HomeMy WebLinkAbout06-Economic Development
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DEVELOPMENT DEPARTMENT
OF THE CITY OF SAN BERNARDINO
ECONOMIC DEVELOPMENT AGENCY
REOlJE."T FOR COMMlS."ION/COIINCD. ACTION
FROM: KENNETH 1. HENDERSON
Executive Director
SUBmcr: RUBA ENTERPRISES
ARCO AM/PM STATION
DAlE: August 10, 1994
SvnQpnlll of Previous ~nrnml"nn/Cnnn.."Jrnmmittee Af'tinn{fI)!
On June 24, 1994, the Community Development Commission approved, in concept, a loan
guarantee in the amount of 1.3 million dollars to RUBA Ente1prises, subject to loan approval by
Valley Bank. Staff was further directed to negotiate a loan guarantee with Valley Bank.
Recommended Motion(s):
(Community Development Commi...~ion)
(Councilwoman Pope-Ludlam's Reeommendation)
MOTION: That the Community Development Commission approve, in concept, an increase of
$100,000 in the Agency's loan guarantee to RUBA Ente1prises, subject to Valley
Bank's approval ofloan in the amount of $1,400,000, bringing the total Agency loan
guarantee request to $1,400,000.
KE~~:+SON
Executive Director
Administrator
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Contact Person(s): Kl'!n1V'!lh J H,.n~n/l1'J'I1i1y WonR
Phone:
5081
Project Area(s): Stale Colle"" (SC)
Wllld(s):
Six (6)
Supporting Data Attached: Sta.ffR~ ~mn from C'..nnnr.Uwnmnn PQpP_T .milnm T #!ttfI!r from AtefFA1chnllrv
FUNDINOREQUIREMENTS: Amount: SI400000
Source: Tax TnM'f"!1Tlp.nt
Budget Authority:
Reqpested
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Commlulnn/Council Notes:
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KJH:lag:08-02-03.cdc
COMMISSION MEETING AGENDA
MEETING DATE: 08/15/1994
Agenda Item Number: 6
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DEVELOPMENT DEPARTMENT
ECONO~CDEVELOPMENTAGENCY
STAFF REPORT
RIJBA EnteQ)ri~es ACRO AMlPM Station
RUBA EnteIp1'ises, which is owned by Mr. Atef Fakhoury, owns an operates an ARCa AM/PM
Gas Station located at the Intersection ofI-215 Freeway and Palm Avenue. The property consists
of a 27,211 sJ. lot and includes a metal framed stucco exterior building. The Mini-Mart building
totals 3,250 s.f. and is fully equipped and stocked with inventory. The property also includes four
(4) concrete gasoline service station islands under a lighted 1,920 s.f. canopy with four (4) fuel
dispensing pwnps with sixteen (16) nozzles. The property is located in close proximity to the 1-
215 Freeway, Blockbuster Pavilion and the Sheriffs Academy, and is, therefore, a high-traffic
area. The facility employs 6-12 individuals on an ongoing basis and is open 24 hours daily. In
addition to selling gasoline and related automotive products, the mini-market purveys a large
assortment of high-profu margin items such as groceries, candy, beer, soft drinks, prepared and
frozen foods, toiletries, magazines and newspapers.
Mr. Fakhoury has also acquired the adjoining parcel to the ARCa AM/PM location with the
intent of developing a Denny's Restaurant, for which he has received tentative SBA 7 A loan
commitment from the Money Store in the amount of $1,025,000.
In December 1990, Mr. Fakhoury obtained a construction loan from Upland Bank in the amount
of $1,264,863 which would convert in nine (9) months to mini-permanent financing based upon a
thirty (30) year amortization, due in seven (7) years. Due to a series of unavoidable delays
obtaining permits and contractor start-ups, the construction of the gas station was not completed
until July of 1992, during which time Upland Bank withdrew its offer for the mini permanent loan.
According to Mr. Fakhoury, for the past two years, Upland Bank has provided him with a series
of short-term extensions (3-6 months) with associated points and fees totalling $114,000. At this
juncture, Upland Bank has been unwilling to accept interest only payments without full payment
of outstanding fees, and does not appear to be interested in any further extensions. This loan is
currently in default and Upland Bank is in the process of foreclosing on the subject property. As
of June 23, 1994, the total amount necessary to cure this default was approximately $1.4 million.
On June 24, 1994, the Community Development Commission approved, in concept, a loan
guarantee in the amount of $1,300,000, subject to loan approval by Valley Bank. It was Mr.
Fakhoury's intent to personally cover the shortfall of $100,000 necessary to satisfy the
outstanding loan.
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KJH:lag:08-02-03.cdc
COMMISSION MEETING AGENDA
MEETING DATE: 08/15/1994
Agenda Item Number: ~
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. DEVELOPMENT DEPARTMENT STAFF REPORT
RUBA Enterprises ARCO AM/PM Station
August 10, 1994
Page Number -2-
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CURRENT STATlIS
Mr. Fakhoury's personal financial statement dated January 31,1994 indicates a sales tax liability
of $110,000, which he is CUJ'Iently paying back at the rate of $2,000 per month. According to
Mr. Fakhoury, the California Franchise Tax Board will not continue to accept monthly payments
and is demanding payment of sales taxes owed in full, upon refinance of the project.
Due to these circumstances, Mr. Fakhoury is requesting an increase of $100,000 or a total of
$1,400,000 in the form of a loan from Valley Bank. Correspondingly, he is also requesting an
additional $100,000 or a total of $1,400,000 in the form of a loan guarantee from the Agency.
Councilwoman Pope-Ludlam recommends adoption of the form motion.
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KJH:Iag:08-02-03.cdc
COMMISSION MEETING AGENDA
MEETING DATE: 08115/1994
Agenda Item Number: tt>
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- Al.J3-e9-'94 TlE 16:360ca.tlCIL CFFICE
lB. Nll:909-~
Il044 P02
CITY OF SAN BBRNARDINO
INTBROFFICB MBMORANDUM
TO:
Tim Ste1Dbaus, Admbllltrator, BcoDomlc Development Apucy
Coundl Oftlce
FROM:
SUBJBCT: Arc:o - AMIPM
DATS:
Avpst 51, 1994
COPIBS: Susan Morales, Aset to Agency AdmlnlAtrato'r; "BDA: .
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Request the Anlo - AMlPM at J{mvIall & Palm be placed on the CnmmlRSiou
Agenda of August IS, 1994, to consider an increase in the loan guarantee amount.
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YALBRIB POPE-LUDLAM
CoulicIlwoman, Sixth Warcl
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August 9,1994
HAND DELIVERED
Atef Fakhoury, President
Ruba Enterprises
5986 N. Palm
San Bernardino, California 92407
Emily Wong, Project Manager
City of San Bernardino Development Department
Economic Development Agency
201 North E Street, Third Floor
San Bernardino, CA 92401-1507
Dear Emily:
I received your draft copy of the owner participation agreement between
the Agency and Ruba Enterprises, Inc. I have contacted councilwomen
Valarie Pope-Ludham and would like to request my guaranty be increased
from $1,300,000 to $1,400,000. The increase is necessary due to a lien
on the property from the Franchise Tax Board.
We had agreed with the district office to pay a portion of this lien and
make payments for the balance. Unfortunately the State Office would not
agree to our terms and requested full pay-off. I have talked with Valley
Bank and due to the appraisal of $2,000,000 and the quality of cash-flow
they have agreed to increase their loan and pay-off the subject lien if the
Agency will concur with their guarantee.
I therefore humbly request the guarantee be increased by $100,000 to
complete this project.
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Atef Fakhoury
President
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