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Home My WebLink AboutR22-Economic Development CITY OF SAN BERNARDINO ECONOMIC DEVELOPMENT AGENCY ORIGINAL FROM: Emil A. Marzullo Interim Executive Director SUBJECT: Implementation of the Maya Cinemas North America, Inc., Disposition and Development Agreement DATE: January 29, 2009 ___u_________ __~____________________________________________________ ---------------------------------------- -------------- ------------------------------ SvnoDsis of Previous Commission/CounciVCommittee Action(s): On October 20, 2008, the Community Development Commission of the City of San Bernardino approved Resolution No. CDC/2008-41 authorizing the Interim Executive director of the Agency to enter into a Redevelopment Project Study and Exclusive Right to Negotiate Agreement with Maya Cinemas North America, Inc. On December 15, 2008, the Mayor and Common Council of the City of San Bernardino consented to the disposition of the 20- Plex to Maya and the Commission approved the sale of the 20-Plex and authorized the Interim Executive Director to execute the Disposition and Development Agreement between the Agency and Maya. ---------------------------------------------------------------------------------------------------------- Recommended Motion(s): (Mavor and Common Council) MOTION: That the Mayor and Common Council of the City of San Bernardino authorize the submittal of a HUD Section 108 Loan Application to the U.S. Department of Housing and Urban Development ____________________________________________________________________________________________________________u__________________________________________ Contact Person(s): Colin Strange Phone: (909) 663-1044 Project Area(s): Supporting Data Attached: Central City North Redevelopment Project Area Ward(s): I" Ii'] Staff Report 0 Resolution(s) 0 Agreement(s)/Contract(s) 0 Map(s) 0 Letter(s) Budget Authority: N/A N/A FUNDING REQUIREMENTS: Amount: $ -0- Source: Signature: Fiscal Review: I) Cu- ~ c.u "- J /> j >.~ Barbara Lindseth, Administrative Services irector ____________u_________ __________________________________________________________----------------- ---~------------ --------------- ----------------- ----------------- ----------------- --------------------------- Commission/Council Notes: ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- P:\AgendasIComm Dev Commission\CDC 2009102-02-09 Maya Cinemas - HUD I08.doc COMMISSION MEETING AGENDA Meeting Date: 02/02/2009 Agenda Item Number: ~ g? ECONOMIC DEVELOPMENT AGENCY STAFF REPORT ----------------------------------------------------------------------- -------------------------------------------------------------------------------- ------------------------------------------------------- BACKGROUND: On September 28, 2008, CinemaStar Luxury Theaters, Inc. ("CinemaStar"), the tenant of the Redevelopment Agency of the City of San Bernardino ("Agency") owned 20-Plex movie theater building (the "20-plex") located at 450 North "E" Street in downtown San Bernardino, ceased operations but retained possession of the premises. As of that date, 14 months of forbearance of rent in the amount of $574,000 was outstanding, the Agency therefore forwarded a termination notice to CinemaStar, but no response was forthcoming. Accordingly, on November 7, 2008, the Agency filed an unlawful detainer action with the Superior Court of California which held CinemaStar to be in default of the terms of their lease and restored the building to the Agency's possession on December 1,2008. On October 20, 2008, the Community Development Commission of the City of San Bernardino (the "Commission") approved Resolution No. CDC/2008-41 authorizing the Interim Executive director of the Agency to enter into a Redevelopment Project Study and Exclusive Right to Negotiate Agreement ("ERN") with Maya Cinemas North America, Inc. ("Maya"). The ERN provided for negotiating, and entering into a Disposition and Development Agreement ("DDA") with the Agency for the purposes of acquiring the vacant Agency owned 20-plex, refurbishing the building and updating the projection equipment to include digital and 3-D projection equipment, converting one auditorium to an I-Max theater and the development ofthe vacant pads in front ofthe 20-plex to retail and entertainment related uses. On December 15, 2008, the Mayor and Common Council of the City of San Bernardino ("Council") consented to the disposition of the 20-Plex to Maya and the Commission approved the sale of the 20-Plex and authorized the Interim Executive Director to execute the DDA between the Agency and Maya. CURRENT ISSUE: The DDA requires that Maya acquire the 20-Plex for the sum of $4.6 million with additional new money for the rehabilitation and upgrades to be provided in a new HUD Section 108 loan not to exceed $9.5 million. The amount outstanding on the Agency loan is not to exceed three years, after which the 20- Plex is to be refinanced and the HUD Section 108 loan satisfied. The current HUD Section 108 loan on the building in the amount of approximately $4.6 million will be retired from the proceeds of the new HUD Section 108 loan. ENVIRONMENT AL IMP ACT: The Agency has reviewed this project under the provisions of the California Environmental Quality Act (CEQA). The Agency has determined that the proposed application submittal is exempt pursuant to chapter 2.6, section 21080 of the Public Resources Code, California Environmental Quality Act (CEQA) statutes, and Section 15061(b)(3), review for exemptions, of the CEQA guidelines. --.---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- P:\Agendas\Comrn Dev Commission\CDC 2009\02-02-09 Maya Cinemas - HUD l08,doc COMMISSION MEETING AGENDA Meeting Date: 02/02/2009 Agenda Item Number: Economic Development Agency Staff Report Maya Cinemas North America, Inc. - HUD 108 Page 2 FISCAL IMP ACT: The HUD Section 108 loan obligation for the 20-plex will increase from $4.6 million to between $9.0 million and $9.5 million as a seven-year interest only loan with a requirement for Maya to prepay the HUD Section 108 loan within three years. RECOMMENDATION: That the Mayor and Common Council adopt the Motion. Emil Qzh-rim E~Director --------------------------------------------------------------------- ----------- ----------------- ------------- ---------------- -------------- ---------------- -------------------------- P:\Agendas\Comm Dev Commission\CDC 2009\02-02-09 Maya Cinemas - HUD IOS.doc COMMISSION MEETING AGENDA Meeting Date: 02/02/2009 Agenda Item Number: