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RESOLUTION NO. CDC/2011-57
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RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION
OF THE CITY OF SAN BERNARDINO APPROVING AND
AUTHORIZING THE FIRST AMENDMENT TO CONTRACT DATED
JULY 21, 2010, THE 2010-HUD SECTION 108 LOAN REFINANCE
CONTRACT DOCUMENTS FOR IMPLEMENTATION OF
SUBSTITUTION OF COLLATERAL AND AUTHORIZING THE
INTERIM EXECUTIVE DIRECTOR OF THE REDEVELOPMENT
AGENCY OF THE CITY OF SAN BERNARDINO ("AGENCY") TO
EXECUTE THE FIRST AMENDMENT AND RELATED DOCUMENTS
FOR IMPLEMENTATION OF THE FIRST AMENDMENT 2010-HUD
SECTION 108 LOAN REFINANCING FOR LOAN GUARANTEE
ASSISTANCE UNDER SECTION 108 OF THE HOUSING AND
COMMUNITY DEVELOPMENT ACT OF 1974, AS AMENDED, 42, U.S.c.
~5308 FOR SERIES HUD 2010-A CERTIFICATES (CDBG SECTION 108
CONTRACT NO. B-96-MC-06-0539) (CENTRAL CITY NORTH
REDEVELOPMENT PROJECT AREA)
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WHEREAS, the City of San Bernardino (the "City") has determined that a high priority
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exists to create jobs for the City's low- and moderate income persons and to eliminate blight in
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the Downtown Area of the City; and
WHEREAS, the declining job base and economy within the City's Downtown Area
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necessitated the City to implement certain activities for job creation; and
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WHEREAS, to stimulate the downtown economy and thereby create jobs, the City
entered into a Disposition and Development Agreement (the "1996-DDA") with MDA-San
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18 Bernardino, LLC ("MDA"), for the development and financing of a multi-screen cinema
19 complex (the "Cinema Complex"); and
20 WHEREAS, as part of the transaction contemplated under the 1996-DDA, in 1998, the
21 U.S. Department of Housing and Urban Development ("HUD") approved a Section 108 Loan in
22 the amount of $7,000,000 (the "1 998-HUD-108 Loan"); and
23 WHEREAS, in 2001, following the downturn III the cinema industry, the
24 Redevelopment Agency of the City of San Bernardino ("Agency") purchased the Cinema
25 Complex from MDA and assumed the 1 998-HUD-1 08 Loan payments; and
WHEREAS, the Agency has continued to make the required semi-armual interest and
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CDC/2011-57
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principle payments to HUD; and
WHEREAS, in May 2010, HUD notified the Agency of the opportunity to refinance
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1998-HUD-I08 Loan through HUD's 2010 Public Offering; and
WHEREAS, on June 21, 2010, the Community Development Commission of the City of
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San Bernardino (the "Commission") approved the 2010 refinancing of the 1998-HUD-108 Loan
(the "Contract); and
WHEREAS, the existing collateral for the Contract is the Cinema Complex; and
WHEREAS, the Agency desires to replace the Cinema Complex as collateral with the
City Hall 5-Level Parking Structure in order to the remove the encumbrance to allow for a
proposed New Market Tax Credit financing; and
WHEREAS, the Agency has received approval from HUD to replace the Contract
collateral; and
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WHEREAS, on September 19,2011, HUD signed the First Amendment to the Contract
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that approves the collateral substitution; and
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WHEREAS, Agency Staff recommends to the Commission approval and authorization
for the Interim Executive Director of the Agency to execute said First Amendment to the
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Contract date July 21,2010, attached hereto as Exhibit "A."
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NOW, THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION OF
THE CITY OF SAN BERNARDINO DOES HEREBY RESOLVE, DETERMINE AND
ORDER, AS FOLLOWS:
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Section 1.
The information and other facts as set forth in the Recitals of this
21 Resolution are true and correct.
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Section 2.
The Commission recogmzes that on June 21, 2010, the Mayor and
23 Common Council approved the 2010 refinancing of the 1998-HUD-I08 Loan.
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Section 3.
The Commission hereby authorizes the Interim Executive Director to
25 execute the First Amendment to the Contract dated July 21, 2010, of the Contract for Loan
Guarantee Assistance under Section 108 of the Housing and Community Development Act of
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CDC/2011-57
1974, as Amended, 42, V.S.C. S5308, and related documents for the substitution of collateral as
may be required to be executed and delivered to HOD on behalf of the Agency together with
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such technical and conforming changes as may be recommended by the Interim Executive
Director and approved by the Agency Counsel and the City Attorney. The Interim Executive
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Director of the Agency or such other designated representative of the Agency is further
authorized to do any and all things and take any and all actions as may be deemed necessary or
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advisable to effectuate the purposes of the Agreement, including making non-substantive
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modifications to the Agreement.
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Section 4.
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Commission.
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This Resolution shall take effect from and after its date of adoption by thi
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CDC/2011-57
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RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION
OF THE CITY OF SAN BERNARDINO APPROVING AND
AUTHORIZING THE FIRST AMENDMENT TO CONTRACT DATED
JULY 21, 2010, THE 2010-HUD SECTION 108 LOAN REFINANCE
CONTRACT DOCUMENTS FOR IMPLEMENTATION OF
SUBSTITUTION OF COLLATERAL AND AUTHORIZING THE
INTERIM EXECUTIVE DIRECTOR OF THE REDEVELOPMENT
AGENCY OF THE CITY OF SAN BERNARDINO ("AGENCY") TO
EXECUTE THE FIRST AMENDMENT AND RELATED DOCUMENTS
FOR IMPLEMENTATION OF THE FIRST AMENDMENT 2010-HUD
SECTION 108 LOAN REFINANCING FOR LOAN GUARANTEE
ASSISTANCE UNDER SECTION 108 OF THE HOUSING AND
COMMUNITY DEVELOPMENT ACT OF 1974, AS AMENDED, 42, U.S.C.
~5308 FOR SERIES HUD 2010-A CERTIFICATES (CDBG SECTION 108
CONTRACT NO. B-96-MC-06-0539) (CENTRAL CITY NORTH
REDEVELOPMENT PROJECT AREA)
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I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Communi
joint
Development Commission of the City of San Bernardino at a re2ular meeting thereof, held
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on the 21st day of November ,2011, by the following vote to wit:
Commission Members:
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Aves Navs Abstain Absent
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MARQUEZ
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JENKINS
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BRINKER
SHORETT
KELLEY
JOHNSON
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20 MC CAMMACK
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The foregoing Resolution is hereby approved this r2-?"~ day of November
,2011.
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Rikke Van Johnson, ice Chairperson
Community Development Commission 1
of the City of San Bernardino
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CDCj2011-57
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Appro'" ~ "F~
BY:~
Agency C nsel
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CDC/2011-57
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
I'rRSTll.M'Rt\1I'lM1!NII TO CONTRACT DATJ!lD JULY 21. 2010
CON'l'1tAC'l' !'OR LOAN GUAR.U1'J.'J!lJ!lASSISTANCE UHDBR
SJ!lC'l'rON 108 01' THE HOUSrNG AND COIIIIIlJNX'l'Y DBVBLOPIIBN'l' ACT
01' 1974, AS ~~, 42 U.S.C. 15308
SEP 1 9 2011
Date of Amendment
UNrT 01' GBNERAL LOCAL OOVJ!l1UllllBN'l': City of San Bernardino, CA
BOlUlOWER: aedevelop$ent Agency of the City of San Bernardino, the
City's designated public agency
COMMr'l'MBN'l' NUMBER: B-96-MC-06-0539
MAXDIUII coar'l'MBN'l' AMOUNT I $7, 000, 000
rNTBRrM FINANCJ:Na CONTRACT AND NOTJ!l1 March 3, U99
Note Amountl $7,000,000
POBLrc OFI'ERXNG CONTRACT AND NOTE: July 21, 2010
Note Amount: $3,860,000
I'ORMER OBLrOORI MDA-San Bernardino Associate., LLC
PROJECT: . Cinema Star Hulti-Plex Theatre Project
This First Amendment is entered into by the Secretary of
Housing and Urban Development ("Secretary"), the City of San
Bernardino, California (the ~Onit of Local General Government"),
and the Redevelopment Agency of the City of San Bernardino
(~BorrowerU) .
RECITALS
WHJ!lUAS, the Secretary, the Unit of Local General Government,
and Borrower entered into a certain Contract for Loan Guarantee
,/\Ssistance dated as of March 17, 1999 (the ~Original Contract"),
pursuant to a Commitment made on December 9, 1997, to assist in
finanCing construction for the Cinema Star Multi-Plex Project
(the "Project"); and
wtmRBAS, the Guaranteed Loan Funds were used by the Borrower
to make a loan to MDA-San Bernardino ,/\Ssociates, LLC (the "Former
Obligor" and "Former Obligor .Loan") to assist in financing
construction for the project, pursuant to 24 CFR 570.703(i)(1),
special economic development activities eligible under
S570.203(b); and
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WHEREAS, subsequent to a default by Former Obligor in
November of 2000, the Former Obligor executed a Grant Deed to the
Borrower on March 21, 2001 granting certain real property to the
Borrower. The Borrower accepted such real property for pUblic
purposes and, pursuant to that grant of certain real property,
the Former Obligor had no further obligations under the Former
Obligor Loan. The real property was to remain subject to a deed
of trust eXecuted by the Former Obligor in favor of the Borrower
and collaterally assigned to the Secretary; and
WHBREAS, the Borrower is requesting a substitution of real
property serving as security for the Borrower's Note, from the
real property that is currently identified in paragraph lS(a),
amending paragraph S(c), as Attachment 3 of the Original Contract
[and subsequently incorporated into the PUblic Offering
Contract], to the alternative real property described on the new
Attachment 3, which is attached to this First Amendment; and
WHEREAS, the Secretary, the Borrower, and the Unit of Local
General Government now desire to amend the Public Offering
Contract to further clarify and facilitate the consummation of
the transaction as contemplated therein;
NOW, THEREFORE, ,in consideration of the premises and the
mutual covenants and agreement set forth herein, the Secretary,
the Unit of Local General Government, and the Borrower mutually
agree that the Public Offering Contract be and hereby is amended
as follows:
paragraph 15 of the Public Offering Contract is amended by
deleting the paragraph as written in its entirety and
substituting therefor the following:
15. Special Conditions and MOdifications:
(a) Paragraph 5(c) of the Contract is amended by deleting
the paragraph as written in its entirety and
substituting therefore the following:
"(c) A sole first priority lien in the name of the
Secretary on the real property described in
Attachment 3 hereof (the 'SUbstitute property'),
established through an appropriate and properly
recorded Deed of Trust (the 'Deed of Trust'). The
Deed of Trust shall contain such provisions as the
Secretary deems necessary."
(b) Guaranteed Loan Funds have been used by the Former
Obligor and Borrower to assist in financing the
construction of a cinema complex, an activity
determined to be eligible under 24 CFR 570.703(i)(1)
and~570.203(b) .
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(c) [Reserved]
(d) Prior to a release by the secretary of the property
currently securing the Section 108 loan (the
"property"). Borrower shall deliver to the Secretary
the following:
(i) The original recorded Deed of Trust for the
Substitute Property. signed by the mortgagor
securing repayment of the indebtedness evidenced
by the Note or, in the alternative, a copy of the
Deed of Trust submitted for recordation, with the
original to follow when received by the Borrower.
(H) A mortgagee title policy, issued bya company and
in a form acceptable to the Secretary, naming the
Secretary as the insured party.
(iii) A certified survey with a legal description
conforming to the title policy and the Deed of
Trust.
(iv) An appraisal in the Substitute Property specifying
an estimate of the as completed fair market value
of not less than 125 percent (125%) of the
principal balance of the Note. The appraisal
shall be completed by an appraiser who is
certified. by the state and has a professional
designation (such as "SRA" or "MAl"), and shall
conform to the standards of the Financial
Institutions Reform, Recovery and Enforcement Act
of 1989 ("FIRREA").
(v) An opinion of Borrower's counsel on its
letterhead, addressed and satisfactory to the
Secretary, that the Deed of Trust is a valid and
legally binding obligation, enforceable in
accordance with its terms.
(e) paragraph 12 is amended by adding at the end thereof
the following language:
"(g) The Secretary may exercise any appropriate
remedies to enforce the lien on the Substitute
Property referred to in paragraph 15(a), amending
paragraph 5(c)."
(f) If anyone or more of the covenants, agreements,
provisions. or terms of the Contract shall be for any
reason whatsoever held invalid, then such covenants.
agreements, provisions or terms shall be deemed
severable from the remaining covenants. agreements,
provisions or terms of the Contract and shall in no way
affect the validity or enforceability of the other
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provisions of the Contract or of this First Amendment
or of the Note or the rights of the Holder thereof.
(g)
Additional Grounds for Default.
Restriction of Pledged Grants.
Remedial Actions.
(i) The Borrower and the Unit of General Local Government
acknowledge and agree that the Secretary's guarantee
of the Note is made in reliance upon the availability
of grants pledged pursuant to paragraph 5(a)
(individually, a "Pledged Grant" and, collectively,
the "pledged Grants") in any Federal fiscal year
subsequent to the Federal fiscal year ending
September 30, 2010 to: (A) pay when due the payments
to become due on the Note, or (B) defease (or, if
permitted, prepay) the full amount outstanding on the
Note. The Borrower and the Unit of General Local
Government further acknowledge and agree that if the
Secretary (in the Secretary's sole discretion)
determines that Pledged Grants are unlikely to be
available for either of such purposes, such
determination shall be a permissible basis for any of
the actions specified in paragraphs (ii) and (iii)
below (without notice or hearing, which the BOrrower
and the Unit of General Local Government expressly
waive) .
Notice of Default.
Availability of Other
(ii) Upon written notice from the Secretary to the
Borrower and the Unit of General Local Government at
the address specified in paragraph 12(f) above that
the Secretary (in the Secretary's sole discretion)
has determined that Pledged Grants are unlikely to be
available for either of the purposes specified in (A)
and (B) of paragraph (i) above (such notice being
hereinafter referred to as the "Notice of Impaired
Security.), the Secretary may limit the availability
of Pledged Grants by withholding amounts at the time
a Pledged Grant is approved or by disapproving
payment requests (drawdowns) submitted with respect
to Pledged Grants.
(iii) If after 60 days from the Notice of Impaired Security
the Secretary (in the Secretary's sole discretion)
determines that Pledged Grants are still unlikely to
be available for either of the purposes specified in
(A) and (B) of paragraph (i) above, the Secretary may
declare the Note in Default and exercise any and all
remedies available under paragraph 12. This
paragraph (iii) shall not affect the right of the
Secretary to declare the Note and/or this Contract in
Default pursuant to paragraph 11 and to exercise in
connection therewith any and all remedies available
under paragraph 12.
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(ivl All notices and submissions provided for hereunder
shall be submitted as directed in paragraph 12(f)
above.
[Remainder of Page xntentionally Left Blank]
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THE UNDZRSXaNBD, as authorized officials on behalf of the.
Borrower or the Secretary, have executed this First Amendment to
Public Offering Contract, it being understood and agreed that no
provisions of the Public Offering Contract, other than those in
paragraph 15 as set forth above, have been changed, and that the
Public Offering Contract as amended continues in full force and
effect.
the
The Redevelopment Agency of the
City of San Bernardino
BORROWER
BYI
(Signature)
(Name)
(Title)
Date I
UNIT OF GENERAL LOCAL GOVERNIItBNT
BY:
(Signature)
(Name)
(Title)
Date I
BY:
Yol Ch8.vez
(Name)
Deputy Assistant ~cretary
for G:I:'ant p:l:'~rams
(T tle)
SEP 1 9 2011
Date:
CDC/2011-57
A'l"l'ACHMEN'l' 3
Legal Description of Substitute Real Property
Parcel 28 of Parcel Map No. 688, in the City of San Bernardino,
County of San Bernardino, State of California, as per plat recorded
in Book 25, Pages 47 through 58, inclusive, of Parcel Maps in the
office of the County Recorded of said County.
APN 0134-311-50