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HomeMy WebLinkAbout04-City Administrator CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION OR't" ,., ~L From: Fred Wilson .. .. . l.i 11\,\llvn Dept: City Administrator Subject: Resolution approving prepayment under the Fourth Amendment to Mutual Release and Settlement Agreement between the City and Dr. Irving Feldkamp, approving a stay of the Fourth Amendment in the event of foreclosure by Upland Bank, and approving a thirty day extension to September 1, 2001 for the date for record Final Tract Map No 14193. MICC Meeting Date: June 18, 2001 Date: June 14, 2001 Synopsis of Previous Council Action: 1994 Settlement Agreement with Dr. Irving Feldkamp adopted by Mayor and Common Council 1997 First Amendment to Settlement Agreement with Dr. Feldkamp adopted. 1998 Second Amendment to Settlement Agreement with Dr. Feldkamp adopted. 1999 Third Amendment to Settlement Agreement with Dr. Feldkamp adopted. 2001 Fourth Amendment to Settlement Agreement with Dr. Feldkamp adopted. Recommended Motion: ~ ' Signature Adopt Resolution. Contact person: Fred Wil~nn Phone: 5122 Supporting data attached: Yes Ward: 5 FUNDING REQUIREMENTS: Amount: Source: (Acct. No.) (A"d n..."'''riptinn) Finance: Council Notes: -4J~e,'-S ~~~"~ 1;,//'6/0/ :F/S:-/ I I / ti> /;) II c> J -#)..- I f j Agenda Item No. t/ &/~.~/Ol MAYOR AND COMMON COUNCIL ECONOMIC DEVELOPMENT AGENCY STAFF REPORT Partial Prepayment of Settlement Agreement with Dr. Irving Feldkamp and Subordination of remaining balance to Upland Bank Background Dr. Feldkamp ("Feldkamp") owns unimproved property (the "Property") located within the former Community Facilities District No. 995 ("CFD 995"). The City has entered into a settlement agreement with Dr. Feldkamp which determines the means of repayment of the past CFD taxes on the Property. On March 26, 2001, Dr. Feldkamp entered into a purchase and sale agreement with Corman Leigh Communities as owner of Cimarron at Verdemont Ranch, LLC ("Corman Leigh"). Corman Leigh is owned by Skip Hubby of Covenant Development and Dan Leigh. On April 16, 2001, the City approved the 4th Amendment to Mutual Release and Settlement Agreement (the "4th Amendment to Settlement Agreement") with Dr. Feldkamp which extended the dates to perform on the settlement agreement in order for Dr. Feldkamp to fulfill the terms of the escrow, since the existing dates contained in the 3rd Amendment had expired. The escrow was originally scheduled to close on May 7, 2001, yet some delays have caused the escrow closing date to be extended to June 14, 2001. All loan documents have been signed. However, on June 8, 2001, Corman Leigh's lender, Upland Bank, requested that the City subordinate the 4th Amendment to Settlement Agreement to its construction deed of trust. The 4th Amendment to Settlement Agreement requires payment of $7,167.75 to the City upon final inspection and clearance of utilities or the close of escrow for each home, whichever is earlier. The total amount due to the City is $544,749. The 4th Amendment to Settlement Agreement also requires that the Tentative Tract Map No. 14193 be recorded on or before August 1,2001, and that construction commence on or before January 1, 2002. In order to close the transaction upon Upland Bank's terms, Corman Leigh has agreed to prepay the City $200,000 of the $544,749 owed to the City. In return, the City would subordinate (on a temporary basis) the remaining $344,749 to Upland Bank's construction deed of trust. That is, in the event of a foreclosure by Upland Bank, the 4th Amendment to Settlement Agreement would be stayed as long as Upland Bank owned the Property. However, upon the sale of the Property to another party, the 4th Amendment to Settlement Agreement would then take effect subject to reasonable modification by the City to conform the dates to the effective date that the new owner takes the Property. The benefit of the proposed transaction is that the City will be prepaid $200,000 within the next week. This money was scheduled to be paid within the next two years upon completion of each home. The City also assists in ensuring that the sale is closed and a developer with the ability to develop the property will now own it. The risk to the City is that in the event of foreclosure, the Bank may delay marketing the Property or may not be able to sell the Property. In that case, the City would have no recourse until the Bank is able to transfer the Property. Thus, the development of the Property would not proceed and the amounts due to the City would not be paid. However, if the City was in first position and able to take the Property at that time there would be no guarantee that it could sell or dispose of the Property any faster than Upland Bank. Due to the delay in closing escrow, Corman Leigh has also requested an additional 30 days to record the first phase of Tract Map No. 14193. The proposed extension would move the date from August 1, 2001 to September 1, 2001. Corman Leigh has its design review package ready to submit to the City, it has bid out the various aspects of the project development, prepared a cut and fill map, plotted homes on the lots, and designed a marketing plan. Recommendation: Staff recommends that the Mayor and Common Council approve the following resolution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the City of San Bernardino (the "City") is a 9 municipal corporation and charter city organized and existing under 10 the constitution and laws of the State of California; and II 12 WHEREAS, Dr. Feldkamp ("Feldkamp") owns unimproved 13 property (the "Property") located within the former Community 14 Facilities District No. 995 ("CFD 995"); and 15 16 WHEREAS, the City has entered into a settlement 17 agreement with Dr. Feldkamp which determines the means of repayment 18 of the past CFD taxes on the Property; and 19 20 WHEREAS, on March 26, 2001, Dr. Feldkamp entered into a 21 purchase and sale agreement with Corman Leigh Communities as owner 22 of Cimarron at Verdemont Ranch, LLC ("Corman Leigh"); and 23 24 WHEREAS, on April 16, 2001, the City approved the Fourth 25 Amendment to Mutual Release and Settlement Agreement (the "4th 26 Amendment to Settlement Agreement") with Dr. Feldkamp which 27 extended the dates to perform on the settlement agreement in order 28 for Dr. Feldkamp to fulfill the terms of the escrow, since the SB2QOI:17715.1 - 1 - , 1 2 3 4 5 existing dates contained in the Third Amendment to Mutual Release and Settlement Agreement had expired; and Bank (the WHEREAS, on June 8, 2001, Corman Leigh's lender, Upland "Bank"), requested that the City subordinate the 4th to Settlement Agreement to its construction deed of 6 Amendment 7 trust; and 8 9 WHEREAS, in order to close the transaction upon Upland 10 Bank's terms, Corman Leigh has agreed to prepay the City $200,000 11 of the $544,749 owed to the City and in return, requests that the 12 City agree to stay the terms of the 4th Amendment to Settlement 13 Agreement during the time the Bank owns the Property; and 14 15 WHEREAS, upon the sale of the Property by the Bank to 16 another party, the 4th Amendment to Settlemept Agreement would then 17 take effect subject to reasonable modification by the City to 18 conform the dates to the effective date that the new owner takes 19 the Property; and 20 21 WHEREAS, due to the delay in closing escrow, Corman Leigh 22 has also requested an additional 30 days to record the first phase 23 of Tract Map No. 14193 which would move the date from August 1, 24 2001 to September 1, 2001. 25 26 NOW, THEREFORE, THE MAYOR AND COMMON COUNCIL OF THE CITY 27 OF SAN BERNARDINO DO HEREBY RESOLVE, DETERMINE AND ORDER AS 28 FOLLOWS: 582001:17715.1 - 2 - > 1 Section 1. Preoayment of Amounts Under the Settlement 2 Aqreement: Stav of Obliqations Under Fourth Amendment in the Event 3 of Foreclosure Bv Uoland Bank. The City hereby approves a $200,000 4 prepayment of the amounts due under the 4th Amendment to Settlement 5 Agreement. The City hereby agrees to stay the terms of the 4th 6 Amendment to Settlement Agreement during the period in which the 7 Bank owns the Property in the event of foreclosure. 8 9 Section 2. Preoaration and Execution of Intercreditor 10 Aqreement. The City hereby authorizes the City Administrator to 11 negotiate the final terms of the Intercreditor Agreement between 12 Upland Bank, Corman Leigh and the City in order to cause the stay 13 of the 4th Amendment to Settlement Agreement pending ownership by 14 the Bank in the event of foreclosure by the Bank. 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Section 3. Aooroval of 30 Dav Extension to Record Tract Mao No. 14193. The City hereby approves an extension of the date for recording the first phase of final Tract Map No. 14193 to September 1, 2001. Section 4. Official Action. The Mayor, the City Clerk, City Attorney, City Special Counsel and any and all other officers or agents of the City are hereby authorized and directed, for and in the name and on behalf of the City, to do any and all things and take any and all actions, including execution and delivery of the intercreditor agreement, any and all assignments, agreements, notices, consents, instruments of conveyance, warrants and other documents, which they, or any of them, may deem necessary SB200L17715.1 - 3 - 1 or advisable in order to consummate the transactions contemplated 2 hereby. Whenever in this Resolution any officer of the City is 3 authorized to execute or countersign any document or take any 4 action, such execution, countersigning or action may be taken on 5 behalf of such officer by any person designated by such officer to 6 act on his or her behalf in the case such officer shall be absent 7 or unavailable. The City hereby appoints the Mayor as agent of the 8 City for purposes of executing any and all documents and which any officer of the City is authorized to execute 9 instruments 10 hereunder. 11 III 12 III 13 III 14 III 15 III 16 III 17 18 19 20 21 22 23 24 25 26 27 28 582001:17715.1 ;. - 4 - . 1 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO APPROVING PREPAYMENT UNDER THE FOURTH AMENDMENT TO 2 MUTUAL RELEASE AND SETTLEMENT AGREEMENT BETWEEN THE CITY OF SAN BERNARDINO AND DR. IRVING FELDKAMP, APPROVING A STAY OF THE FOURTH 3 AMENDMENT IN THE EVENT OF FORECLOSURE BY UPLAND BANK AND EXTENDING THE RECORDING DATE FOR TRACT MAP NO. 14193 4 5 Section 5. Effective Date. This Resolution shall 6 take effect from and after the date of its passage and adoption. 7 8 I HEREBY CERTIFY that the foregoing Resolution was duly 9 adopted by the Mayor and Common Council of the City of 10 San Bernardino at a meeting thereof, held on 11 the 12 Council: 13 ESTRADA LIEN 14 MCGINNIS SCHNETZ 15 SUAREZ ANDERSON 16 MCCAMMACK 17 18 day of June, 2001, by the following vote, to wit: AYES NAYS ABSTAIN ABSENT City Clerk 19 The foregoing resolution is hereby approved this day of June, 2001. 20 21 22 Mayor of the City of San Bernardino 23 Approved as to form and legal content: 24 By: 25 City Attorney 26 27 28 582001:17715.\ - 5 - 1 STATE OF CALIFORNIA COUNTY OF SAN BERNARDINO ss 2 CITY OF SAN BERNARDINO 3 4 I, City Clerk of the City of San Bernardino, DO HEREBY CERTIFY that the foregoing and attached 5 copy of Mayor and Common Council of the City of San Bernardino Resolution No. is a full, true and correct copy of that 6 now on file in this office. 7 IN WITNESS WHEREOF, I affixed the official seal of the 8 City of San Bernardino this have hereunto set my hand and Mayor and Common Council of the day of , 2001. 9 10 11 12 13 14 15 16 17 18 19 20 21 City Clerk 22 23 24 25 26 27 28 SB2001:17715.1