HomeMy WebLinkAboutR15-Redevelopment Agency
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DBVBLOP"BRT DBPART"BRT
OF TUB CIn OF SAK BERlWUlII'IO
REOUEST FOR COMMISSIOR/COURCIL ACTIOR
From:
KENNETH J. HENDERSON
Executive Director
Subject: FIRST AMEI'IDMBI'IT TO LOAK
AGREBI'IEK'l - AKITA'S BADRY
Date:
July 6, 1992
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SvnoDsis of Previous Commission/Council/Committee Action(s):
On May 19, 1987, the Mayor and Common Council adopted Resolution No.
87-168, whereby the City accepted assignment of a loan, on behalf of
the Economic Development Council, made to the Buttercup Bakery.
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Recommended Motion(s):
(Mavor And Common Council)
MOTIOR
That the Mayor and Common Council authorize the Mayor of
the City of San Bernardino to execute the attached
amendment which extends the loan amortization period and
assigns additional payors to a loan agreement between the
City of San Bernardino and Anita's Bakery (formerly the
Buttercup Bakery).
.1".,,,
RSOI'I
or
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Contact Person(s): Ken Henderson/Jav Munoz
Phone:
5081
Project Area(s): Mt. Vernon (MTV)
Ward(s) :
One (1)
Supporting Data Attached: Staff ReDort. Amendment
FUNDING REQUIREMENTS:
Amount: $
N/A
Source:
N/A
Budget Authority:
N/A
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Commission/Council Notes:
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KJH:AJM:tnt:0042h
COMMISSIOR MBBTIl'IG AGEKDA
Meeting Date: 07/06/1992:)
Agenda Item l'Iumber: )
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DEVELOPMENT DEPARTMERT
OF TIIB CIn OF SAIl IlBUARDIJIO
STAFF RBPOU
First AalPntlMent to Loan ARreement
At a meeting of the Mayor and Common Council held on May 19, 1987,
the Council adopted Resolution Number 87-168. This Resolution
caused the City of San Bernardino to become the sssignee of the
Economic Development Council (EDC) with regard to its small business
loan to the Buttercup Bakery.
Conditions of the loan agreement stipulate that Mr. Ortiz (the
original borrower) is to make monthly installments, including both
principal and interest, in the amount of $920.83 commencing on June
1, 1985, and continUing through July 1, 1992. This amortization
schedule will leave a balloon payment with an approximate
outstanding balance of thirty-five thousand dollars ($35,OOO.00) on
July 1, 1992, at which time, the entire principal balance, plus
interest, shall become due and payable. The agreement also provides
that the note shall become immediately due and payable upon transfer
of title of the bakery for any reason.
On February 14, 1992, Mr. Ortiz contacted staff and inquired about
the possibility of refinancing his small business loan. He informed
staff that he would not be able to make the final loan payment. In
the ensuing conversation with Mr. Ortiz, it was determined that he
no longer owns the bakery for which he received the loan. Mr.
Ortiz sold the bakery to Ricardo and Herminia Sam on June 16,
1989. Mr. Ortiz and the subsequent owners have an agreement by
which Mr. and Mrs. Sam do not assume the obligation with the City,
but instead make the monthly payments of $920.83 to Mr. Ortiz who
then remits same to the City. It should be noted that upon transfer
of title to its second owner, the unpaid balance of the note became
due and payable.
In further discussions with Mr. Ortiz and the present owners of the
bakery, it was expressed to staff that both parties wished that the
present owners be allowed to assume the loan and that Mr. Ortiz be
released from his obligation. The present owners have been making
the monthly payments without a problem since they bought the bakery
and assure staff that they could continue to do so if the City
allows them to assume the loan.
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K.JH :AJM: tnt: 0042h
COIm:SSIOR IID1'IIIG AGDDA
Meetinc Date: 07/06/1992
Aal!llda It. lI1aber: h
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DBVELOPMDT DnD:;:C:lTAYF IlBPORT
FIRST AftuJJl'll5lllY TO AGREBMBBT
Jul7 6, 1992
Paae __ber -2-
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Staff has deterained that it would be advantageous to extend the
loan to September 1, 1995, and amortize the outstanding balance,
thereby allowing the bakery to remain in operation. However, due to
the fact that Mr. Ortiz was remiss in not informing the City as to
the sale of the bakery, staff recommends the following conditions:
(a) that Mr. Ortiz be retained as a borrower and obligee under said
note;
(b) that the real property located in Baldwin Park pledged as
security for the note should remain so pledged;
(c) that Mr. and Mrs. Sam be added as borrowers to the note, and;
(d) that all of the business assets located within Anita's Bakery
(formerly the Buttercup Bakery) at 739 North Mt. Vernon Avenue
also be pledged as security for the note.
(e) that as a result of the restructuring, the loan be paid down
from $35,000 to $30,000 and that a 1.5% loan fee be charged.
These items have already been paid by the borrowers.
The resulting loan would be as follows:
AaoUllt:
rem:
ADDual Interest Rate:
Monthly P&yllent:
$30,000.00
38 IIOntha
9.0%
$910.25
All parties agree to the above refrenced terms and conditions
subject to Common Council approval.
Staff recommends adoption of the form motion.
Dl'IRKTII :.T. RSOlf, Executive Director
Develo~ent Department
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KJB:AJM:tnt:0042h
COIlIIISSIOR IIDTmG AGBlIDA
Meetina Date: 07l06/l912r-/
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jS1111I111
mIS FIRST AtmRlJm;Itr TO LOAK AGREEKEKr is lIade and entered into all
of this ll1b day of ~, 1992, by and between PEQRO R. ORTIZ, an individual,
hereinafter referred to as "Borrower," RICARDO AND HERMINIA SAM, husband and
wife, hereinafter referred to aa "Assignees," and the CITY OF SAR BERNARDINO,
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a Charter City, as assignee of the San Bernardino Economic Development
Council, hereinafter referred to as "City."
VITID:SSImI:
WHEREAS, on August 2, 1984, Borrower entered into a certain Loan
Agreement with the San Bernardino Economic Development Council regarding a
business located in the City of San Bernardino, and
WHEREAS, on June 19. 1987, the San Bernardino Economic Development
Council did assign said loan to City which aasignment waa accepted by City by'
Resolution No. 87-16g dated Mav 19. 1987, and
WHEREAS, Borrower desires now to assign the loan to Assignees,
NOW, THEREFORE, the parties hereto agree as follows:
1. Said Loan Agreement is hereby amended to add Ricardo and
Herminia Sam, husband and wife as borrowers thereunder.
2. Pedro R. Ortiz shall be retained as a borrower and obligee under
said Loan Agreement, and the real property pledged for repayment under said
Loan Agreement shall remain so pledged.
3. The due date of the loan shall be extended to September 1, 1995.
4. Except as amended herein said Loan Agreement shall remain in
full force and effect.
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FIRST Armftlll'lllilU TO LOO Ac:u&Iuuu H: PEDRO R. ORTIZ
the First Amendment is executed on the dsy and
CITY OF SO BBIlKARDIJro
BY:
W.R. HOLCOMB, MAYOR
PEDRO R. ORTIZ
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RI CARDO SAM
HERMINIA SAM
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