HomeMy WebLinkAbout1985-088
1,020-33/0379S/dm
02/26/85
RESOLUTION NO. 85-88
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE
CITY OF SAN BERNARDINO, CALIFORNIA, ASSIGNING A
PORTION OF THE CITY'S PRIVATE ACTIVITY BOND LIMIT
FOR CALENDAR YEAR 1985 FOR USE IN CONNECTION WITH
THE KCKC BUILDING PROJECT
WHEREAS, the City of San Bernardino, California (the
"Ci ty") , is authorized and empowered by Ordinance No. 3815, as
amended, to finance various types of commercial, industrial and
multifamily residential projects and to issue industrial development
revenue bonds for the purpose of assisting developers in the
-acquisition, construction and rehabilitation of such projects; and
WHEREAS, the Ordinance is intended to provide a means for
the City to assist in the financing of the development of industry
and commerce and to thereby broaden the employment opportunities for
residents of the City and its tax and revenue base; and
WHEREAS ,
the City has received an application for
tax-exempt industrial development bond financing (the "Application")
from Jerome P. Maltz (the "Company"), pursuant to and in accordance
with the provisions of the Ordinance; and
WHEREAS, the City has adopted its Resolution entitled:
"Resolution of the Mayor and Common Council of
the City of San Bernardino, California, Declaring
its Intention to Issue its Industrial Development
Revenue Bonds; Directing the Preparation of
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Certain Documents; and Making Certain other
Findings and Determinations in Connection
therewith (KCKC Building Project)"
and
WHEREAS. the City has. by the adoption of said Resolution.
indicated its intent to issue its industrial development revenue
bonds for the purpose of financing the construction and development
of an approximately 30.000 square foot office building located
within the City. and as more fully described in the Application and
identified as the KCKC Building Project (the "Project"). to be
undertaken by the Company; and
WHEREAS. the provisions of the Tax Reform Act of 1984
require that certain industrial revenue bond financing projects
receive an allocation equal to the aggregate principal amount of the
bonds so issued for said projects in accordance with the provisions
of Section 103 (n) of the Internal Revenue Code of 1954. as amended
(the "Code"); and
WHEREAS. the financing of the Project of the Company by the
City shall require the City to assign an allocation of the calendar
year 1985 Private Activity Bond Limit of the City of San Bernardino.
as determined in accordance with the Proclamation of the Governor of
the State of California. dated July 19. 1984 (the "Proclamation").
or. if such allocation is insufficient to provide for the financing
of the Project. to obtain a transfer of part or all of such
allocation from the State or a local agency for use in--connection
with the financing of the Project; and
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WHEREAS, it is appropriate at this time for the City to
take certain action with respect to the Project.
NOW, THEREFORE, THE MAYOR AND COMMON COUNCIL OF THE CITY OF
SAN BERNARDINO DO HEREBY FIND, RESOLVE, DETERMINE AND ORDER AS
FOLLOWS:
Section 1. The City hereby assigns an amount equal to
$3,912,000.00 of the calendar year 1985 Private Activity Bond
Limit of the City of San Bernardino for the purpose of providing for
_the financing of the Project of the Company by the City pursuant to
Ordinance No. 3815, as amended.
Section 2.
The assignment of said portion of the
calendar year 1985 Private Activity Bond Limit of the City of San
Bernardino as herein authorized shall be subject to the submission
by the Company of evidence satisfactory to the Staff of the
Redevelopment Agency of the City of San Bernardino that the
restrictions of Code Section 103(b)(6)(0) are not applicable to the
tax-exempt financing of the Project. Said assignment shall expire
on the ninetieth (90th) day following the adoption of this
Resolution, unless the term of such assignment is extended by
subsequent resolution or resolutions of the City. In the event that
the City determines that bonds shall not be issued and delivered in
connection with the Project on or before such ninetieth (90th) day
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following the adoption of this Resolution, the City may rescind the
effectiveness of this Resolution and the assignment of said portion
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of the calendar year 1985 Private Activity Bond Limit of the City of
San Bernardino by the adoption of an appropriate resolution of the
City.
The City hereby acknowledges that such assignment of said
portion of the calendar year 1985 Private Activity Bond Limit of the
Ci ty of San Bernardino as transferred pursuant to this Resolution,
subject to the satisfaction of the condition as provided in this
Section 2, shall be irrevocable upon the issuance of bonds for the
Project by the City pursuant to Ordinance No. 3815, as amended. at
least to the extent of the principal amount of such bonds so issued
by the City in connection with the Project.
Section 3.
The Staff of the Redevelopment Agency of the
City of San Bernardino shall comply with all reporting requirements,
as necessary, to the California Debt Limit Allocation Committee as
established pursuant to the Proclamation and all other requirements
therein.
Section 4.
This Resolution shall take effect upon
adoption.
I HEREBY CERTIFY that the foregoing resolution was duly adopted
by the Mayor and Common Council of the City of San Bernardino at an
Adjourned Regular meeting thereof, held on the 7th day of 1985,
by the following vote, to wit:
AYES:
Council Members Castaneda. Hernandez. Marks, Quiel.
Frazier. Strickler
NAYS:
None
ABSENT:
None.
Abstain: Councilman Reilly
~//~t?/~~
/ City Clerk
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of
(J~he ~oregoing resolution is
~~~ . 1985.
Approved as to form:
c~ if~
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1,020-29/0357S/vlg
02/01/85
APPLICATION OF JEROME P. MALTZ
FOR INDUSTRIAL DEVELOPMENT REVENUE BOND FINANCING
CITY OF SAN BERNARDINO, CALIFORNIA
PART I GENERAL AND BUSINESS INFORMATION
1.1 The legal name of the Applicant 18 Jerome P. Maltz, an
individual.
1.2 The Applicant 18 an individual who ahall undertake the project
as either a corporation or as a partnerahip to which the
Applicant ahall transfer the right. and dutie. under this
Application. The Applicant ia in the procen of developing an
approzillately 30.000 .quare foot office buUdina with ponible
lilllited retaU uns located on the north aide of 4th Street
between "G" Street and "R" Street in the City of San Bernardino,
California (the "Project"). The Applicant has previously
acquired the property necesaary for the proposed office building
development (the "Property"), and shall develop aaid Proparty
and construct the Project thereon.
1.3 The _Uing addren and the addrea. of the Applicant 18 as
follows:
Mr. Jerome P. Mal tz
4325 Gayle Drive
Tanana, California 91356
1.4 Social Security No. 568-44-0520
1.5 Ms. Joan L. Kushell ia the principal contact for tbe Applicant.
1.6 Telephone Number (818) 995-4649.
1. 7 The Applicant ia an individual who shall undertake the Project
as either a corporation or a partnerahip to be hereafter formed.
1.7.1
The Applicant ahall own property and conduct busine&B
in tbe City of San Bernardino, State of California.
The corporation or partnership organizational
documents of the Applicant shall be executed prior to
the time when the Applicant proceeds with the
financing and construction of the Project.
1.8 The Applicant shall own 1001 of the Project either individually
or through a wholly-owned corporation or partnership.
1.7.2
1.9 Ms. Kushell of Xushell/Sacks Group, Inc.. ahall be the individual who
will have primary respondbility for conductina the busineas of . the
Applicant with respect to the Project.
1.10 BUliness ventures of the Applicant.
1.10.1
1.11 Employees
1.11.1
1.11.2
The Applicant is the owner of radio station XCItC in the
City of San Bernardino. and is undertaking the Project as a
personal investment opportunity and as a business location
for aaid radio station.
The Applicant currently has twenty-three (23) employees
located in the City at radio station XCKC. Although the
principal objective of the Project ia to provide office
facilities within the City of San Bernardino, the
construction and operation of the Project will create
certain e.ployment opportunities witbin the City. The
Project shall create other apace for approximately 150
employment opportunities.
The business offices of the Applicant shall be located at
432 "G" Street, San Bernardino, California.
1.12 Professional services will be provided by the following:
1.12.1
1.12.2
1.12.3
1.12.4
B.L. Rosenberg' Co., CPA shall serve as the accountant for
the Applicant and is located at 180 North La Salle Street.
No. 2300, Chicago, Illinois 60601.
Norton S. ltarno, Esq.. of ltarno, Schwartz , Friedman,
16255 Ventura Boulevard, Encino, California 91436,
(818) 981-3400 is the attorney for the Applicant.
The Law Offices of Timothy J. Sabo, a Professional
Corporation. shall serve as Bond Counsel to the City with
regard to the tax-exempt financing for the Project.
Principal Architect - Timothy Smith,
2914 Main Street, Santa Monica,
(213) 392-9501.
of Togawa , Smith,
California 90405,
1.13 The principal banking accounts of the Applicant shall be held by City
National Bank, corporate office at Wilshire and Roxbury, Beverly
Bills, California. .
1.14 The source of funding for the Project is anticipated .to be derived
from a variety of tax-exempt financing sources including the private
placement of a tax-exempt bond or other obligation with a lender to
be obtained hereafter or a letter of credit backed financing.
PART II BOND ISSUE
2.1 The ..tilllated total amount of the financing paelcaae and the proposed
use of bond proceeds is as follows:
2.1.1
Project cost - $2,705.000
Leaal, printina and related fees - $100,000
2.1.2
2.1.3
2.1.4
Financing costs and fees - $320,000
Capitalized interest - $350,000
2.1.5
2.1.6
Other miscellaneous costs - $50,000
Land acquisition - $475,000
Total:
$4.000.000
2.2
The estimated taraet date for the financing is presently anticipated
in the third quarter of 1985. with construction to co_nce as soon
as possible after the financina packaae is completed and the Project
shall be completed in one (1) construction phase which shall take
between six (6) and ten (10) months to complete.
2.3 It is proposed that the financina be in the form of a construction
loan durina the construction period which would have the traditional
construction loan provisions in that drawdowns would be permitted as
construction proceeds upon submission of requisition vouchers. Upon
the completion of construction of the Project and the certification
that all improvements have been completed, the lender will then
permit an interest rate adjustment and a principal amount increase,
as warranted, and convert the construction loan to a permanent
financina.
2.4 The pr..ent proposal for the financina of the Project anticipates
that the tax-exempt bonds or other obliaations will be sold to a
cOlllllercial bank or other such lender through a private placement or
that there be a public offerina of such securities.
PART III FINANCIAL INFORMATION
3.1 The financial statements of the Applicant are on file with the City.
3.2 - The Applicant shall be doing business as either a corporation or a
aeneral partnership pursuant to the laws of the State of California
and the Applicant would be considered a small business with regard to
its relative size in comparison with other .uch businesses
undertakina projects of this type. No federal small business loan
auarantees are proposed in connection witb the propo.edfinancing as
contemplated by this Application.
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PART IV PROJECT INFORMATION
4.1 The Project as propoaed by the Applicant ahall include .the
conatruction and operation of an approximately 30,000 aquare l;oot
office building on a portion of a 1.36 acre aite located on 4th
Street between "G" Street and "S" Street in the City of San
Bernardino. The Project ahall include 30,000 aquare feet of gron
leaseable office apace and onaite parking as required by the City and
appurtenant landscaping and other improvements. The Project ahall be
located on land mre particularly deacribed and included as Exhibit
"A" hereto.
4.1.1
The Project ahall be leased at a proposed gross rental rate
of $1.25 per aquare foot.
4.2 The componenta and the eatimated total cost of the f\U1ctional parts
of the Project are.. follows:
4.2.1
4.2.2
4.2.3
4.2.4
4.2.5
4.2.6
Land - $475,000
Building conatruction - $1,800,000
Tenant improvement a - $450,000
Engineering and technical aervicea - $55,000
Permita and fee a - $150,000
Total:
$2,930,000
MiacellaneoUB items -
a. Construction contingency - $100,000
b. Applicant's development and organization
coata - $150,000
c. Intereat during conatruction - $350,000
Total: $3,530,000
4.3 The estimated construction period for the Project is as follows:
4.3.1
4.3.2
Construction of the Project would commence as soon as
possible after iasuance of the tax-exempt Obligations.
The planned construction shall occur in one (1) phase and
be completed within aix (6) to ten (10) mnths from the
date of commencement.
4.4 The aupervising architect reapon&ible for the deaign of the Project
on behalf of the Applicant ahall be Mr. Timothy Smith of Togawa &
Smith.
4.5 The Project ahall be known as "The KCKC Building".
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4.6 The Project is the development of a new office complex and is not an
expansion or an alteration of an exiating facility. The Property
presently has located thereon one (1) single family dwelling and a
restaurant facility known as the Pirate's Den which is presen.tly
closed. The neceasar)' infrastructure iteJllll and other public
improvelllents auat be relocated or installed on the Project site and
the Applicant desires to obtain a below market rate tax-exempt
construction and permanent financing of the improvements to be placed
thereon.
4.7 The Property on which the Project is proposed to be located is
currently owned by the Applicant subject to a IIOrtgage on the
Property.
4.8 The Project will provide approximately 30,000 square feet of gross
leanable cOllllllercial office space within the City of San Bernardino
and provide facilities for KCXC radio station.
4.8.1
Attached as Exhibit "A" is an 8-1/2 x 11 inch map showing
the site location of the proposed Project.
A description of the plant process - not applicable.
4.9 A negative declaration pursuant to tbe provisions of the California
Environmental Quality Act of 1970, as amended, would in all
probability be satisfactory for the Project as proposed by the
Applicant. Bowever, the Project shall comply with all applicable
provisions of said Act.
4.8.2
4.10 There are no permits, water quality enforcelllent orders, air pollution
permits or variances or other evidence of actions necessary in
connection with this Project. A sewer permit for the construction of
the Project shall be obtained.
4.11 There are no local, state or federal pollution control agencies which
impose regulations, standards or requirements with regard to the
operations of the proposed Project to be undertaken by the Applicant.
4.12 The proposed Project shall comply with all applicable City of San
Bernardino, County of San Bernardino, and other regional, county or
basin plans to which this Project shall conform and the appropriate
waste water and air quality requirements which shall be in conformity
with all of the above juriSdictions.
4.13 It is presently anticipated that the proposed Project will not
produce any by-prOducts or residues which would involve the ultimate
disposal or the need for a plan to accomplish same. Recycling or
salvage will not be a function of the proposed Project nor will there
be any market opportunities generated with regard to same'.'
PART V PUBLIC BENEFITS
5.1 The City of San Bernardino will receive significant benefits by the
initiation of this Project as proposed by the Applicant and
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particularly throuah the utilization of the financing _thod as is
available under Ordinance Ro. 3815, as amended, of the City of San
Bernardino. Due to the fact that conventional intereat rates :for
conatruction and permanent financing for coauercial office projects
u contemplated by the Applicant are at aignificantly higher levels
on conventionally borrowed funds than for tax-exempt financed
projects, neither the Applicant nor any other penons or legal
entities are able to provide the type of IIOdern and attractive
coanercial office complex that is needed within the City of San
Bernardino.
5.1.1
5.1.2
5.1.3
The Project will provide quality office apace within a
blighted area of the City and will aasiat in the
redevelopment of a portion of the City of San Bernardino.
Conatruction of the Project is anticipated
approximately $3,500,000 to $4,000,000 of
valuation to the tax rolla of the City.
The \IIleful 811!thod of financing provided for in
Ordinance No. 3815 of the City vis-a-vis the \IIle of the
conventional _thod will permit the Applicant to complete
the financing and construction of the Project within an
accelerated time frame. The _thod of financing provided
in Ordinance Ro. 3815 will provide new aources of financing
to the Applicant and such financing will be made available
at lower tax-exempt intereat rates.
to add
usesaed
5.2 The City will benefit, as can be demonstrated punuant to Section 1
of Ordinance No. 3815, aa amended, of the City of San Bernardino, in
that needed office apace "ill be generated by the proposed Project
and the clearance of an underutilized and blighted area will be
implemented. The Applicant ia not attempting to construct said
proposed Project merely for the financial inducement that is offered
purauant to the Ordinance, but rather due to the long-term busineBS
reaaona that are aignificant due to the location of the proposed
Project and the real economic benefits available to the community.
There are no detriments that can be incurred by the City with regard
to this type of financing for thia Project, and the City of San
Bernardino will receive substantial benefits throuah increases in
assessed valuation of property, the redevelopment related goals to be
served by the Project, plus the increased long-term coanercial office
space opportunities that will be available to businesses within the
City.
PART VI COMMITMENTS
6.1 The Applicant by the aubmission of this Application agrees to comply
and/or to assist the City in complying with all atate and federal
laws in the iaauance of the bonds or other auch tax-exempt
obligations to finance the Project, including, without limitation,
making of any required application to a governmental department, for
authorization, qualification or registration of the offer, iuuance
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or sale of the bonds or other tax-exempt obligations, and any
amendments thereto, and any permit or otber authorization of such
governmental department, prior to tbe delivery b)' tbe City of s\1ch
bonds or other tax-exempt obligations. .'
6.2 The Applicant further co_its to cause and/or to a..iat the City in
causing to be printed any prospectus or other written or printed
communication proposed to be published in coonection with the
inuance, offer or aale of bonds or other tax-exempt obligations,
prior to the delivery by the City of such bonds or other tax-exempt
obligations, and, to the extent deemed necessary by the City,
following delivery of auch bonds or other tax-exempt obligations.
6.3 The Applicant alao co_its to pay all expenses in connection with the
issuance, offer or aale of tbe bonds or otber tax-exempt obligations,
whether or not auch bonds or other tax-exempt obligations are finally
i..ued, and to bold tbe City barmleaa from an)' and all upeDlles
related thereto, to pay it.... on an ongoing baaia so that neither the
Cit)', nor its adv!aors, attorneys, employees and the like will
accumulate any claims against the Cit)'.
6.4 The Applicant will auppl)' any additional information, agreements and
undertakings aa the Cit)' MY require as a result of conferences and
negotiations and copies of such additional information shall be
forwarded to the Cit)' by the Applicant and ahall be deemed to be
supplements or amendments to this Application.
PART VII SIGNATURE
7.1 The undersigned as authorized principals of the Applicant as noted
belOW, hold the prime responsibility for the financing to be taken
for the proposed Project, and certify tbat the undersigned have the
authority to bind the Applicant to contract terms; that this
Application to the best knowledge or belief of the undersigned,
contains no false or incorrect information or data, and this
Application, including exhibits and attachments hereto, is truly
descriptive of the proposed Project. The undersigned also represent
by the execution of this Application familiarity with Ordinance No.
3815, as amended, of tbe City of San Bernardino.
PART VIII FEE SCHEDULE
8.1 The Applicant acknowledges that the City requires a non-refundable
application fee of $50 for each Project to be considered for
eligibility, to be paid when the basic documents are requested. With
the submittal of this Application, $500 is payable to the City. If
this Application is accepted, an additional fee of $10,000 is psysble
for administrative costs. The Applicant acknowledges that the
co_itments in Part VI above are in addition to these fiXed amounts.
Thus, in the event that no closing occurs, the Cit)' shall be
reimbursed for its processing costs.
8.2 All fees of the City may be capitalized and included in the bond
issue as acceptable to the bond purchaser.
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8.3 The Applicant aclmowledges that the City derives ita entire support
from the fees for its services. The total function of the City is
conducted on a self-supporting basis, and involves DO state general
revenues or expenditures from taxes from the atate or any of -its
political subdivisions. Ho indebtedness or taxing power of the City
is involved. Project revenues are the sole security for bonds of the
City. The federal guarantees, if any, enhance these revenues and
income and tbe security of the bonds.
8.4 Pursuant to Resolution Ho. 81-108 of the City, as amended by
Resolution No. 81-410 of the City, one percent (1%) of the principal
amount of the bond issue shall be deposited in the City Treasury in
the Industrial Revenue Bond Reserve and Development Fund, which shall
be used in such manner as the Mayor and CODlllOn Council may direct
from time to time.
"APPLICANT"
By:
~~1?t .
-}?ome P. Maltz ~
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Exhibit "A'~
(legal description of aite location of
the proposed Project)
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