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HomeMy WebLinkAboutR28- Economic Development ECONOMIC DEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO FROM: Maggie Pacheco,Director SUBJECT: APPROVAL OF N AMENDMENT TO Housing and Community Development THE LOAN AGREEMENT BETWEEN DATE: March 9,2000 THE T AGENCY NORI U I NAL AND CITY SAN BERNARDINO O Synopsis of Previous Commission/CouncillCommittee Action(s): On December 6, 1999, the Mayor and Common Council approved the reallocation of Community Development Block Grant(CDBG)funds and conceptually authorized a loan to the Inland Valley Development Agency(IVDA)so that they may renovate a commercial building at the former Norton Air Force Base and allow for the use by the new business of Astrofab,Inc.,a California Corporation. ----- ------------—'---'—'—'-----`---------—---—---- — --- --- Recommended Motion(s): (Mayor and Common Council) MOTION: RESOLUTION OF THE MAYOR AND COMMON COUNCIL APPROVING AND AUTHORIZING THE MAYOR TO EXECUTE AN AMENDMENT TO THE COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) LOAN AGREEMENT BY AND BETWEEN THE CITY OF SAN BERNARDINO AND INLAND VALLEY DEVELOPMENT AGENCY(IVDA) Contact Person(s): Gary Van Osdel/M. Pacheco Phone: 663-1044 Project Area(s) Ward(s): 1-4,6&7 Supporting Data Attached: 0 Staff Report 0 Resolution(s)Z Agreement(s)/Contmct(s) O Map(s)O Letter/Memo FUNDING REQUIREMENTS Amount: $ Source: CDBG Funds Budget Authority: Loan of$120,000 authorized 1/10/2000 SIGNATURE: Gary a Os el,Execu ve Director Maggie Pacheco,Director Ec omic Development Agency Housing and Community Development Commission/Council Notes: -- ----------------------------- GVO:MP:Iag:03-20-00 Amend IVDA COMMISSION MEETING AGENDA Meeting Date: 03/20/2000 Agenda Item Number: RAY ECONOMIC DEVELOPMENT AGENCY STAFF REPORT --------------------------------------------------------------------------------------------------------------------- Approval of an Amendment to the Loan Agreement Between the Inland Valley Development Agency(IVDA) and City of San Bernardino BACKGROUND Subsequent to December 6, 1999, on January 10, 2000 the Mayor and Common Council authorized and approved a loan to the Inland Valley Development Agency (IVDA)in the amount of$120,000, at 3% per annum with a five (5) year maturity date, to be paid in fifty-four (54) monthly installment payments of principal interest in the amount of$2,299. Payments were to be deferred for the initial six(6) months of the term of the loan. The City loan was to be secured by a promissory note (the "Note") and the real estate collateral located at 195 North Del Rosa Drive, San Bernardino, California (APN#136-341-016), commonly referred to as the former Norton Air Force Base Parcel "F-2" (the "Property"). The City's loan would further be secured by a recorded first deed of trust against the Property. As of January 18, 2000, the value of this Property is $3.6 million. CURRENT ISSUE At the time the Mayor and Common Council and IVDA approved the CDBG Loan Agreement, it was expected that the Property to be used as collateral (Parcel "F-2") would be free and clear of all encumbrances prior to the City making the loan and releasing any funds to IVDA. However, it now appears that certain pending litigation between IVDA and a third party has clouded the title to the Property (Parcel "F-2") and said litigation is not expected to be concluded by the time IVDA seeks to draw funds from the City. Consequently, the title to the Property is not free and clear of all encumbrances as required under the CDBG Loan Agreement and IVDA is unable to draw down the $120,000 loan from the City under the terms of the CDBG Loan Agreement as previously approved by the Mayor and Common Council. In light of these circumstances, discussions have occurred for an alternative structure to securing the City's loan of$120,000. This alternative collateral proposal would require IVDA to provide both Parcel "F-1" and Parcel "F-2" (see map) as collateral for the City loan at the time of initial disbursement of loan proceeds. This larger parcel has an estimated appraised value of $8.2 million. Although the pending litigation affects both Parcel "F-1" and "17-2", there is sufficient value in the larger parcel to give assurance that resolution of the pending litigation will ensure that the City's loan is adequately secured. ---------------------------------------------------------------------------------------------------------------------------------------- GVO:MP:lag:03-20-00 Amend IVDA COMMISSION MEETING AGENDA Meeting Date: 03/20/2000 Agenda Item Number: ka_ Economic Development Agency Staff Report Amendment to IVDA Loan Agreement March 8,2000 Page Number-2- --------------------------------------------------------------------------------------------------------------------- In addition, IVDA is expecting to receive title to the property commonly known as the Parcel I-3, which includes the Series 932 site (the Series 932 site is the property to be improved with the City loan proceeds for Astrofab's use), and IVDA seeks to have the option of substituting the collateral (Parcel "F-1" and"F-2") with the Series 932 site (see map). Agency staff is informed that IVDA expects to take fee title from the United States Air Force to Parcel 1-3 (including the Series 932 site) within the next 45 days. Moreover, the Series 932 site is not clouded by any litigation or monetary encumbrances. Staff further believes that when the IVDA does finally obtain fee title to the Parcel I-3 and the Series 932 site, a transfer of the City's security from Parcel"F to the Series 932 site will provide sufficient collateral for the City loan. For the reasons noted in this report, staff is recommending approval of the attached Amendment to the CDBG Loan Agreement. Under the proposed Amendment, IVDA would be permitted to grant the City a deed of trust in all of Parcel F ("F-1"and"F-2"), subject to the potential effect of the pending litigation, and/or the IVDA may substitute Parcel F for a deed of trust for the Series 932 site at such time as: (i) the IVDA has obtained fee title from the Air Force and (ii) IVDA delivers a written appraisal report which confirms that Series 932 site has an appraised value of not less than four times the City loan amount (i.e., $480,000), and has obtained a certificate of subdivision compliance for the Series 932 site from the City. It should be further noted that Astrofab, Inc., and IVDA have executed a sixty (60) month Lease Agreement for the Series 932 Building. Astrofab will occupy the building by March 21, 2000 and will initially pay $13,405 monthly rent to IVDA. This monthly lease payment will further insure that the City's loan is secured and repaid as provided for under the CDBG Loan Agreement. Accordingly, staff recommends approval of the Amendment to the CDBG Loan Agreement as provided for in this report. FISCAL IMPACT Based on previous Council action, funds have already been appropriated for the January 10, 2000 IVDA and City CDBG Loan Agreement in the amount of$120,000. RECOMMENDATION That the Mayor and Con Council adopt the attached Resolution. Maggie P o, Director Housing a Community Development -------------------------------------------------------------------------..............................—----------------------- GVO:MP:Iag:03-20-00 Amend IVDA COMMISSION MEETING AGENDA Meeting Date: 03/20/2000 Agenda Item Number: JUL CITY OF SAN BERNARDINO INTEROFFICE MEMORANDUM TO: James F. Penman City Attorney FROM: Huston T. Carlyle,Jr. Sr. Assistant City Attom DATE: March 16, 2000 RE: Amendment to the Community Development Block Grant (CDBG) Loan Agreement Between the Inland Valley Development Agency (IVDA) and the City of San Bernardino (Agenda Item#R-28) On January 24, 2000, the Mayor and Common Council approved a Loan Agreement with the Inland Valley Development Agency(IVDA)in the amount of$120,000 at 3%per annum with a five (5) year maturity date. The City loan was secured by a promissory note and real estate commonly referred to as the former Norton Air Force Base Parcel "F-2." The City's loan would finther be secured by a recorded first deed of trust against"F-2." To that extent,the Loan Agreement required the IVDA to remove or insure around Exceptions Nos. 12-19,inclusive, and 23, 24 and 25 in the title Report dated December 17, 1999. These exceptions relate to a lawsuit currently pending against the IVDA by Ming Plaza Development, Inc. and Adams Financial Services, Inc., among others. Accordingly, it was required that the parcel known as "F-2" to be used as collateral would be free and clear of all encumbrances prior to the City making the loan and releasing any fiords to the IVDA or,failing that, the IVDA would insure around such encumbrances. Approximately three weeks ago,I was advised by Ms. Maggie Pacheco of the EDA and Mr. Dave Gondek of the law firm of Sabo&Green that the pending litigation would not be resolved"any time soon''and that the IVDA was hoping to have the United States Air Force convey to it the parcel upon which the improvements were to be made with the loan - Series 932 site(this is the location where the property is being improved for use by Astrofab,Inc.). I asked what was the IVDA's next alternative in case the conveyance by the Air Force was not timely. It appears that the only"other property"the IVDA has is the larger Parcel F,which includes both"F-2" (appraised at$3.6 million) and"F-1" (appraised at$4.650 million), for a total valuation of approximately$8.25 million. Last week, Mr. Gondek advised me that the Air Force would not be able to complete the conveyance of the Series 932 site and that the IVDA wished to proceed with"Plan B,"that is,having the City's loan initially "collateralized"by Parcel F (subject to the litigation exceptions),and then having it transferred to the Series 932 site once the IVDA obtained title from the Air Force,as long as the Series 932 site appraised for a least four times($480,000) the loan by the City ($120,000), the City was in the primary position, and the IVDA has obtained a certificate of subdivision compliance for the Series 932 site from the City. I advised Mr.Gondek,as I had previously to both he and Ms. Pacheco,that it was the Mayor and Common Council which would decide whether it wished to agree to this Amendment and the fact that we would want the Amendment to be as favorable as possible to the City should Parcel F be initially relied upon did not mean that we still necessarily agreed with this approach. To that extent, the following observations are noted in the Amendment: The City agrees to have its $120,000 loan initially collateralized by Parcel F (appraised at $8.25 million), subject to the litigation exceptions(Section 7 of Amendment,top of page 5). Once the IVDA obtains fee title to the Series 932 site,the City may,at any time,give written notice that the City elects to have the IVDA secure the loan with a deed of trust in that Series,subject to certain requirements. The IVDA is obligated to comply (Section 9 of Amendment,page 6). If the City's loan is still secured by Parcel F and the litigation is resolved against the IVDA, then entry of a final judgment in favor of the beneficiary or holder of an equitable interest in Parcel F identified in gr y of the exceptions in the Title Report is deemed a breach by the IVDA unless the judgment is satisfied by the IVDA(Section I 1 of Amendment,page 7). Should such breach occur, the Promissory Note terms would authorize the City to declare all of the outstanding indebtedness immediately due and payable. If the City's loan is still secured by Parcel F and the litigation is resolved against the IVDA, resulting in recorded liens or encumbrances on Parcel F,then if in the sole opinion of the City such recordation adversely impacts the marketable title to such security, the IVDA is in default unless such lien or encumbrance is not removed or "bonded around" within thirty (30) days of initial recordation(Section 12 of Amendment,page 8). Again,should such a default occur,the Promissory Note terms would authorize the City to declare all of the outstanding indebtedness immediately due and payable. In conclusion,I would also note that the Staff Report indicates that the IVDA and its tenant, Astrofab, Inc., have executed a sixty(60)month Lease Agreement for the Series 932 Building,to be occupied by the tenant by March 21, 2000 with an initial monthly rent payment to the IVDA of $13,405. Representative(s)from the law firm of Sabo&Green will be present at Monday's Mayor and Common Council meeting to answer any questions about the subject lawsuit involving the IVDA. COPY 1 RESOLUTION NO. C2 3 RESOLUTION OF THE MAYOR AND COMMON COUNCIL APPROVING AND AUTHORIZING THE MAYOR TO EXECUTE AN 4 AMENDMENT TO THE COMMUNITY DEVELOPMENT BLOCK 5 GRANT (CDBG) LOAN AGREEMENT BY AND BETWEEN THE CITY OF SAN BERNARDINO AND INLAND VALLEY DEVELOPMENT 6 AGENCY (IVDA) 7 SECTION 1. The City of San Bernardino(the "City") through its Economic g Development Agency("Agency") is responsible for carrying out economic development and 9 redevelopment activities through the implementation of its Community Development Block 10 Grant(CDBG)Program and is authorized to provide under its Consolidated Plan and federal 11 regulations economic development loans for the purpose of creating or retaining low and 12 moderate income jobs for the community; and 13 SECTION 2. The Inland Valley Development Agency (IVDA) is a public entity Q14 engaged in the implementation of a plan approved by the Secretary of the Air Force for the 15 civilian reuse and redevelopment of portions of the lands known as the former Norton Air Force 16 Base; and 17 SECTION 3. IVDA has applied to the City for a loan of Community Development 18 Block Grant (CDBG) funds in the amount of$120,000 for which IVDA shall use together with 19 other IVDA funds to prepare, construct, rehabilitate and install certain improvements presently 20 estimated to cost $155,000 of Building No. 932 in order that such commercial building shall be 21 ready for occupancy and reuse by a commercial-industrial tenant under a lease/sublease 22 agreement with IVDA; and 23 SECTION 4. The Mayor and Common Council hereby authorize and approve the 24 Amendment to the Community Development Block Grant(CDBG) Loan Agreement attached 25 hereto as Exhibit"A", and incorporated herein by reference by and between the City and the © IVDA which provides an alternate means for IVDA to utilize substitute real estate collateral to I secure the City's loan. The Mayor is hereby authorized to execute the Amendment to the Loan 2 Agreement on behalf of the City; and 3 SECTION 5. The Mayor and City Attorney are authorized to make changes to the Loan 4 Agreement provided the changes are non-substantive in nature, and do not increase the amounts 5 provided in the Loan Agreement and this Resolution. 6 7 8 9 10 12 13 14 15 16 17 18 19 //// 20 21 22 23 24 25 2 maWW I RESOLUTION OF THE MAYOR AND COMMON COUNCIL APPROVING C 2 AND AUTHORIZING THE MAYOR TO EXECUTE AN AMENDMENT TO THE COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) LOAN 3 AGREEMENT BY AND BETWEEN THE CITY OF SAN BERNARDINO AND INLAND VALLEY DEVELOPMENT AGENCY(IVDA) 4 5 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and 6 Common Council of the City of San Bernardino at a meeting thereof, held on the day of 2000, by the following vote to wit: 8 Council Members: Ayes Nays Abstain Absent ESTRADA _ 9 LIEN _ 10 MCGINNIS _ II SCHNETZ _ 12 SUAREZ — ANDERSON 13 — MILLER _ 014 15 16 City Clerk 17 The foregoing resolution is hereby approved this day of 2000. 18 19 20 Judith Valles, Mayor City of San Bernardino 21 Approved as to farm and Legal Content: 22 James F. Penman City Attorney 23 24 By' 25 3" mco w z000-es CG� AMENDMENT TO THE 2000 CITY OF SAN BERNARDINO COMMUNITY DEVELOPMENT BLOCK GRANT LOAN AGREEMENT (INLAND VALLEY DEVELOPMENT AGENCY: BUILDING NO. 932) THIS AMENDMENT to the 2000 City of San Bernardino Community Development Block Grant Loan Agreement ("Amendment No. 1") is dated as of ,March _, 2000, by and between the Inland Valley Development Agency (the "BORROWER") and the City of San Bernardino (the "City") and is entered into with respect to the following facts: --RECITALS-- The City and the BORROWER have each previously approved and authorized the execution of that certain agreement entitled "2000 City of San Bernardino Community Development Block Grant Loan Agreement (Inland Valley Development Agency Building NO. 932) " . Such loan agreement is referred to in this Amendment No. 1 as the "LOAN Agreement"; and WHEREAS, the LOAN Agreement provides for the City to loan to :he BORROWER an amount not to exceed One Hundred Twenty Thousand Dollars ($120, 000 . 00) , subject to certain terms and conditions, including without limitation the grant by the BORROWER of a first mortgage lien security interest in favor of the City in the lands owned by the Agency referred to in the LOAN Agreement as "Parcel 1 F-2" as security for the repayment by the BORROWER of the LOAN from 1 the City. I NOW THEREFORE, IN CONSIDERATION OF THE PROMISES OF THE PARTIES SET FORTH IN THIS AMENDMENT NO. 1, THE CITY AND THE BORROWER HEREBY AGREE AS FOLLOWS : Section 1. In addition to the usage of the terms and phrases set forth in the Recitals of this Amendment No. 1, the definitions of other words and phrases as used in this Amendment No. 1 shall be the same as provided in the LOAN Agreement unless the specific context of usage of such word or phrase in this Amendment No. 1 may otherwise require. The text of the LOAN Agreement is incorporated into this Amendment No. 1 by this reference. Section 2 . Concurrently with the approval of this Amendment No. 1 by the Common Council of the CITY, the Common Council has received a CITY staff report, which generally sets forth the purpose of this Amendment No. 1 to the LOAN Agreement. This Amendment No. 1 as requested by the BORROWER (the Inland CSBO/0006/DOC/992-1 3/15/00 240 ct 1 2000-65 Valley Development Agency as the "BORROWER" under the LOAN Agreement) , is deemed necessary and appropriate by the CITY and the BORROWER in order to provide the BORROWER with an election, which may be exercised by the BORROWER at the time of LOAN Closing, to either pledge all of Parcel F to the CITY as part of the LOAN collateral under the Deed of Trust or to pledge Building 932 to the CITY as part of the LOAN collateral under the Deed of Trust; provided that at this time of LOAN Closing, the BORROWER has obtained fee title interest in the lands and improvements referred to as "Building No. 932" from the Air Force (an approximately 4 .85 acre, more or less, portion of former Norton Air Force Base Parcel I-3 as more particularly described in Exhibit "A-1" attached to this Amendment No. 1) and that certain other conditions as set forth in the LOAN Agreement, as modified by this Amendment No. 1 are also satisfied. If at the time of LOAN Closing the BORROWER has pledged Parcel F to the CITY under the Deed of Trust and thereafter the BORROWER may wish to transfer fee title in Parcel F to a third party, such as the San Bernardino International Airport Authority for public airport purposes, the BORROWER may substitute the Parcel F collateral with a pledge to the CITY of Building No. 932 under a substitute deed of trust; provided that at the time of such substitution of collateral for the LOAN the BORROWER owns- the fee title interest in Building No. 932 and has satisfied the other conditions in favor of the CITY as set forth in the LOAN Agreement, as modified by this Amendment No. 1 . Section 3 . Section I .e . , of the LOAN Agreement is hereby amended to read as follows: "e. Collateral: At the time of LOAN Closing, the Note shall be secured by: (i) a deed of trust on the property located at 195-199 North Del Rosa Drive, San Bernardino, California (APN 136-341-011 and APN 136-341-015) also referred to former Norton Air Force Base Parcel "F" (the "Property") ; or (ii) Building No . 932, including the collateral assignment of the sublease by and between the BORROWER and Astrofab, Inc. , to the CITY; provided that the conditions described in the following subparagraphs (A) and (B) satisfied at the time of initial disbursement of the proceeds of the LOAN: CSBO/0006/DOC/992-1 3/15/00 240 ct 2 ' 2000-65 (A) the BORROWER owns the fee title interest in Building No. 932 and has obtained a certificate of subdivision compliance from the CITY approving the legal description of Building No. 932 , and (B) the BORROWER has delivered a written appraisal report to the CITY prepared by an appraiser who is a MAI or ASA qualified real estate appraiser which appraisal report indicates a value for Building No. 932 which is not less than four (4) times the amount of the LOAN; and if applicable (iii) if at the time of LOAN Closing the BORROWER executes the Deed of Trust affecting Parcel "F", the BORROWER shall also deliver to the CITY the beneficial economic assignment of the sublease of Building No. 932 by and between the BORROWER and Astrofab, Inc. , substantially in the form as Exhibit "E" to the LOAN Agreement. The form of the deed of trust under either (i) , above (affecting the Property/Parcel F) or (ii) , above affecting Building No. 932 , is Exhibit "D" to the LOAN Agreement. A CTLA Lender' s policy of title insurance in favor of the CITY under (i) or (ii) , above, is required as more particularly described in Section 15 .b. (4) and Section 17 . " Section 4 . Section 1 .g. (4) (a) of the LOAN Agreement is hereby amended to read as follows : " (a) If following the initial disbursement of the proceeds of the LOAN to BORROWER at the time of the LOAN Closing there is a change in the BORROWER' S ownership or control of: (i) the Property/Parcel F, if the BORROWER has pledged the Property/Parcel F to the CITY under the Deed of Trust; or (ii) the Project, if the BORROWER has pledged Building No. 932 to the CITY under the Deed of Trust; provided however, an amendment or assignment of the CSBO/0006/DOC/992-1 3/15/00 240 ct 3 2000-65 sublease of Building No. 932 by and between Astrofab, Inc. , and the Agency which does not materially and adversely change the terms of such sublease shall not be deemed to be a change in the BORROWER' S ownership or control of Building No. 932 under this subsection (a) (ii) , if applicable;" - Section 5 . Section 5 of the LOAN Agreement is amended to read as follows : "5 . DULY AUTHORIZED The making and performance by BORROWER of the LOAN and the execution and delivery of NOTE, Deed of Trust, (affecting the Property/Parcel F or Building No. 932, as applicable) the Beneficial Economic Assignment of the Sublease, if applicable, the Environmental Indemnity and any security agreement (s) and other instrument(s) have been duly authorized by all necessary action and will not violate any law, rule, regulation, order, writ, judgment, decree, determination or award presently in effect having applicability to BORROWER or result in a breach of any credit agreement or instrument to which BORROWER is a party or by which its assets may be bound or affected. " Section 6 . Section 15 .b . ( 3) of the LOAN Agreement is amended to read as follows : " (3) The Deed of Trust (affecting either the Property/Parcel F or Building No. 932 , as applicable) is duly authorized, executed and delivered and when fully executed and duly filed and recorded is a valid and binding commitment of BORROWER enforceable in accordance with its terms;" Section 7 . Section 15 .b. (4 ) of the LOAN Agreement is amended to read as follows : (4) (A) If at the time of LOAN Closing the BORROWER has pledged the Property/Parcel F to the CITY under the Deed of Trust, the security interest of the CITY in the Property/Parcel F shall be subject to: (a) Nondelinquent taxes and assessments; CSB0/0005/D0C/992-1 3/15/00 240 ct 4 2000-65 (b) Such other exceptions to title in the Property as have been approved by the CITY; provided, however upon the approval of Amendment No. 1 to the LOAN Agreement, the CITY agrees to accept and approve the following exceptions to title in the Property as disclosed in Orange Coast Title Company preliminary title report number 5-128368-9, dated December 17, 1999, identified as Exceptions Nos . 12 , through 19, inclusive, and Exceptions Nos . 23, 24 and 25 ; and The Beneficial Economic Assignment of the Sublease is duly authorized, executed and delivered and is a valid and binding commitment of the BORROWER, subject only to the rights of the Secretary of the Air Force under the EDC Agreement. (B) If at the time of LOAN Closing the BORROWER has pledged the Building No. 932 to the CITY under the Deed of Trust, the security interest of the CITY in Building No. 932 shall be subject to: (a) Nondelinquent taxes and assessments ; (b) The covenants and restrictions included in the Air Force Quitclaim Deed whereby the fee interest of the Air Force in Building No. 932 is transferred to the IVDA and such other exceptions to title in Building No. 932 as shall be subject to the approvals by the CITY in its reasonable discretion upon its receipt of a preliminary title report for Building No. 932 . " Section 8 . The text of Section 15 .b. (5) of the LOAN Agreement is hereby stricken and in place thereof an editorial notation is added to read as follows : " (5) [TEXT MODIFIED BY SECTION 7 OF AMENDMENT NO. 1 TO LOAN AGREEMENT TO CONFORM TO LOAN CLOSING ELECTION OF THE AGENCY TO PLEDGE EITHER THE PROPERTY/PARCEL F OR BUILDING NO. 932 TO THE CITY UNDER THE DEED OF TRUST] " Section 9 . The text of Section 16 of the LOAN Agreement is hereby amended to read as follows : CSBO/0006/DOC/992-1 3/15/00 240 Ct 5 2000-65 1116 . SPECIAL OPTION OF CITY TO CAUSE BORROWER TO DELIVER DEED OF TRUST TO CITY AFFECTING BUILDING NO. 932 I£ at the time of LOAN Closing the BORROWER delivers the Deed of Trust affecting Parcel F to the CITY, the CITY shall have the right but not the obligation at any time. after LOAN Closing to cause the BORROWER to deliver a deed of trust in favor of CITY affecting Building No. 932 as security for the LOAN as follows : (1) at any time after BORROWER obtains fee title interest in Parcel I-3 and/or Building No. 932 from the Air Force under the EDC Agreement the CITY may give BORROWER a written notice which references this Section 16 and states the election of CITY to cause the BORROWER to secure the LOAN with a deed of trust in Building No. 932; (2) within sixty (60) days following receipt of such notice from the CITY the BORROWER shall cause the appraisal report and the lender' s policy of title issuance and a substitute deed of trust affecting Building No. 932 in recordable form to be delivered to the CITY all as provided in Section l .e. , as if at the time of LOAN Closing the BORROWER had originally delivered a deed of trust to the CITY under Section I .e. (ii) ; (3) promptly following the recordation of the deed of trust in favor of CITY described in subparagraph (2) , above, the CITY shall release and reconvey its deed of trust security interest in Parcel "F" to the BORROWER; (4) BORROWER shall be responsible for paying for all costs and expenses associated with the exercise by the CITY of its right under this Section 16 to cause the deed of trust collateral for the LOAN to be secured by Building No. 932 . " CSBD/0006/DCC/992-1 3/15/00 240 ct b 2000-65 Section 10 . Section 17 is hereby amended to read as follows : 1117 . TITLE INSURANCE BORROWER shall have secured a CLTA lender' s policy of title insurance insuring CITY in the form issued by a title company satisfactory to CITY, in the amount of the LOAN secured either by the Deed of Trust affecting the Property/Parcel F as provided in Section 15 .b. (4) (A) or the Deed of Trust affecting Building No. 932 as provided in Section 15 .b. (4) (B) , as applicable. " Section 11 . Section 37 and Section 38, of the LOAN Agreement are hereby amended to read as follows : 1137 . ENCUMBRANCE OF THE PROPERTY/PARCEL F OR BUILDING NO. 932 After the LOAN Closing the BORROWER shall not create or suffer to exist any mortgage, pledge, lien, charge, judgment or other encumbrance not shown on the policy of title insurance: (i) on the Property/Parcel F except for leases affecting the Property/Parcel F as provided for by the Deed of Trust without first obtaining written approval from CITY, if at the time of LOAN Closing the Property/Parcel F is pledged to the CITY under the Deed of Trust; provided, however that the entry of a final judgment in favor of the beneficiary or holder of an equitable interest in Parcel F identified in any of the exceptions to title in Parcel F described in Section 15 .b. (4) (A) (b) shall be deemed to be a breach of this covenant of the BORROWER in favor of the CITY unless such a judgment is satisfied by the BORROWER; or (ii) on Building No. 932 except for leases affecting Building No . 932 as provided for by the Deed of Trust without first obtaining written approval from the CITY, if at the time of LOAN Closing Building No. 932 is pledged to the CITY under the Deed of Trust. CSBO/0006/DOC/992-1 3/15/00 240 ct 7 2000-65 38 . SALE OR TRANSFER OF PROPERTY/PARCEL F OR BUILDING NO. 932 Until such time as the LOAN is repaid in full to the CITY BORROWER shall not sell, convey, or suffer to be conveyed, leased, assigned, transferred or otherwise dispose of the Property/Parcel F or Building No. 932. unless approved in writing by CITY. " Section 12 . Section 49 of the LOAN Agreement is hereby amended to read as follows : "49. ADVERSE IMPACT ON MARKETABLE TITLE OF SECURITY If BORROWER permits the recording of any lien or encumbrance upon the Property/Parcel F or Building No. 932 , as pledged to the CITY under the applicable form of the Deed of Trust, which in the sole opinion of the CITY adversely impacts the marketable title to such security, BORROWER shall be in default under this LOAN Agreement if such lien or encumbrance is not removed or a corporate surety bond or other undertaking is delivered by the BORROWER in a form and principal amount satisfactory to the CITY within thirty (30) days of initial recordation. " Section 13 . Paragraph 2 of Exhibit "C" of the LOAN Agreement (Loan Disbursement Approval Procedure) is hereby amended to read as follows : "2 . (a) The CITY shall make the initial disbursement of the proceeds of the LOAN to the BORROWER within ten (10) days following receipt of a completed written request for LOAN disbursement and confirmation by the Executive Director of the Economic Development Agency of the City of San Bernardino, or designee, that all of the following have been satisfied: A) each of the following have been fully executed by the BORROWER: i) Note; xi) (a) Deed of Trust(Parcel F) or if applicable (b) Deed of Trust (Building No. 932) ; iii) Environmental Indemnity Agreement; iv) Beneficial Economic Assignment of the Sublease for Building No. 932 if Deed of Trust (Parcel F) under (ii) (a) , above; CSB0/0006/D0C/992-1 3/15/00 240 ct 8 2000-65 B) the BORROWER has delivered the opinion of its legal counsel as set forth in Section 15 .b. , of the LOAN Agreement; C) the BORROWER has provided the CITY with a CTLA lender' s policy of title insurance in the principal amount of the LOAN in the form required by Section 15 .b. (4) of the LOAN Agreement for either Parcel F or Building 932 , as applicable; D) the BORROWER has provided the CITY with written evidence of insurance coverage as required by Section 35 of the LOAN Agreement; E) the BORROWER has provided the CITY with a true and correct copy of the fully executed sublease agreement relating to Building 932 by and between Astrofab, Inc. and the BORROWER, together with the tenant financial information described at Section l .g (14) and (15) of the LOAN Agreement; F) if the Deed of Trust (Parcel F) is delivered to the CITY at the time of LOAN Closing, the BORROWER shall also provide the CITY with a copy of the appraisal report dated May 24 , 1999, relating to Parcel "F" and a confirming letter of the appraiser which indicates an allocation of value for Parcel "F" between Parcel "F-1" and Parcel "F-2" such that Parcel "F-2" has a value of not less than $1,200, 000 . 00; or if applicable G) if the Deed of Trust (Building No. 932) is delivered at the time of LOAN Closing to the CITY the BORROWER shall also provide the CITY with a copy of an appraisal report relating to Building No. 932 which indicates a value for Building No. 932 which is not less than four (4) times the LOAN. " Section 14 . The staff of the Economic Development Agency of the City of San Bernardino, in consultation with the City Attorney, are authorized to prepare and accept conforming changes in the various legal descriptions which accompany the exhibits to the LOAN Agreement and the final form of the Deed of Trust to be presented CSBO/0006/DOC/992-1 3/15/00 240 ct 9 2000-65 by the BORROWER to the CITY at the time of the LOAN Closing, so as to implement the purpose of this Amendment No. 1 . IN WITNESS WHEREOF, the authorized officer of the parties have executed this AMENDMENT NO. 1 TO THE LOAN AGREEMENT. BORROWER Inland Valley Development Agency Dated: By; Approved As To Form: By: General Counsel CITY City ojSn Ber nardino Dated• D3 07/ ��0 gy; (�� y r By ::C lb, C y Clerk Ap roved As To Form: .s �, ty Attornfiy.Nry ey CSBO/0006/DOC/992-1 3/15/00 240 Ct 10 2000-65 EXHIBIT "A-1" LEGAL DESCRIPTION OF BUILDING NO. 932 CSBO/0006/DOC/992-1 3/15/00 240 ct 11 2000-65 SCALE I ui I'-400' ---------- 932 H 7 :1 { l-2.33' 0,o�— --------- pf 7. .7 t ­7 r V r 7 14, -A L_7 AREA: 211,200 SQ FT 4.85 ACRES fOWNER PARCEL NO. INLAND VALLEY PARCEL 932 Hernandez, Kroone & Associates, In DEVELOPMENT AGENCY CiS a7 Consulting Civil Engiineers & Land Surveyors FTJ, 234 East Drake Drive DESCRIP'nON DATE San Bernardino, CA 92408 BLDG 932 9/ 11 /99 PARCEL 932 2000-65 LEGAL DESCRIPTION In the City of San Bemardino, County of San Bemardino, State of Cafrfomia, being a portion of Parcel 10, as shown on Record of Survey 98-0019, as per map, recorded in Book 110, Pages 51 through 53, records of said County, together with portions of vacated streets and alleys lying within and adjacent to said blocks, described as follows: The easterly one half of Parcel 10 per said Record of Survey. EXCEPTING the north 140.00 feet of said parcel. Bearings and Distances used in the above description are on the Cafrfomia Coordinate System, Zone 5 (NAD-83). Multiply distances shown by 1.0000684 to obtain ground level distances. END OF DESCRIPTION This real property description has been pared by under my UNI direction, in conf ance th ofes i nal Land S rvey Act. 4 �IIDL®I1� � Signature k Professional Lan urwyor * yR-NIL- Date /' / 3 — 00 ��� i CITY OF SAN BERNARDINO Interoffice Memorandum CITY CLERK'S OFFICE Records and Information Management (RIM) Program DATE: March 23, 2000 TO: Maggie Pacheco, Director, Housing and Community Development FROM: Melanie Miller, Senior Secretary RE: Transmitting Documents for Signature - Resolution 2000-65 Attached are the following documents: One copy of Resolution 2000-65 -SW o original"--e ai al agreements Please obtn n signatures where indicated on the agreements. Please return one fully executed original agreement to the City Clerk's Office as soon as possible, to my attention. If you have any questions, please do not hesitate to contact me at ext. 3212. Thank you. Rachel Clark City Clerk By: Melanie Miller Senior Secretary I hereby acknowledge receipt of the above mentioned documents. Signed: Date: - c} 3�D v