD '..1'. ago froa hi. garage
<... .xhibit D - Ki.tory of au.in...). OV.r th. y.ar. h. ran a vary
at..dy graving avec...tul operation. In tbe lattaI' part of 19.. be ..4.
a daciaion to build ~ n.. facility in th. City of San aarnardino'. Stat.
Coll.g. Indu.trial 'ark.
Tbl. .ove proved to be di..at.rioue
r..ult of ..veral jUdge..ntal aiatak..
DO control OVer.
for, hi. buain... operatioD fro. a
h. .ad. .nd oth.r probl... h. had
Hr. St.phen. cho.a to ba hi. o.n ganar.l contractor, Thi. re.ulted in
hi. being pulled a.ay fro. running th. bu.ine.. oparation .ff.ctivaly
and .aintainin, poor control ovar .ubcontractor. .hich re.ulted in the
facility taking four month. long~r to build th.n .nticipat.d.
Antioipatiing a .10. down in .al.. durin, con.truction of the na.
facility. .ith hi. b.ing the g.n.ral contractor. h. ..cur.d a lot of
cont~act. or over .old .or_ to covar the con.truction period, lut .h.n
tha op.Qin, of the na. facility .a. delayad .any proj.ct. got behind.
Onc. apt.rin, th. n.. faCility. to catch up h. began hiring na.
..ploy.... Ki. .hop totalad t.enty-thre. a.ploy.e. at tha old facility
but within ona .onth'. ti.. ha had .ixty ..ploy.a. in th. D.. facility.
To catc~ ~p the project. ovarti.. beca.e th. nor.. It took fro.
-
.
III
-
o
o
Pag. t3
Summ.ry of Lo.n Applic.tion
Kiako Indu.tri... Incorpor.t.d
S.pt.mb.r. 198' until April. 1990 to ..k. hi. .hop run prop.rly. But
during thi. p.riod h. h.d lo.t .pproxi.t.ly '280.000.00.
Prior to .t.rting con.truction of the n.. f.cility Mr. 8t.ph.n.
cont.ct.d a.n.r.l T.l.phon. Co.p.ny .nd South.rn C.liforni. Idi.on
Co.p.ny wh.r. the co.t for th.ir ..rvic.. ... to be '1'.000.00
in.t.ll.d. During con.truction. .ft.r the n.. .hop .nd offic. f.cility
... .t.rt.d . n.w building p.r.it w.. t.k.n out by . n.ighbor co.p.ny.
All .xi.ting bu. in..... on the oth.r .id. of the .tr..t in thi.
indu.tri.l p.rk w.r. con.id.r.d on t..por.ry phon.. .nd pow.r. Vh.n hi.
n.ighbor co.p.ny took out hi. building p.r.it th.r. w.. not .nough
..rvic.. .v.il.bl. for .11 of th... Und.r PUC 3.. a.n.r.l T.l.phon.
Co.p.n, .nd South.rn C.liforni. Idi.on Co..ny con.id.r.d Mr. V.,n.
It.ph.n. the d.v.lop.r for the indu.tri.1 .it.. .. ... .t . point wh.r.
h. could not do .nything but continu.. Thi. co.t.d an additonal
.200.000.00 to run und.rground uti1ilti.. for ..rvic.. ov.r . ell. for
Gen.r.l T.1.phon. Co.pany .nd South.rn C.1iforni. Idi.on Co.p.ny.
Vb.a be applied for refund ...tatanee fro. tbe city of Ian ..rDardlno'.
..d...lop..nt Agency b. v.. told that tbay could Dot reiabur.. hi. for
iaprov...ntl alr.ady lnltal1e4 c... latter attach.d to thi. ..ctiOD),
During thi. p.riod Kiako Indu.tri.. lo.t .pproxi.t.ly '500.000.00. whioh
i. the r...on for it. c..h probl.... Thi. i. c.rt.inly . 0.. ti..
occuranc. and i. not indicativ. of the profit.blility of the coap.ny.
Tb. l.ck of c..h r..ult.d in payroll t.x p.nalti...Dd int.r..t coupl.d
with ..rvic. ch.rg.. to v.ndor.. Mr. St.ph.n. .pent a tr...ndou. ..ount
of hi. ti.. dir.ct.d toward ..nipul.tion of c..h flow in 1i.u of running
hi. bu. in... op.r.tion. Thi. lo.n r.qu..t will lift the burd.n of c..h
flow. Ki.ko'. future .ith r..p.ct to cu.to..r.. it. r.put.tion. and
comeit..nt to .ucc... i. .xtr...l1y bright.
Lo.n.bl. .quity Loan-To-Valu. i. 38' .nd 10an.b1. col1at.r.l cov.rag. i.
2.6:1 a. per the fo110.ing.
Market Loanabl.
Co11at.r.l Off.r.d Value L!.1!a Bauitv Sauity
1. IUlin... Paraonal
Prop.rty 611.350 16,595 5",755 51'.755
2. Bulin... Rul
Prop.rty 2.000.900 1.213.000 717,000 62'.600
3. a..14ance-Ho.. U5,OOO 155.000 370,000 216,000
.. R.ntal Propart, 150.000 22.000 121.000 102.000
Total. 3.116.350 1,606.595 1.779.755 l,5U,U5
......... ......... ......... .........
Exhibit <K) i. an
parlonal proparty
12, 19'0.
.quip..nt .ppr.ia.l
compl.t.d by A. Z.
at liquidation valu. on bu. in...
SteiD CO.p.D~, Iocorporated, M.~
Exhibit <L) i.. r.a1 ..tat. .ppr.i..1 of the bu.in... r..l prop.rt,
coapl.t.d by Rob.rt O. Cool.y in San B.rn.rdino, C.lifornia, Octob.r 30.
198'. Tb. land v.lu. in the .bov. .ppr.i..1 w.. comput.d.t '2.00 per
.qu.r. foot. April 12. 1'91 N.tiona1 C.n Corpor.tion brought 24 .cr..
.cro.. tb. .tr..t fro. Ki.ko Indu.tri.. .t 83.00 . .qu.r. foot. Th.,
.r. going to build . di.tribution c.nt.r on the .it..
Computing the bu. in... prop.rty ..rk.t v.lu. of 611,350 1... the actu.1
d.pr.ci.t.d fix.d ....t. froa 1/31/91 fin.qci.1 .t.t...nt. of 169,663
l.av.. .n .d'u.t.d fix.d ....t. b.l.nc. of 4.1,6'7. Adding the .dju.t.d
fix.d ....t ba1.nc. to the .quit, of 181.'14 .qu.t.. to aD .4ju.ted
.quity b.1.nc. of 630,501. Thi. ...n. tb.t tb. .dju.t.4 p.bt.,o.equitr
r.tio .ft.r lo.n .pprov.1 i. 1.9':1 <1223,830 / 630,501).
~
!
i
lJ
-
o
o
. Redevelopment Agency · City of San Bernardino
~oo Nanh '0' Slrec~ Founh Floor . Sill Bernardino, California 9241.
(714) 384.S081 FAX (714) ..1-9<113
Pride ~
\::?..
Sit... H. Dukell
Euaui.e DireclDr
August 8, 1989
Re.C.E.IVED
AUG 9 1989
K1MKO. IND.
Hr. Wayne Stevens
Klmco Industries, Inc.
2010 W. Foothill Boulevard
San BernardIno, California 92410
Re: REQUEST FOR ASSISTANCE
Dear Hr. Stevens:
We have revIewed your request of June 8, 1989 In detaIl, and have also
reviewed all aspects of your proposal wIth Agency counsel as well as Agency's
Spec I a I Counse I.
WhIle we are very conscIous of the costs Involved with the buIld-out of your
facility, It Is the clear recommendation of our attorneys that the Agency Is
unable to assist you at this time. As set out In our letter of June I, 1989
to you. assIstance from the Agency on Improvements that have been Installed
would constitute a gift of public funds, which Is In violation of the
CalifornIa Constitution. The other Items mentioned In your letter were not
eligible for Agency assistance.
Should you have any further questions. please feel free to contact either
myself or Nancy Davison at 384-5081.
SD:ND: sm:2209H
cc; H. R. Bob Holcomb, Mayor
-
.
.
~
..
NAIIE or FIb:
OWNn :
HETHOD or
ACQUISITION:
LOCATION
or BUSINESS:
1IUU'l' 'OTINTIAL:
COHPETITION:
HISTORY or
BUSINESS:
III
o
o
BUSINESS HISTORY
Kimko Industriee, Incorporated
Wayne J. Stephen.
Pr..ident and Sole Stockholder
881 We.t Imer.on
Upl.nd, CA 917.6
17181986-0616
Hr. W.yne J. St.phen. .tarted comp.ny in April, 1973
in hie verage et home at the ege of t.enty-three.
Kimko Induetriee ie located at 5855 Indue trial
'ark..y in the city of San Bernerdino'e State
Colleve Indu.trial 'erk.
Simko Indu.triee ie etrictly an industrial
febric.tor aDd con.tructor. Approxietely 95' of
ita cODtracta are t..ued direct1, b, tb. aDd uear.
A ..jorlt~ of ita ell.Atel. are repeat cu.t~.r. ia
tbe C...Dt, rock cru.hlo9,....ltlD9 aDd proc...1Dg
lnduatrl... Klako ..nufactur.. aDd 10.tall. a large
voluan. of .ir pollutioD cODtrol equipmeDt. i.e.
duat collectora. precipitator_, acrubbera, eto. with
the anvlornmantal regulation. aDd public concern. at
. .11 tim. high tod.y limko'e m.rket poteDtiel i.
con.idered to be very briVht.
limko h.. never .olicited .ork. All it. contr.cte
h.. been by invitetion .here tbe biddinv liet ie
limited to . very fev eelected bidder..
Kimko Indu.trie. primery competitore .r. CDK
Con.truetor., a Ne. Mexico b..ad coapany. Tha
Indu.tri.l Comp.ny <TIC> in SprinVbo.t. Color.do and
Duncan F.bricatore in Bloomington, C.lifornia.
Hr. Wayne Stephene etarted limko Induetri.e in
April. 1973 in hi. gar.v. .t bome at tb. .V. of
tv.nty-thr... In Auguet, 1973 b. used '1.200.00
received ee . veddinv vift to 1.... . 2.800 equar.
foot building in S.n Bern.rdino.
.rom 1973 until 19'9, Kimko'e faciliti.. compri.ed
of tbe .... 2,.00 .quare foot .bop 10cate4 on ..vaD
.cre. vitb . 600 foot offic. tr.il.r.
Due to buildinv re.triction.. tbe city of .an
.ernardino would Dot allow auy for. of expansion OD
tb. old .ite.
Thoughout the year., it beca.. apparent tbat a
change .a. n.eded. Nev cueto.era .ere ver~
difficult to acquire becau.e of their ekeptici.m of
Xi.ko'. phy.ical appearance and lack of a facility.
Direct labor cost. vas incr...ing yearly along with
comprehensive inaurance. It beea.e difficult to
acquire and retain qualified ..ploy... becau.e of
the vorkinv conditione of the old eit.. Working
mo.tly outeide the elemente pley.d h.voc .ith
limko'. production. It bee... y.ry claar th.t in
order to atay in buein.ee. a n.. and mod.rn facility
... . nece..it,.
Con.tructing end mOYinv into tbe na. facility .ae
die.at.rioue for Kiako Indu.tri.e. A v.ri.ty of
jUdgem.ntal ai.t.k.e by Hr. St.phane and
con.truction d.laye .nd over-rune caue.d the company
.
.
.
o
-
o
raga .2
Hiatory ot Buainaa.
Kiako Indu.triaa, Incorporated
~AGUI~
CAPACITY:
.'
1
to lo.e approxiately $500,000.00 o.er e twenty month
period.
Kimko Indu.trie. went tro. twenty three to ae.enty
e.ployee. in the new tacility, in ju.t One month.
The problem. and lo.t ot inco.e can .ainly be
contributed to Mr. Wayne J. Stephen. not con.idering
a .low.r more controlled aGve-in period. Tbi. would
ha.e .ada con.truction dalay. .anageabla and not
cau.ed .uch a .eriou. ca.h tlow probla. to keep up.
Kiako Indu.tri.. ha. be.n a ..ry
and with thi. loan r.qu..t will
lbe future.
.ucc...tul cGapany
continu. to be in
Mr. Wayne ~. Itephen., Pr..14ent aDd aol.
atockho14.r, of Klako Induatri.., IDcorporated 1.
It. founder 80.. eight..n r..~. aVo.
Mr. Stephen. ha. . Bachelor ot Scienca degree in
Engineering trom Ut.h St.te Univ.r.ity .nd i. ..ry
capable ot running hi. co.pany.
The wl11 to ex.pand and the over exuberance in
.ale.. not to b. .hort in .al.. with an incr....
in o..rhead, coupled with ti.. d.lay. and
jUdge.ental mi.take. oau.ed . ca.h tlow probl.. th.t
many per.on. would not ha.e been ~to b.ndle.
H. did .nd i. now ..eking help to once .g.in put hi.
company back on the auec...ful track.