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CITr OF SAN BERNARDIr-.? - REQUE~" FOR COUNCIL ACT'~N
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Dept:
Community Development
Subject: NEIGHBORHOOD HOUSING SERVICES, INC.
SHORT-TERM LOAN AGREEMENT (INFILL
HOUSING)
From:
Kenneth J. Henderson, Director
Date:
September II,I987
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Synopsis of Previous Council action:
In July, 1984, the Mayor and Common Council approved a $50,000 loan to San Bernardino
Neighborhood Housing Services, Inc., for the purpose of acquiring ten (10) vacant parcels
for NHS's veterans Owner-Built Infill Housing Program.
On November 18,1985, the Mayor and Common' Council approved a $20,000 short term
loan with NHS to assist NHS with a cash flow problem relative to program start-up. The
loan was secured by pre-development funds provided by Life Savings and Loan.
On July 7, 1986, the Community Development Commission adopted Resolution Number
#4896 directing the execution of an agreement between the Redevelopment Agency and
NHS for participation in the Infill Housing Program.
(SYNOPSIS CONTINUED TO NEXT PAGE)
Recommended motion:
ADOPT RESOLUTION.
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Contact parson:
Ken Henderson/Maurice Oliva
Phone:
5065
Supporting data attached:
Staff Report
Ward:
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FUNDING REOUIREMENTS:
Amount:
Sourca: (ACCT. NO.)
(ACCT. DESCRIPTION)
Finance:
Council Notal:
75.C12U
Agenda Item No.
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SYNOPSIS OF PREVIOUS COUNCIL ACTION: (Continued...)
In July 1986, the Mayor and Common Council authorized by resolution a
$20,000 short-term loan with San Bernardino Neighborhood Housing Services,
Inc. to assist them with administrative costs related to the Infill Housing
Program.
9/10/87
CI~. OF SAN BERNARDt:)) - REQUE::f FOR COUNCIL ACTJ)N
STAFF REPORT
In July 1984, the Mayor and Common Council approved a $50,000
deferred loan to San Bernardino Neighborhood Housing Services,
Inc., (NHS) for the acquisition of ten (10) vacant parcels for
NHS's Owner-Built Infill Housing Program. In November, 1985, the
Mayor and Common Council approved a $20,000 short term loan to
assist NHS with a cash flow problem relative to start-up of the
OWner-Built Program. Said loan was needed to facilitate the
timely implementation of the program. The short term loan
accrued interest at seven-percent (7%) per annum and was repaid
in six (6) installments over a forty (40) week period. The loan
was secured by pre-development funds provided by Life Savings and
Loan and administrative funds provided by Neighborhood
Reinvestment Corporation. The owner-built homes are now
completed on five (5) of the ten (10) lots. The sale of the
fifth owner-built home closed escrow August 18, 1987.
On July 7, 1986, the Community Development Commission authorized
the selection of NHS as one of two (2) developers for participa-
tion in the City's Infill Housing Program. Later that month the
remaining balance of the previous $20,000 loan was paid off as a
condition of the Mayor and Common Council's approval to use the
same $20,000 as a second loan to assist NHS's administration of
the Infill Housing Program. The second $20,000 loan note,
secured by a first deed of trust on five (5) lots, was to be paid
out of the closing receipts from the sale of each home, with the
entire loan due on September 5, 1987.
Due to unforeseen difficulties pertaining to the completion of
the five (5) owner-built homes, construction on the second five
(5) homes was delayed. However, construction of the second five
(5) infill homes is well underway now and completion is
anticipated in December, 1987. Neighborhood Housing Services has
requested an extension of the $20,000 loan until June 30, 1988 in
order to provide enough time to close escrows after construction
is complete.
The proposed loan extension would be for the original $20,000
plus accrued interest to date and secured by a second deed of
trust (subordinate to first deed of trust for construction loan
in the amount of $240,000). An estimated $4,000.00 would be
repaid from the sale of each house.
The reason for placement of this item on the supplemental aaenda
was that staff was not able to ascertain prior to the reaular
aaenda deadline (September 10. 19871 whether or not NHS would be
able to pav off its short term loan. Since the previous loan
note was due on September 5. 1987. the Mavor and Common Council
should act as soon as possible on NHS's reauest for an extension
of the term of the loan aareement.
9/11/87
75-0264
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Staff Report Cont~nued...
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Adoption of the resolution by the Mayor and Common Council would
authorize the Mayor to execute an amendment to the loan agreement
with NHS not to exceed $21,400 ($20,000 principal plus $1,400.00
accrued interest) and extending the term of said loan agreement
to J ne 30, 1988.
(].
Kenneth J. Henderson
Director of Community Dev lopment
KJH/MLO/lab/0477
9/11/87
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RESOLUTION NO.
RESOLUTION OF THE CITY OF SAN BERNARDINO APPROVING AND
3 AUTHORIZING AN AMENDMENT TO THE SHORT TERM LOAN AGREEMENT BETWEEN
CITY OF SAN BERNARDINO AND SAN BERNARDINO NEIGHBORHOOD HOUSING
4 SERVICES, INC., FOR INFILL HOUSING PROGRAM, AND EXTENDING TERM OF
AGREEMENT TO JUNE 30, 1988.
5
BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY
6 OF SAN BERNARDINO AS FOLLOWS:
7
SECTION 1. Recitals. The Mayor and Common Council of the
8 City of San Bernardino has appropriated $20,000 of its 1985/1986
9 community Development Block Grant funding to assist San
10 Bernardino Neighborhood Housing Services, Inc., with the
11 implementation of its various housing programs, particularly the
12 Infill Housing Program sponsored by the city of San Bernardino.
13 Said appropriation is evidenced by a loan agreement and a
14 straight note dated September 5, 1986, secured by a deed of trust
15 recorded as instrument number 86-259803 in the office of the San
16 Bernardino county Recorder. San Bernardino Neighborhood Housing
17 Services, Inc., (NHS) has made timely payments in accordance with
18 the terms, conditions and amortization schedule of that loan
19 agreement and note, and is current on such payments, NHS has
20 requested an extension of such loan agreement and note through
21 June 30, 1988.
22
SECTION 2. Imo1ementation. The Mayor of the City of San
23 Bernardino is hereby authorized and directed to execute, for and
24 on behalf of the City of San Bernardino, an amendment to the
25 above referenced loan agreement and note between the city of San
26 Bernardino and Neighborhood Housing Services, Inc., for short
27 term loan for Infill Housing Program, copies of which are annexed
28 hereto as Exhibits "1" and "2", and incorporated herein by
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1 reference. Upon execution thereof, the term of the agreement
2 between city and San Bernardino Neighborhood Housing Services,
3 Inc" and the note and deed of trust assuring payment of the loan
4 shall be continued for the period from September 5, 1987 to June
5 30, 1988.
6 I HEREBY CERTIFY that the foregoing resolution was duly
7 adopted by the Mayor and Common Council of the City of San
8 Bernardino at a meeting thereof, held on the
9 day of , 1987, by the following vote, to wit:
10
11
12
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14
15
16
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18 of
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AYES:
Council Members
NAYES:
ABSENT:
CITY CLERK
The foregoing resolution is hereby approved this
, 1986.
day
Mayor, City of San Bernardino
22 Approved as to form and
legal content:
23 ~~ )
24
Sr. sst.City torney
25
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26 0478
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AMENDMENT TO SHORT-TERM LOAN AGREEMENT EXTENDING
AGREEMENT FROM SEPTEMBER 5, 1987 TO JUNE 30, 1988 AND INCREASING
THE PRINCIPAL AMOUNT OF THE LOAN.
THIS AGREEMENT, is entered into on the ____ day of
, 1987, by and between the CITY OF SAN
BERNARDINO, a public body corporate, hereinafter "City", and
NEIGHBORHOOD HOUSING SERVICES, INC., a California non-profit
corporation, hereinafter "NHS", sets forth the agreement of the
parties as specified herein.
The parties hereto agree:
1. City has previously advanced to NHS the sum of
$20,000 pursuant to a loan agreement and note of date September
5, 1986 which expires on or about September 5, 1987. The note is
secured by a deed of trust recorded as document number 86-259803
in the office of the San Bernardino County Recorder.
2. City and NHS hereby agree to an extension of that
16 loan agreement and note upon the following terms.
17 a) NHS agrees to repay to City and the principal
18 amount of the note is hereby increased to the sum of $21,400.
19 Interest shall accrue thereon at a rate of seven-percent (7%) per
20 annum, from date of this amendment. said sums are to be paid
21 one-fifth (1/5) from the proceeds of the sale of each of the five
22 (5) parcels of real property and any improvement thereon securing
23 the note. Interest shall continue to accrue on all unpaid
24 amounts until the total debt is paid in full.
25 3, All other terms of the short-term loan agreement and
26 straight note dated September 5, 1986 and all security for same
27 shall continue as is and, shall remain in effect for the duration
28 of this extension except as otherwise specifically provided
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herein.
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agreement effective the day and year set forth above.
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IN WITNESS WHEREOF, the parties hereto have executed this
CITY OF SAN BERNARDINO
NEIGHBORHOOD HOUSING SERVICES,
INCORPORATED
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BY:
BY:
BY:
Attest:
11 BY:
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13 Approved as form and
legal content:
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15 BY: ~~~
S~Asst.City torney
16
City Clerk
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effective the clay and year aet forth above.
CITY OF SAN BERNARDINO
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8 Attest:
9i ..#7,.-7// /It?/~/'h
BY
10 / City Clerk
11 Approved as to form:
12 BY~t~/t~
. .City Attorney
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NEIGHBORHOOD HOUSING SERVICES, i
INCORPORATED :
BYtA~~
Pres1aent i
BY
Secretary
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DO NOT DESTROY'S NOTE.,. When paId thIS not<;..!'nd theed of Trust must be
surrendered to the ....,)1 Amet' " Title In!lur~nce (omr wllh. _--Iues1 for reconveyance
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STRAIGHT NOTE
$ 20.000.00
San Bernardino,
., California,
September 5, 198fi
thin one year after this date, with periodic payments in intervals
after date,
for value received, Neighborhood Housing Services, Inc.
promise~ to pay
to
the City of San bernardino, c/o Redevelopment Agency, 320 City Hall,
San Bernardino, CA 92418, or elsewhere as notified by payee,
,or order,
at San Bernardino, CA
the Stlm of
Twenty Thousand and nO/lOO- - - - - - - - - - ($20,000.00) - Dollars,
with interest from
date hereof
until paid, at the rate of seven (7%)
per cent, per annum, payable as follows: the sum of $4,000 payable upon sale of any
house built upon the property covered by the trust deed securing this note;
it being intended that five separate houses will be built upon such property
and sold; in the event that not all five houses are sold within one year froy
the date hereof, the entire principal sum with interest is due and payable il
full one year from the date hereof.
Interest shall accrue on the balance
outstanding at any time; on sale of the fifth house, the total amount then
due shall be forthw{th payable. Payee shall give separate partial releases
(reconveyances) as to individual parcels at time of sale of individual house,
This note is secured by a deed of trust executed coincident herewith, which
deed of trust is subordinate to construction financing.
Should interest not be so paid, it shall thereafter bear like interest as the principal, but such unpaid interest so compounded
shall not exceed an amount equal to simple interest on the unpaid principal at the maximum rate permitted by law. Should
default ~ made in the payment of any installment of interest when due, then the whole sum of principal and interest shall
become Immediately due and payable at the option of the holder of this note. Should suit be commenced to collect this
note ~r any portion thereof, such sum as the Court may deem reasonable shall be added hereto as attorney's fees. Principal
and Interest payable in lawful money of the United States of America. This note is secured by a certain DEED OF
TRUST to the FIRST AMERICAN TITlE INSURANCE COMPANY, a California corporation, as TRUSTEE.
_NEIGHBORHOOD HOUSING SERVICES, INC.
By: // -/,/ _/_
(.bUU.<<-- ~-J-
Its Executive Director
9/10/87
EXHIBIT .Z.
. ) 124 (4/12)
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SHORT-TERM LOAN AGREEMENT
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;) ,1986, by and between THE CITY OF SAN BERNARDINO, a public body corporate,
G I hereinafter .City", and NEIGHBORHOOD HOUSING SERVICES, INC., a California
THIS AGREEMENT, entered into effective the5Jti
4
7 non-profit corporation, hereinafter "NHS" ,sets forth the agreement of the
8 parties as specified herein.
9 The parties hereto agree:
10li 1. City shall forthwith advance to NUS the sum of $20,000, to assist
1111 NUS until such time as NUS is able to make various draws upon funds due from
12 I other entities.
13 2. NUS agrees to repay to City the sum of $20,000, with interest
14 accruing at a rate of seven-percent (7%) per annum, out of the closing
151 receipts from the sale of each home.
10 i 3. NUS shall execute and deliver to City, at such time as City is
17 prepared to issue a check or warrant to NUS, a Promissory Note in form
18 approved by City Attorney to assure repayment of the loan. NUS shall also
19 provide to City a Deed of Trust and assignment of rents pledging funds from
20 the sale of five (5) infi11 single family detached homes individually or
21 collectively. Such Promissory Note and Deed of Trust shall be in form
22 approved by City Attorney. Upon the sale of individual homes, the Community
23 Development Division staff will authorize partial release of the Deed of Trust. .
24
4. Upon presentation of the duly executed Promissory Note and Deed of
25 Trust, in form approved by City Attorney, the Comlll.tnity Development Division
26 staff shall deliver its check or warrant for $20,000, as specified
27 hereinabove, using Community Development Block Grant funds.
2M IN WITNESS WHEREOF, the parties hereto have executed this agreement
9/10/87
EXHIBIT "1"