HomeMy WebLinkAboutR10-Economic Development Agency
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DBVELOPIIBlft DIPAIt.umJI.I. OF 'lIIB
CITY OF SAIl BERlWIDIBO
REOUEST FOR COMMISSIOR/COURCIL ACTIOR
From:
ICENRETH J. HENDERSON
Executive Director
Subject: SJWlOW BILLS APAau.no.aJ:
PROJECT
Date:
July 30, 1991
Synopsis of Previous Coaaission/CcnmcillC~ttee Action:
On June 20, 1991, the Redevelopment Committee reviewed the history and
financina for the Shadow Hills Apartment Project. Action was delayed
until July 18, 1991 for further investigation of legal questions by
staff.
On July 18, 1991, the Redevelopment Committee reconsidered the
financial request based upon additional information provided by staff.
. The matter was forwarded to the COllllllUllity Development CODDDiasion for
action.
RecoaaeDlled IIotion:
lC...-nn4tv Develolllll!llt C,..t...iDlll
That the Community Development Commission approve and adopt that
certain addeDllUII to the Joint Development Agreement by and between the
Redevelopment Agency of the City of San Bernardino, the City of San .
Bernardino and cn Investments, Limited.
~
Adllinistrator
~~BRSOR
Executive Director
Contact Person(s): Ken Henderson/Doris Daniels Phone:
508l
Project Area(s): State Colle2e Ward(s):
Five (5)
Supportina Data Attached:
Staff Renort: Addendum to Joint Dev. ARreement
FUNDING REQUIREMENTS:
Amount: *1.600.000
Source: 20X Set-Aside Fund
Budget Authority:
Commission/Council Botes:
KJH:DAD:lab:0065E
COtllISSIOB AGBBDA
Keetina Date: 08/05/91
AgeDlla Item Bo: -1..CL.
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DEVELOPMDT DEPAJrnoar,nJ:
STAFF UPORY
Shadow Rills Anartlllent proiect
On June 20, 1991 the Redevelopment Committee reviewed the history of
and financing for the Shadow Hills Apartment Project. Staff presented
an addendum to the Joint Development Agreement between cn Investments
and City and the Redevelopment Agency (Development Department) which
declared that all parties had performed pursuant to the Agreement, and
outlined changes that would be necessary in order to carry out the
intent of the Agreement, since the property was subject to a deed of
trust held by the Resolution Trust Corporation ("RYC"), as Receiver for
Westport Federal Savings Bank. As of May 1, 1991, the unpaid balance
of the RYC loan was su-hundred, twenty thousand dollars ($620,000),
with interest of approximately thirty-thousand dollars ($30,000) (see
attached report).
The Committee conducted an extensive discussion regarding the pro~osed
. financing, effect of a foreclosure on the adopted conditions, covenants
and restrictions, the underlying zoning of the affected property and
related matters. After discussion, the Redevelopment Committee
requested that staff further investigate legal questions regarding the
covenants recorded against the property, as well as, reconsider the
financial package, since the developers are requesting assistance in
the nature of bond enhancement.
On July 18, 1991, the Redevelopment Committee reconsidered the
financial request based upon the following additional information:
1. If the City continues with the project along the lines proposed by
cn Investments, Ltd., the following would be realized:
a) Lower income use restrictions.
b) Construction of New Pine Avenue.
c) Upgraded and intensive landscaping of the project.
d) Building of a daycare center.
e) Reduced density.
f) On-site management.
g) Repayment of 1.65 million dollars in Twenty-Percent (20X)
Set-Aside Funds, plus fifty-percent (50X) of all profits.
.h) The deed of trust to Parcel Number "4".
i) Development of two-hundred, twenty-eight (228) affordable
rental units.
2. If in fact the City does not participate, the following may
potentially occur:
a) Loss of 1.65 million dollars (this loss will certain occur if
RTC forecloses).
KJH:DAD:lab:0065E
COIMISSIOII AGBIDA
Meeting Date: 08/05/1991
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DEVELOl'MDT DEPU1'hr.D.l STAFF IlEPORT
Shadow Bil18 Apartaent Project
July 30, 1991
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b) Loss of two-hundred, twenty-eight (228) affordable rental units.
c) Construction delay of New Pine Avenue.
d) Removal of covenants with land if RTC forecloses.
After the July Redevelopment CODlllittee meetina, cn Investments agreed
to an Addendum to the Joint Development Agreement (see attached
addendum) with the City and the Redevelopment Agency (Development
Department) to enable the parties to cooperate in attemptina to
compromise with and find a way to payor recast the RTC's obligation
and obtain a reconveyance of its deed of trust, and to provide a source
of funds to accomplish this goal. The addendum provides for the
followina:
. 1. cn Investments will payor reimburse the Ci ty for the costs of
that portion of "New" Pine Avenue from the boundary of the acreage
to Irvinaton Avenue, up to a l118Ximum of two-hundred, fifty-thousand
dollars ($250,000).
2) The Department will pledge tax increment revenues in an amount
sufficient to provide for the sale and to ensure the marketability
of a maximum principal amount of fifteen million dollars
($15,000,000) of the mortgage revenue bonds.
3) cn Investments will continue to work to resolve on its own a
settlement with the RTC. The City will use, to the extent
practical, its good offices to negotiate a settlement or payoff of
the RTC loan on terms acceptable to cn.
4) cn Investments will provide security to the Department in the form
of a deed of trust recorded againat Parcel Naaber "4" which is
subordinate only to the bond financina, and Which will grant to the
Department the right of foreclosure, so as to guaranty the
repayment of Department advances to cn.
5) The City will be given a "Profits Interest" in the property
consisting of fifty-percent (50%) of any cash flow from the
apartment project, as well as fifty-percent (50%) of any profit
realized by cn upon each refinancina and upon sale of the property.
Based upon the foregoing, staff recollDllends adoption of the form motion.
U1'U'IIIi~ON' Executive Director
Development Department
KJH:DAD:1ab:0065E
COlWIISSION AGElIDA
Meetina Date: 08/05/1991
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ADDBlUl1JII TO JOIft DEVILOPMIIIT &t!Ino:""uuu:
BY AlID BEJ'w......
TIIB IEDBVELOPMIIIT AGDCY OF TBI CITY OF SAIl 1l1mI&VDnro,
TIIB CITY OF SAIl 1l1mI&1!D11IO, AlID
en IBVll)U'JUIiS, LTD. (BBlBIIIAI'DR TIIB w.JDAW)
SBcrIOB A. Introduetion .ftd CnnRideraticm..
A-1. In consideration of the promises set out below, each of
the Parties wishes to add certain provisions to the JDA and each agrees to
perform the further acts as set out in this Addendum. Except as specifically
changed by reference in this Addendum, all provisions of the JDA remain in
full force and effect. Each Party hereby acknowledges that each of the other
Parties has satisfsctorily, and in a timely manner considering the
circUDIBtances, performed under and is current in all of its obligations
imposed by the JDA.
A-2. CFB's title to the three (3) Parcels Which comprise the
Property is subject to the lien of a deed of trust held by the Resolution
Trust Corporation ("RTC"), as Receiver for Westport Federal Ssvings Bank (the
"RTC Loan"). The approximate unpaid principal balance of the RTC Loan was, on
May 1, 1991, $620,000, with accrued interest of approximately $14,000. One of
the purposes of this Addendum i8 to enable the Parties to cooperate in
attempting to compromise with and find a way to pay or recast the RTC's
obligation and obtain a reconveyance of its deed of trust, and to provide a
source of funds to accomplish this goal.
SKerIOK B. CFB'S Ob1iaation.
B-1. Lines numbered "21" and "22", Section 2.2, at page "4" of
the JDA, sre hereby deleted in their entirety and replaced with the following:
"As soon as is practicable after consent from all governmental
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1 agencies having jurisdiction, and issuance by the City of the
2 necessary permits, but in any event not later than sixty (60)
3 days after the issuance of auch permita, CFB will......
4 B-2. The following sentence is added at page "5", at the end of
6 Section 2.2 of the JDA:
6 "From the funds provided to CFB upon issuance of the Bonds
7 described in Section C-2 of this Addendum, CFB will payor
8 reimburse the City for the costs of that portion of "Rev" Pine
9 Avenue from" the boundary of the Acreage to Irvington Avenue, up
10 to a maximum of $250,000."
11 SBcrIOR C. Modifications of and Additi....- to Actions bv the Aaencv
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and the City.
C-l.
Section 3.2, appearing at page "8", is hereby deleted in
C-Z. In order to facilitate the goals aOught to be achieved by
this Addendum, the Agency will pledge, for the benefit of the Property, tax
increment revenues which are considered as aurplus and which are attributable
solely to twenty percent (20X) of the amount to be deposited into the Agency's
Low- and Moderate-Income Houaing Fund, an amount aufficient to provide for the
sale and to ensure the marketability of a maximum principal amount of
$15,000,000 of the Housing Authority of the County of San Bernardino Mortgage
Revenue Bonds, Series 1990-B. The maximum amount of such surplus tax
increment revenues to be paid by the Agency in accordance with the pledge as
above set forth and which then become due and payable from CFB to the Agency
and not otherwise reimbursed by CFB to the Agency pursuant to this Addendum
shall not exceed $1,600,000 from time to time in the aggregate or $1,066,000
in any one fiscal year; provided that all such amounts to be paid by the
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Agency hereunder shall be so paid by the Agency to the extent necessaly for a
period of time not in excess of three (3) years from the date of issuance of
the certificate of occupancy for the last unit to be constructed on the
Property but in no event later than five (5) years from the date of the
issuance of the Bonds referred to above.
&-3. The City will use its good offices in nelotiating a
settlement or payoff of the RTC Loan on terms acceptable to cn although it is
understood that cn will continue to work to resolve, on its own, a settlement
with RTC.
C-4. Amounts to be made available by the Agency pursuant to
Section C-2 shall be secured by a deed of trust in a form acceptable to the
Alency executed by en and recorded alainst Parcel Number "4" of the Property
subordinate only to the bond financing referred to in said Section &-2. Such
deed of trust shall Irant to the Agency the ript of foreclosure at such time
as the $1,600,000 sllrelate limitation on Agency advances has been reached so
as to luaranty the repayment by cn of any such Agency advances pursuant to
Section C-2 and in accordance with the lillitation aet forth therein. The deed
of trust shall be recorded and shall be enforceable solely with respect to
Parcel NUmber "4" of the Property.
SECTION D. Profit lIbadna.
The City is hereby given a "Profits Interest" in the Property,
consisting of:
D-l. Fifty-percent (SOX) of any cash flow from the apartment
project to be built on the Property. Cash Flow is defined as:
"Gross revenues from rents and any services (such as laundry)
from the apartment project less (i) operating expenses; (ii)
payments of principal and interest on any loans secured by the
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apartment project or the Property, and; (iii) funds reasonably
set aside for improvements and reserves. Depreciation (cost
recovery) and any other non-cash expense reported on CFB's
financial statements and tax returns shall not be a deduction
from gross revenues in computing Cash Flow."
B-2. fifty-percent (SOX) of any profit realized by CFB upon
each refinancing and upon sale of the Property.
B-3. All books and records necessary to determine Cash Flow
under Section B-1 and profits under Section B-2 shall be maintained by CFB in
accordance with the accounting procedures required by the Internal Revenue
Code and shall be made available for inapection by an authorized
repreaentative of the Agency.
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2 ADJlDD1JII TO CFB IBYBI>UII.....:S JDA DGARDIBG SHADOW BILLS
APAourmaJ. PROJECT
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IIIf WInuBS 1fJu;/lBOr. the Parties hereto have executed this Addendum on
the day and year first hereinabove written.
Ar.rBS'r :
CIn CLEIlX
ArrEST :
Secretary
Approved as to Form and
Leaa1 Content:
JAMES F. PENMAN.
City Attorney
By:
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08/05/1991
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CITY or SAIl gvwa1lDIIIfO:
BY: W.i. "Bob" Holcomb. Mayor
DDBVILOl'!mIr AGBIIfCY Cbmwun
DBVILOl'!mIr COIMISSIOIIf:
By: W.i. Holcomb. Chairman
CFB IIIfVISDIBIITS. LrD:
By: Sara ieaan. Sole General
Partner
CLllIIBIS, S.L., a California
LWtecl Partnership. of which
all of the c:eneral Partners are
the followin& three (3)
Individuala and one (1)
Corporation:
By: Donald J. ieaan
General Partner
By: Stanley C. Swartz
General Partner
By: James i.White
General Partner
sum.own PROPERTIES. IIIfC.:
By: James i. White. President