HomeMy WebLinkAbout02-Economic Development Agency CITY OF SAN BERNARDINO
ECONOMIC DEVELOPMENT AGENCY ORIG- ' ' L.
FROM: Emil A.Marzullo SUBJECT: Joint Mayor and Common Council and
Interim Executive Director Community Development Commission
Workshop on Agency Redevelopment Projects
DATE: March 2,2011 and Housing Funds
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Synoasis of Previous Commission/CounciUCommittee Action(s)•
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Recommended Motion(s):
(Community Development Commission)
A: Resolution of the Community Development Commission of the City of San Bernardino approving the appointment of
certain members to the San Bernardino Economic Development Corporation
B: Resolution of the Community Development Commission of the City of San Bernardino approving a Certain Project
Funding Agreement by and between the Redevelopment Agency of the City of San Bernardino("Agency")and the San
Bernardino Economic Development Corporation, Inc., relating to the $525,000,000 principal amount for the
Redevelopment Project Areas-Capital Improvement Projects
C: Resolution of the Community Development Commission of the City of San Bernardino authorizing (1) that Certain
Loan Agreement in connection with the issuance of the Redevelopment Agency of the San Bernardino Promissory Note
Series 2011 (City Redevelopment Activities and Public Works Projects), and (2) that Loan Agreement in connection
with the issuance of the San Bernardino Promissory Note Series 2011 and the forms of legal documents related thereto
D: Resolution of the Community Development Commission of the City of San Bernardino approving a Certain Housing
Capitalization Funding Agreement(Sub-Recipient Agreement)by and between the Redevelopment Agency of the City
of San Bernardino ("Agency") and Affordable Housing Solutions, Inc., a California non-profit corporation ("AHS"),
Inc.,relating to the financing of certain housing programs and activities
(Mayor and Common Council)
E: Resolution of the Mayor and Common Council of the City of San Bernardino approving and authorizing a Certain
Reimbursement and Project Implementation Agreement by and between the City of San Bernardino and the San
Bernardino Economic Development Corporation, Inc., authorizing the form of certain legal documents related thereto
______— and authorizing and directing their preparation,execution_and delivery ------------------------------------------------------
Contact Person(s): Emil A.Marzullo Phone: (909)663-1044
Project Area(s): Citywide Ward(s): All
Supporting Data Attached: 0 Staff Report 0 Resolution(s) 0 Agreement(s)/Contract(s)❑Map(s)❑Letter(s)
See
FUNDING REQUIREMENTS: Amount: $ attached Source: See attached
Budget Authority: See attached
Signature: Fiscal Review:
Emil zullo,Intermm Executive Director Lori P ino, ery,I im ief Financial Officer
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Commission/Council Notes: �p s Q11- �� aW -� oL(J//-/Q aD//— L
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V\Agendas\Comm Dev Commission\201 t CDC Items\Special Joint Workshop\03-03-11 Joint MCC and CDC Funding Agreement SR.doc COMMISSION MEETING AGENDA
Meeting Date: 03/03/2011
Agenda Item Number:
ECONOMIC DEVELOPMENT AGENCY
STAFF REPORT
JOINT MAYOR AND COMMON COUNCIL AND COMMUNITY DEVELOPMENT
COMMISSION WORKSHOP ON AGENCY REDEVELOPMENT PROJECTS AND
HOUSING FUNDS
A. Summary of the Resolution of the Community Development Commission of the City of San
Bernardino approving the appointment of certain members to the San Bernardino Economic
Development Corporation:
1. SBEDC Board to be comprised of 6 voting directors - 3 to be appointed by the Commission
and the remaining 3 to be appointed by the official actions of the following for 1 Board
member each by: (i) the Board of Education of the San Bernardino City Unified School
District, (ii) the Board of Supervisors of the County of San Bernardino, and (iii) the Board of
Directors of the San Bernardino Chamber of Commerce. SBEDC will function initially with 3
Commission members until each of the specified entities has duly appointed their
representatives to serve on the SBEDC Board;
2. Bylaws to be amended by the current 3 member board. Successors to the current 3 member
board will be the Commission appointed members plus 3 members from the entities listed in
paragraph 1 above upon appointments of their respective representative to serve on the SBEDC
Board;
3. The individuals appointed pursuant to paragraph 1 above must comply with the following
qualifications: (i) be an elected member of the Board of the San Bernardino City Unified
School District residing within the City, (ii) be a member of the Board of Supervisors of the
County of San Bernardino having any portion of the City within their supervisorial district, and
(iii) be an elected member of the Board of Directors of the San Bernardino Chamber of
Commerce residing within the City;
4. Commission will appoint 3 members of the Commission to serve on the SBEDC Board at the
time that the Project Funding Agreement is approved;
5. SBEDC to adhere to all requirements applicable to public agencies including Brown Act,
Political Reform Act, Government Code 1090 and Public Records Act. All meetings of
SBEDC are to be conducted at the San Bernardino City Council Chambers or at another
location within the City having television recording capabilities for all SBEDC meetings.
B. Summary of the Resolution of the Community Development Commission of the City of San
Bernardino approving a Certain Project Funding Agreement by and between the
Redevelopment Agency of the City of San Bernardino ("Agency") and the San Bernardino
Economic Development Corporation, Inc., relating to the $525,000,000 principal amount for
the Redevelopment Project Areas - Capital Improvements Projects:
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Economic Development Agency Staff Report
Page 2
1. SBEDC commits to undertake identified projects for the Agency in exchange for the transfer of
the current surplus tax increment revenues and future surplus tax increment revenues.
3. SBEDC agrees to provide staffing and to retain consultants as necessary to implement all
obligations incurred by SBEDC under this Agreement.
4. SBEDC manages all Agency owned properties whether such are intended to be under
continued Agency ownership or title is transferred to another successor entity. This contractual
obligation is also a committed tax increment obligation.
5. Agreement to contain expanded list of redevelopment projects that are currently in process and
those future anticipated redevelopment projects ("Redevelopment Activities") for which the
Agency pledges to transfer the tax increment revenues to SBEDC.
6. Agreement to contain a list of City and Agency public works projects, City CIP projects and
other future anticipated public works projects to be located within the City ("Public Works
Projects") and within Redevelopment Project Areas which are contracted to be undertaken by
SBEDC with Agency tax increment revenues and CMB loan proceeds.
7. The obligations incurred by the Agency in this contractual arrangement with SBEDC will
enable the filing of an annual Statement of Indebtedness with the County of San Bernardino
each year for the dollar amount of the contractual obligations related to the Redevelopment
Activities, the Public Works Projects and the implementation costs related to each such
category of projects in addition to the obligation of SBEDC to manage and maintain those real
properties then owned by the Agency.
8. Agreement contains Events of Default in the event the Bylaws of SBEDC are modified without
the consent of the Commission, failure to maintain 501(c)(3) status and failure to implement
any assignment of this Agreement to a Commission designated JPA. Agreement contains other
customary defaults for non-performance.
C. Summary and background of the Resolution of the Community Development Commission of
the City of San Bernardino authorizing (1) that Certain Loan Agreement in a principal
amount of 5600,000,000 in connection with the issuance of the Redevelopment Agency of the
San Bernardino Promissory Note Series 2011 (City Redevelopment Activities and Public
Works Projects), and (2) that Loan Agreement in the principal amount of 510,000,000 in
connection with the issuance of the San Bernardino Promissory Note Series 2011 (Agency
Projects) and the forms of legal documents related thereto:
Background:
CMB Export, LLC ("CMB"), was formed in the mid-1990's to establish a "regional center" initially
for the counties of San Bernardino, Riverside and Sacramento to assist in financings for the closed
military bases in these counties. The Inland Valley Development Agency ("IVDA") entered into the
initial loan transaction with CMB in 1997 for the first loan of this type pursuant to the EB-5 Program
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Agenda Item Number:
Economic Development Agency Staff Report
Page 3
administered initially by the Immigration and Naturalization Services ("INS") which has since been
restructured into the United States Citizenship and Immigration Services ("USCIS"). The IVDA and
the San Bernardino International Airport Authority ("SBIAA") have jointly entered into multiple
additional loans with CMB. The loan proceeds have been used by the IVDA/SBIAA in part for
various Airport and roadway infrastructure projects, and in most instances, the proceeds were used to
partially fund cost overruns or local matching fund requirements of other federal grants.
The EB-5 program for the CMB regional center allows foreign nationals to obtain permanent residency
status in the United States upon the investment of $500,000 in a qualified investment activity that
generates U.S.jobs. Typically, the minimum investment amount is $1,000,000 but the lower amount
of$500,000 per investor applies in San Bernardino County due to the higher unemployment rates and
the closure of the Norton Air Force Base ("NAM"). CMB establishes separate limited liability
companies for each investment pool and requires that there be no prepayment by the borrowing
governmental entity of the principal amount for at least three years. This restriction allows adequate
time for the investors to meet all criteria required by the USCIS for obtaining the permanent residency
status. Rather than investing in private businesses as virtually all other regional centers have elected to
undertake, CMB will only place loans into infrastructure and public improvement investments with
governmental agencies whereby the necessary jobs that are required to be generated can be
demonstrated utilizing an economic model approved by the USCIS. In San Bernardino County, the
model provides that for each $1,000,000 of infrastructure and public improvement construction dollars
expended by governmental agencies, 5.7 jobs are generated in the local economy resulting from the
construction and ultimate use of the infrastructure and public improvements. Each investor must
demonstrate that their$500,000 investment has generated 10 new jobs.
Summary:
1. Parties will be the Agency and a Limited Partnership entity to be formed by CMB solely for
this Agency financing.
2. Agreement will provide for multiple tranches as CMB determines at its sole discretion that the
Agency designated Redevelopment Activities and Public Works Projects are then ready for
financing and the Agency has adequate revenues to repay each tranche.
3. Each tranche will commence a separate 6-year term from the Initial Funding Date of that
particular tranche (i.e., the date when the first $500,000 of foreign investor funds are disbursed
by CMB to the Agency for each tranche) and the first repayment date of 42 months will also be
determined from the Initial Funding Date.
4. Separate Loan Agreements will be executed for a principal amount of $600,000,000 and
$10,000,000, and will include a list of the Redevelopment Activities and the Public Works
Projects set forth in the Project Funding Agreement that are eligible to be financed through this
Loan Agreement with CMB plus current Agency projects for the second loan of$10,000,000.
5. A separate Loan Agreement and Indenture will be fully executed and delivered by the Agency
and CMB for each loan immediately after the approval of the Loan Agreement and Indenture to
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Agenda Item Number:
Economic Development Agency Staff Report
Page 4
be thereafter binding upon the Agency and contractually committing the Agency to repay all
loans as advanced by CMB in each tranche as funds are delivered by CMB to the Agency for
use by SBEDC.
6. The obligations incurred under this Loan Agreement and Indenture will be set forth on the
annual Statement of Indebtedness of the Agency whether or not any tranche has then been
established. The Loan Agreement will require the Agency to reserve excess tax increment
revenues in a special account to assure that adequate funds are available for undertaking of all
projects as financed by CMB.
7. The Agency may substitute additional projects for those initially specified as the
Redevelopment Activities and the Public Works Projects with the approval of CMB at its sole
discretion.
D. Summary of the Resolution of the Community Development Commission of the City of San
Bernardino approving a Certain Housing Capitalization Funding Agreement (Sub-Recipient
Agreement) by and between the Redevelopment Agency of the City of San Bernardino
("Agency") and Affordable Housing Solutions, Inc., a California non-profit corporation
("AHS"), Inc., relating to the financing of certain housing programs and activities:
' 1. This agreement between the Agency and AHS is to continue the role of AHS in undertaking
housing activities of the Agency utilizing the low- and moderate-income housing fund.
2. This agreement also includes the assignment of any federal funds transferred to the Agency
pursuant to Sub-Recipient Agreement by the City (e.g., HOME,NSP, etc.).
3. This agreement is substantially similar to the Project Funding Agreement of the Agency with
the SBEDC but limited in scope to the housing activities of AHS.
4. This agreement memorializes the relationship that currently exists between the Agency and
AHS for housing programs.
E. Summary of the Resolution of the Mayor and Common Council of the City of San Bernardino
approving and authorizing a Certain Reimbursement and Project Implementation
Agreement by and between the City of San Bernardino and the San Bernardino Economic
Development Corporation, Inc., authorizing the form of certain legal documents related
thereto and authorizing and directing their preparation, execution and delivery:
1. The City and SBEDC are parties to the Agreement.
2. The Agreement recites the same Public Works Projects as included in the Project Funding
Agreement but additionally commits SBEDC to those specific Public Works Projects that are
City initiated.
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Agenda Item Number: c4
Economic Development Agency Staff Report
Page 5
3. SBEDC becomes contractually liable to the City for performance utilizing the tax increment
revenues to be received by SBEDC pursuant to the Project Funding Agreement.
ENVIRONMENTAL IMPACT:
Neither action meets the definition of a "project" under Section 15378 of the California Environmental
Quality Act (CEQA), which states that a "Project" means the whole of an action, which has a potential
for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect
physical change in the environment.
FISCAL IMPACT:
Repayment of these loans would be interest only and payable quarterly. The Agency would only be
responsible and financially liable for a particular loan or any portion thereof when a precise "shovel
ready" project had been identified together with the revenue sources to pay the quarterly interest
payments and to assure the repayment or refinancing of the principal amount of the respective loan at
the 6-year maturity date. There is no impact to the City's General Fund.
RECOMMENDATION:
That 1) the Mayor and Common Council conduct the workshop and continue the action to a date and
time certain; or 2) Resolutions A, B, C, D and E be adopted
Emil A. Marzullo, In im xecutive Director
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Meeting Date: 03/03/2011
Agenda Item Number:
i
1 RESOLUTION NO.
2 RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF
3 THE CITY OF SAN BERNARDINO APPROVING THE APPOINTMENT OF
CERTAIN MEMBERS TO THE SAN BERNARDINO ECONOMIC
4 DEVELOPMENT CORPORATION
5 WHEREAS, the San Bernardino Economic Development Corporation (the "SBEDC"),
6 initially incorporated as the Economic Development Council, was formed pursuant to the non-profit
7 corporation laws of the State of California, and currently exists for the purposes of assisting in the
8 implementation of various redevelopment initiatives within the City of San Bernardino (the "City")
9 and to undertake such other activities, programs and projects of the Agency and the City as are then
10 deemed advisable by SBEDC through its board of directors (the"Board"); and
11 WHEREAS, the SBEDC bylaws have been duly amended (the "Bylaws") incorporating
12 various changes as are applicable to the SBEDC and to incorporate other updates, including changes
13 to the composition of the SBEDC Board; and
14 WHEREAS, the SBEDC Board as provided in the Bylaws shall be comprised of six (6)
15 voting directors; three (3) to be appointed by the Commission and the remaining three (3) to be
16 appointed by the official actions of the following for one (1) Board member each by: (i) the Board
17 of Education of the San Bernardino City Unified School District for an elected Board member of the
18 school district residing within the City, (ii) the Board of Supervisors of the County of San
19 Bernardino for a County Supervisor having any portion of their supervisorial district located within
20 the City regardless of residency of such Supervisor, and (iii) the Board of Directors of the San
21 Bernardino Chamber of Commerce of an elected members of such Board of Directors residing
22 within the City; and
23 WHEREAS, the SBEDC shall function initially with three (3) Commission members acting
24 as the Board until such time as the specified entities have duly appointed their representatives to
25 serve on the SBEDC Board; and
26 WHEREAS, it is necessary at this time to undertake the appointment of the three (3)
27 members of the Community Development Commission as appointed members to the Board of the
28 SBEDC; and
1 Q- R
PAAgendas\Comm Dev Commission\2011 CDC Items\Special Joint Workshop\03-03-11 SBEDC Appointing Members CDC Reso.doc
1 WHEREAS, the SBEDC intends to enter into a Reimbursement and Project Implementation
2 Agreement (the "Reimbursement Agreement") with the City for the purpose of assisting the City in
3 the implementation and undertaking of various City Public Works Projects; and
4 WHEREAS, the Agency intends to enter into a certain Project Funding Agreement with the
5 SBEDC (the "Funding Agreement") whereby the Agency will duly assign and set over to the
6 SBEDC certain current and future tax increment revenues of the Agency for the purposes of
7 restructuring the manner in which the Agency, through the SBEDC, conducts its governmental
8 functions as a community redevelopment agency pursuant to the Community Redevelopment Law,
9 found at Health & Safety Code Section 33000, et seq. (the "CRL"), and for the purposes of having
10 the SBEDC, rather than the Agency, undertake and implement certain redevelopment related
11 projects and other Agency designated public works projects in a more efficient and expeditious
12 manner than can be accomplished through operational and management structure utilizing solely the
13 Agency resources for the undertaking and implementation of all such projects; and
14 WHEREAS, the adoption of this Resolution is necessary and desirable to complete the
15 implementation of certain redevelopment related projects and designated public works of both the
16 City and the Agency.
17 NOW, THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION OF THE
18 CITY OF SAN BERNARDINO DOES HEREBY RESOLVE, DETERMINE AND ORDER, AS
19 FOLLOWS:
20 Section 1. This Commission hereby moves to appoint and approves the appointment of
21 and to serve on the
22 Board of the SBEDC until such time as either(i) this Commission votes to change the appointments
23 to the Board of the SBEDC or (ii) such members of this Commission as herein appointed are no
24 longer serving as a member of this Commission.
25 Section 2. This Resolution shall take shall take effect from and after the date of adoption by
26 this Commission.
27
28
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1 RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF
THE CITY OF SAN BERNARDINO APPROVING THE APPOINTMENT OF
2 CERTAIN MEMBERS TO THE SAN BERNARDINO ECONOMIC
3 DEVELOPMENT CORPORATION
4
5 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Community
6 Development Commission of the City of San Bernardino at a meeting
7 thereof,held on the day of , 2011, by the following vote to wit:
8 Commission Members: Ayes Nays Abstain Absent
MARQUEZ
9 VACANT
10 BRINKER
11 SHORETT
12 KELLEY
13 JOHNSON
14 MC CAMMACK
15
16
17 Secretary
18 The foregoing Resolution is hereby approved this day of , 2011.
19
20
Patrick J. Morris, Chairperson
21 Community Development Commission
22 of the City of San Bernardino
23
Approved as to Form:
24
25 By; C-Z�W
26 Agenc ou 1
27
28
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m Appointing Members CDC Reso.doc
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BYLAWS
OF THE
SAN BERNARDINO ECONOMIC DEVELOPMENT CORPORATION, INC.
a California Nonprofit Public Benefit Corporation
History of Actions Taken ;.
Related to Bylaws
Bylaws Adopted 009
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Amendment 2011
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BYLAWS OF THE
ECONOMIC DEVELOPMENT CORPORATION, INC.
TABLE OF CONTENTS
Page
ARTICLE NAME AND CORPORATE OFFICES...................................................................... I
1.1 NAME.................................................................................... ......... I
r.
1.2 PRINCIPAL OFFICE.......................................................... ...
..........
1.3 OTHER OFFICES............................................................... ......................
1.4 PURPOSES........................................................... ............................... I
ARTICLE 11 DIRECTORS .....................................................01's' ..................................2
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2.1 GENERAL POWERS.................... ....... ..........2
-%4/................. ..................
2.2 SPECIFIC POWERS..............
......................................................
2.3 NUMBER OF DIRECTOR
;' ... r.,
.. .............................................................4
2.4 RESTRICTIONS ON.INTERESTED PERSONS AS DIRECTORS.................4
2.5 ELECTION AND TERM OF OFFICE OF DIRECTORS..................................4
2.6 RESIGNATION AND VACANCIES.................................................................5
2.7 PLACE OF MEETINGS; MEETINGS BY TELEPHONE................................5
2.8 REGULAR MEETINGS.....................................................................................5
2.9 f RESERVED I....................................................................................................6
2.10 QUORUM...........................................................................................................6
2.11 WAIVER OF NOTICE.......................................................................................6
2.12 ADJOURNMENT...............................................................................................6
2.13 NOTICE OF ADJOURNED MEETING............................................................6
2.14 ACTION BY WRITTEN CONSENT WITHOUT A MEETING ......................6
2.15 FEES AND COMPENSATION OF DIRECTORS AND
REIMBURSEMENT.........................................Error! Bookmark not defined.
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ARTICLE III COMMITTEES.......................................................................................................7
3.1 COMMITTEES OF DIRECTORS......................................................................7
3.2 MEETINGS AND ACTION OF COMMITTEES..............................................7
ARTICLEIV OFFICERS ..............................................................................................................8
4.1 OFFICERS ..........................................................................................................8
4.2 ELECTION OR APPOINTMENT OF OFFICERS................::<,.::;, ,,..,:_........8
4.3 SUBORDINATE OFFICERS...................................................: ;:::::,.................8
4.4 REMOVAL AND RESIGNATION OF OFFICERS..` :................................8
4.5 VACANCIES IN OFFICES......................... .. 8
4.7 PRESIDENT .......................................�,.�:�::r' .. ..........................................9
4.8 VICE PRESIDENT.................... . :..` >. ..... ......................................................9
4.9 SECRETARY. .................... ': ::;.. .............................................................9
4.10 TREASURER......... ......................................................................9
-,
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4.11 DEPOSIT AND DISBitRSE ENT................................................................. 10
4.12 BOND................................................................................................................ 10
ARTICLE V INDEMNIFICATION OF DIRECTORS OFFICERS EMPLOYEES
ANDOTHER AGENTS ................................................................................................... 10
5.1 INDEMNIFICATION....................................................................................... 10
5.2 ;APPROVAL OF INDEMNITY........................................................................ 10
5.3 PAYMENT OF EXPENSES IN ADVANCE................................................... 11
5.4 INSURANCE INDEMNIFICATION............................................................... 11
5.5 AMENDMENT, REPEAL OR MODIFICATION........................................... 1 l
ARTICLE VI RECORDS AND REPORTS ................................................................................ 11
6.1 RECORDS; INSPECTION BY DIRECTORS ................................................. 11
6.2 ANNUAL REPORT.......................................................................................... 11
6.3 ANNUAL STATEMENT................................................................................. 12
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6.4 REPORTS TO SECRETARY OF STATE....................................................... 12
ARTICLE VII GENERAL MATTERS ....................................................................................... 13
7.1 CHECKS; DRAFTS, EVIDENCES OF INDEBTEDNESS............................. 13
7.2 CORPORATE CONTRACTS AND INSTRUMENTS;
HOW EXECUTED r.
...............................................................................,:.x.......... 13
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I 7.3 CONSTRUCTION• DEFINITIONS...........................................f'.,s rrfir,.tr Y.r,,... . .. 13
ARTICLE VIII AMENDMENTS r.... .. . ... ............ 13
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AMENDMENT BY DIRECTORS
............ .........:k ................... 13
8.1 AMENDMENT BY DIRECTORS................. "
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•..'ky • •:......................
8.2 RECORD OF AMENDMENTS {
. }.....:� .::::..................................... 14
ARTICLE IX INTERPRETATION " "
9.1 AMENDMENTS TO LAW.............................................................................. 14
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BYLAWS
OF THE
SAN BERNARDINO ECONOMIC DEVELOPMENT CORPORATION, INC.
ARTICLE I
r.
NAME AND CORPORATE OFFICES
1.1 NAME �� JrJ.
The name of this corporation is the SAN BERNAROJN0%.. ECONOMIC
DEVELOPMENT CORPORATION, INC. (the"Corporation").
1,4
1.2 PRINCIPAL OFFICE rJ' ,0 J
The principal office for the transaction of the activities and Vfairs of the Corporation (the
"Principal Office") shall be 201 North "E" Street, Third,.:Floor San Bernardino, California
92401. The Board may change the Principal Office from'
one location to another. Any change of
location of the Principal Office shall be noted by tle.:Secretary on these Bylaws opposite this
section or this section may be amended to statethe.new location.
1.3 OTHER OFFICES
The Board may at any time establish branch or subordinate offices at any place or places
where the Corporation is qualified to conduct its activities.
1.4 PURPOSES
A. This corporation is a nonprofit public benefit corporation and is not organized for
the private gain of any person. It is organized for public purposes within the meaning of the
Nonprofit Public Benefit Corporation Law (codified at California Corporations Code Sections
5110 et seq.), as amended from time to time, and is organized and operated exclusively for
charitable purposes within the meaning of Section 501(c)(3) of the Internal Revenue Code of
1986, as amended, or the corresponding provisions of any subsequent federal tax laws (the
"Code").
B. This Corporation is formed for the purpose of lessening governmental burdens by
providing assistance to the Redevelopment Agency of the City of San Bernardino (the
"Agency") in its efforts to promote the green development and redevelopment and to implement
other financings and projects that may be requested by the Agency to be undertaken by the
Corporation within the municipal boundaries of the City of San Bernardino but only to the extent
that such purposes constitute exclusively charitable, scientific and educational purposes within
the meaning of Sections 501(c)(3), 170(c)(2)(B), 2055(a)(2)and 2522(a)(2) of the Code.
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C. In its exercise of the above purpose, the Corporation shall have the following
powers, subject to those limitations set forth in these Bylaws:
(1) To enter into, perform and carry out contracts of any kind necessary to, or
in connection with, or incidental to, the accomplishment of the purposes of the
Corporation;
(2) To borrow money and to issue evidences of indebtedness and to'kcure the
same in furtherance of any or all of the purposes of the Corporation; y:
1.
(3) To receive and maintain a fund or funds,real or persogal'pXoperty' both,
and, subject to the restrictions and limitations hereinafter set forth .to`use and'apply the
whole or any part of the income therefrom and the principal thereof.exclusively for
charitable, religious, scientific, literary or educational purpo'ses:<:either directly or by
contributions to organizations that qualify as exempt. organizations under Section
501(c)(3) of the Code and its Regulations as they no }. xj.s;._9",%, they may hereafter be
amended; and
rr.
(4) The Corporation shall have the-power to do and perform all things
whatsoever set out in this Article I and necessar_:orl&idental to the accomplishment of
said purposes;
provided, however, that notwithstanding any provisions of these Bylaws, the Corporation shall
not conduct or carry on any activities:..not.permitted to be conducted or carried on by an
organization exempt from federal taxation under Section 501(c)(3) of the Code or by an
organization, contributions to which are deductible under Section 170(c)(2) of the Code.
ARTICLE II
DIRECTORS
2.1 GENERAL POWERS
Subject to the provisions of the California Nonprofit Public Benefit Corporation Law and
any other applicable laws and to any limitations in the Articles of Incorporation and these
Bylaws, the business and affairs of the Corporation shall be managed and all corporate powers
shall be exercised by or under direction of the Board of Directors (the "Board"). The Board may
delegate the management of the day-to-day operation of the business of the Corporation to a
management company or other person provided that the business and affairs of the Corporation
shall be managed and all corporate powers shall be exercised under the ultimate direction of the
Board.
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2.2 SPECIFIC POWERS
Without prejudice to the general powers set forth in Section 2.1 of these Bylaws, but
subject to the same limitations,the directors of the Corporation shall have the power to:
(a) Appoint and remove at the pleasure of the Board, all of the Corporation's
officers, agents and employees; prescribe powers and duties for them that are consistent
with the law, with the Articles of Incorporation and with these Bylaws.
(b) Change the Principal Office or principal place of business office in
California from one location to another; cause the Corporation to be.;.qua'tifi'd_�"'onduct
its activities in any other state, territory, dependency or country an its activities
within or outside California. r.
(c) Assume obligations, enter into contracts, borrow money and incur
indebtedness on behalf of the Corporation and cause to:;be executed and delivered for the
corporate purposes, in the corporate name, promissory notes,bonds, debentures, deeds of
trust, mortgages,pledges,hypothecation, and othi`evi�dV`ss of debt and securities.
d Acquire, mortgage, encumber'' OM'*�title to, pledge, sell, release, or
otherwise dispose of real or personal property'and>interests therein when and upon such
terms as the Board determines to be in thebest;inierest of the Corporation.
(e) Facilitate any merger, consolidation, liquidation, plan of exchange,
acquisition of stock, or the reorganization or transfer of a substantial portion of the assets
of the Corporation.
(f) Amend the Articles of Incorporation or these Bylaws.
(g) Adopt operating and capital budgets and authorize expenditures outside of
such budgets.
(h) Approve and amend the Corporation's business and strategic plans.
(i) Create corporate subsidiaries and/or establish corporate joint ventures.
0) Acquire shares of or any interest in any corporation or other legal entity or
business enterprise, or create any partnership or other legal entity which the Corporation
is or will be a partner, shareholder or member of similar participant.
(k) Change or reorganize the Corporation into any other legal form.
(1) Establish or participate in any noncorporate joint venture.
Exercise of any or all of the above powers by the Board is subject to its limitation to enter
into any action that would adversely affect the tax-exempt status of the Corporation.
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n
2.3 NUMBER OF DIRECTORS
of the Corporation shall be six 6 . Three 3
The authorized number of directors rp O ( )
directors shall be residents of the City of San Bernardino or as otherwise qualified and selected
in the manner set forth in Section 2.5(a) and three (3) directors shall be members of the
Community Development Commission of the City of San Bernardino, or any successor board or
agency, elected in the manner set forth in Section 2.5(b).
No reduction of the authorized number of directors shall have the effect of rem'dWA* g any
director before that director's term of office expires.
2.4 CONFLICTS OF INTEREST; OTHER APPLICABLE CAL-IF O1 N1<A LAWS
The disclosure by directors of all conflicts of interest shall be consistent with.thok requirements
applicable to municipal corporations pursuant to California law. A1.I::pro-visions of California law
with respect to municipal corporations and the conduct of business and the'activities of elected
and appointed officials serving on the governing bodies of.,goe rpm
ental agencies shall be
applicable to the Corporation and the Board, including, but not limited to, the Ralph M. Brown
Act of the State of California (the `Brown Act") (GoveriiriErit.Code Section 54950, et seq.), the
Public Records Act (Government Code Section :: 'et seq.), the Political Reform Act
(Government Code Section 87000, et seq.), the confli-c# -of interest provisions of Government
Code Section 1090, et seq., the prevailing wage,`requ re. tints for public works projects (Labor
Code Section 1770, et seq.).
2.5 SELECTION AND TERM OF,OFFICE OF DIRECTORS
a. Directors Selected 61Certdin Entities. Three (3) members of the Board shall be
appointed by the Commission asset forth in Section 2.3 and in subsection b. below and the
remaining three (3) members of the Board shall be appointed by the official actions of the
following entities for one (1) Board member each by: (i) the Board of Education of the San
Bernardino City Unified School District for an elected member of such Board of Education who
resides within the City of San Bernardino, (ii) the Board of Supervisors of the County of San
Bernardino to appoint a County Supervisor having any portion of the City of San Bernardino
within their supervisorial district regardless of residency of such appointed County Supervisor,
and (iii) the Board -of Directors of the San Bernardino Chamber of Commerce to appoint one
elected member_of said Board of Directors residing within the City of San Bernardino. The
initial., Board of the Corporation be the three (3) individuals selected by the Commission to serve
as members of the Board until each of the specified entities has duly appointed their
representatives to serve on the Board of the Corporation. The individuals appointed pursuant to
this subsection a. must comply with the following qualifications as applicable to each appointed
individual: (i) be an elected member of the Board of the San Bernardino City Unified School
District residing within the City of San Bernardino, (ii) be a member of the Board of Supervisors
of the County of San Bernardino having any portion of the City within their supervisorial district,
and (iii) be an elected Board member of the San Bernardino Chamber of Commerce residing
within the City. Until such time as one (1) or more of the three (3) appointed representatives
appointed by the entities described in items (i), (ii) and (iii) or the preceding sentence, other than
those appointed by the Commission, have been duly appointed to serve on the Board of the
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�V
ai{�
Corporation, a majority of the three (3) individuals appointed by the Commission shall constitute
a quorum for all actions of the Board and for which a majority of the quorum is then present
shall be required for the approval of all actions of the Board. If and when the previously
identified entities appoint individuals to serve of the Board, the quorum requirement shall be
increased so that a quorum shall always be a majority of the Board members appointed and
servicing for which a majority of the quorum shall be required for the adoption and approval of
all actions of the Board.
b. Directors Elected by the Community Development Commission. The Cornmunity
Development Commission of the City of San Bernardino, or any successor board:ot:agency, shall
elect three (3) of its members to serve as directors. Said directors shall hol!-i,.of�ce.until the
expiration of the term for which elected and until a successor has been el&Wd:,;and qualified,
except in the case of the death,resignation, or removal of such a director. ,
r.
2.6 RESIGNATION AND VACANCIES
;r
Any director may resign effective upon giving oral or written notice to the President, the
Secretary or the Board, unless the notice specifies a later..time'for:`the effectiveness of such
resignation. Except on notice to the Attorney General,of the.State Hof California, no director may
resign if the Corporation would be left without a duly elected director or directors.
Vacancies on the Board may be filled in'accordance with the applicable process for the
election of directors as set forth in Section 2.5 for the remaining term of the vacant office.
A vacancy or vacancies in the Board shall be deemed to exist (i) in the event of the death,
resignation or removal of any director,(ii)-if the Board by resolution declares vacant the office of
a director who has been declared of unsound mind by an order of court or convicted of a felony
or(iii) if the authorized number of directors is increased.
2.7 PLACE OF MEETINGS
Regular meetings of the Board may be held at any place within the City of San
Bernardino which has been designated from time to time by resolution of the Board. In the
absence of such a designation, regular meetings shall be held at the Principal Office of the
Corporation. Special meetings of the Board may be held at any place within the City of San
Bernardino which has been designated in the notice of the meeting or, if not stated in the notice
or if there is no notice, at the Principal Office of the Corporation.
2.8 CONDUCT OF MEETINGS
All regular and special meetings of the Board shall be held and conducted, and with
notice provided, all as required pursuant to the Brown Act, and the time and place of such
regular meetings shall be fixed by the Board. The City Attorney shall be entitled to attend all
such meetings at which members of the Mayor and Common Council are in attendance as
directors of the Corporation.
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2.9 [ RESERVED 1
2.10 QUORUM
As further provided in Section 2.5.a., a majority of the authorized and duly appointed
number of directors shall constitute a quorum for the transaction of business, except to adjourn as
provided in Section 2.12 of these Bylaws. Every act or decision done or made by a majority of
the directors present at a meeting duly held at which a quorum is present shall be considered as
the act of the Board, subject to the provisions of the California Nonprofit Puili ;; Benefit
Corporation Law, the Articles of Incorporation and other applicable law, including without
limitation, those provisions relating to (i) approval of contracts or transa-[loxis, nswhich a
director has a direct or indirect material financial interest; (ii) approval 6f--certain"�'ransactions
between corporations having common directorships; (iii) creation and appointment of
committees; (iv) indemnification of directors; and (v) the Political =Reform:Act; and (vi) the
Brown Act.
A meeting at which a quorum is initially present may not coutmue to transact business
and may only adjourn the meeting to a subsequent date and titre.
2.11 WAIVER OF NOTICE
Notice of a meeting need not be given to any director who signs a waiver of notice or a
consent to holding the meeting or who attends the meeting without protesting the lack of notice
to such director prior to the meeting or at its commencement. All such waivers, consents, and
approvals shall be filed with the corporate`records or made a part of the minutes of the meeting.'
2.12 ADJOURNMENT
A majority of the directors present, whether or not a quorum is present, may adjourn any
meeting to another time.and place,and in the event no directors are then present, the Secretary of
the Corporation or a duly authorized representative may adjourn the meeting from time to time
until a quorum is present in conformity with the Brown Act.
2.1.3 NOTICE OF ADJOURNED REGULAR MEETING
"cif a regular meeting is adjourned, notice of any adjournment to another time and place
shall.be given as soon as practicable after the adjournment has been determined, to the directors
who were not present at the time of the adjournment.
2.14 NO ACTION BY WRITTEN CONSENT
No action required or permitted to be taken by the Board may be taken without the
conduct of an officially noticed and duly conduced meeting of the Board.
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1 t
ARTICLE III
COMMITTEES
A,.
3.1 COMMITTEES OF DIRECTORS
The Board may, by resolution adopted by a majority of the authorized number of
directors, designate one or more committees, each consisting of two (2) or more directors, to
serve at the pleasure of the Board. The Board may designate one or more directors as-';alternate
members of any committee, who may replace any absent member at any xrieeting'of the
committee. The appointment of members or alternate members of a committeexequir..,Ahe vote
of a majority of the authorized number of directors. Any such committee sl alf.Jfave°authority to
act in the manner and to the extent provided in the resolution of the Board.and''may have all of
the authority of the Board, except with respect to:
�r
(a) The filing of vacancies on the Board or in`anv,'6 n?rttee.
(b) The fixing of compensation of the:dit'&ors Yfor`serving on the Board or on
any committee. , ?
... .
(c) The amendment or repeal of these Bylaws or the adoption of new Bylaws.
(d) The amendment or,repeal<;of any resolution of the Board which by its
express terms is not so amendable of,repealable.
r;
(e) The expending.of,ci3rporate funds to support a nominee for director after
more people have been nominated for director than can be elected;
(f) The creation of any other committees of the Board or the appointment of
members thereof.
(g) The approval of any contract or transaction to which the Corporation is a
party and in which one or more of its directors has a material financial interest, except as
special approval is provided for in Section 5233(d)(3) of the California Corporations
Code.
3.2 MEETINGS AND ACTION OF COMMITTEES
Meetings and actions of committees shall be governed by, and held and taken in
accordance with, the provisions of the Brown Act and Article II of these Bylaws, Section 2.7
(place of meetings), Section 2.8 (regular meetings), Section 2.9 (special meetings and notice),
Section 2.10 (quorum), Section 2.11 (waiver of notice), Section 2.12 (adjournment), Section 2.13
(notice of adjourned meetings), and Section 2.14 (no action without a meeting), with such
changes in the context of those Bylaws as are necessary to substitute the committee and its
members for the Board and its members; provided, however, that the time of regular meetings of
committees may be determined either by resolution of the Board or by resolution of the
committee, that special meetings of committees may also be called by resolution of the Board,
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and that notice of special meetings of committees shall also be given to all alternate members,
who shall have the right to attend all meetings of the committee. The Board may adopt rules for
the government of any committee not inconsistent with the provisions of these Bylaws.
ARTICLE IV
OFFICERS
YJ
4.1 OFFICERSsr
rN
The officers of the Corporation shall be a President, Vice-Pres<den# Secretary and
Treasurer. Any number of offices may be held by the same person e'�cept:that-neither the
Secretary nor the Treasurer may serve concurrently as President.
4.2 ELECTION OR APPOINTMENT OF OFFICERS "" {t
The officers of the Corporation, except such officers.:as may.be appointed in accordance
with the provisions of Section 4.3 or Section 4.5 of these::l Ia.ws,,shall be chosen by the Board
and shall serve at the pleasure of the Board, subject tai.the""n'&s, if any, of an officer under any
contract of employment.
4.3 SUBORDINATE OFFICERS
The Board may appoint, or may:;empidwer.the President to appoint, such other officers as
the business of the Corporation may require; each of whom shall hold office for such period,
have such authority, and perform_ such duties as are provided in these Bylaws or as the Board
may from time to time determine.
4.4 REMOVAL AND RESIGNATION OF OFFICERS
All officers serve at the pleasure of the Board and any officer may be removed, either
with or without cause, by the Board at any regular or special meeting of the Board or, except in
the case of an officer chosen by the Board, by any officer upon whom such power of removal
may be conferred,by the Board.
Any officer may resign at any time by giving written notice to the Corporation. Any
resignation shall take effect at the date of the receipt of that notice or at any later time specified
in that notice; and, unless otherwise specified in that notice, the acceptance of the resignation
shall not be necessary to make it effective. Any resignation is without prejudice to the rights, if
any, of the Corporation under any contract to which the officer is a party.
4.5 VACANCIES IN OFFICES
A vacancy in any office because of death, resignation, removal, disqualification or any
other cause shall be filled in the manner prescribed in these Bylaws for regular appointments to
that office.
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4.6 [ RESERVED]
4.7 PRESIDENT
The President shall be the Chief Executive Officer of the Corporation and shall, subject
to the control of the Board, have general supervision, direction, and control of the business and
the officers of the Corporation. The President shall preside at. all meetings of the Board. The
President shall have the general powers and duties of management usually vested irLzhe:.office of
President of a corporation, and shall have such other powers and duties as may be;. res bed by
the Board or these Bylaws. fs. `F�r%,,
4.8 VICE PRESIDENT �f�
In the absence or disability of the President, the Vice Presid'eril• €:any,'shall perform all
the duties of the President and when so acting shall have all the:-po'wefs of,'and be subject to all
the restrictions upon, the President. The Vice Presidents p l<:hve:such other powers and
perform such other duties as from time to time may be re*. bA60 for them respectively by the
Board, these Bylaws, or the President.
4.9 SECRETARY
The Secretary, or Assistant Secretary if such officer is so appointed, shall keep or cause
to be kept, at the Principal Office of the Corporation or such other place as the Board may direct,
a book of minutes of all meetings and.actions of directors and committees of directors. The
minutes shall show the time and place each meeting, whether regular or special (and, if
special, how authorized and the_notice`given), the names of those present at directors' meetings
or committee meetings, and the proceedings thereof.
}
The Secretary or Assistant Secretary shall give, or cause to be given, notice of all
meetings of the Board required to be given by law or by these Bylaws. The Secretary or
Assistant Secretary shall keep the seal of the Corporation, if one be adopted, in safe custody and
shall have such other powers and perform such other duties as may be prescribed by the Board or
by these Bylaws.
}
4.10 TREASURER
The Treasurer shall keep and maintain, or cause to be kept and maintained, adequate and
correct books and records of accounts of the properties and business transactions of the
Corporation, including accounts of its assets, liabilities, receipts, disbursements, gains, losses,
capital and retained earnings. The Treasurer shall send or cause to be given to the directors such
financial statements and reports as are required to be given by law, by these Bylaws, or by the
Board. The books of account shall at all reasonable times be open to inspection by any director.
The Treasurer shall deposit all money and other valuables in the name and to the credit of
the Corporation with such depositaries as may be designated by the Board. The Treasurer shall
disburse the funds of the Corporation as may be ordered by the Board, shall render to the
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President and directors, whenever they request it, an account of all of his or her transactions as
Treasurer and of the financial condition of the Corporation, and shall have such other powers and
perform such other duties as may be prescribed by the Board or these Bylaws.
4.11 DEPOSIT AND DISBURSEMENT
The Treasurer shall deposit, or cause to be deposited, all money and other valuables in
the name and to the credit of the Corporation with such depositories as the Board may,i esignate,
shall disburse the Corporation's funds as the Board may order, shall render to the.:Pres*' nt and
directors, when requested, an account of all transactions as Treasurer and;,,o ..tie financial
condition of the Corporation, and shall have such other powers and perform-S-6-h ot# r duties as
the Board or the Bylaws may prescribe. %== err
r =�f
4.12 BOND ;: '
If required by the Board, the Treasurer shall give the.•=G...... on a bond in the amount
and with the surety or sureties specified by the Board for faithful perfotrnance of the duties of the
office and for restoration to the Corporation of all of itS,bboks.,:papers, vouchers, money, and
other property of every kind in the possession or under the�tontrol of the Treasurer on his or her
death, resignation, retirement or removal from office*.*..
ARTICLE iv <
AF A INDEMNIFICATION OF DIRECTORS OFFICERS EMPLOYEES
AND OTI-IER AGENTS
5.1 INDEMNIFICATION
To the fullest extent permitted by law, this Corporation shall indemnify its directors,
officers, employees and other persons described in Section 5238(a) of the California
Corporations Code; including persons formerly occupying any such positions, against all
expenses,judgments, fines, settlements and other amounts actually and reasonably incurred by
them in connection with any "proceeding," as that term is used in that section of the California
Corporations Code and including an action by or in the right of the Corporation, by reason of the
fact that such person is or was a person described by that Section. "Expenses," as used in this
Bylaw,shall have the same meaning as in Section 5238(a) of the California Corporations Code.
5.2 APPROVAL OF INDEMNITY
On written request to the Board by any person seeking indemnification, the Board shall
promptly determine under Section 5238(e) of the California Corporations Code whether the
standard of conduct set forth in Sections 5238(b) and (c) have been met and, if it has, the Board
shall authorize indemnification.
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5.3 PAYMENT OF EXPENSES IN ADVANCE
To the fullest extent permitted by law and except as otherwise determined etermined by the Board,
expenses and attorneys' fees incurred by any persons described in Section 5.1 in defending any
civil or criminal action or proceeding for which indemnification is required pursuant to
Section 5.1, or if otherwise authorized by the Board, shall be paid by the Corporation in advance
of the final disposition of such action or proceeding upon receipt of an undertaking by or on
behalf of the indemnified party to repay such amount if it shall ultimately be determined that the
indemnified party is not entitled to be indemnified for those expenses.
5.4 INSURANCE INDEMNIFICATION
The Corporation shall have the power to purchase and maintain irk uran on behalf of
any person who is or was a director, officer, employee or agent of the:Corporat%n against any
liability asserted against or incurred by such person in such capacity.oT arising out of that
person's status as such. ,
5.5 AMENDMENT REPEAL OR MODIFICATION
Any amendment, repeal or modification of any'provision of this Article V shall not
adversely affect any right or protection of a director or.:agent of the Corporation existing at the
time of such amendment, repeal or modification.
ARTICLE VI
RECORDS AND REPORTS
6.1 RECORDS; INSPECTION BY DIRECTORS
The Corporation shall keep adequate and correct books of records of account and written
minutes of the proceedings of its Board and committees of the Board. Every director shall have
the absolute right at any reasonable time to inspect and copy all books, records, and documents
of every kind and to inspect the physical properties of the Corporation. Such inspection by a
director may be made in person or by an agent or attorney and the right of inspection includes the
' right to copy and make extracts.
6.2 ANNUAL AUDIT
The Board shall furnish to the directors and make available for public inspection and
distribution not later than one hundred twenty (120) days after the close of the Corporation's
fiscal year an annual audit conducted by ars independent firm of certified public accountants.
The audit shall contain the following information, in appropriate detail, for the fiscal year:
(a) The assets and liabilities, including trust funds, of the Corporation as of
the end of the fiscal year.
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(b) The principal changes in assets and liabilities, including trust funds, during
the fiscal year.
(c) The revenue and receipts of the Corporation, both unrestricted and
restricted to particular purposes, for the fiscal year.
(d) The expenses and disbursements of the Corporation, for both general and
restricted purposes, during the fiscal year.
(e) Any information required by Section 6.3 of these Bylaws.
Any other information required by generally accepted accQUnt�Rg:,-pane pies and
governmental accounting requirements.
The annual audit shall be accompanied by any report on it o(independent certified public
accountants or making recommendations and reviews of management and=�other procedures of
the Corporation.
6.3 ANNUAL STATEMENT
As part of the annual audit to be furnished to the directors and to the public pursuant to
Section 6.2 of these Bylaws, the Board shall f i sh,to'the directors an annual statement of any
transaction or indemnification of the following kinds:
(a) Any transaction (i) in which the Corporation, its parent, or its subsidiary
was a party, (ii) in which an"interested person" had a direct or indirect material interest,
and (iii) which involved more than Fifty Thousand Dollars ($50,000), or was one of a
number of transactions with the same interested person involving, in the aggregate, more
than Fifty Thousand Dollars-($50,000). For the purposes of this section, an "interested
person" is any director or officer of the Corporation or its parent or subsidiary; however,
a mere common directorship shall not be considered a material financial interest.
(b) Any-indemnifications or advances aggregating more than Ten Thousand
Dollars ($10,000) paid during the fiscal year to any officer or director of the Corporation
pursuant-to. Article V of these Bylaws unless such indemnification was previously
approved by the directors under Section 5238(e)(1)of the California Corporations Code.
°6.4 REPORTS TO SECRETARY OF STATE
The Board shall cause to be filed with the Secretary of State an annual statement
containing the following information:
(a) The names and addresses of its President, Secretary and Treasurer.
(b) The street address of its Principal Office.
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(c) A designation of an agent for service of process.
The statement shall be filed on the form prescribed by the Secretary of State.
ARTICLE VII
GENERAL MATTERS
7.1 CHECKS; DRAFTS; EVIDENCES OF INDEBTEDNESS
From time to time, the Board shall determine by resolution which person._.or:per.sgns may
sign or endorse all checks, drafts, other orders for payment of money, notes or'othtir'evidences of
indebtedness that are issued in the name of, or payable to, the Corporation,�Iand 60' the persons
so authorized shall sign or endorse those instruments. .
7.2 CORPORATE CONTRACTS AND INSTRUMENTS 'HOW EXECUTED
The Board, except as otherwise provided in thew--B. ylaws;zmy authorize any officer or
officers, or agent or agents, to enter into any contract ox_exeeufe ahy instrument in the name of
and on behalf of the Corporation; such authority may, be,, general or confined to specific
instances. Unless so authorized or ratified by the Board or within the agency power of an
officer, no officer, agent or employee shall have an' or authority to bind the Corporation
by any contract or engagement or to pledge its credit or to render it liable for any purpose or for
any amount.
7.3 CONSTRUCTION;DEFINITIONS
Unless the context requires otherwise, the general provisions, rules of construction and
definitions in the California `Nonprofit Public Benefit Corporation Law shall govern the
construction of these Bylaws. Without limiting the generality of this provision, the singular
number includes the plural; the plural number includes the singular, and the term "person"
includes both a corporation and a natural person.
ARTICLE VIII
AMENDMENTS
-8:1 AMENDMENT BY DIRECTORS
Subject to compliance with the provisions of Sections 2.4 and 2.8, the Board may adopt,
amend or repeal these Bylaws except that the Board may not extend the term of a director
beyond that for which the director was designated.
Ai
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8.2 RECORD OF AMENDMENTS
Whenever an amendment or new Bylaw is adopted, it shall be copied in the book of
minutes with the original Bylaws. If any Bylaw is repealed, the fact of repeal, with the date of
the meeting at which the repeal was enacted or written consent was filed, shall be stated in said
book.
ARTICLE IX
INTERPRETATION '
9.1 AMENDMENTS TO LAWf}lt� ¢'<y;`��r � '
'✓,. ! ''ter_
Reference in these Bylaws to any provision of the California Cotporations Code,
specifically the Nonprofit Public Benefit Corporation Law, shall be deemed to include all
amendments thereof.
r
r
lSf
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CERTIFICATE OF ADOPTION OF BYLAWS
OF THE
SAN BERNARDINO ECONOMIC DEVELOPMENT CORPORATION, INC.
I,the undersigned, do hereby certify:
1. That I am the duly elected and President of the ECONOMIC .DEVELOPMENT
CORPORATION, INC., a California nonprofit public benefit corporation
2. That the foregoing Bylaws constitute the Bylaws of said corporation as amended
f-,
by the Board of Directors of said corporation on March 2011. E
f.- 40 r .
IN WITNESS WHEREOF, I have hereunto subscribed 1"hy' aril =fi is _th day of March,
2011. �
JJ.
President
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R,
Obligations and/or the other obligations as incurred pursuant to the Funding Agreement.
Section 4. Approval of Terms and Provisions. The Commission hereby approves th
terms and provisions of the Funding Agreement and the totality of the Agency's obligation
thereunder.
Section 5. Approval of Final Form of Funding Agreement. The Commission hereby
approves the form of the Funding Agreement in the form on file with the Secretary,together with
any changes therein or additions thereto as may be approved by the Chair or the Executive Directo .
The Commission hereby further authorizes and directs the conversion of the form of the Fundin
Agreement into the final form thereof, together with such changes or modifications as deeme
H necessary or desirable by the Chair or the Executive Director upon the recommendation of Agenc
^sl
11 Counsel and the City Attorney. The Chair or the Executive Director or such other authorized offic
CD
1 of the Commission is hereby authorized and directed to execute and deliver, and the Secretary
o-
12 Assistant Secretary is hereby authorized and directed to attest to, the final form of the Fundin
U �
14 Agreement. U
U a
1 Section 6. Official Action: Validation Action. The Chair, Vice-Chair, Secreta
H Assistant Secretary, Executive Director, Agency Counsel, City Attorney and any and all other
�Z \J �17 members and officers of the Agency are hereby authorized and directed,for and in the name and oi i ;
P behalf of the Agency,to do any and all things and take any and all actions,including execution an
CR
IS delivery of any and all assignments, certificates, requisitions, agreements, notices, consent%
N N
2 instruments of conveyance, warrants and other documents, which they, or any of them, may dee 4 U U
21 necessary or advisable in order to fulfill the obligations of the Agency under the Fundin
2 Agreement. Whenever in this Resolution any officer of the Agency is authorized to execute or
21 countersign any document or take any action,such execution,countersigning or action may be take
24 on behalf of such officer by any person designated by such officer to act on his or her behalf in th
2_ case such officer shall be absent or unavailable.
2 b This Commission further authorizes and directs Aizency Counsel together with the Ci
2 Attorney to file an action in the Superior Court of San Bernardino County pursuant to Code of Civ
2f Procedure Section 860 et se g., as to the matters contained in this Resolution the Fundin
5
P:\Ag=das\Comm D,,Commission\2011 CDC Ilcros\Special Joint Wotkahop\03-03-11 Agency&SBEDC-Funding Ag—nt CDC Rm.doc
1
Agreement and the other actions of the Agency and the Mayor and Common Council as approved i
furtherance of the Funding Agreement, the Housing Cal2italization Funding Agreement (Sub-
recipient Agreement),the incurrence of the indebtedness pursuant to the EB-5 funding loan progran
and the Project Implementation Agreement of the City with SBEDC.
Section 7. Effective Date. This Resolution shall become effective immediately upo
adoption by this Commission.
1
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1
1
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1
1
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P:V.gendesWomm De Commission12011 CDC Ilems\Speciul Joint Workshop\03-03-11 Agmcy B.SBEDC-Funding Agreement CDC Reso.dm
1 RESOLUTION NO. C (OP
2 RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF
3 THE CITY OF SAN BERNARDINO APPROVING A CERTAIN PROJECT
FUNDING AGREEMENT BY AND BETWEEN THE REDEVELOPMENT
4 AGENCY OF THE CITY OF SAN BERNARDINO (`AGENCY") AND THE
SAN BERNARDINO ECONOMIC DEVELOPMENT CORPORATION, INC.,
5 RELATING TO THE$525,000,000 PRINCIPAL AMOUNT REDEVELOPMENT
AGENCY OF THE CITY OF SAN BERNARDINO REDEVELOPMENT
6 PROJECT AREAS CAPITAL IMPROVEMENT PROJECTS
7 WHEREAS, the City of San Bernardino, California the "City"),( ty ), is a municipal corporation
8 and charter city, duly organized and existing pursuant to the provisions of the constitution of the
9 State of California; and
10 WHEREAS, the Community Development Commission of the City of San Bernardino (the
11 "Commission") is the governing body of the Redevelopment Agency of the City of San Bernardino
12 (the "Agency'), a public body, corporate and politic, organized and existing pursuant to the
13 California Community Redevelopment Law (Health and Safety Code Section 33000, et seq.) (the
14 "CRL"); and
15 WHEREAS, the Agency was established b appropriate action of the City, the
y tY, purposes
16 of exercising redevelopment powers within the City boundaries through the adoption and approval
17 of various redevelopment project areas that are currently in existence within the City (the "Project
18 Areas") as further described in the applicable redevelopment plans accompanying such Project
19 Areas (the"Redevelopment Plans"); and
20 WHEREAS, the San Bernardino Economic Development Corporation (the "SBEDC") was
21 formed pursuant to the non-profit corporation laws of the State of California, and currently exists for
22 the purposes of assisting in the implementation of various redevelopment initiatives within the City
23 and to undertake such other activities, programs and projects of the Agency and the City as are then
24 deemed advisable by the SBEDC through its board of directors; and
25 WHEREAS, pursuant to the Community Redevelopment Law (Health & Safety Code
26 Section 33000, et seq.) (the "CRL" or the "Authorizing Provisions"), the Agency may enter into
27 funding agreements and financing agreements with other public agencies, private entities and non-
8 profit corporations to carry out its redevelopment and other public infrastructure development
1 al�)
P:\Agendas\Comm De Commission\2011 CDC Items\Special Joint Workshop\03-03-11 Agency&SBEDC-Funding Agreement CDC Reso.doc : 3" �\
1 purposes; and
2 WHEREAS, the SBEDC has requested that the Agency act at this time to assist the SBEDC
3 with the financing of certain public infrastructure and the implementation of other programs and
4 activities located within the Project Areas, together with other public infrastructure that is necessary
5 to support the long-term development and redevelopment of the portions of the City located within
6 the Project Areas, namely, those public improvements,public infrastructure and other developments
7 and activities, programs and projects all as set forth in the current year 2010-2011 Budget of the
8 Agency and the Downtown Vision Plan for the Theater District of the Agency as indicated on
9 Exhibit"A"(the"Programs, Projects and Activities")of the Funding Agreement by and between the
10 Agency and the EDC relating to the $525,000,000 Principal Amount Redevelopment Agency of the
11 City of San Bernardino Redevelopment Project Areas Capital Improvement Projects (the "Funding
12 Agreement" as said Funding Agreement is attached to this Resolution as Exhibit "A") plus those
13 other public improvements and public infrastructure as set forth on the Implementation Plan of the
14 Agency as indicated on Exhibit `B" of the Funding Agreement (the "Implementation Plan Public
15 Improvements") (collectively,the "Redevelopment Related Improvements"); and
16 WHEREAS, in addition to the Redevelopment Related Improvements, the SBEDC, in
17 furtherance of the redevelopment of various areas of the City and in particular with the Project
18 Areas, requires the Agency to commit to certain levels of additional financing amounts to the
19 SBEDC for the fulfillment of the contractual commitments and other financial obligations as set
20 forth on Exhibit"C"of the Funding Agreement(the"Other EDC Contractual Obligations"); and
21 WHEREAS, the Agency has determined to finance the Redevelopment Related
22 Improvements and the Other EDC Contractual Obligations by the incurring of the indebtedness as
23 required by the Funding Agreement, including, but not limited, the issuance of one or more EB-5
24 foreign investor direct loan obligations, other privately placed loans with commercial lenders and
25 private parties, the issuance of municipal bonds and the pledge of the tax increment revenues of the
26 Agency to the EDC as set forth in the Funding Agreement during the period of time that the Agency
27 is entitled to receive tax increment revenues pursuant to the Redevelopment Plans for the Project
28 Areas as the financial obligations of the Agency as shall be applicable for the period of time that
2
P:\Agendas\Comm Dev Commission\2011 CDC Items\Special Joint Workshop\03-03-11 Agency&SBEDC-Funding Agreement CDC Reso.doc
1 such financial obligations of the Agency to the EDC are payable under the Funding Agreement; and
2 WHEREAS, in order to secure the financial obligations of the Agency to the SBEDC as
3 provided in the Funding Agreement,the Agency desires to transfer to the SBEDC, the responsibility
4 for the management and maintenance of the Agency real property assets as described on Exhibit
5 "D" of the Funding Agreement (the "Agency Real Property Assets"), which shall be operated and
6 managed by the SBEDC with the tax increment revenues to be provided by the Agency to the
7 SBEDC for such purposes at such time as determined by the SBEDC in its sole and absolute
8 discretion as further provided in the Funding Agreement; and
9 WHEREAS, the Agency and the SBEDC seek to provide through the Funding Agreement
10 that in addition to the obligations as incurred pursuant to the Funding Agreement, the Agency shall
11 pledge to the SBEDC additional revenues as necessary to support the ongoing contractual and
12 budgeted obligations and commitments of the SBEDC as shall be incurred in furtherance of the
13 improvement of the Redevelopment Related Improvements and the Other SBEDC Contractual
14 Obligations and to fund the construction and/or financing of the Redevelopment Related
15 Improvements and the Other SBEDC Contractual Obligations; and
16 WHEREAS, consistent with the SBEDC obligations incurred pursuant to the Funding
17 Agreement and the commitment of the Agency to fulfill its financial commitments to the SBEDC,
18 during the Term of the Funding Agreement, the Agency tax increment revenues available pursuant
19 to the Redevelopment Plans for the Project Areas shall become revenues attributed to and payable to
20 the SBEDC, and the Agency therein pledges the tax increment revenues for the payment and
21 repayment of the obligations to pay for and for the administration and undertaking of the
22 Redevelopment Related Improvements, the Other SBEDC Contractual Obligations and/or the other
23 obligations as incurred pursuant to the Funding Agreement; and
24 WHEREAS, the Commission has duly considered the terms of such transactions as
25 contemplated herein and has determined that it is in the best interests of the City and Agency to
26 enter into the Funding Agreement to finance said Redevelopment Related Improvements and the
27 other obligations as incurred pursuant to the Funding Agreement, and thus desire to approve and
18 authorize said Funding Agreement.
P:\Agendas\Comm Dev Commission\2011 CDC Items\Special Joint Workshop\03.03-11 Agency&SBEDC-Funding Agreement CDC Reso.doc
I NOW, THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION OF THE
2 CITY OF SAN BERNARDINO DOES HEREBY RESOLVE, DETERMINE AND ORDER AS
3 FOLLOWS:
4 Section 1. Approval of Assistance with Financing. The Commission hereby approves
5 the Agency's financing of the Redevelopment Related Improvements and the Other SBEDC
6 Contractual Obligations by the incurring of indebtedness pursuant to the Funding Agreement
7 including, but not limited, the issuance of one or more EB-5 direct loan obligations, other privately
8 placed loans with commercial lenders and private parties, the issuance of municipal bonds and the
9 pledge of the tax increment revenues of the Agency to the SBEDC as set forth in the Funding
10 Agreement during the period of time that the Agency is entitled to receive tax increment revenues
11 pursuant to the Redevelopment Plan for the Project Areas as the financial obligations of the Agency
12 as shall be applicable for the period of time that such financial obligations of the Agency to the
13 SBEDC are payable thereunder.
14 Section 2. Approval of Security Regarding the Financial Obligations. The Commission
15 hereby approves the transfer to the SBEDC of the responsibility for the management and
16 maintenance of the Agency real property assets as described on Exhibit "D" of the Funding
17 Agreement (the "Agency Real Property Assets") and the performance and financial obligations set
18 forth in Article 2 of the Funding Agreement.
19 Section 3. Pledge of Additional Revenue.
20 A. The Commission hereby approves the pledge from the Agency to the SBEDC of
21 additional revenues as necessary to support the ongoing contractual and budgeted obligations and
22 commitments of the SBEDC and to fund the construction and/or financing of the Redevelopment
23 Related Improvements and the Other SBEDC Contractual Obligations as outlined in the Funding
24 Agreement.
25 B. The Commission hereby approves that the Agency tax increment revenues available
26 pursuant to the Redevelopment Plans for the Project Areas become revenues attributed to the
27 SBEDC, and the Agency's pledge of the tax increment revenues for the payment and repayment of
28 the obligations to pay for the Redevelopment Related Improvements, the Other SBEDC Contractual
4
P:\Agendas\Comm Dev Commission\2011 CDC Items\Special Joint Workshop\03-03-11 Agency&SBEDC-Funding Agreement CDC Reso.doc
1 Obligations and/or the other obligations as incurred pursuant to the Funding Agreement.
2 Section 4. Approval of Terms and Provisions. The Commission hereby approves the
3 terms and provisions of the Funding Agreement and the totality of the Agency's obligations
4 thereunder.
5 Section 5. Approval of Final Form of Funding Agreement. The Commission hereby
6 approves the form of the Funding Agreement in the form on file with the Secretary, together with
7 any changes therein or additions thereto as may be approved by the Chair or the Executive Director.
8 The Commission hereby further authorizes and directs the conversion of the form of the Funding
9 Agreement into the final form thereof, together with such changes or modifications as deemed
10 necessary or desirable by the Chair or the Executive Director upon the recommendation of Agency
11 Counsel and the City Attorney. The Chair or the Executive Director or such other authorized officer
12 of the Commission is hereby authorized and directed to execute and deliver, and the Secretary or
13 Assistant Secretary is hereby authorized and directed to attest to, the final form of the Funding
14 Agreement.
15 Section 6. Official Action. The Chair, Vice-Chair, Secretary, Assistant Secretary,
16 Executive Director, Agency Counsel, City Attorney and any and all other members and officers of
17 the Agency are hereby authorized and directed, for and in the name and on behalf of the Agency, to
18 do any and all things and take any and all actions, including execution and delivery of any and all
19 assignments, certificates, requisitions, agreements, notices, consents, instruments of conveyance,
20 warrants and other documents, which they, or any of them, may deem necessary or advisable in
21 order to fulfill the obligations of the Agency under the Funding Agreement. Whenever in this
22 Resolution any officer of the Agency is authorized to execute or countersign any document or take
23 any action, such execution, countersigning or action may be taken on behalf of such officer by any
24 person designated by such officer to act on his or her behalf in the case such officer shall be absent
25 or unavailable.
26 Section 7. Effective Date. This Resolution shall become effective immediately upon
27 adoption by this Commission.
28
MAgendas\Comm Dev Commission\2011 CDC Items\Special Joint Workshop\03-03-11 Agency&SBEDC-Funding Agreement CDC Reso.doc
1 RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF
THE CITY OF SAN BERNARDINO APPROVING A CERTAIN PROJECT
2 FUNDING AGREEMENT BY AND BETWEEN THE REDEVELOPMENT
3 AGENCY OF THE CITY OF SAN BERNARDINO ("AGENCY") AND THE
SAN BERNARDINO ECONOMIC DEVELOPMENT CORPORATION, INC.,
4 RELATING TO THE$525,000,000 PRINCIPAL AMOUNT REDEVELOPMENT
AGENCY OF THE CITY OF SAN BERNARDINO REDEVELOPMENT
5 PROJECT AREAS CAPITAL IMPROVEMENT PROJECTS
6
7 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Community
8 Development Commission of the City of San Bernardino at a meeting thereof,
9 held on the day of ,2011, by the following vote,to wit:
10 Commission Members: Ayes Nays Abstain Absent
11 MARQUEZ
12 VACANT
13 BRINKER
14 SHORETT
15 KELLEY
16 JOHNSON
17 MC CAMMACK
18
19
Secretary
20
The foregoing Resolution is hereby approved this day of ,2011.
21
22
23 Patrick J. Morris, Chairperson
Community Development Commission
24 of the City of San Bernardino
25 Approved as to Form:
26
27 By
Agenc o sel
28
6
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1 EXHIBIT "A"
2 Funding Agreement
3
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8
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15
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P:\Agendas\CommDevCommission\2011 CDC Items\Special Joint Workshop\03-03-11 Agency&SBEDC-Funding Agreement CDC Reso.doc
PROJECT FUNDING AGREEMENT
by and between
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNA:RDINO
and
SAN BERNARDINO ECONOMIC DEVELOPMENT CORPORATION,INC.,
A CALIFORNIA NON-PROFIT CORPORATION
Relating to the
$525,000,000 PRINCIPAL AMOUNT
REDEVELOPMENT AGENCY OF THE
CITY OF SAN BERNARDINO
REDEVELOPMENT PROJECT AREAS
CAPITAL IMPROVEMENT PROJECTS
PROJECT FUNDING AGREEMENT
THIS PROJECT FUNDING AGREEMENT is made and entered into as of March
2011 (this "Funding Agreement"), by and between the Redevelopment Agency of the City of
San Bernardino, a public body, corporate and politic existing under the laws of the State of
California (the "Agency") and the San Bernardino Economic Development Corporation, Inc., a
California non-profit corporation("SBEDC"),as follows.
WITNESSETH:
WHEREAS, the Agency was established by appropriate action of the City of San
Bernardino (the "City"), for the purposes of exercising redevelopment powers within the City
boundaries through the adoption and approval of various redevelopment project areas that are
currently in existence within the City (the "Project Areas") as further described in the applicable
redevelopment plans accompanying such Project Areas (the"Redevelopment Plans"); and
WHEREAS, the Community Development Commission of the City of San Bernardino
(the "Commission") acts as the governing body of the Agency for all official actions taken on
behalf of the Agency; and
WHEREAS, SBEDC was formed pursuant to the non-profit corporation laws of the State
of California and was formed and exists for the purposes of assisting in the implementation of
various redevelopment initiatives within the City and to undertake such other activities,
programs and projects of the Agency and the City as are then deemed advisable by EDC through
its board of directors; and
WHEREAS, pursuant to the Community Redevelopment Law (Health & Safety Code
Section 33000, et seq.) (the "CRL" or the "Authorizing Provisions"), the Agency may enter into
project funding agreements and financing agreements with other public agencies, private entities
and non-profit corporations to carry out its redevelopment and other public infrastructure
development purposes; and
WHEREAS, SBEDC has requested that the Agency act at this time to assist SBEDC with
the financing of certain public infrastructure and the implementation of other programs and
activities located within the Project Areas, together with other public infrastructure that is
necessary to support the long-term development and redevelopment of the portions of the City
located within the Project Areas, namely, those public improvements, public infrastructure and
other developments and activities,programs and projects all as set forth in the current year 2010-
201 Budget of the Agency and the Downtown Vision Plan for the Theater District of the Agency
as indicated on Exhibit "A" (the "Programs, Projects and Activities") as attached hereto and
incorporated herein by reference plus those other public improvements and public infrastructure
as set forth on the Implementation Plan of the Agency as indicated on Exhibit `B" (the
"Implementation Plan Public Improvements") as attached hereto and incorporated herein by
reference(collectively,the"Redevelopment Related Improvements"); and
WHEREAS, in addition to the Redevelopment Related Improvements, SBEDC, in
furtherance of the redevelopment of various areas of the City and in particular with the Project
1
P:Wgendas\Comm Dev Commission\2011 CDC ltems\Special Joint Workshop\03-03-11 Agency&SBEDC-Project Funding Agreement.doex
Areas, requires the Agency to commit to certain levels of additional financing amounts to
SBEDC for the fulfillment of the contractual commitments and other financial obligations as set
forth on Exhibit "C" (the "Other SBEDC Contractual Obligations") as attached hereto and
incorporated herein by reference; and
WHEREAS, the Agency has determined to finance the Redevelopment Related
Improvements and the Other SBEDC Contractual Obligations by the incurring of the
indebtedness as required by this Funding Agreement, including, but not limited, the issuance of
one or more EB-5 foreign investor direct loan obligations, other privately placed loans with
commercial lenders and private parties,the issuance of municipal bonds and the pledge of the tax
increment revenues of the Agency to SBEDC as set forth in this Funding Agreement during the
period of time that the Agency is entitled to receive tax increment revenues pursuant to the
Redevelopment Plans for the Project Areas as the financial obligations of the Agency as shall be
applicable for the period of time that such financial obligations of the Agency to SBEDC are
payable hereunder; and
WHEREAS, in order to secure the financial obligations of the Agency to SBEDC as
provided in this Funding Agreement, the Agency desires to transfer to SBEDC the responsibility
for the management and maintenance of the Agency real property assets as described on Exhibit
"D" (the "Agency Real Property Assets") as attached hereto and incorporated herein by
reference which shall be operated and managed by EDC with the tax increment revenues to be
provided by the Agency to SBEDC as further provided herein; and
WHEREAS, the Agency and SBEDC seek to provide through this Funding Agreement
that in addition to the obligations as incurred pursuant to this Funding Agreement, the Agency
shall pledge to EDC additional revenues as necessary to support the ongoing contractual and
budgeted obligations and commitments of SBEDC as shall be incurred in furtherance of the
improvement of the Redevelopment Related Improvements and the Other EDC Contractual
Obligations and to fund the construction and/or financing of the Redevelopment Related
Improvements and the Other EDC Contractual Obligations; and
WHEREAS, consistent with the SBEDC obligations incurred pursuant to this Funding
Agreement and the commitment of the Agency to fulfill its financial commitments to SBEDC,
during the Term (as defined in Section 1.03) of this Funding Agreement, the Agency tax
increment revenues available pursuant to the Redevelopment Plans for the Project Areas shall
become revenues attributed to and payable to SBEDC, and the Agency herein pledges the tax
increment revenues for the payment and repayment of the obligations to pay for and for the
administration and undertaking of the Redevelopment Related Improvements, the Other SBEDC
Contractual Obligations and/or the other obligations as incurred pursuant to this Funding
Agreement; and
WHEREAS,the Agency and SBEDC have determined that it is in the best interests of the
Agency and SBEDC to enter into this Funding Agreement to finance said Redevelopment
Related Improvements and the other obligations as incurred pursuant to this Funding Agreement,
and thus desire to provide for the terms and conditions of their cooperation in such matters as
herein provided.
2
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NOW THEREFORE,the parties to this Funding Agreement agree, as follows.
ARTICLE I
DEFINITIONS; TERM OF FUNDING AGREEMENT
Section 1.01. Recitals. The Recitals set out above are true and correct.
Section 1.02. Definitions. Unless the context otherwise requires, capitalized terms used
herein and not defined herein shall have the meanings as generally ascribed to such terms.
Section 1.03. Assignment. This Funding Agreement shall be subject to assignment at
the written direction of the Commission to SBEDC for any assignment of this Funding
Agreement that is authorized by the Commission to be made to any duly established joint powers
authority as so directed by the Commission in writing to SBEDC pursuant to written notice
delivered by the Commission to SBEDC. Upon receipt of any such written notice of assignment
from the Commission specifying the assignment of this Funding Agreement to such joint powers
authority, SBEDC shall immediately take all necessary actions to timely accomplish the
assignment to the joint powers authority as may then be required in accordance with such
direction of the Commission.
Section 1.04. Bylaws. The Commission has authorized the execution of this Funding
Agreement with SBEDC based upon the corporate bylaws of SBEDC (the "Bylaws") as are in
existence as of the date of this Funding Agreement which specify the manner and term of the
appointment of directors to the corporate board of SBEDC and which, in additional to other
matters, requires SBEDC to comply with certain requirements that are applicable to
governmental entities within the State. No amendment, change or other modification shall be
made to the Bylaws without the prior written approval of the Commission which approval may
be granted or withheld at the sole and absolute discretion of the Commission.
Section 1.05. Maintenance of Tax-Exempt Status. SBEDC covenants and agrees to
maintain the current tax status of SBEDC for federal income tax purposes as an exempt
' organization organized as a California non-profit corporation and pursuant to Internal Revenue
Code Section 501(c)(3), and SBEDC shall cause to be prepared and timely transmitted all
necessary filings with State of California and the Internal Revenue Service to maintain such tax-
exempt status as a California non-profit corporation. SBEDC further covenants and agrees not to
enter into any transaction or to undertake any other type of activity that would cause SBEDC to
become a taxable entity, and all revenues, including but not limited to the tax increment revenues
to be received by SBEDC pursuant to this Funding Agreement, shall be used strictly in
conformance with this Funding Agreement and in a manner so as not to cause any income or
funds received by SBEDC to be determined to be "unrelated business income"that would in any
manner jeopardize the tax-exempt status of SBEDC.
Section 1.06. Term. This Funding Agreement shall remain in full force and effect so
long as the obligations incurred by the Agency to SBEDC remain outstanding and unpaid, but in
no event later than the last date that the Agency is entitled to receive the tax increment revenues
pursuant to the Redevelopment Plans for the Project Areas for the repayment of indebtedness and
other financial and contractual obligations.
3
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ARTICLE II
PAYMENT OF TAX INCREMENT REVENUES OF AGENCY TO EDC
Section 2.01. Transfer of Powers.
(a) In order to carry out the Redevelopment Related Improvements and the Other
SBEDC Contractual Obligations, SBEDC shall assume all performance obligations with respect
thereof and the Agency hereby pledges to SBEDC all tax increment revenues available to the
Agency from the Redevelopment Plans for the Project Areas during the Term of this Funding
Agreement for the payments as required for SBEDC to fully perform each and every financial
and contractual obligation as set forth on Exhibits "A", "B" and "C" as to the Redevelopment
Plans for the Project Areas. The Agency shall be responsible for compliance with all
requirements imposed by the Redevelopment Plans and for the timely payment of funds and the
reporting of such uses pursuant to the CRL, and SBEDC shall be responsible for all compliance
with respect to the public works requirements as imposed pursuant to California law with regard
to the implementation and undertaking of the Redevelopment Related Improvements and the
Other SBEDC Contractual Obligations.
(b) SBEDC shall use and apply the tax increment revenues as pledged pursuant to
this Funding Agreement to undertake, manage, administer and implement all aspects of the
Redevelopment Related Improvements and the Other SBEDC Contractual Obligations,
specifically including,but not limited to:
1. the design, construction and implementation of the Redevelopment Related
Improvements as set forth in the 2010-2011 Budget of the Agency and the
Downtown Vision Plan for the Theater District of the Agency as indicated on
Exhibit"A";
2. undertaking of the Other SBEDC Contractual Obligations as set forth on Exhibit
«B».
3. managing and maintaining the Agency Real Property Assets as set forth on
Exhibit"C".
(c) The Agency Real Property Assets shall not be transferred in fee by the Agency to
SBEDC except upon the subsequent approval of the Commission, the Council and SBEDC as to
any such subsequent transfer of fee title. SBEDC shall be responsible for the management and
property maintenance of the Agency Real Property Assets for such period of time that the
Agency Real Property Assets continue to be owned in fee title by the Agency. The obligation of
the Agency to transfer the management and property maintenance for the Agency Real Property
Assets shall be a binding and enforceable contractual obligation upon the Agency from and after
the date of this Funding Agreement, and any failure of the Agency to remit the necessary tax
increment revenues to provide for the payment of such management and property maintenance
expenses for the Agency Real Property Assets as required herein shall be an Event of Default
pursuant to Section 3.01 hereof.
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Section 2.02. Irrevocable Pledge of Tax Increment Revenues. Pursuant to and in
consideration of the assumption of the obligations by SBEDC as set forth in Section 2.01 above,
commencing as of the date of this Funding Agreement during the 2010-2011 fiscal year and for
each fiscal year thereafter during the Term, those tax increment revenues derived by the Agency
from the Redevelopment Plans for the Project Areas are hereby irrevocably pledged to SBEDC
pursuant to this Funding Agreement on a basis subordinate to all presently authorized and issued,
and future authorized and issued debt obligations of the Agency that are sold through municipal
underwriting means or debt obligations with third party commercial lenders, including, but not
limited to those amounts that are in excess of the tax increment revenues budgeted to be
expended by the Agency for the current 2010-2011 fiscal year of the Agency and for each fiscal
year thereafter during the Term. Such pledge of the tax increment revenues of the Agency to
SBEDC shall be irrevocable during the Term of this Funding Agreement. The maximum dollar
amount of the tax increment revenues pledged by the Agency to SBEDC pursuant to this
Funding Agreement for the use and pledge of tax increment revenues for debt and other
contractual obligations that are intended to be issued or incurred by SBEDC on and after the date
of this Funding Agreement shall not exceed $525,000,000 in the aggregate principal amount plus
interest payable thereon.
Section 2.03. Use of Tax Increment Revenues.
(a) Throughout the Term of this Funding Agreement, SBEDC hereby agrees that the tax
increment revenues as pledged by the Agency pursuant to Section 2.02 above shall be applied for
the payment and/or repayment of the obligations incurred by SBEDC pursuant to Section 2.01
above.
(b) SBEDC shall take all steps necessary to utilize the tax increment revenues to pay
principal and interest due on all debt and other contractual obligations of EDC as specified in this
Funding Agreement. Such payments shall be absolute obligations of EDC and shall not be
subject to any deduction or offset of any kind whatsoever.
(c) EDC shall submit an annual proposed budget for each fiscal year to the
Commission and the Mayor and Common Council of the City of San Bernardino (the "Council")
for review and concurrence at least sixty (60) calendar days prior to any final approval of such
annual budget by SBEDC. Any budget as thereafter approved by SBEDC shall be modified to
include the comments as approved by the Commission and the Council within such budget and
as to such items that cannot be agreed upon among the Commission, the Council and SBEDC,
those particular items shall be deleted from the budget as may thereafter be approved by SBEDC.
Section 2.04. Use of Excess Tax Increment Revenues. During the Term of this
Funding Agreement and to the extent that there are excess tax increment revenues ("Excess Tax
Increment Revenues") after payment and/or repayment of the vai:ous obligations incurred by
SBEDC pursuant to Section 2.01 above, such Excess Tax Increment Revenues shall be used by
SBEDC for other qualifying public works projects and the improvements within the Project
Areas or transferred to the Agency for use pursuant to the Redevelopment Plans for the Project
Areas. In addition to the rights of the Commission and the Council to approve the annual
budgets as specified in Section 2.03(c) above, the Commission and the Council shall also have
5
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the right to approve (i) the sale of any real property that may hereafter be transferred to SBEDC
pursuant to this Funding Agreement, including the price, terms and other conditions to be
imposed upon the sale of any such real property that is intended to be transferred to any third
party, whether a private entity or governmental agency, and (ii) any agreement by and between
SBEDC and any project developer or landowner seeking to obtain any form redevelopment
assistance or other form of participation agreement, reimbursement agreement other project
related agreement from SBEDC.
ARTICLE III
EVENTS OF DEFAULT; RIGHTS AND REMEDIES
Section 3.01. Each of the following occurrences shall constitute an "Event of Default"
under this Funding Agreement:
(a) Failure to Make Payments When Due. Failure by either party to pay any amount
due on or before the date that such payment is due and payable pursuant to this Funding
Agreement.
(b) Other Defaults. Should SBEDC fail duly and punctually to perform or observe
any agreement, covenant or obligation binding on SBEDC under this Funding Agreement which
could lead to an Event of Default, such failure shall continue for thirty (30) calendar days after
the earlier of(i) the date as of which SBEDC had actual knowledge of such failure, and (ii) the
date on which the Agency gives SBEDC notice of such failure.
(c) Breach of Representation or Warranty. Should any representation or warranty
made or deemed made by one party to the other party herein be false or misleading in any
material respect on the date as of which made which could lead to an Event of Default which is
not remedied to the satisfaction of the non-defaulting party within ninety (90) calendar days
following receipt by the defaulting party of written notice of such inaccuracy.
(d) Failure to Assign. Failure of SBEDC to comply with the written notice of the
Commission for the assignment of this Funding Agreement to a joint powers authority as may be
directed by the Commission to SBEDC pursuant to Section 1.03 shall be an Event of Default
pursuant to this Section 3.01(e), and the Commission may thereupon terminate this Funding
Agreement immediately upon receipt of such notice of termination by SBEDC without cure and
without any prior notice.
(e) Amendment to SBEDC Bylaws. Any amendments to the adopted Bylaws of
SBEDC that amend, change or otherwise modify the form of said Bylaws as were in existence as
of the date of this Funding Agreement without the prior written approval of the Commission as
required by Section 1.04 shall be an Event of Default pursuant to this Funding Agreement. Upon
the occurrence of any such Event of Default pursuant to this Section 3.01(d) for failure of
SBEDC to comply with Section 1.04, the Commission may thereupon terminate this Funding
Agreement immediately upon receipt of such notice of termination by SBEDC without cure and
without any prior notice.
6
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(f) Failure to Maintain Tax Exempt Status. Any failure of SBEDC to maintain the
current tax-exempt status of SBEDC as an Internal Revenue Code Section 501(c)(3) non-profit
corporation as required by Section 1.05 shall be an Event of Default under this Section 3.01(f).
Upon the occurrence of any such Event of Default pursuant to this Section 3.01(f) for failure of
SBEDC to comply with Section 1.05, the Commission may thereupon terminate this Funding
Agreement immediately upon receipt of such notice of termination by SBEDC without cure and
without any prior notice.
Section 3.02. Rights and Remedies.
(a) Acceleration. Etc. Upon the occurrence of any Event of Default by the Agency to
remit the tax increment revenues to SBEDC, the unpaid principal amount of any and all tax
increment revenues payable pursuant to this Funding Agreement shall automatically become
immediately due and payable for each fiscal year in which such Event of Default shall have
occurred. After the expiration of all cure periods by the Agency, thereafter SBEDC may
exercise any or all rights and remedies under this Funding Agreement or otherwise pursuant to
applicable law.
(b) Waiver of Demand. Demand, presentment, protest and notice of nonpayment are
hereby waived by SBEDC. SBEDC also waives, to the extent permitted by law, the benefit of all
valuation,appraisal and exemption laws.
(c) Parties to Institute Proceedings. Upon a default by either party, the non-
defaulting party may institute any proceeding at law or in equity to enforce the obligations of the
other party under this Funding Agreement and/or any covenants and obligations of the other
party contained in this Funding Agreement.
(d) Waivers,Amendments and Remedies. No delay or omission of the either party to
exercise any right under this Funding Agreement shall impair such right or be construed to be a
waiver of any Event of Default or an acquiescence therein, and any single or partial exercise of
any such right shall not preclude other or further exercise thereof or the exercise of any other
right, and no waiver, amendment or other variation of the terms, conditions or provisions of this
Funding Agreement whatsoever shall be valid unless in a writing signed by the other party, and
then only to the extent in such writing specifically set forth. All remedies contained in this
Funding Agreement or by law afforded shall be cumulative and all shall be available to the
parties until the obligations have been paid in full and this Funding Agreement has been
terminated or until the expiration of the Term of this Funding Agreement.
ARTICLE IV
MISCELLANEOUS
Section 4.01. Amendment. The provisions of this Funding Agreement may be
amended only upon the written approval of the parties hereto which approval shall be granted at
the absolute and sole discretion of each party.
Section 4.02. Beneficiaries of Funding Agreement. To the extent applicable, the
parties identified in the Redevelopment Related Improvements and the Other SBEDC
7
R WgendasTomm Dev Commission\2011 CDC Items\Special Joint Workshop\03-03-11 Agency&SBEDC-Project Funding Agreement.doex
I
Contractual Obligations are expressly recognized as a third party beneficiary hereto. Nothing in
this Funding Agreement, expressed or implied, is intended to give to any person, other than
SBEDC and the Agency, as parties hereto, and those parties identified in the Redevelopment
Related Improvements and the Other SBEDC Contractual Obligations, all as third party
beneficiaries hereof, any right, remedy or claim under or by reason of this Funding Agreement.
Any covenants, stipulations, promises or agreements in this Funding Agreement contained by
and on behalf of SBEDC and the Agency or any member, officer or employee thereof shall be
for the sole and exclusive benefit of SBEDC and the Agency as parties hereto and the parties
identified in the Redevelopment Related Improvements and the Other SBEDC Contractual
Obligations as third party beneficiaries hereof.
Section 4.03. No Personal Liability. No member, officer or employee of SBEDC or
the Agency shall be individually or personally liable for the payment of any amounts of the tax
increment revenues as pledged to SBEDC by the Agency pursuant to this Funding Agreement;
but nothing herein contained shall relieve any member, officer or employee of SBEDC and the
Agency from the performance of any official duty provided by law.
Section 4.04. Partial Invalidity. If any one or more of the agreements or covenants or
portions thereof provided in this Funding Agreement to be performed on the part of SBEDC or
the Agency should be contrary to law, then such agreement or agreements, such covenant or
covenants, or such portions thereof, shall be null and void and shall be deemed separable from
the remaining agreements and covenants or portions thereof.
Section 4.05. Notices and Delivery. Any consent, notice or other communication
herein required or permitted to be given shall be in writing and may be personally served,
telecopied or sent by courier service or United States mail and shall be deemed to have been
given when delivered in person or by courier service, upon receipt of a telecopy (or on the next
business day if such telecopy is received on a non-business day or after 5:00 p.m. (at the office of
the recipient) on a business day) or four (4) business days after deposit in the United States mail
(registered or certified, with postage prepaid and properly addressed). Any party delivering a
communication by telecopy shall also send a copy thereof by one of the other means provided in
this Section 4.05. For the purposes hereof the addresses of the parties hereto (until notice of a
change thereof is delivered as provided in this Section 4.05) shall be as set forth in the official
business addresses of each party as of the date of this Funding Agreement and at such other
address as may be designated by such party in a written notice to all of the other party.
Section 4.06. Survival of Warranties and Agreements. All agreements,
representations, warranties and indemnities made or given herein shall survive the execution and
delivery of this Funding Agreement and the making,repayment and fulfillment of the obligations
of the parties as incurred in this Funding Agreement.
Section 4.07. Severability. In case any provision in or obligation under this Funding
Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions or obligations, or of such provision or obligation in
any other jurisdiction, shall not in any way be affected or impaired thereby.
8
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I
Section 4.08. Headings. Section headings in this Funding Agreement are included
herein for convenience of reference only and shall not constitute a part of this Funding
Agreement for any other purpose or be given any substantive effect.
Section 4.09. Governing Law; Waiver. This Funding Agreement shall be governed
by,and shall be construed and enforce in accordance with,the laws of the State of California.
Section 4.10. Successors and Assigns. This Funding Agreement shall be binding upon
the parties hereto and their respective successors and assigns. The terms and provisions of this
Funding Agreement shall inure to the benefit of any assignee or transferee of the tax increment
revenues or any portion thereof, and in the event of any permitted such transfer or assignment,
the rights and privileges herein conferred upon the applicable party shall automatically extend to
and be vested in such transferee or assignee, all subject to the terms and conditions hereof.
Section 4.11. Performance of Obligations. SBEDC agrees that the Agency may, but
shall have no obligation to, make any payment or perform any act required of SBEDC under any
of the obligations as incurred by SBEDC pursuant to this Funding Agreement or take any other
action which the Agency in its discretion deems necessary or desirable to protect or preserve the
pledge of the tax increment revenues pursuant to this Funding Agreement.
Section 4.12. Construction. The parties acknowledge that each party has reviewed and
revised this Funding Agreement and that the normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not be employed in the
interpretation of this Funding Agreement or any amendments or exhibits hereto.
Section 4.13. Entire Agreement. This Funding Agreement embodies the entire
agreement between the parties and supersedes all prior agreements, written and oral, relating to
the subject matter hereof.
Section 4.14. Execution in Several Counterparts. This Funding Agreement may be
executed in any number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original; and all such counterparts, or as many of them as SBEDC and the
Agency shall preserve undestroyed, shall together constitute but one and the same instrument.
P:\Agendas\Comm Dev Commission\2011 CDC Items\Special Joint Workshop\03-03-11 Agency&SBEDC-Project Funding Agreement.do
IN WITNESS WHEREOF, the Redevelopment Agency of the City of San Bernardino
and the San Bernardino Economic Development Corporation, Inc., a California non-profit
corporation, have caused this Project Funding Agreement to be signed in their name by their
respective Executive Director and President all as of the date and year first above written.
AGENCY
Redevelopment Agency of the City of San
Bernardino
By:
Interim Executive Director
ATTEST:
By:
Secretary
APPROVED AS TO FORM:
By:
Agency Counsel
SBEDC
San Bernardino Economic Development
Corporation, Inc., a California non-profit
corporation
By:
President
ATTEST:
By:
Secretary
10
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EXHIBIT"A"
Projects
•
11
P:Wgendas\Comm Dev Commission\2011 CDC Items\Special Joint Workshop\03-03-11 Agency&SBEDC-Project Funding Agreement.docx
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EXHIBIT"B"
Other SBEDC Contractual Obligations
P:\Agendas\CommDevCommission\2011 CDC Items\Special Joint Workshop\03-03-11 Agen y&SBEDC-Project Funding Agreement.docx
Additional Ongoing Agency Contractual Obligations
to be Undertaken by the SBEDC
1. Theater Promotion and Operations and Promotion of Special Events: including, but
not limited to, California Theater operations, management and productions; Sturgess
Theater operations, management and productions; Convention and Visitors' Bureau;
Court Street Square; Baseball Stadium; Route 66 annual event; IEMG television
station.
2. Staffing, Personnel, Consultants and other Professional Services to Implement
Funding Agreement: including but not limited to, salaries and benefits to employees,
fees and reimbursable expenses to consultants.
3. Property Maintenance and Management of Agency/SBEDC Owned Properties;
including but not limited to, retaining of professional real estate consultants and
service providers, payment of utilities, repair and maintenance and required capital
upgrades, marketing and leasing, insurance and maintaining reserves and
replacements for other property damage and liability issues.
4. Master Services Agreement of City with Agency: to be assigned by Agency to
SBEDC and the scope and anticipated expenditures to be annually approved by the
Board of the SBEDC.
5. Community Beautification Services: at the direction of the SBEDC Board to
determine annual scope and costs of services.
6. Infrastructure Analyses within Redevelopment Project Areas: determine deficiencies
and deferred maintenance and other safety hazards caused by inadequate
infrastructure; determine frequency and extent of periodic repairs and maintenance to
infrastructure; recommend capital improvement programs for infrastructure
obsolescence and required upgrades and replacements.
7. Membership Subscriptions and Organizational Dues: including, but not limited to,
IEEP, Film Commission, state and national organizations, ICSC, CRA and other
industry organizations.
8. Office Expenses/Administration: including, but not limited, office supplies, office
equipment and furnishings, computers and communications equipment and software,
IT and communications consultants, utilities, other supplies and other out-sourced
services.
AOWN
1
PAAgendas\Comm De Commission11011 CDC Items\Special Joint Workshop\03-03-11 Exhibit B(SBEDC Contractual Obligations)-Project Funding Agreement.doc
9. Administration of Agreements: (i)Leases: surface parking lots and parking structures,
Carousel Mall, theaters, Shandin Hills Golf Course, EDA Building, and any other
Agency operating property; and (ii) Other Agreements: contract compliance and
monitoring for all promissory notes and financial and performance obligations of
parties pursuant to Loan Agreements, Reimbursement Agreements, DDA's and
OPA's.
10. ProRe1Disposition Expenses and Management: including, but not limited to, all
related to sales and brokerage commissions, marketing, preparation of materials and
agreements, appraisals, surveys, environmental reports,title and escrow costs.
11. Redevelopment Plan Administration: including, but not limited to, NWPAC, other
Project Area Committees, annual tax increment analyses and projections of forecasted
tax increment revenues, administration of taxing entity pass-through agreements,
analyses of foreclosure rates, assessment appeals and delinquent property tax reports,
other Redevelopment Plan and Redevelopment Project Area administration and
compliance.
12. Periodic Reporting Requirements: including, but not limited to, all state and federal
reporting on redevelopment activities, filings with California Secretary of State,
compliance with all FPPC reporting forms, continuing disclosure requirements for all
Agency municipal bond issues and other bond issue related arbitrage and Trust
Indenture compliance matters, review of annual audits and preparation of annual
budgets.
2
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EXHIBIT u C»
Management and Maintenance for Agency Real Property Assets
13
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MANAGEMENT AND MAINTENANCE FOR AGENCY
REAL PROPERTY ASSETS
Improved Redevelopment Agency Properties:
1. 3380 Little Mountain Drive- Shandon Hills Golf Course
2. 780 North`B" Street—The Sturges Theatre Building
3. Church and"D"Parking Lots
4. 512 North"E" Street- 5d'and"E" Street Parking Lot
5. 451 North"F" Street Parking Lot
6. 450 North"E"Streets—20-Plex Movie Theater: Appraised
7. 480 North"D"Street Grassed Lots
8. Parking Lot Adjacent to north of the Law Library Parking Lots
9. 710 North"D" Street—City Police Station
10. 562 West 4d' Street—The California Theatre Building
11.NWC 4'and"E" Streets—3 Grassed Lots: Appraised
12. 396 North`B" Street—Woolworth Building
13. 390 North"E"Street—"J"Building Lot
14. 385 North"E"Street—Vacant Restaurant: Appraised
15. 3-Level Parking Structure—Carousel Mall Parking Structure
16. 295 Carousel Mall Drive—Mall Common Area Parking Lot(30+acres)
17. 5`}'Mount Vernon Street Parking Lot
18. 349 North"E"Street—Court Street Square: Appraised
19. Court Street Parking Lot—Adjacent to the north of 300 N. "D" Street.
20. 297 North"E" Street—City of San Bernardino Convention Center: Appraised
21. 201 North"E" Street,Building A&B-Mixed Use Office/Retail Building
22. 5-Level Parking Structure—201 North"D" Street
23. 170& 174 South`B" Street
24. 820 Cooley Drive-Cooley Drive Parking Lots
25. 4-Acre Lot West of 170& 174 South"E" Street
26. 280 South"E"Street—Baseball Stadium: Appraised
27. 1289, 1316 and 1350 South"E"Street—Multi Use Office/Garage Campus: Appraised
28. Bond Street Planter
29. 266 East 3`d Street—National Guard Armory
Unimproved Redevelopment Agency Properties:
1. Various parcels throughout city—approximately 100 properties(includes 100 acre Bice
parcels)
2. Various remnant parcels throughout city—approximately 25 properties
1 RESOLUTION NO. COPY
2
3 RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION
OF THE CITY OF SAN BERNARDINO AUTHORIZING (1) THAT
4 CERTAIN LOAN AGREEMENT IN CONNECTION WITH THE
ISSUANCE OF THE REDEVELOPMENT AGENCY OF THE SAN
5 BERNARDINO PROMISSORY NOTE SERIES 2011 (CITY
6 REDEVELOPMENT ACTIVITIES AND PUBLIC WORKS PROJECTS),
AND (2) THAT LOAN AGREEMENT IN CONNECTION WITH THE
7 ISSUANCE OF THE SAN BERNARDINO PROMISSORY NOTE SERIES
2011 AND THE FORMS OF LEGAL DOCUMENTS RELATED THERETO
8
9 WHEREAS, the Community Development Commission of the City of San Bernardino (the
10 "Commission") is the governing body of the Redevelopment Agency of the City of San Bernardino
11 (the "Agency") and is authorized under Health and Safety Code Section 33000, et seq., to issue
12 bonds, notes and other obligations and enter into loan agreements for the purpose of financing
13 public capital improvements within the City of San Bernardino (the"City"); and
14 WHEREAS, the Agency seeks to finance certain multiple Redevelopment Activities and
15 Public Works Projects within the jurisdiction of the City over an extended period of time
16 (collectively,the"Projects"); and
17 WHEREAS, the Agency has determined that the best mode of financing the Projects is
18 through a loan from the Lender (the "Loan") in the principal amount not to exceed Five Hundred
19 and Twenty Five Million Dollars ($525,000,000.00) under and secured by an Indenture (the
20 "Agreement") and a Promissory Note (the "Note") in the form attached as Exhibit "A" to the
21 Agreement; and
22 WHEREAS, CMB Infrastructure Investment Group VII, LP, a California limited partnership
23 (the"Lender"),organized in accordance with the requirements for regional centers as set forth under
24 the United States Immigration Act of 1990,as amended,has offered to fund the Loan pursuant to
25 the terms of the Agreement; and
26 WHEREAS, the repayment of the Loan will be made from the excess tax increment
27 revenues of the Agency, which shall be placed in a special and separate account to assure that
28 adequate funds are available for the undertaking of all projects as financed by the Lender; and
P:1Agendas\Comm Dev Commission\2011 CDC Items\Special Joint Workshop\03-03-1 l EB-5 Loan Agreement$200M CDC Reso C.doc
f
1 WHEREAS,the Agency seeks to finance other various infrastructure projects, including,but
2 not limited to,those identified in the Programs, Projects and Activities attached as Exhibit"A"to
3 the Project Funding Agreement within the jurisdiction of the City(the"Other Projects"); and
4 WHEREAS,the Agency has determined that the best mode of financing the Other Projects is
5 through a loan from CMB Infrastructure Investment Group VII-B, LP, a California limited
6 partnership (the "Lender B") (the "1 OM Loan") in the principal amount not to exceed Ten Million
7 Dollars ($10,000,000.00) under and secured by an Indenture ("Agreement B") and a Promissory
8 Note("Note B")in the form attached as Exhibit"A"to Agreement B;and
9 WHEREAS, Lender B, organized in accordance with the requirements for regional centers
10 as set forth under the United States Immigration Act of 1990, as amended, has offered to fund the
11 I OM Loan pursuant to the terms of the Agreement; and
12 WHEREAS, the Agency has determined that it is in the best interests of the Agency and the
13 City to enter into the Agreement and Agreement B and to issue the Note and Note B to finance said
14 Projects; and
15 WHEREAS, based upon the foregoing, the Agency desires to approve the Agreement and
16 Agreement B and the Note and Note B as set forth above.
17 NOW, THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION OF THE
18 CITY OF SAN BERNARDINO DOES HEREBY RESOLVE, DETERMINE AND ORDER, AS
19 FOLLOWS:
20 Section 1. Approval of the Issuance of the Note. The Agency hereby approves the issuance
21 of the Note in the amount not to exceed $525,000,000. The Loan shall be made in tranches of
22 between $5,000,000 to $20,000,000 at a time. The proposed repayment of the tranches shall be six
23 (6) years from each tranche's initial funding date at a rate of interest not to exceed 5.25%. Interest
24 on the Note shall be paid quarterly until maturity, and principal shall be paid in full on or before the
25 Final Maturity Date, as defined in the Note. The Loan shall be repaid from the excess Tax
26 Increment Revenues of the Agency, as further described and defined in the Agreement.
27 Section 2. Approval of the Issuance of Note B. The Agency hereby approves the issuance
28 of Note B in the amount not to exceed $10,000,000. The proposed term of the 10M Loan shall be
2
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1 six (6) years at a rate of interest not to exceed 5.25%. Interest on the Loan shall be paid quarterly
2 until maturity, and principal shall be paid in full on or before the maturity date. The proceeds of the
3 Bond shall be transferred to the Agency under the Indenture and shall be applied by the Agency to
4 fund the Improvements. The security for the Loan shall be the surplus tax increment revenues of the
5 Agency.
6 Section 3. Approval of the Terms of the Note, Note B, the Agreement and Agreement B.
7 The Agency hereby approves the Note, Note B, the Agreement and Agreement B in the forms
8 presently on file with the Secretary of the Agency with such changes thereto as may be approved by
9 the Chairman or the Executive Director of the Agency when such terms and conditions have been
10 ascertained. The Agency hereby further authorizes and directs that the forms of the Note, Note B,
11 the Agreement and Agreement B presently on file with the Secretary be converted into the final
12 forms thereof together with such changes or modifications as deemed necessary or desirable by the
13 Chairman or Executive Director of the Agency, upon the recommendation of Agency Counsel. The
14 Chairman, Executive Director or such other authorized officer of the Agency are hereby authorized
15 and directed to execute and deliver, and the Secretary is hereby authorized and directed to attest to,
16 the final forms of the Note, Note B, the Agreement and Agreement B when the same has been
17 prepared for and in the name of the Agency, and such execution and delivery shall be deemed to be
18 conclusive evidence of the approval thereof. The Agency hereby authorizes the delivery and
19 performance of the obligations under the Note and Agreement to accomplish these financings as
20 contemplated herein.
21 Section 4. Official Action. The Chairman, Executive Director, Secretary, Agency Counsel
22 and any and all other officers of the Agency are hereby authorized and directed, for and in the name
23 and on behalf of the Agency, to do any and all things and take any and all actions, including
24 execution and delivery of any and all assignments, certificates, requisitions, agreements, notices,
25 consents, instruments of conveyance, warrants and other documents, which they, or any of them,
26 may deem necessary or advisable in order to consummate the financings as described herein.
27 Whenever in this Resolution any officer of the Agency is authorized to execute or countersign any
28 document or take any action, such execution, countersigning or action may be taken on behalf of
[` 3
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1 such officer by any person designated by such officer to act on his or her behalf in the case such
2 officer shall be absent or unavailable. The Agency hereby appoints its Chairman and Executive
3 Director as agents of the Agency for purposes of executing any and all documents and instruments
4 which any officer of the Agency is authorized to execute hereunder.
5 Section 5. Effective Date. This Resolution shall become effective immediately upon
6 adoption.
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
4
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1 RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION
OF THE CITY OF SAN BERNARDINO AUTHORIZING (1) THAT
2 CERTAIN LOAN AGREEMENT IN CONNECTION WITH THE
3 ISSUANCE OF THE REDEVELOPMENT AGENCY OF THE SAN
BERNARDINO PROMISSORY NOTE SERIES 2011 (CITY
4 REDEVELOPMENT ACTIVITIES AND PUBLIC WORKS PROJECTS),
AND (2) THAT LOAN AGREEMENT IN CONNECTION WITH THE
5 ISSUANCE OF THE SAN BERNARDINO PROMISSORY NOTE SERIES
6 2011 AND THE FORMS OF LEGAL DOCUMENTS RELATED THERETO
7 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Community
8 Development Commission of the City of San Bernardino at a meeting
9 thereof,held on the day of , 2011, by the following vote to wit:
10 Commission Members: Ayes Nays Abstain Absent
11 MARQUEZ
12 VACANT
13 BRINKER
14 SHORETT
15 KELLEY
16 JOHNSON
17 MC CAMMACK
18
19
Secretary
20
21 The foregoing Resolution is hereby approved this day of , 2011.
22
23 Patrick J. Morris, Chairperson
Community Development Commission
24 of the City of San Bernardino
25 Approved as to Form:
26
27 By:
Agency 1
28
6
PAAgendas\Comm Dev Commission\2011 CDC Items\Special Joint Workshop\03-03-11 EB-S Loan Agreement S200M CDC Reso C.doc
INDENTURE AND LOAN AGREEMENT
by and between
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
and
CMB INFRASTRUCTURE INVESTMENT GROUP VII,LP
Relating to the
$525,000,000
PROMISSORY NOTE
(CMB INFRASTRUCTURE INVESTMENT GROUP VII,LP
REDEVELOPMENT ACTIVITIES AND PUBLIC WORKS PROJECTS)
Dated as of March , 2011
INDENTURE AND LOAN AGREEMENT
This Indenture and Loan Agreement dated as of March_, 2011 (this "Agreement"), is by
and between the Redevelopment Agency of the City of San Bernardino,a public body,corporate and
politic (the "Agency"), and CMB Infrastructure Investment Group VII, LP, a California limited
partnership(the"Lender"):
WITNESSETH
WHEREAS,the Agency seeks to finance certain multiple redevelopment activities and public
works projects within the jurisdiction of the City of San Bernardino (the City") over an extended
period of time(collectively,the"Projects"); and
WHEREAS, the Agency has determined that the best mode of financing the Projects is
through a loan from the Lender(the"Loan") in the principal amount not to exceed Five Hundred
Twenty Five Million Dollars ($525,000,000.00) under and secured by this Indenture and a
promissory note (the"Note")in the form attached as Exhibit"A"; and
WHEREAS,the Lender,a California limited partnership,organized in accordance with the
requirements for regional centers as set forth under the United States Immigration Act of 1990, as
amended,has offered to fund the Loan pursuant to the terms of this Agreement; and
WHEREAS,AS, the repayment of the Loan will be made from the excess Tax Increment
Revenues of the Agency, which shall be placed in a special and separate account to assure that
adequate funds are available for the undertaking of all projects as financed by Lender(the"Special
Account"); and
WHEREAS, the obligation incurred under the Agreement will be set forth on the annual
Statement of Indebtedness of the Agency; and
WHEREAS,the Agency has determined that all things necessary to cause the Note, when
duly executed by the Agency as provided herein,to be a legal and valid obligation of the Agency,as
applicable, enforceable in accordance with its terms, and to constitute this Indenture as a valid
agreement for the purposes and uses herein set forth in accordance with its terms,have been done
and taken and the execution and delivery hereof and the execution,authentication and delivery of the
Note, subject to the terms hereof,have in all respects been duly authorized.
NOW,THEREFORE,THIS INDENTURE WITNESSETH, that in order to secure the
payment of the principal of, and the interest on, the Note under this Indenture and to secure the
performance and observance of all of the covenants and conditions therein and herein set forth,and
to declare the terms and conditions upon and subject to which the Note is to be issued and received,
and in consideration of the premises and of the mutual covenants herein contained, and for other
valuable consideration, the receipt whereof is hereby acknowledged, the Agency does hereby
covenant and agree with Lender, as follows:
1
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ARTICLE I
DEFINITIONS
"Loan" means EB-5 foreign investor loan in the amount of Five Hundred Twenty Five
Million Dollars($525,000,000.00)through CMB Infrastructure Investment Group VII, LP,for the
Redevelopment Activities and Public Works Projects as authorized to be issued hereunder.
"Lender" means CMB Infrastructure Investment Group VII, LP, a California limited
partnership,organized in accordance with the requirements for regional centers as set forth under the
Immigration Act of 1990,as amended,and for the purpose of promoting economic growth through,
among other things, increased export sales, improved regional productivity, job creation and
increased domestic capital investment, and to generate jobs through the immigrant investor visa
program of the United States Citizenship and Immigration Service ("USCIS").
"Tax Increment Revenues" means those property tax increment revenues available to the
Agency or any successor in interest to the Agency attributable to the several redevelopment project
areas of the Agency after payments have been remitted or provided for regarding all pass-through
obligations to taxing agencies, deposits to the Low and Moderate Income Housing Fund of the
Agency, and after payments of all debt service obligations previously incurred by the Agency for
any form of indebtedness, including, but not limited to, publicly issued tax allocation bonds and
refunding bonds, loans from private parties or commercial lending institutions and other forms of
assistance provided to property owners (collectively, the "Prior Obligations"). The pledge to the
Lender of the Tax Increment Revenues pursuant to this Agreement shall at all times be subordinate
to the Prior Obligations and any other subsequently issued or incurred obligations of the Agency
payable in whole or in party from the property tax increment revenues and/or the Tax Increment
Revenues.
ARTICLE II
THE LOAN
Section 2.1 Terms of the Loan. The Lender shall loan to the Agency a principal amount equal to
Five Hundred Twenty Five Million Dollars($525,000,000.00) (the"Loan"). The Loan shall bear
interest at the rate of 5.25%per annum per each Tranche,as defined hereinafter,accruing from and
after each date of funding of a portion of the total principal amount of the Loan to the Agency.
Interest shall be calculated on the number of actual days that the principal amount of the Loan is
outstanding in each year on the basis of 365/366 days in a calendar year. The Loan shall be
represented by the"$525,000,000 Redevelopment Agency of the City of San Bernardino Promissory
Note (CMB Infrastructure Investment Group VII, LP) Series 2011" substantially in the form
attached hereto as Exhibit"A" (the "Note") executed by the Agency in favor of the Lender. The
Lender shall charge the Agency no origination points or loan fees, nor require the payment of any
prepaid interest, in connection with making the Loan.
,J 2
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Section 2.2 Form of Note. The Note shall be substantially in the form attached hereto as
Exhibit "A", which is incorporated herein and made a part hereof, with necessary or appropriate
variations, omissions and insertions as permitted or required hereby.
Section 2.3 Application of Loan Proceeds.
(a) Use of Funds. The Agency shall use and apply the proceeds of the Loan for
the implementation and construction of the Projects and any other related legal purposes in
connection with the Projects and of the Agency with respect to the Projects pursuant to the
California Health and Safety Code.
(b) Funding of the Loan.
(1) Acknowledgement. The Agency hereby acknowledges that (i) the
Lender,as an approved and federally-designated"regional center",is authorized and intends to raise
capital from foreign investors who seek to obtain permanent residency in the United States in
accordance with the EB-5 investor visa program of the Immigration and Nationality Act(the"EB-5
Program"), and (ii) it is anticipated that each foreign investor will make an investment with the
Lender of Five Hundred Thousand Dollars ($500,000.00). In that regard, the Agency further
acknowledges that the principal amount of the Loan to be dispersed by the Lender to the Agency is
dependant on the amount of capital raised by the Lender from foreign investors,and accordingly,the
Agency agrees that the Lender does not guarantee that the entire principal amount of the Loan, or
any portion thereof, shall be disbursed to the Agency. Additionally, the Agency further
acknowledges that to maintain compliance with the rules and regulations promulgated under the EB-
5 Program,the Lender is required to lend and/or invest its funds with third parties located within the
geographic area that constitutes the Bondholder's "regional center", and accordingly,the Agency
further agrees that those funds raised by the Lender pursuant to this Indenture will be allocated to
such third parties for the undertaking of the Projects,which allocation shall be made in the sole and
absolute discretion of the Lender.
(2) Funding•
(a) Subject to Section (1) above, and the other terms and
conditions of this Agreement, the Loan shall be disbursed to the Agency in no more than
Forty (40) Tranches, each in the minimum principal amount of Five Million Dollars
($5,000,000.00) and a maximum principal amount of Twenty Million Dollars
($20,000,000.00)(each,a"Tranche"),and each Tranche will be disbursed to the Agency at
such time as determined by the Lender,in its sole and absolute discretion,provided that the
Lender anticipates that each Tranche will be disbursed when the funds invested by a
minimum number of investors in the Lender become available to the Lender for
disbursement to the Agency. If, and when, the Lender determines it is able to disburse a
Tranche to the Agency, the Lender shall provide the Agency with notice thereof, and the
Agency agrees that it will accept and borrow such funds. Each Tranche,or portion thereof,
shall be disbursed by wire transfer to an account of the Agency pursuant to written
instructions to be provided by the Agency. The Lender shall not be required to disburse any
Tranche to the Agency if an Event of Default by the Agency hereunder has occurred and is
3
NAgendas\Comm Dev Commission\2011 CDC Items\Special Joint Workshop\03-03-11 EB-5 S200M Loan Agreement(EDA).doc
continuing. Each Tranche shall commence a separate six (6)-year term from the initial
funding date of that particular Tranche. The dates on which the first Five Hundred Thousand
Dollars($500,000.00)of foreign investor funds of each Tranche is disbursed to the Agency
under this Agreement shall be referred to separately and numbered in the following manner:
"Initial Funding Date No. 1"and consecutively numbered thereafter in a similar manner for
each subsequent Tranche. Collectively,these funding dates shall be referred to herein as the
"Initial Funding Dates."
(b) Upon execution of this Agreement,no further action shall be
necessary to authorize the funding and disbursement of each consecutive Tranche or portion
thereof.
(3) Payment Covenant of Agency.
(a) The Loan is not secured by the pledge of,the assignment of,or
the granting of any security interest in, the assets, funds, revenues or properties of the Agency,
except from the Tax Increment Revenues generally as provided otherwise herein.
(b) The Agency hereby agrees and covenants to appropriate funds
with respect to each fiscal year throughout the term of this Agreement in an amount sufficient to
make required interest payments during the applicable fiscal year. In addition,the Agency agrees
and covenants to appropriate funds with respect to the fiscal years in which the maturity dates occur
for each Tranche in an amount sufficient to pay the outstanding principal of each Tranche on its
maturity date.
(c) The Loan shall be repaid through excess Tax Increment
Revenues of the Agency, which shall be placed in that certain Special Account to assure that
adequate funds are available for the undertaking of all projects as financed by the Lender.
(d) The full obligation incurred under this Agreement shall be set
forth on the annual Statement of Indebtedness of the Agency, regardless of the existence of a
Tranche.
(e) The obligations of the Agency under this Agreement and under
the Note are not guaranteed by, nor payable either directly or indirectly by, nor are they the
obligations of,the City of San Bernardino,California or its employees,officers or agents,but are the
obligations solely of the Agency payable from the Tax Increment Revenues and other assets and
funds as legally available therefore at the option of the Agency.
Section 2.4 Repayment of the Loan, Prepayment Provisions.
(a) Principal. Payment of principal, as set out in Tranches, shall be due and
payable seventy-two(72)months following the Initial Funding Date of each Tranche(the"Maturity
Dates"),and shall be paid in immediately available funds of the Agency to the Lender. The Agency
may,without penalty,prepay solely as to the entire outstanding principal balance of each Tranche
4
PAAgendas\Comm Dev Commission\2011 CDC Items\Special Joint Workshop\03-03-11 EB-5$200M Loan Agreemem(EDA).doc
any time on or after forty-two(42)months following its Initial Funding Date(collectively,the"First
Repayment Dates"), or prior to such date upon the consent of the Lender.
(b) Interest. Interest on each active Tranche shall be paid quarterly throughout the
term of the Loan on each January 1,April 1,July 1 and October 1 (each such date is defined herein
as an "Interest Payment Date"), with the final interest payment being due and payable on the
Maturity Date of the Tranche, still outstanding, with the most recent Initial Funding Date. All
interest shall be payable in arrears based upon the principal balance outstanding as of each Interest
Payment Date for the immediately preceding interest accrual period for the actual number of days
that principal was then outstanding on the Loan. The Lender shall submit invoices to the Agency on
a quarterly basis prior to each Interest Payment Date. All interest shall be calculated on the basis of
the actual number of days during each quarterly interest payment that any principal amount of the
Loan was then outstanding.
(c) Late Charges. A late charge of three percent(3%)(the"Late Charge")of the
amount due shall be paid with respect to each payment of interest not made within thirty (30)
calendar days from and after an Interest Payment Date ("Delinquent Interest"). A late charge of
three percent(3%)of the amount due shall be paid with respect to the late payment of principal on
the Maturity Dates, if such payment of principal is not made by said Maturity Dates("Delinquent
Principal"). Each amount of Delinquent Interest and Delinquent Principal plus the applicable late
charges (together, a "Delinquent Payment") shall bear interest at 5.25% per annum until such
Delinquent Payment is made in full to the Lender.
(d) Acceleration of Certain Interest Payments. In the event the Agency fails to
make two (2) consecutive interest payments to the Lender, or two (2) interest payments in any
twelve(12)-month period,the Lender may accelerate payment of the amount of interest coming due
on the next two(2)succeeding Interest Payment Dates after notice from the Lender to the Agency,
so that all such interest for the next two (2) Interest Payment Dates, together with all Delinquent
Payments, Late Charges and interest due thereon, shall be due and payable on(i)the tenth (IOth)
calendar day of the month following the month in which the second (2D) consecutive interest
payment was not made or(ii)the second(2nd)interest payment in a twelve(12)-month period was
not made, as applicable. Such amounts of interest that are subject to acceleration shall only be
payable upon invoice from the Lender delivered to the Agency. Thereafter, the Agency shall
continue to remit quarterly interest payments in accordance with this Agreement and the Note.
ARTICLE III
SECURITY FOR THE BOND
Section 3.1 The Loan is secured solely by the Note,in the form attached as Exhibit"A".
The Agency does not specifically pledge or commit any other source of funds or assets for the
repayment for the Loan other than the Tax Increment Revenues as provided herein. The Loan shall
be repaid through excess Tax Increment Revenues of the Agency,which shall be placed in a Special
Account to assure that adequate funds are available for the undertaking of all projects as financed by
the Lender. The Note shall be subordinate to any and all existing bond, notes, liens or other
obligations of the Agency.
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ARTICLE IV
REPRESENTATIONS AND COVENANTS OF THE AGENCY
Section 4.1 The Agency has been duly organized under the laws of the State of California
and has the power to enter into this Agreement and to incur the obligations under the Note.
Section 4.2 Execution of this Agreement and the Note has been duly authorized by the
governing body of the Agency.
Section 4.3 No governmental or regulatory approvals that have not been previously
obtained by the Agency are required for the due approval,execution and delivery by the Agency of
this Agreement and the Note.
Section 4.4 This Agreement and the Note will be duly executed and delivered by the
Agency and this Agreement and the Note constitute valid and binding obligations of the Agency,
payable as set forth herein and in the Note.
Section 4.5 The representations of the Agency contained in this Agreement shall be true
and correct in all material respects on and as of each Initial Funding Dates as referred to in Section
2.2 above,with the same force and effect as though such representations and warranties had been
made on and as of such date.
Section 4.6 On and as of each of the Initial Funding Dates,the Agency is not in default
under any other indebtedness of the Agency, and the execution, delivery or performance of the
Agency of this Agreement and the Note shall not,to the best of the Agency's knowledge,contravene
any provision of law,statute,rule or regulation of any governmental instrumentality and shall not,to
the best of the Agency's knowledge,conflict or be inconsistent with or result in any breach of any
terms,covenants or provisions of,or constitute a default under,or result in the creation or imposition
of a lien pursuant to the terms of, any loan agreement, credit agreement or any other agreement,
contract or instrument to which the Agency is a party or by which it is bound or to which it may be
subject.
Section 4.7 The Agency recognizes that the investors comprising the Lender are required
to demonstrate the creation of jobs through the expenditure of the funds as invested by such
investors with the Lender pursuant to the rules and regulations of the USCIS. The Agency agrees to
undertake the Projects in an expeditious manner to accomplish such expenditures of the Loan
proceeds for the intended purposes under this Agreement.
Section 4.8 The Agency intends to and agrees to undertake the Projects specified as the
Redevelopment Activities and Public Works Projects as described in Exhibit`B." Nevertheless,the
Agency reserves the right to substitute additional projects for the initially specified Projects upon
written approval of the Lender at its sole discretion; such approval shall not be unreasonably
withheld.
MAgendas\Comm Dev Commission\2011 CDC Items\Special Joint Workshop\03-03-11 EB-5$200M Loan Agreement(EDA).doc
ARTICLE V
EVENTS OF DEFAULT
Section 5.1 By Lender. The following shall constitute a default by the Lender: failure to
fund the Loan as provided in Section 2.3(b)of this Agreement within thirty(3 0)calendar days after
written request by the Agency for an Initial Funding Date or any subsequent funding dates to occur.
The Lender shall ensure that the first Tranche shall be disbursed to the Agency by June 30, 2012,
and that the full amount of the Loan shall be disbursed by the Lender to the Agency as soon as
practicable thereafter.
Section 5.2 ByAgency. The following shall constitute a default by the Agency:
(a) failure to pay the principal of,interest on,and any payments with respect to,
the Note, on or before the tenth (10th) calendar day following an Interest Payment Date or the
fifteenth(15th)calendar day following a Maturity Date, as applicable,as each payment of interest
and principal is required to be made; or
(b) failure to perform, or a delay in performing, any term or provision of this
Agreement and such failure or delay is not corrected within thirty(3 0)calendar days after receipt of
notice thereof from the Lender.
ARTICLE VI
REMEDIES
Section 6.1 Upon a default by the Lender, (i) the Agency shall be released from any
further obligations under this Agreement or the Note except for the repayment of the principal of,
and interest on,any dollar amounts previously advanced, if any,by the Lender to the Agency,and
(ii)the Agency may seek appropriate legal, injunctive or equitable relief.
Section 6.2 Upon a default by the Agency pursuant to Section 5.2 above,the Lender may
institute any proceeding at law or in equity to enforce the obligations of the Agency under the Note
and/or any covenants and obligations of the Agency contained in this Agreement.
Section 6.3 In any action brought under this Agreement, the prevailing party shall be
entitled to reimbursement from the other party of its costs and expenses (including reasonable
attorney's fees) in bringing such action. Additionally, the Lender shall be entitled to any costs,
including reasonable attorney's fees,incurred in collecting amounts due and payable to the Lender
under the Note.
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ARTICLE VII
NO ASSIGNMENT
Section 7.1 The Lender shall not be entitled to,and shall not,assign the Note,nor its right
to receive payments under the Note to any other party without the prior written consent of the
Agency,which consent shall not be unreasonably withheld.
ARTICLE VIII
TERM
Section 8.1 This Agreement shall terminate upon the payment in full by the Agency of all
amounts due under the Note.
ARTICLE IX
NOTICES
Section 9.1 Notices shall be presented in person or by certified or registered United States
mail, return receipt requested, postage prepaid, or by overnight delivery made by a nationally
recognized delivery service to the addresses noted below. Notice presented by United States mail
shall be deemed effective the second business day after deposit with the United States Postal
Service. This Section shall not prevent giving notice by personal service,telephonically verified fax
transmission,or telephonically verified e-mail transmission which shall be deemed effective upon
actual receipt of such personal service or telephonic verification. Either party may change their
address for receipt of written notice by so notifying the other party in writing.
TO AGENCY: Redevelopment Agency of the City of San Bernardino
Attention: Interim Executive Director
201 North "E" Street, Suite 301,
San Bernardino, California 92401
Phone: (909) 663-1044
Fax: (909) 888-9413
TO LENDER: CMB Infrastructure Investment Group VII, LP
Attention: Patrick Hogan
4507 49th Avenue
Moline, Illinois 61265
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ARTICLE X
MISCELLANEOUS
Section 10.1 Governing Law;Jurisdiction. This Agreement shall be governed by the laws
of the State of California,and in the event any party seeks judicial relief or to enforce or to interpret
any provision of this Agreement and the Note, such actions shall be filed in the Superior Court of
San Bernardino County, California,Main Branch, in the City of San Bernardino, California.
Section 10.2 Entire Agreement. This Indenture constitutes the entire agreement among the
parties and may not be amended without the prior written consent of the parties hereto. This
Indenture supersedes all prior negotiation,discussions and previous agreements between the parties
concerning the subject matter herein. The parties intend this Indenture to be the final expression of
their agreement with respect to the terms herein and a complete and exclusive statement of such
terms. No modification,amendment or waiver of any term herein shall be binding unless executed
in writing by the parties hereto.
Section 10.3 Amendment. This Indenture maybe amended as deemed necessary by written
instruments duly approved and executed by the parties hereto. Any such amendments or
modifications shall be valid,binding and legally enforceable only if in written form and executed by
the parties hereto after the same have been duly approved and authorized for execution.
Section 10.4 Severability. Each and every section of this Indenture shall be construed as a
separate and independent covenant and agreement. If any term or provision of this Indenture or the
application thereof shall be declared invalid or unenforceable,the remainder of this Indenture,or the
application of such term or provision to circumstances other than those to which it is invalid or
unenforceable,shall not be affected thereby,and each term and provision of this Indenture shall be
valid and enforceable to the extent permitted by law.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF,the Redevelopment Agency of the City of San Bernardino has
caused this Indenture to be signed in the name of the Redevelopment Agency of the City of San
Bernardino by its Interim Executive Director and CMB Infrastructure Investment Group VII,LP,has
caused this Indenture to be signed in its name by its officer thereunto duly authorized,all as of the
date and year first above written.
AGENCY
Redevelopment Agency of the City of San
Bernardino, a public body, corporate and politic
By:
Emil A. Marzullo, Interim Executive Director
ATTEST:
By:
LENDER
CMB Infrastructure Investment Group VII, LP
a California limited partnership
By:
General Partner
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EXHIBIT"A"
INLAND VALLEY DEVELOPMENT AGENCY/
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
PROMISSORY NOTE SERIES 2011
(CITY REDEVELOPMENT ACTIVITIES AND PUBLIC WORKS PROJECTS)
RATE OF MATURITY ISSUE
INTEREST: DATE DATE:
5.25% per annum as The Final Maturity Date as Date of First Initial Funding
applicable to each Tranche Defined Herein Date as Defined in the
Financing Indenture
REGISTERED OWNER: CMB Infrastructure Investment Group VII,LP
PRINCIPAL AMOUNT: $525,000,000
FOR VALUE RECEIVED,THE REDEVELOPMENT AGENCY OF THE CITY OF SAN
BERNARDINO, a public body, corporate and politic (the "Agency"), hereby promise to pay to
CMB Infrastructure Investment Group VII,LP,a Limited Partnership,organized under the laws of
the State of California (the "Lender"), from the excess Tax Increment Revenues of the Agency,
which shall be placed in a special and separate account to assure that adequate funds are available for
the undertaking of all projects as financed by the Lender,the principal sum of Five Hundred Twenty
Five Million Dollars($525,000,000)plus interest at a rate of 5.25%per annum,in accordance with
the terms and provisions of that certain Indenture and Loan Agreement dated as of March_,2011,
by and between the Agency and CMB Infrastructure Investment Group VII, LP(the"Indenture").
This Note shall be paid in full on the Maturity Date of the Tranche,still outstanding,with the most
recent Initial Funding Date,which shall be no later than six(6)years from said Initial Funding Date
(the "Final Maturity Date").
The Agency agrees to pay the aforesaid principal plus interest in accordance with the terms
hereinafter set forth:
1. This Note shall be payable, as follows:
(a) On each Maturity Date, the undersigned shall pay in lawful money of the
United States of America the principal and any remaining interest of the applicable Tranche to the
Lender at 4507 49''Avenue,Moline,Illinois 61265,or to such other address or to such account and
in such manner as the Lender shall direct. The Agency may,without penalty,prepay solely as to the
entire outstanding principal balance on any Tranche funding at any time on or after forty-two(42)
months from said Tranche's Initial Funding Date,and on any other date thereafter,or prior to such
date upon the consent of the Lender.
4840-8157-9784.1 1
(b) Interest shall be paid quarterly on each January 1,April 1,July 1 and October
1 (each such date is defined herein as an "Interest Payment Date"), commencing on the Interest
Payment Date following the first Initial Funding Date with the final interest payment due and
payable on the Final Maturity Date. Interest shall be payable in arrears based upon the principal
balance of each Tranche this Note is outstanding as of each interest payment date.
2. If a payment is not timely made and remains overdue for a period of thirty (30)
calendar days after the same becomes due and payable (a "Delinquent Payment"), the Agency,
without notice or demand by the Lender,shall pay a late charge in an amount equal to three percent
(3%) of the Delinquent Payment owing (the "Late Charge"). Each Delinquent Payment plus the
applicable Late Charge shall bear interest at 5.25%per annum until such amount is paid in full to the
Lender.
3. In the event the Agency fails to make two (2)consecutive interest payments to the
Lender, or two (2) interest payments in any twelve(12)-month period,the Lender may accelerate
payment of the amount of interest coming due on the next two (2) succeeding Interest Payment
Dates after notice from the Lender to the Agency, so that all such interest for the next two (2)
Interest Payment Dates, together with all Delinquent Payments, Late Charges and interest due
thereon, shall be due and payable on the (i) tenth (I O b) calendar day of the month following the
month in which the second(2"d)consecutive interest payment was not made,or(ii)the second(2"d)
interest payment in a twelve(12)-month period was not made,as applicable.
4. This Note is solely the debt of the Agency. This Note is not a debt of any of the City
of San Bernardino,State of California,or any other of the State's political subdivisions and neither
the City of San Bernardino,the State,nor any other of said State's political subdivisions are liable
hereon. This Note does not constitute an indebtedness within the meaning of any constitutional or
statutory debt limitation or restriction. Neither the employees, officers and agents of the Agency,
nor any persons executing this Note are liable personally on this Note by reason of its issuance.
5. This Note is payable solely from the excess Tax Increment Revenues of the Agency,
which shall be placed in a special and separate account to assure that adequate funds are available for
the undertaking of all projects as financed by the Lender.
6. This Note shall not be assigned by the Lender without permission of the Agency,
which permission shall not be unreasonably withheld.
7. The execution,delivery and performance of this Note have been duly authorized by
all necessary actions of the Agency, do not require the consent or approval of any other person,
regulatory,Agency or other governmental body,and do not conflict with,result in a violation of,or
constitute a default of (a) any provision of any agreement or other instrument binding upon the
Agency, or(b) any law, governmental regulation, court decree or order applicable to the Agency;
provided, however, that all requisite activities of the governing boards of the Agency have been
taken to provide for the payment of the Note and interest thereon.
8. This Note,when delivered,shall constitute a legal,valid and binding obligation of the
Agency,enforceable in accordance with its terms.
4840-8157-9784.1 2
9. It is hereby recited,certified and declared that any and all acts,conditions and things
required to exist,to happen and to be performed precedent to and in the issuance of this Note exist,
have happened and have been performed in due time,form and manner as required by the California
Constitution and the laws of the State of California.
10. This Note shall be subordinate to any and all existing bond, notes, liens or other
obligations.
11. This Note and the Indenture constitute the entire understanding and agreement of the
parties as to the matters set forth herein and therein. No alteration of,or amendment to,this Note
shall be effective unless given in writing and signed by the Lender and the Agency.
12. Payment of the principal amount of this Note may not be accelerated by the Lender,
unless otherwise provided in the Indenture.
13. This Note has been delivered to the Lender and accepted by the Lender in the State of
California. In the event of a lawsuit,the Lender and the Agency agree to submit to the jurisdiction
of the courts of San Bernardino County,California. This Note shall be governed by the laws of the
State of California as to the interpretation of any matter contained herein.
14. If a court of competent jurisdiction finds any provision of this Note invalid or
unenforceable as to any person or circumstance,such finding shall not render that provision invalid
or unenforceable as to any other persons or circumstances. If feasible,any such offending provision
shall be deemed to be modified to be within the limits of enforceability or validity; provided,
however,in the event the offending provision cannot be so modified,it shall be stricken and all other
provisions of this Note in all respects shall remain valid and enforceable.
REMAINDER INTENTIONALLY LEFT BLANK
4840-8157-9784.1 3
IN WITNESS WHEREOF,the Agency has caused this Note to be executed as of this
day of ,2011.
Redevelopment Agency of the City of San Bernardino
By:
Interim Executive Director
Attest:
By:
4840-8157-9784.1 4
INDENTURE AND LOAN AGREEMENT
by and between
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
and
CMB INFRASTRUCTURE INVESTMENT GROUP VII,LP
Relating to the
$10,000,000
PROMISSORY NOTE
(CMB INFRASTRUCTURE INVESTMENT GROUP VII,LP)
INDENTURE AND LOAN AGREEMENT
This Indenture and Loan Agreement dated as of _, 2011 (this
"Agreement"),is by and between the Redevelopment Agency of the City of San Bernardino,a public
body, corporate and politic(the"Agency"), and CMB Infrastructure Investment Group VII, LP, a
California limited partnership(the"Lender"):
WITNESSETH
WHEREAS,the Agency seeks to finance certain various infrastructure projects,including,
but not limited to,those identified in the Programs,Projects and Activities attached as Exhibit"A"to
the Project Funding Agreement within the jurisdiction of the City of San Bernardino(the City")(the
"Projects"); and
WHEREAS, the Agency has determined that the best mode of financing the Projects is
through a loan from Lender(the"Loan")in the principal amount not to exceed Ten Million Dollars
($10,000,000.00) under and secured by this Agreement and a promissory note(the"Note") in the
form attached hereto as Exhibit"A"; and
WHEREAS,the Lender,a California limited partnership,organized in accordance with the
requirements for regional centers as set forth under the United States Immigration Act of 1990,as
amended,has offered to fund the Loan pursuant to the terms of this Agreement; and
WHEREAS, the repayment of the Loan will be made from the excess Tax Increment
Revenues of the Agency; and
WHEREAS,the Agency has determined that all things necessary to cause the Note, when
duly executed by the Agency as provided herein,to be a legal and valid obligation of the Agency,as
applicable, enforceable in accordance with its terms, and to constitute this Agreement as a valid
agreement for the purposes and uses herein set forth in accordance with its terms,have been done
and taken and the execution and delivery hereof and the execution,authentication and delivery of the
Note, subject to the terms hereof,have in all respects been duly authorized.
NOW, THEREFORE, THIS INDENTURE WITNESSETH, that in order to secure the
payment of the principal of, and the interest on, the Note under this Agreement and to secure the
performance and observance of all of the covenants and conditions therein and herein set forth,and
to declare the terms and conditions upon and subject to which the Note is to be issued and received,
and in consideration of the premises and of the mutual covenants herein contained, and for other
valuable consideration, the receipt whereof is hereby acknowledged, the Agency does hereby
covenant and agree with Lender, as follows:
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ARTICLE I
DEFINITIONS
"Loan" means EB-5 foreign investor loan in the amount of Ten Million Dollars
($10,000,000)through CMB Infrastructure Investment Group VII,LP for the Projects as authorized
to be issued hereunder.
"Lender" means CMB Infrastructure Investment Group VII, LP, a California limited
partnership,organized in accordance with the requirements for regional centers as set forth under the
Immigration Act of 1990,as amended,and for the purpose of promoting economic growth through,
among other things, increased export sales, improved regional productivity, job creation and
increased domestic capital investment, and to generate jobs through the immigrant investor visa
program of the United States Citizenship and Immigration Service("USCIS").
"Tax Increment Revenues"means those property tax increment revenues available to the
Agency or any successor in interest to the Agency attributable to the several redevelopment project
areas of the Agency after payments have been remitted or provided for regarding all pass-through
obligations to taxing agencies, deposits to the Low and Moderate Income Housing Fund of the
Agency, and after payments of all debt service obligations previously incurred by the Agency for
any form of indebtedness, including, but not limited to, publicly issued tax allocation bonds and
refunding bonds, loans from private parties or commercial lending institutions and other forms of
assistance provided to property owners (collectively, the "Prior Obligations"). The pledge to the
Lender of the Tax Increment Revenues pursuant to this Agreement shall at all times be subordinate
to the Prior Obligations and any other subsequently issued or incurred obligations of the Agency
payable in whole or in party from the property tax increitent revenues and/or the Tax Increment
Revenues.
ARTICLE II
THE LOAN
Section 2.1 Terms of the Loan. The Lender shall loan to the Agency a principal amount
equal to Ten Million Dollars($10,000,000.00)(the"Loan"). The Loan shall bear interest at the rate
of 5.25%per annum,accruing from and after each date of funding of a portion of the total principal
amount the Loan to the Agency. Interest shall be calculated on the number of actual days that the
principal amount of the Loan is outstanding in each year on the basis of 365/366 days in a calendar
year. The Loan shall be represented by the"$10,000,000 Redevelopment Agency ofthe City of San
Bernardino Promissory Note Series 2011(CMB Infrastructure Investment Group VII, LP)"
substantially in the form attached hereto as Exhibit "A" (the "Note") executed by the Agency in
favor of the Lender. The L-,nder shall charge the Agency no origination points or loan fees, nor
require the payment of any prepaid interest,in connection with making the Loan.
Section 2.2 Form of Note. The Note shall be substantially in the form attached hereto as
Exhibit"A", which is incorporated herein and made a part hereof, with necessary or appropriate
variations,omissions and insertions as permitted or required hereby.
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it
i
Section 2.3 Application of Loan.
(a) Use of Funds. The Agency shall use and apply the proceeds of the Loan for
the construction of the Project and any other related legal purposes in connection with the Project
and of the Agency with respect to the Project pursuant to the California Health and Safety Code.
(b) Funding of the Loan.
(1) Acknowled eg_ment. The Agency hereby acknowledges that (i) the
Lender,as an approved and federally-designated"regional center",is authorized and intends to raise
capital from foreign investors who seek to obtain permanent residency in the United States in
accordance with the EB-5 investor visa program of the Immigration and Nationality Act(the"EB-5
Program"), and (ii) it is anticipated that each foreign investor will make an investment with the
Lender of Five Hundred Thousand Dollars ($500,000.00). In that regard, the Agency further
acknowledges that the principal amount of the Loan to be dispersed by the Lender to the Agency is
dependant on the amount of capital raised by the Lender from foreign investors,and accordingly,the
Agency agrees that the Lender does not guarantee that the entire principal amount of the Loan, or
any portion thereof, shall be disbursed to the Agency. Additionally, the Agency further
acknowledges that to maintain compliance with the rules and regulations promulgated under the EB-
5 Program,the Lender is required to lend and/or invest its funds with third parties located within the
geographic area that constitutes the Bondholder's "regional center", and accordingly,the Agency
further agrees that those funds raised by the Lender pursuant to this Agreement will be allocated to
such third parties for the undertaking of the Project,which allocation shall be made in the sole and
absolute discretion of the Lender.
(2) Funding. Subject to Section (1) above, and the other terms and
conditions of this Agreement, the Loan shall be disbursed to the Agency, in no more than twenty
(20) tranches, each in the minimum principal amount of Five Hundred Thousand Dollars
($500,000.00)(each,a"Tranche"),and each Tranche will be disbursed to the Agency at such time as
determined by the Lender, in its sole and absolute discretion,provided that the Lender anticipates
that each Tranche will be disbursed when the funds invested by an investor in the Lender become
available to the Lender for disbursement to the Agency. If,and when,the Lender determines it is
able to disburse a Tranche to the Agency,the Lender shall provide the Agency with notice thereof,
and the Agency agrees that it will accept and borrow such funds. Each Tranche shall be disbursed
by wire transfer to an account of the Agency pursuant to written instructions to be provided by the
Agency. The Lender shall not be required to disburse any Tranche to the Agency if an Event of
Default by the Agency hereunder has occurred and is continuing. Each Tranche shall commence a
separate six (6)-year term from the initial funding date of that particular Tranche. The dates on
which the first Five Hundred Thousand Dollars ($500,000.00) of foreign investor funds of each
Tranche is disbursed to the Agency under this Agreement shall be referred to separately and
numbered in the following manner: "Initial Funding Date No. 1" and consecutively numbered
thereafter in a similar manner for each subsequent Tranche. Collectively,these funding dates shall
be referred to herein as the"Initial Funding Dates."
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(3) Payment Covenant of the Agency.
(a) The Loan is not secured by the pledge of,the assignment of,or
the granting of any security interest in, the assets, funds, revenues or properties of the Agency,
unless provided otherwise herein.
(b) The Agency hereby agrees and covenants to appropriate funds
with respect to each fiscal year throughout the term of this Agreement in an amount sufficient to
make required interest payments during the applicable fiscal year. In addition,the Agency agrees
and covenants to appropriate funds with respect to the fiscal year in which the Maturity Date occurs
in an amount sufficient to pay the outstanding principal of the Loan on the Maturity Date.
(c) The Loan shall be repaid through the Agency's excess Tax
Increment Revenues.
(d) The obligations of the Agency under this Agreement and under
the Note are neither guaranteed by, nor payable either directly or indirectly by, nor are they the
obligations of,the City of San Bernardino,but are the obligations solely of the Agency.
Section 2.4 Repayment of the Loan; Prepayment Provisions.
(a) Principal. Payment of principal, as set out in Tranches, shall be due and
payable seventy-two(72)months following the Initial Funding Date of each Tranche(the"Maturity
Dates"),and shall be paid in immediately available funds of the Agency to the Lender. The Agency
may,without penalty,prepay solely as to the entire outstanding principal balance of each Tranche
any time on or after forty-two(42)months following its Initial Funding Date(collectively,the"First
Repayment Dates"),or prior to such date upon the consent of the Lender.
(b) Interest. Interest shall be paid quarterly throughout the term of the Loan on
each January 1, April 1, July 1 and October 1 (each such date is defined herein as an "Interest
Payment Date"), commencing on October 1, 2011, with the final interest payment being due and
payable on the Maturity Date of the Tranche, still outstanding,with the most recent Initial Funding
Date(the"Final Maturity Date"). All interest shall be payable in arrears based upon the principal
balance outstanding as of each Interest Payment Date for the immediately preceding interest accrual
period for the actual number of days that principal was then outstanding on the Loan. The Lender
shall submit invoices to the Agency on a quarterly basis prior to each Interest Payment Date. All
interest shall be calculated on the basis of the actual number of days during each quarterly interest
payment that any principal amount of the Loan was then outstanding.
(c) Late Charges. A late charge of three percent(3%)(the"Late Charge")of the
amount due shall be paid with respect to each payment of interest not made within thirty (30)
calendar days from and after an Interest Payment Date ("Delinquent Interest"). A late charge of
three percent(3%)of the amount due shall be paid with respect to the late payment of principal on
the Maturity Dates, if such payment of principal is not made by said Maturity Dates("Delinquent
Principal"). Each amount of Delinquent Interest and Delinquent Principal plus the applicable late
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charges (together, a "Delinquent Payment") shall bear interest at 5.25% per annum until such
Delinquent Payment is made in full to the Lender.
(d) Acceleration of Certain Interest PaMents-. In the event the Agency fails to
make two (2) consecutive interest payments to the Lender, or two (2) interest payments in any
twelve-month period,the Lender may accelerate payment of the amount of interest coming due on
the next two(2)succeeding Interest Payment Dates after notice from the Lender to the Agency, so
that all such interest for the next two (2) Interest Payment Dates, together with all Delinquent
Payments, Late Charges and interest due thereon, shall be due and payable on(i)the tenth(10th)
calendar day of the month following the month in which the second (2"d) consecutive interest
payment was not made or(ii)the second(2nd)interest payment in a twelve-month period was not
made,as applicable. Such amounts of interest that are subject to acceleration shall only be payable
upon invoice from the Lender delivered to the Agency. Thereafter, the Agency shall continue to
remit quarterly interest payments in accordance with this Agreement and the Note.
ARTICLE III
SECURITY FOR THE LOAN
Section 3.1 The Loan is secured solely by the Note,in the form attached as Exhibit"A".
The Agency does not pledge or commit any other source of funds or assets for the repayment for the
Loan. The Note shall be subordinate to any and all existing bonds,notes,liens or other obligations
of the Agency.
ARTICLE IV
REPRESENTATIONS AND COVENANTS OF THE AGENCY
Section 4.1 The Agency has been duly organized under the laws of the State of California
and has the power to enter into this Agreement and to incur the obligations under the Note.
Section 4.2 Execution of this Agreement and the Note has been duly authorized by the
governing body of the Agency.
Section 4.3 No governmental or regulatory approvals that have not been previously
obtained by the Agency are required for the due approval,execution and delivery by the Agency of
this Agreement and the Note.
Section 4.4 This Agreement and the Note will be duly executed and delivered by the
Agency and this Agreement and the Note constitute valid and binding obligations of the Agency,
payable as set forth herein and in the Note.
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Section 4.5 The representations of the Agency contained in this Agreement shall be true
and correct in all material respects on and as of the Initial Funding Date as referred to in Section 2.2
above,with the same force and effect as though such representations and warranties had been made
on and as of such date.
Section 4.6 On and as of the Initial Funding Date,the Agency is not in default under any
other indebtedness of the Agency,and the execution,delivery or performance of the Agency of this
Agreement and the Note shall not,to the best of the Agency's knowledge,contravene any provision
of law, statute,rule or regulation of any governmental instrumentality and shall not,to the best of
Agency's knowledge,conflict or be inconsistent with or result in any breach of any terms,covenants
or provisions of, or constitute a default under, or result in the creation or imposition of a lien
pursuant to the terms of,any loan agreement,credit agreement or any other agreement,contract or
instrument to which the Agency is a party or by which it is bound or to which it may be subject.
Section 4.7 The Agency recognizes that the investors comprising the Lender are required
to demonstrate the creation of jobs through the expenditure of the funds as invested by such
investors with the Lender pursuant to the rules and regulations of the USCIS. The Agency agrees to
undertake the Project in an expeditious manner to accomplish such expenditures of the Loan
proceeds for the intended purposes under this Agreement.
ARTICLE V
EVENTS OF DEFAULT
Section 5.1 By Lender. The following shall constitute a default by the Lender:failure to
fund the Loan as provided in Section 2.3(b)of this Agreement within thirty(30)calendar days after
written request by the Agency for an Initial Funding Date or any subsequent funding date to occur.
The Lender shall ensure that the first$500,000.00 shall be disbursed to the Agency by January 31,
2012, and that the full amount of the Loan shall be disbursed by the Lender to the Agency on or
before December 31, 2012.
Section 5.2 By Agency. The following shall constitute a default by the Agency:
(a) failure to pay the principal of,interest on,and any payments with respect to,
the Note, on or before the tenth (10"') calendar day following an Interest Payment Date or the
fifteenth(15th)calendar day following a Maturity Date,as'applicable, as each payment of interest
and principal is required to be made; or
(b) failure to perform, or a delay in performing, any term or provision of this
Agreement and such failure or delay is not corrected within thirty(30)calendar days after receipt of
notice thereof from the Lender.
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ARTICLE VI
REMEDIES
Section 6.1 Upon a default by the Lender, (i) the Agency shall be released from any
further obligations under this Agreement or the Note except for the repayment of the principal of,
and interest on,any dollar amounts previously advanced,if any,by the Lender to the Agency, and
(ii)the Agency may seek appropriate legal,injunctive or equitable relief.
Section 6.2 Upon a default by the Agency pursuant to Section 5.2 above,the Lender may
institute any proceeding at law or in equity to enforce the obligations of the Agency under the Note
and/or any covenants and obligations of the Agency contained in this Agreement. In any action
brought under this Agreement,the prevailing party shall be entitled to reimbursement from the other
party of its costs and expenses (including reasonable attorney's fees) in bringing such action.
Additionally,the Lender shall be entitled to any costs,including reasonable attorney's fees,incurred
in collecting amounts due and payable to the Lender under the Note.
ARTICLE VII
NO ASSIGNMENT
The Lender shall not be entitled to, and shall not, assign the Note, nor its right to receive
payments under the Note to any other party without the prior written consent of the Agency,which
consent shall not be unreasonably withheld.
ARTICLE VIII
TERM
This Agreement shall terminate upon the payment in full by the Agency of all amounts due
under the Note.
ARTICLE IX
NOTICES
Notices shall be presented in person or by certified or registered United States mail,return
receipt requested, postage prepaid, or by overnight delivery made by a nationally recognized
delivery service to the addresses noted below. Notice presented by United States mail shall be
deemed effective the second business day after deposit with the United States Postal Service. This
Section shall not prevent giving notice by personal service,telephonically verified fax transmission,
or telephonically verified e-mail transmission which shall be deemed effective upon actual receipt of
such personal service or telephonic verification. Either party may change their address for receipt of
written notice by so notifying the other party in writing.
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TO AGENCY: Redevelopment Agency of the City of San Bernardino
Attention: Interim Executive Director
201 North"E" Street, Suite 301
San Bernardino,California 92401
Phone: (909)663-1044
Fax: (909) 888-9413
TO LENDER: CMB Infrastructure Investment Group VII,LP
Attention: Patrick Hogan
4507 49`"Avenue
Moline, Illinois 61265
ARTICLE X
MISCELLANEOUS
Section 10.1 Governing Law;Jurisdiction. This Agreement shall be governed by the laws
of the State of California,and in the event any party seeks judicial relief or to enforce or to interpret
any provision of this Agreement and the Note, such actions shall be filed in the Superior Court of
San Bernardino County, California,Main Branch, in the City of San Bernardino, California.
Section 10.2 Entire Agreement. This Agreement and the Note constitute the entire
agreement among the parties and may not be amended without the prior written consent of the
parties hereto. This Agreement supersedes all prior negotiation, discussions and previous
agreements between the parties concerning the subject matter herein. The parties intend this
Agreement to be the final expression of their agreement with respect to the terms herein and a
complete and exclusive statement of such terms. No modification,amendment or waiver of any term
herein shall be binding unless executed in writing by the parties hereto.
Section 10.3 Amendment. This Agreement may be amended as deemed necessary by
written instruments duly approved and executed by the parties hereto. Any such amendments or
modifications shall be valid,binding and legally enforceable only if in written form and executed by
the parties hereto after the same have been duly approved and authorized for execution.
Section 10.4 Severability. Each and every section of this Agreement shall be construed as
a separate and independent covenant and agreement. If any term or provision of this Agreement or
the application thereof shall be declared invalid or unenforceable,the remainder of this Agreement,
or the application of such term or provision to circumstances other than those to which it is invalid or
unenforceable,shall not be affected thereby,and each term and provision of this Agreement shall be
valid and enforceable to the extent permitted by law.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF,the Redevelopment Agency of the City of San Bernardino has
caused this Agreement to be signed in the name of the Redevelopment Agency of the City of San
Bernardino by the Interim Executive Director and CMB Infrastructure Investment Group VII,LP,
has caused this Agreement to be signed in its name by its officer thereunto duly authorized,all as of
the date and year first above written.
AGENCY
Redevelopment Agency of the City of San Bernardino
a public body, corporate and politic
By:
Interim Executive Director
ATTEST:
By:
LENDER
CMB Infrastructure Investment Group VII, LP
a California limited partnership
By:
General Partner
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EXHIBIT"A"
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
PROMISSORY NOTE SERIES 2011
(CMB INFRASTRUCTURE INVESTMENT GROUP VII,LP)
RATE OF INTEREST MATURITY DATE ISSUE DATE
5.25% per annum as The Final Maturity Date as Date of First Initial Funding
applicable to each Tranche Defined Herein Date as Defined in the
Financing Indenture
REGISTERED OWNER: CMB Infrastructure Investment Group VII,LP
PRINCIPAL AMOUNT: $10,000,000
FOR VALUE RECEIVED,THE REDEVELOPMENT AGENCY OF THE CITY OF SAN
BERNARDINO, a public body, corporate and politic (the "Agency"), hereby promises to pay to
CMB Infrastructure Investment Group VII,LP,a Limited Partnership,organized under the laws of
the State of California (the "Lender"), from its excess Tax Increment Revenues, which shall be
placed in a special and separate account to assure that adequate funds are available for the
undertaking of all projects as financed by Lender, the principal sum of Ten Million Dollars
($10,000,000) plus interest at a rate of 5.25% per annum, in accordance with the terms and
provisions of that certain Indenture and Loan Agreement dated as of _,2011,by and
between the Agency and CMB Infrastructure Investment Group VII, LP (the "Indenture"). This
Note shall be paid in full on the Maturity Date of the Tranche,still outstanding,with the most recent
Initial Funding Date,which shall be no later than(6)years from said Initial Funding Date(the"Final
Maturity Date").
The Agency agrees to pay the aforesaid principal plus interest in accordance with the terms
hereinafter set forth:
1. This Note shall be payable, as follows:
(a) On each Maturity Date, the undersigned shall pay in lawful money of the
United States of America the principal and any remaining interest of the applicable Tranche to the
Lender at 4507 49th Avenue,Moline,Illinois 61265,or to such other address or to such account and
in such manner as the Lender shall direct. The Agency may,without penalty,prepay solely as to the
entire outstanding principal balance on any Tranche funding at anytime on or after forty-two(42)
months from said Tranche's Initial Funding Date,and on any other date thereafter,or prior to such
date upon the consent of the Lender.
(b) Interest shall be paid quarterly on each January 1,April 1,July 1 and October
1 (each such date is defined herein as an "Interest Payment Date"), commencing on the Interest
Payment Date following the first Initial Funding Date with the final interest payment due and
1
payable on the Final Maturity Date. Interest shall be payable in arrears based upon the principal
balance of each Tranche this Note outstanding as of each interest payment date.
2. If a payment is not timely made and remains overdue for a period of thirty (30)
calendar days after the same becomes due and payable (a "Delinquent Payment"), the Agency,
without notice or demand by the Lender,shall pay a late charge in an amount equal to three percent
(3%) of the Delinquent Payment owing (the "Late Charge"). Each Delinquent Payment plus the
applicable Late Charge shall bear interest at 5.25%per annum until such amount is paid in full to the
Lender.
3. In the event the Agency fails to make two (2) consecutive interest payments to the
Lender, or two (2) interest payments in any twelve-month period, the Lender may accelerate
payment of the amount of interest coming due on the next two (2) succeeding Interest Payment
Dates after notice from the Lender to the Agency, so that all such interest for the next two (2)
Interest Payment Dates, together with all Delinquent Payments, Late Charges and interest due
thereon, shall be due and payable on the (i) tenth (100) calendar day of the month following the
month in which the second(2°a)consecutive interest payment was not made,or(ii)the second(2nd)
interest payment in a twelve-month period was not made,as applicable.
4. This Note is solely the debt of the Agency. This Note is not a debt of any of the City
of San Bernardino,State of California,or any other of the State's political subdivisions and neither
the City of San Bernardino,the State,nor any other of said State's political subdivisions are liable
hereon. This Note does not constitute an indebtedness within the meaning of any constitutional or
statutory debt limitation or restriction. The employees,officers and agents of the Agency,and any
persons executing this Note are not liable personally on this Note by reason of its issuance.
5. This Note is payable solely from the excess Tax Increment Revenues of the Agency,
which shall be placed in a special and separate account to assure that adequate funds are available for
the undertaking of all projects as financed by Lender.
6. This Note shall not be assigned by the Lender without permission of the Agency,
which permission shall not be unreasonably withheld.
7. The execution,delivery and performance of this Note have been duly authorized by
all necessary actions of the Agency, do not require the consent or approval of any other person,
regulatory,Agency or other governmental body,and do not conflict with,result in a violation of,or
constitute a default of: (a) any provision of any agreement or other instrument binding upon the
Agency, or(b)any law, governmental regulation, court decree or order applicable to the Agency;
provided, however, that all requisite activities of the governing boards of the Agency have been
taken to provide for the payment of the Note and interest thereon.
8. This Note,when delivered,shall constitute a legal,valid and binding obligation of the
Agency, enforceable in accordance with its terms.
2
9. It is hereby recited,certified and declared that any and all acts,conditions and things
required to exist,to happen and to be performed precedent to and in the issuance of this Note exist,
have happened and have been performed in due time,form and manner as required by the California
Constitution and the laws of the State of California.
10. This Note shall be subordinate to any and all existing bond, notes, liens or other
obligations.
i
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11. This Note and the Indenture constitute the entire understanding and agreement of the
parties as to the matters set forth herein and therein. No alteration of, or amendment to,this Note
shall be effective unless given in writing and signed by the Lender and the Agency.
12. Payment of the principal amount of this Note may not be accelerated by the Lender,
unless otherwise provided in the Indenture.
13. This Note has been delivered to the Lender and accepted by the Lender in the State of
California. In the event of a lawsuit,the Lender and the Agency agree to submit to the jurisdiction
of the courts of San Bernardino County,California. This Note shall be governed by the laws of the
State of California as to the interpretation of any matter contained herein.
14. If a court of competent jurisdiction finds any provision of this Note invalid or
unenforceable as to any person or circumstance,such finding shall not render that provision invalid
or unenforceable as to any other persons or circumstances. If feasible,any such offending provision
shall be deemed to be modified to be within the limits of enforceability or validity; provided,
however,in the event the offending provision cannot be so modified,it shall be stricken and all other
provisions of this Note in all respects shall remain valid and enforceable.
REMAINDER INTENTIONALLY LEFT BLANK
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IN WITNESS WHEREOF,the Agency has caused this Note to be executed as of this_
day of ,2011.
Redevelopment Agency of the City of San Bernardino
By:
Interim Executive Director
Attest:
4
By:
City Clerk
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1 RESOLUTION NO.
2 RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF
3 THE CITY OF SAN BERNARDINO APPROVING A CERTAIN HOUSING
CAPITALIZATION FUNDING AGREEMENT (SUB-RECIPIENT
4 AGREEMENT) BY AND BETWEEN THE REDEVELOPMENT AGENCY OF
THE CITY OF SAN BERNARDINO ("AGENCY") AND AFFORDABLE
5 HOUSING SOLUTIONS, INC., A CALIFORNIA NON-PROFIT
6 CORPORATION ("AHS"), INC., RELATING TO THE FINANCING OF
CERTAIN HOUSING PROGRAMS AND ACTIVITIES
7
8 WHEREAS, the City of San Bernardino, California (the "City") is a municipal corporation
9 and charter city, duly organized and existing pursuant to the provisions of the constitution of the
10 State of California; and
11 WHEREAS, the Agency was established by appropriate action of the City, for the purposes
12 of exercising redevelopment powers within the City boundaries through the adoption and approval
13 of various redevelopment project areas that are currently in existence within the City (the "Project
14 Areas") as further described in the applicable redevelopment plans accompanying such Project
15 Areas (the "Redevelopment Plans");and
16 WHEREAS, the Community Development Commission of the City of San Bernardino (the
17 "Commission") acts as the governing body of the Agency for all official actions taken on behalf of
18 the Agency; and
19 WHEREAS, AHS was formed pursuant to the non-profit corporation laws of the State of
20 California and was formed and exists for the purposes of assisting in the implementation of various
21 housing initiatives within the City and to undertake such other activities, programs and projects of
22 the Agency and the City as are then deemed advisable by AHS through its board of directors as the
23 same relate to housing activities; and
Z4 WHEREAS, pursuant to the Community Redevelopment Law (Health & Safety Code
25 Section 33000, et seq.) (the "CRL" or the "Authorizing Provisions"), the Agency may enter into
26 project funding agreements and financing agreements with other public agencies, private entities
27 and non-profit corporations to carry out its affordable housing purposes; and
28
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1 WHEREAS,the Agency receives certain funds annually attributable to the Project Areas and
2 from the Inland Valley Development Agency ("IVDA") which are designated as low and moderate
3 income housing funds pursuant to the CRL which are required to be used solely for the purposes as
4 set forth in the CRL (those low and moderate income housing funds as received from the Project
5 Areas and the IVDA are collectedly referred to herein as the"Low Mod Funds"); and
6 WHEREAS, AHS has requested that the Agency act at this time to assist AHS with the
7 financing of certain housing programs and the implementation of other programs and activities
8 located within the Project Areas and within the City, together with other public infrastructure that is
9 necessary to support the long-term development and redevelopment of housing units located within
10 portions of the City located within the Project Areas, including those public improvements, public
11 infrastructure and other housing developments and activities, programs and projects all as set forth
12 in the current year 2010-2011 Budget of the Agency as indicated on Exhibit "A" (the "Housing
13 Programs, Projects and Activities") of the proposed Housing Capitalization Funding Agreement
14 (Sub-Recipient Agreement) (the "Sub-Recipient Agreement") plus those other housing activities
15 and programs as set forth on the Implementation Plan of the Agency as indicated on Exhibit `B" of
16 the Sub-Recipient Agreement (the "Housing Compliance Plan of the Agency's Implementation
17 Plan") (collectively,the "Housing Related Programs"); and
18 WHEREAS, in addition to the Housing Related Programs, AHS, in furtherance of the
19 redevelopment of various areas of the City and in particular with the Project Areas, requires the
20 Agency to commit to certain levels of additional financing amounts to AHS for the fulfillment of the
21 contractual commitments and other financial obligations as set forth on Exhibit "D" of the Sub-
22 Recipient Agreement(the "Other AHS Contractual Obligations"); and
23 WHEREAS, the Agency has determined to finance the Housing Related Programs and the
24 Other AHS Contractual Obligations by the incurring of the indebtedness as required by the Sub-
25 Recipient Agreement attributable to the Low Mod Funds, including, but not limited, the issuance of
26 one or more direct loan obligations, other privately placed loans with commercial lenders and
27 private parties, the issuance of municipal bonds and the pledge of the tax increment revenues in the
28 form of the Low Mod Funds of the Agency to AHS as set forth in the Sub-Recipient Agreement
2
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1 during the period of time that the Agency is entitled to receive tax increment revenues in the form of
ICI
2 Low Mod Funds pursuant to the Redevelopment Plans for the Project Areas and from the IVDA as
j 3 the financial obligations of the Agency as shall be applicable for the period of time that such
I
{ 4 financial obligations of the Agency to AHS are payable hereunder; and
5 WHEREAS, in order to secure the financial obligations of the Agency to AHS as provided
6 in the Sub-Recipient Agreement, the Agency desires to transfer to AHS the responsibility for the
7 management and maintenance of the Agency real property assets as described on Exhibit "E" of the
8 Sub-Recipient Agreement (the "Agency Real Property Assets"), which shall be operated and
9 managed by AHS with the tax increment revenues in the form of the Low Mod Funds to be
10 provided by the Agency to AHS as further provided in the Sub-Recipient Agreement; and
11 WHEREAS, the Agency and AHS seek to provide through the Sub-Recipient Agreement
12 that in addition to the obligations as incurred pursuant to the Sub-Recipient Agreement, the Agency
13 shall pledge to AHS additional Low Mod Funds as necessary to support the ongoing contractual and
14 budgeted obligations and commitments of AHS as shall be incurred in furtherance of the
15 implementation of the Housing Related Programs and the Other AHS Contractual Obligations and
16 to fund the construction and/or financing of the Housing Related Programs and the Other AHS
17 Contractual Obligations; and
18 WHEREAS, consistent with the AHS obligations incurred pursuant to the Sub-Recipient
19 Agreement and the commitment of the Agency to fulfill its financial commitments to AHS, during
20 the Term of the Sub-Recipient Agreement, the Agency tax increment revenues in the form of the
21 Low Mod Funds available pursuant to the Redevelopment Plans for the Project Areas and from the
22 IVDA shall become revenues attributed to and payable to AHS, and the Agency therein would
23 pledge the tax increment revenues in the form of the Low Mod Fund for the payment and repayment
24 of the obligations to pay for and for the administration and undertaking of the Housing Related
25 Programs, the Other AHS Contractual Obligations and/or the other obligations as incurred pursuant
26 to the Sub-Recipient Agreement; and
27 WHEREAS, the Agency has obtained certain housing funds from the City that were
28 obtained through federal governmental sources for which the Agency and the City entered into one
3
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9
3
1 or more sub-recipient agreements for the manner and use of such City funds by the Agency, and the
2 parties intend that the Sub-Recipient Agreement shall constitute a similar sub-recipient agreement to
3 likewise transfer all obligations and funds of the Agency received and to be received pursuant to the
4 sub-recipient agreements to AHS pursuant to the Sub-Recipient Agreement; and
5 WHEREAS, the Agency has determined that it is in the best interests of the Agency to enter
6 into the Sub-Recipient Agreement to finance said Housing Related Programs and the other
7 obligations as incurred pursuant to the Sub-Recipient Agreement, and thus desire to provide for the
8 terms and conditions of its cooperation in such matters as therein provided.
9 WHEREAS, the Commission has duly considered the terms of such transactions and
10 obligations as contemplated herein and has determined that it is in the best interests of the City and
11 Agency to enter into the Sub-Recipient Agreement t, and thus desire to approve and authorize said
12 Sub-Recipient Agreement.
13 NOW, THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION OF THE
14 CITY OF SAN BERNARDINO DOES HEREBY RESOLVE, DETERMINE AND ORDER AS
15 FOLLOWS:
16 Section 1. Approval of Assignment of other Sub-Recipient Agreements. The Commission
17 hereby approves the transfer and assignment of all additional sub-recipient agreements that are
18 currently in full force and effect by and between the Agency and the City and all federally funded
19 governmental loan programs, governmental funds, availability to acquire housing units upon a
20 federal government foreclosure of an insured mortgage loan including other foreclosure properties
21 and use of funds such as the Neighborhood Stabilization Program ("NSP") and the HOME
22 Investment Partnership Program ("HOME Program") in their various series of fundings and the
23 execution of any and all additional documents as may be necessary, without any further
24 amendments or modifications to the Sub-Recipient Agreement, to implement such transfer and
25 assignment.
26 Section 2. Approval of Pledge of Low and Moderate Income Housing Funds. The
27 Commission hereby approves the Agency's pledge to AHS of all tax increment revenues in the form
28 of the Low Mod Funds available to the Agency from the Redevelopment Plans for the Project Areas
4
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1 and from the IVDA during the Term of the Sub-Recipient Agreement, not to exceed $375,000,000
2 in the aggregate principal amount plus interest payable thereon, for the payments as required for
3 AHS to fully perform each and every financial and contractual obligation as set forth in the Sub-
4 Recipient Agreement and as required by the IVDA.
5 Section 3. Approval of Responsibility for Compliance. The Commission hereby approves
6 the Agency maintaining responsibility for compliance with all requirements imposed by the
7 Redevelopment Plans and for the timely payment of funds and the reporting of such uses pursuant to
8 the CRL.
9 Section 4. Approval of Terms and Provisions. The Commission hereby approves the terms
10 and provisions of the Sub-Recipient Agreement and the totality of the Agency's obligations
11 thereunder.
12 Section 5. Approval of Final Form of Sub-Recipient Agreement. The Commission hereby
13 approves the form of the Sub-Recipient Agreement in the form on file with the Secretary, together
14 with any changes therein or additions thereto as may be approved by the Chair or the Executive
15 Director as such changes may be approved by Agency Counsel and the City Attorney. The
16 Commission hereby further authorizes and directs the conversion of the form of the Sub-Recipient
17 Agreement into the final form thereof, together with such changes or modifications as deemed
18 necessary or desirable by the Chair or the Executive Director upon the recommendation of Agency
19 Counsel. The Chair or the Executive Director or such other authorized officer of the Commission is
20 hereby authorized and directed to execute and deliver, and the Secretary or Assistant Secretary is
21 hereby authorized and directed to attest to, the final form of the Sub-Recipient Agreement.
22 Section 6. Official Action. The Chair, Vice-Chair, Secretary, Assistant Secretary,
23 Executive Director, Agency Counsel and any and all other members and officers of the Agency are
24 hereby authorized and directed, for and in the name and on behalf of the Agency, to do any and all
25 things and take any and all actions, including execution and delivery of any and all assignments,
26 certificates, requisitions, agreements, notices, consents, instruments of conveyance, warrants and
27 other documents, which they, or any of them, may deem necessary or advisable in order to fulfill the
28 obligations of the Agency under the Sub-Recipient Agreement. Whenever in this Resolution any
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1 officer of the Agency is authorized to execute or countersign any document or take any action, such
2 execution, countersigning or action may be taken on behalf of such officer by any person designated
3 by such officer to act on his or her behalf in the case such officer shall be absent or unavailable.
4 Section 7. Effective Date. This Resolution shall take effect from and after its date of
5 adoption by this Commission.
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1 RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF
THE CITY OF SAN BERNARDINO APPROVING A CERTAIN HOUSING
2 CAPITALIZATION FUNDING AGREEMENT (SUB-RECIPIENT
3 AGREEMENT)BY AND BETWEEN THE REDEVELOPMENT AGENCY OF
THE CITY OF SAN BERNARDINO ("AGENCY") AND AFFORDABLE
' 4 HOUSING SOLUTIONS, INC., A CALIFORNIA NON-PROFIT
CORPORATION ("AHS"), INC., RELATING TO THE FINANCING OF
5 CERTAIN HOUSING PROGRAMS AND ACTIVITIES
s
6 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Community
7 Development Commission of the City of San Bernardino at a meeting
5
8 thereof,held on the day of , 2011,by the following vote to wit:
9 Commission Members: Ayes Nays Abstain Absent
10 MARQUEZ
11 VACANT
12 BRINKER
13 SHORETT
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14 KELLEY
15 JOHNSON
l 16 MC CAMMACK
17
18 Secretary
19
The foregoing Resolution is hereby approved this day of , 2011.
20
21
22 Patrick J. Morns, Chairperson
Community Development Commission
23 of the City of San Bernardino
24 Approved as to Form:
25
26 By'
Agency un
27
28
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HOUSING CAPITALIZATION FUNDING AGREEMENT
(SUB-RECIPIENT AGREEMENT)
by and between
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
and
AFFORDABLE HOUSING SOLUTIONS,INC.,A CALIFORNIA NON-PROFIT
CORPORATION
Relating to the
$375,000,000 PRINCIPAL AMOUNT
REDEVELOPMENT AGENCY OF THE
CITY OF SAN BERNARDINO
LOW AND MODERATE INCOME
HOUSING FUND PROJECTS
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HOUSING CAPITALIZATION FUNDING AGREEMENT
(SUB-RECIPIENT AGREEMENT)
THIS HOUSING CAPITALIZATION FUNDING AGREEMENT (SUB—RECIPIENT
AGREEMENT) is made and entered into as of March _, 2011 (this "Funding Agreement"), by and
between the Redevelopment Agency of the City of San Bernardino, a public body, corporate and
politic existing under the laws of the State of California (the "Agency") and Affordable Housing
Solutions, Inc., a California non-profit corporation("AHS"), as follows.
WITNESSETH:
WHEREAS, the Agency was established by appropriate action of the City of San Bernardino
(the "City"), for the purposes of exercising redevelopment powers within the City boundaries through
the adoption and approval of various redevelopment project areas that are currently in existence within
the City (the "Project Areas") as further described in the applicable redevelopment plans
accompanying such Project Areas(the "Redevelopment Plans"); and
WHEREAS, the Community Development Commission of the City of San Bernardino (the
"Commission") acts as the governing body of the Agency for all official actions taken on behalf of the
Agency; and
WHEREAS, AHS was formed pursuant to the non-profit corporation laws of the State of
California and was formed and exists for the purposes of assisting in the implementation of various
housing initiatives within the City and to undertake such other activities, programs and projects of the
Agency and the City as are then deemed advisable by AHS through its board of directors as the same
relate to housing activities; and
WHEREAS, pursuant to the Community Redevelopment Law (Health & Safety Code Section
33000, et seq.) (the "CRL" or the "Authorizing Provisions"), the Agency may enter into project
funding agreements and financing agreements with other public agencies, private entities and non-
profit corporations to carry out its affordable housing purposes; and
WHEREAS, the Agency receives certain funds annually attributable to the Project Areas and
from the Inland Valley Development Agency ("IVDA") which are designated as low and moderate
income housing funds pursuant to the CRL which are required to be used solely for the purposes as set
forth in the CRL (those low and moderate income housing funds as received from the Project Areas
and the IVDA are collectedly referred to herein as the"Low Mod Funds"); and
WHEREAS, AHS has requested that the Agency act at this time to assist AHS with the
financing of certain housing programs and the implementation of other programs and activities located
within the Project Areas and within the City, together with other public infrastructure that is necessary
to support the long-term development and redevelopment of housing units located within portions of
the City located within the Project Areas, including those public improvements, public infrastructure
and other housing developments and activities, programs and projects all as set forth in the current year
2010-2011 Budget of the Agency as indicated on Exhibit "A" (the "Housing Programs, Projects and
Activities") as attached hereto and incorporated herein by reference plus those other housing activities
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and programs as set forth on the Implementation Plan of the Agency as indicated on Exhibit "B" (the
"Housing Compliance Plan of the Agency's Implementation Plan")as attached hereto and incorporated
herein by reference(collectively,the"Housing Related Programs"); and
WHEREAS, in addition to the Housing Related Programs, AHS, in furtherance of the redevelopment
of various areas of the City and in particular with the Project Areas, requires the Agency to commit to
certain levels of additional financing amounts to AHS for the fulfillment of the contractual
commitments and other financial obligations as set forth on Exhibit "D" (the "Additional Ongoing
Agency Contractual Obligations to be undertaken by AHS") as attached hereto and incorporated herein
by reference; and
WHEREAS, the Agency has determined to finance the Housing Related Programs and the
Other AHS Contractual Obligations by the incurring of the indebtedness as required by this Funding
Agreement attributable to the Low Mod Funds, including, but not limited, the issuance of one or more
direct loan obligations, other privately placed loans with commercial lenders and private parties, the
issuance of municipal bonds and the pledge of the tax increment revenues in the form of the Low Mod
Funds of the Agency to AHS as set forth in this Funding Agreement during the period of time that the
Agency is entitled to receive tax increment revenues in the form of Low Mod Funds pursuant to the
`a Redevelopment Plans for the Project Areas and from the IVDA as the financial obligations of the
Agency as shall be applicable for the period of time that such financial obligations of the Agency to
AHS are payable hereunder; and
WHEREAS, in order to secure the financial obligations of the Agency to AHS as provided in
this Funding Agreement, the Agency desires to transfer to AHS the responsibility for the management
and maintenance of the Agency real property assets as described on Exhibit "E" (the "Agency Real
Property Assets") as attached hereto and incorporated herein by reference which shall be operated and
managed by AHS with the tax increment revenues in the form of the Low Mod Funds to be provided
by the Agency to AHS as further provided herein; and
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WHEREAS, the Agency and AHS seek to provide through this Funding Agreement that in
addition to the obligations as incurred pursuant to this Funding Agreement, the Agency shall pledge to
AHS additional Low Mod Funds as necessary to support the ongoing contractual and budgeted
obligations and commitments of AHS as shall be incurred in furtherance of the implementation of the
Housing Related Programs and the Other AHS Contractual Obligations and to fund the construction
{ and/or financing of the Housing Related Programs and the Other AHS Contractual Obligations as
further identified on Exhibit"C"(the "Housing Related Projects/Programs Capital Needs Analysis") as
attached hereto and incorporated herein by reference; and
WHEREAS, consistent with the AHS obligations incurred pursuant to this Funding Agreement
and the commitment of the Agency to fulfill its financial commitments to AHS, during the Term (as
defined in Section 1.03) of this Funding Agreement,the Agency tax increment revenues in the form of
the Low Mod Funds available pursuant to the Redevelopment Plans for the Project Areas and from the
IVDA shall become revenues attributed to and payable to AHS, and the Agency herein pledges the tax
increment revenues in the form of the Low Mod Fund for the payment and repayment of the
obligations to pay for and for the administration and undertaking of the Housing Related Programs, the
Other AHS Contractual Obligations and/or the other obligations as incurred pursuant to this Funding
Agreement; and
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WHEREAS, the Agency has obtained certain housing funds from the City that were obtained
through federal governmental sources for which the Agency and the City entered into one or more
Sub-Recipient Agreements for the manner and use of such City funds by the Agency, and the parties
intend that this Funding Agreement shall similarly constitute a sub-recipient agreement to likewise
transfer all obligations and funds of the Agency received and to be received pursuant to the Sub-
Recipient Agreements to AHS pursuant to this Funding Agreement; and
WHEREAS,the Agency and AHS have determined that it is in the best interests of the Agency
and AHS to enter into this Funding Agreement to finance said Housing Related Programs and the other
obligations as incurred pursuant to this Funding Agreement, and thus desire to provide for the terms
and conditions of their cooperation in such matters as herein provided.
NOW THEREFORE, the parties to this Funding Agreement agree, as follows.
ARTICLE I
DEFINITIONS; TERM OF FUNDING AGREEMENT
Section 1.01. Recitals. The Recitals set out above are true and correct.
Section 1.02. Definitions. Unless the context otherwise requires, capitalized terms used
herein and not defined herein shall have the meanings as generally ascribed to such terms.
Section 1.03. Assignment. This Funding Agreement shall be subject to assignment at the
written direction of the Commission to AHS for any assignment of this Funding Agreement that is
authorized by the Commission to be made to any duly established joint powers authority as so directed
by the Commission in writing to AHS pursuant to written notice delivered by the Commission to AHS.
Upon receipt of any such written notice of assignment from the Commission specifying the assignment
of this Funding Agreement to such joint powers authority, AHS shall immediately take all necessary
actions to timely accomplish the assignment to the joint powers authority as may then be required in
accordance with such direction of the Commission.
Section 1.04. Bylaws. The Commission has authorized the execution of this Funding
Agreement with AHS based upon the corporate bylaws of AHS (the "Bylaws") as are in existence as
of the date of this Funding Agreement which specify the manner and term of the appointment of
directors to the corporate board of AHS and which, in additional to other matters, requires AHS to
comply with certain requirements that are applicable to governmental entities within the State. No
amendment, change or other modification shall be made to the Bylaws without the prior written
approval of the Commission which approval may be granted or withheld at the sole and absolute
discretion of the Commission.
Section 1.05. Maintenance of Tax-Exempt Status. AHS covenants and agrees to maintain
the current tax status of AHS for federal income tax purposes as an exempt organization organized as a
California non-profit corporation and pursuant to Internal Revenue Code Section 501(c)(3), and AHS
shall cause to be prepared and timely transmitted all necessary filings with State of California and the
Internal Revenue Service to maintain such tax-exempt status as a California non-profit corporation.
AHS further covenants and agrees not to enter into any transaction or to undertake any other type of
activity that would cause AHS to become a taxable entity, and all revenues, including but not limited
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to the tax increment revenues to be received by AHS pursuant to this Funding Agreement, shall be
used strictly in conformance with this Funding Agreement and in a manner so as not to cause any
income or funds received by AHS to be determined to be "unrelated business income" that would in
any manner jeopardize the tax-exempt status of AHS.
Section 1.06. Term. This Funding Agreement shall remain in full force and effect so long as
the obligations incurred by the Agency to AHS remain outstanding and unpaid, but in no event later
than the last date that the Agency is entitled to receive the tax increment revenues in the form of the
Low Mod Funds pursuant to the Redevelopment Plans for the Project Areas and from the IVDA for the
repayment of indebtedness and other financial and contractual obligations.
Section 1.07. Reporting to Commission. AHS shall provide written reports on a quarterly
basis to the Commission on behalf of the Agency setting forth for the applicable reporting period all
expenditures of funds and all purchases, rehabilitation and sales of housing units and the execution by
AHS of any and all other agreements entered into by AHS in furtherance of this Funding Agreement
and the use of the Low and Mod Fund. An annual budget shall be prepared by AHS and submitted to
the Commission for review and comment in the manner and by the dates as provided in Section 2.03(c)
hereof. AHS shall additionally prepare and submit all reports as may be required by the State pursuant
to the CRL or pursuant to other applicable State laws with copies of all such reports submitted to the
Commission upon filing of such reports.
Section 1.08. Cooperation with City Housing Authority. AHS recognizes that the San
Bernardino City Housing Authority (the "City Housing Authority"has been formed and is presently in
existence with the City of San Bernardino. To the extent feasible, AHS shall coordinate its housing
related activities in a manner consistent with the goals and objectives of the City Housing Authority
and shall endeavor to undertake joint housing projects or oversee any and all housing activities deemed
appropriate by the City Housing Authority to the extent such may be financially feasible under the
circumstances.
Section 1.09. Assignment of other Sub-Recipient Agreements. By the execution and
delivery of this Funding Agreement,the parties intend to transfer and assign to AHS all additional sub-
recipient agreements that may currently be in full force and effect by and between the Agency and the
City for any and all federally funded governmental loan programs, governmental funds, availability to
acquire housing units upon a federal government foreclosure of an insured mortgage loan including
other foreclosure properties and use of funds such as the Neighborhood Stabilization Program ("NSP")
and the HOME Investment Partnership Program ("HOME Program") in their various series of
fundings. The parties agree to execute all such additional documents as may be necessary without any
further amendments or modifications to this Funding Agreement to implement and carry out the full
intent of this Section 1.09.
ARTICLE II
PAYMENT OF LOW MOD FUND OF AGENCY TO AHS
Section 2.01. Transfer of Powers.
(a) In order to carry out the Housing Related Projects and the Other AHS Contractual
Obligations, AHS shall assume all performance obligations with respect thereof and the Agency
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hereby pledges to AHS all tax increment revenues in the form of the Low Mod Funds available to the
Agency from the Redevelopment Plans for the Project Areas and from the IVDA during the Term of
this Funding Agreement for the payments as required for AHS to fully perform each and every
financial and contractual obligation as set forth on Exhibits "A", `B", "C", "D" and "E" as to the
Redevelopment Plans for the Project Areas and as required by the IVDA. The Agency shall be
responsible for compliance with all requirements imposed by the Redevelopment Plans and for the
timely payment of funds and the reporting of such uses pursuant to the CRL, and AHS shall be
responsible for all compliance with respect to the requirements as imposed pursuant to California law
for the use of the Low Mod Funds with regard to the implementation and undertaking of the Housing
Related Programs and the Other AHS Contractual Obligations.
(b) AHS shall use and apply the tax increment revenues as pledged pursuant to this Funding
Agreement to undertake, manage, administer and implement all aspects of the Redevelopment Related
Improvements and the Other AHS Contractual Obligations, specifically including,but not limited to:
1. the design, construction and implementation of the Housing Related Programs as set
forth in the 2010-2011 Budget of the Agency as indicated on Exhibit"A";
2. undertaking of the Housing Compliance Plan of the Agency's Implementation Plan as
set forth on Exhibit`B";
3. undertaking the housing related projects and programs identified in the Capital Needs
Analysis as set forth on Exhibit"C",
4. undertaking of the Other AHS Contractual Obligations as set forth on Exhibit"D";
5. managing and maintaining the Agency Real Property Housing Assets as set forth on
Exhibit"E".
(c) The Agency Real Property Housing Assets shall not be transferred in fee by the Agency
to AHS except upon the subsequent approval of the Commission, the Council and AHS as to any such
subsequent transfer of fee title. AHS shall be responsible for the management and property
maintenance of the Agency Real Property Housing Assets for such period of time that the Agency Real
Property Housing Assets continue to be owned in fee title by the Agency. The obligation of the
Agency to transfer the management and property maintenance for the Agency Real Property Housing
Assets shall be a binding and enforceable contractual obligation upon the Agency from and after the
date of this Funding Agreement, and any failure of the Agency to remit the necessary tax increment
revenues to provide for the payment of such management and property maintenance expenses for the
Agency Real Property Housing Assets as required herein shall be an Event of Default pursuant to
Section 3.01 hereof.
Section 2.02. Irrevocable Pledge of Low Mod Funds. Pursuant to and in consideration of
the assumption of the obligations by AHS as set forth in Section 2.01 above, commencing as of the
date of this Funding Agreement during the 2010-2011 fiscal year and for each fiscal year thereafter
during the Term, those tax increment revenues derived by the Agency from the Redevelopment Plans
for the Project Areas and from the IVDA as Low Mod Funds are hereby irrevocably pledged to AHS
pursuant to this Funding Agreement on a basis subordinate to all presently authorized and issued, and
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future authorized and issued debt obligations of the Agency that are sold through municipal
underwriting means or debt obligations with third party commercial lenders, including,but not limited
to those amounts that are in excess of the tax increment revenues budgeted to be expended by the
Agency for the current 2010-2011 fiscal year of the Agency and for each fiscal year thereafter during
the Tenn. Such pledge of the Low Mod Funds of the Agency and the IVDA to AHS shall be
irrevocable during the Term of this Funding Agreement. The maximum dollar amount of the tax
increment revenues pledged by the Agency to AHS pursuant to this Funding Agreement for the use
and pledge of Low Mod Funds for debt and other contractual obligations that are intended to be issued
or incurred by AHS on and after the date of this Funding Agreement shall not exceed $375,000,000 in
the aggregate principal amount plus interest payable thereon.
Section 2.03. Use of Tax Increment Revenues.
(a) Throughout the Term of this Funding Agreement, AHS hereby agrees that the Low Mod
Funds as pledged by the Agency pursuant to Section 2.02 above shall be applied for the payment
and/or repayment of the obligations incurred by AHS pursuant to Section 2.01 above.
(b) AHS shall take all steps necessary to utilize the Low Mod Funds to pay principal and
interest due on all debt and other contractual obligations of AHS as specified in this Funding
Agreement. Such payments shall be absolute obligations of AHS and shall not be subject to any
deduction or offset of any kind whatsoever.
(c) AHS shall submit an annual proposed budget for each fiscal year to the Commission
and the Mayor and Common Council of the City of San Bernardino (the "Council") for review and
concurrence at least sixty(60) calendar days prior to any final approval of such annual budget by AHS.
Any budget as thereafter approved by AHS shall be modified to include the comments as approved by
the Commission and the Council within such budget and as to such items that cannot be agreed upon
among the Commission, the Council and AHS, those particular items shall be deleted from the budget
as may thereafter be approved by AHS.
Section 2.04. Use of Excess Low Mod Funds. During the Tenn of this Funding Agreement
and to the extent that there are excess tax increment revenues generated and received by AHS as Low
Mod Funds ("Excess Tax Increment Revenues") after payment and/or repayment of the various
obligations incurred by AHS pursuant to Section 2.01 above, such Excess Tax Increment Revenues
shall be used by AHS for other qualifying housing projects and housing related programs and activities
within the Project Areas and the City. In addition to the rights of the Commission and the Council to
approve the annual budgets as specified in Section 2.03(c) above, the Commission and the Council
shall also have the right to approve the sale of any real property that may hereafter be transferred to
AHS pursuant to this Funding Agreement, including the price, terms and other conditions to be
imposed upon the sale of any such real property that is intended to be transferred to any third party,
whether a private entity or governmental agency. All agreements entered into by and between AHS
and any housing project developer or landowner seeking to obtain any form of redevelopment housing
assistance or other form of participation agreement, reimbursement agreement other housing project
related agreement from AHS shall be included in the quarterly reports as required by Section 1.07
hereof.
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ARTICLE III
EVENTS OF DEFAULT; RIGHTS AND REMEDIES
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Section 3.01. Each of the following occurrences shall constitute an "Event of Default" under
this Funding Agreement:
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! (a) Failure to Make Payments When Due. Failure by either party to pay any amount due on
or before the date that such payment is due and payable pursuant to this Funding Agreement.
(b) Other Defaults. Should AHS fail duly and punctually to perform or observe any
agreement, covenant or obligation binding on AHS under this Funding Agreement which could lead to
an Event of Default, such failure shall continue for thirty (30) calendar days after the earlier of(i) the
date as of which AHS had actual knowledge of such failure, and (ii) the date on which the Agency
gives AHS notice of such failure.
(c) Breach of Representation or Warranty. Should any representation or warranty made or
deemed made by one party to the other party herein be false or misleading in any material respect on
the date as of which made which could lead to an Event of Default which is not remedied to the
satisfaction of the non-defaulting party within ninety (90) calendar days following receipt by the
defaulting party of written notice of such inaccuracy.
(d) Failure to Assign. Failure of AHS to comply with the written notice of the Commission
for the assignment of this Funding Agreement to a joint powers authority as may be directed by the
Commission to AHS pursuant to Section 1.03 shall be an Event of Default pursuant to this Section
3.01(e), and the Commission may thereupon terminate this Funding Agreement immediately upon
receipt of such notice of tennination by AHS without cure and without any prior notice.
(e) Amendment to AHS Bylaws. Any amendments to the adopted Bylaws of AHS that
amend, change or otherwise modify the form of said Bylaws as were in existence as of the date of this
Funding Agreement without the prior written approval of the Commission as required by Section 1.04
shall be an Event of Default pursuant to this Funding Agreement. Upon the occurrence of any such
Event of Default pursuant to this Section 3.01(d) for failure of AHS to comply with Section 1.04, the
Commission may thereupon terminate this Funding Agreement immediately upon receipt of such
notice of termination by AHS without cure and without any prior notice.
(f) Failure to Maintain Tax-Exempt Status. Any failure of AHS to maintain the current tax-
exempt status of AHS as an Internal Revenue Code Section 501(c)(3) non-profit corporation as
required by Section 1.05 shall be an Event of Default under this Section 3.01(f). Upon the occurrence
of any such Event of Default pursuant to this Section 3.01(f) for failure of AHS to comply with Section
1.05, the Commission may thereupon terminate this Funding Agreement immediately upon receipt of
such notice of termination by AHS without cure and without any prior notice.
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Section 3.02. Rights and Remedies.
(a) Acceleration, Etc. Upon the occurrence of any Event of Default by the Agency to remit
the tax increment revenues to AHS, the unpaid principal amount of any and all Low Mod Funds
3 payable pursuant to this Funding Agreement shall automatically become immediately due and payable
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for each fiscal year in which such Event of Default shall have occurred. After the expiration of all
cure periods by the Agency, thereafter AHS may exercise any or all rights and remedies under this
Funding Agreement or otherwise pursuant to applicable law.
(b) Waiver of Demand. Demand, presentment, protest and notice of nonpayment are
hereby waived by AHS. AHS also waives, to the extent permitted by law, the benefit of all valuation,
appraisal and exemption laws.
(c) Parties to Institute Proceedings. Upon a default by either party,the non-defaulting party
s may institute any proceeding at law or in equity to enforce the obligations of the other party under this
Funding Agreement and/or any covenants and obligations of the other party contained in this Funding
Agreement.
(d) Waivers, Amendments and Remedies. No delay or omission of the either party to
exercise any right under this Funding Agreement shall impair such right or be construed to be a waiver
of any Event of Default or an acquiescence therein, and any single or partial exercise of any such right
shall not preclude other or further exercise thereof or the exercise of any other right, and no waiver,
amendment or other variation of the terms, conditions or provisions of this Funding Agreement
whatsoever shall be valid unless in a writing signed by the other party, and then only to the extent in
such writing specifically set forth. All remedies contained in this Funding Agreement or by law
afforded shall be cumulative and all shall be available to the parties until the obligations have been
paid in full and this Funding Agreement has been terminated or until the expiration of the Term of this
Funding Agreement.
ARTICLE IV
MISCELLANEOUS
Section 4.01. Amendment. The provisions of this Funding Agreement may be amended only
upon the written approval of the parties hereto which approval shall be granted at the absolute and sole
discretion of each party.
Section 4.02. Beneficiaries of Funding Agreement. To the extent applicable, the parties
identified in the Housing Related Programs and the Other AHS Contractual Obligations are expressly
recognized as a third party beneficiary hereto. Nothing in this Funding Agreement, expressed or
implied, is intended to give to any person, other than AHS and the Agency, as parties hereto, and those
parties identified in the Housing Related Programs and the Other AHS Contractual Obligations, all as
third party beneficiaries hereof, any right, remedy or claim under or by reason of this Funding
Agreement. Any covenants, stipulations, promises or agreements in this Funding Agreement
contained by and on behalf of AHS and the Agency or any member, officer or employee thereof shall
be for the sole and exclusive benefit of AHS and the Agency as parties hereto and the parties identified
in the Housing Related Programs and the Other AHS Contractual Obligations as third party
beneficiaries hereof.
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? Section 4.03. No Personal Liability. No member, officer or employee of AHS or the Agency
shall be individually or personally liable for the payment of any amounts of the tax increment revenues
a as pledged to AHS by the Agency pursuant to this Funding Agreement; but nothing herein contained
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shall relieve any member, officer or employee of AHS and the Agency from the performance of any
a
official duty provided by law.
Section 4.04. Partial Invalidity. If any one or more of the agreements or covenants or
0 portions thereof provided in this Funding Agreement to be performed on the part of AHS or the
Agency should be contrary to law, then such agreement or agreements, such covenant or covenants, or
such portions thereof, shall be null and void and shall be deemed separable from the remaining
agreements and covenants or portions thereof.
Section 4.05. Notices and Delivery. Any consent, notice or other communication herein
required or permitted to be given shall be in writing and may be personally served, telecopied or sent
a by courier service or United States mail and shall be deemed to have been given when delivered in
person or by courier service, upon receipt of a telecopy(or on the next business day if such telecopy is
received on a non-business day or after 5:00 p.m. (at the office of the recipient) on a business day) or
four (4) business days after deposit in the United States mail (registered or certified, with postage
prepaid and properly addressed). Any party delivering a communication by telecopy shall also send a
copy thereof by one of the other means provided in this Section 4.05. For the purposes hereof the
addresses of the parties hereto (until notice of a change thereof is delivered as provided in this Section
4.05) shall be as set forth in the official business addresses of each party as of the date of this Funding
Agreement and at such other address as may be designated by such party in a written notice to all of
the other party.
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Section 4.06. Survival of Warranties and Agreements. All agreements, representations,
warranties and indemnities made or given herein shall survive the execution and delivery of this
Funding Agreement and the making, repayment and fulfillment of the obligations of the parties as
incurred in this Funding Agreement.
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Section 4.07. Severability. In case any provision in or obligation under this Funding
Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions or obligations, or of such provision or obligation in any
other jurisdiction, shall not in any way be affected or impaired thereby.
Section 4.08. Headings. Section headings in this Funding Agreement are included herein for
convenience of reference only and shall not constitute a part of this Funding Agreement for any other
purpose or be given any substantive effect.
Section 4.09. Governing Law; Waiver. This Funding Agreement shall be governed by,
and shall be construed and enforce in accordance with,the laws of the State of California.
Section 4.10. Successors and Assigns. This Funding Agreement shall be binding upon the
parties hereto and their respective successors and assigns. The terms and provisions of this Funding
Agreement shall inure to the benefit of any assignee or transferee of the tax increment revenues or any
portion thereof, and in the event of any permitted such transfer or assignment, the rights and privileges
herein conferred upon the applicable party shall automatically extend to and be vested in such
transferee or assignee, all subject to the terms and conditions hereof.
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Section 4.11. Performance of Obligations. AHS agrees that the Agency may, but shall have
no obligation to, make any payment or perform any act required of AHS under any of the obligations
as incurred by AHS pursuant to this Funding Agreement or take any other action which the Agency in
its discretion deems necessary or desirable to protect or preserve the pledge of the tax increment
revenues pursuant to this Funding Agreement.
! Section 4.12. Construction. The parties acknowledge that each party has reviewed and
revised this Funding Agreement and that the normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of
this Funding Agreement or any amendments or exhibits hereto.
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Section 4.13. Entire Agreement. This Funding Agreement embodies the entire agreement
between the parties and supersedes all prior agreements, written and oral, relating to the subject matter
hereof.
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Section 4.14. Execution in Several Counterparts. This Funding Agreement may be
executed in any number of counterparts and each of such counterparts shall for all purposes be deemed
to be an original; and all such counterparts, or as many of them as AHS and the Agency shall preserve
undestroyed, shall together constitute but one and the same instrument.
(Wool
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IN WITNESS WHEREOF, the Redevelopment Agency of the City of San Bernardino and
Affordable Housing Solutions, Inc., a California non-profit corporation, have caused this Housing
Capitalization Funding Agreement to be signed in their name by their respective Executive Director
and President all as of the date and year first above written.
AGENCY
Redevelopment Agency of the City of San Bernardino
By:
Interim Executive Director
ATTEST:
By:
Secretary
APPROVED AS TO FORM:
By.
Agency Counsel
AHS
Affordable Housing Solutions, Inc., a California non-
profit corporation
By:
Chief Executive Officer
ATTEST:
By:
Secretary
11
P:\Agendas\Comm Dev Commission2011 CDC hems\Special Joint Workshop\03-03-11 Agency&AHS-Housing Capitalization Funding Agreement.doa
EXHIBIT"A"
Housing Related Programs
(From Approved 2010-2011 Budget)
12
P:Wgendas\Comm Dev Commission 2011 CDC Items\Special Joint Workshop\03-0 3-1 l Agency&AHS-Housing Capitalization Funding Agreement.docx
Line 7201
Page 1 of 1
Expenditure Detail-Capital Expenses
Development Capital Expenses Housing-Budget Line 7201
Project Area Description of Activity Amount
Low-moderate Carry-Over:
A. SF Beautification Grant 1,000,000
B. City Wide HAP 2,000,000
C. 49th Street Telacu property acquisition/relocation/demo 500,000
D. 5th and Merdian Project 2,000,000
E. Annual Notice of Funds Available-2009/10 6,000,000
F. Senior& Disabled minor repairs 136,000
G. Housing Programs/BP carry-over funds*** 4,281,300
15,917,300
New Projects:
A. Housing Prog funds (using carry-over)*** (4,281,300)
B. Utility Rebate Program Low Income 75,000
C. Residential revitalization opportunities 3,000,000
D. Highland and Medical Center Senior Housing 3,950,000
E. Annual Notice of Funds Available-2010/11 6,000,000
F. Rehabilitation Loan Program- HSC Violations 500,000
25,161,000
ESGP A. Grant for 2009-10 for Programs as previously approved 158,200
HPRP A. Home Prevention Rehabilitation Program 1,338,000
HOME A. Grant for 2009-10 for Programs as previously approved 1,598,400
B. Carry-over from prior years-allocated 2,601,000
.! C. Mobile Home Grant Program Administration 200,000
D. Home Buyer Education and Training 80,000
NIP A. Neighborhood Initiative Program 140,000
NSP A. Neighborhood Stabilization Program 4,295,000
Project Area Recap:
Low-moderate 25,161,000
ESGP 158,200
HPRP 1,338,000
HOME 4,479,400
NIP 140,000
NSP 4,295,000
Total Line 7201 35,571,600
w.
Page 44
T,
EXHIBIT"B"
Housing Compliance Plan of the Agency's Implementation Plan
3
1
13
P:\Agendas\Comm Dev Commissio&2011 CDC ltemsSpecial Joint Workshop\03-03-1 I Agency&AHS-Housing Capitalization Funding Agreement.docx
San Bernardino Redevelopment Agency
SECTION III: HOUSING COMPLIANCE PLAN
64
Bernardino /' 11
INTRODUCTION
Overview of the Housing Compliance Plan
The CRL requires agencies to adopt an affordable housing compliance plan that identifies how the
Agency will achieve the affordable housing production requirements for each Project Area. The
compliance plan must be consistent with the jurisdiction's housing element and must also be reviewed
and, if necessary, amended at least every five years in conjunction with the cyclical preparation of the
housing element or the agency's five year implementation plan. This section of the Implementation
Plan addresses specific requirements in the CRL with respect to prior affordable housing activities and
the anticipated housing program for the current ten-year planning period (fiscal years 2004-05 through
2013-14) ("Compliance Period"). This Housing Compliance Plan amends the Affordable Housing
Compliance Objectives adopted on January 22, 2007 and presents an updated affordable housing plan
through the duration of the Compliance Period. Additionally, the Housing Compliance Plan details the
Agency's Housing Goals and proposed work program during the Compliance Period and evaluates the
Agency's affordable housing requirements for the next ten years (FY 2009-10 to 2018-19) and the life
of the Redevelopment Plans.
The Agency is required to allocate 20% of the tax increment revenue it receives from the Project Areas
to increase and improve housing affordable to very low, low, and moderate income households. The
Housing Fund has been established for this revenue. The Agency has the authority to expend the
Housing Fund either inside or outside the Project Areas and aggregate its housing production activities
among all Project Areas to more effectively meet housing program objectives. This includes the area
contained within the Inland Valley Development Agency ("IVDA") Redevelopment Project Area located
within the City of San Bernardino jurisdictional boundaries. The Agency, with the adoption of its 2004
Housing Compliance Plan, has taken action to aggregate its new and substantially rehabilitated units
among all Project Areas. The Agency will consider similar action at the Public Hearing to consider the
adoption of this Implementation Plan. It is anticipated that, based upon the evidence provided, the
Agency will find that the aggregation of its affordable housing obligations among its Project Areas is of
benefit to the Project Areas and the community, and that such aggregation will not cause or exacerbate
racial, ethnic, or economic segregation.
Redevelopment agencies use implementation plans to establish ten-year objectives to achieve
compliance with the CRL in its affordable housing programs. These generally fall into three categories:
• Housing Production — Based on the number of housing units constructed or substantially
rehabilitated over a ten-year period, a redevelopment agency must ensure that a percentage of
these units are affordable to low and moderate income households.
• Replacement Housing — Another legal obligation of redevelopment agencies is to ensure that any
housing units destroyed or removed as a result of an agency redevelopment project are replaced
within four years.
• Expenditures by Household Types — Redevelopment agencies must meet specific requirements on
the amount of Housing Funds spent over a ten-year period on housing affordable to very low income
households, low income households, and housing for residents under the age of 65.
3
s 65
San Bernardino Redevelopment
ye,11,1111pl(,111t,11t,1tio1, 11hui:FY 2009-10 through 2013-11
IVDA PROJECT AREA AND HOUSING POLICY WITH THE AGENCY
IVDA is a joint powers authority comprised of the Cities of Colton, Loma Linda, Redlands, and San
Bernardino, and the County of San Bernardino (the "County"). The IVDA Project Area was adopted by
ordinance of the IVDA on July 18, 1990. The IVDA Project Area covers approximately 14,000 acres
within approximately 22,400 (assessor's) parcels. The majority of land within the IVDA Project Area
falls within the City and County unincorporated territory, with somewhat smaller areas falling within the
Cities of Colton, Loma Linda, and Redlands. The IVDA was formed in response to the federal
government's decision to close the Norton Air Force Base. Under the CRL, specific authority was
granted to these jurisdictions to form a redevelopment project area within three miles of the territory
surrounding, adjacent to, or in proximity to the Norton Air Force Base. Base closures have a significant
impact on the economy of the surrounding area and authority was granted to the IVDA and participating
agencies to revitalize this area.
The IVDA and participating jurisdictions have entered into an agreement whereby said jurisdictions
have agreed to administer IVDA's Low and Moderate Income Housing Funds to increase and improve
the communities' supply of housing available at affordable housing costs to persons and families of
very low, low, and moderate income households within their respective jurisdictional boundaries.
Pursuant to the current IVDA affordable housing program, 20% housing set-aside funds are transferred
by the IVDA to each participating jurisdiction which in turn use these funds for specific affordable
housing development activities either within the portion of the IVDA Project Area located within their
jurisdictional boundaries or elsewhere in the territorial jurisdiction of the participating jurisdiction. Each
participating jurisdiction provides the IVDA with an annual written report on the member's use of such
affordable housing funds.
Under the provisions of CRL Section 33413(b)(2)(ii), when a redevelopment agency produces an
j - affordable housing unit outside its project area, an agency may only claim a 50% °inclusionary housing
credit" for such a housing unit. On September 14, 2005 the IVDA adopted Resolution No. 2005-08
which permitted each member jurisdiction that adopts an acceptance resolution of the IVDA
Inclusionary Housing Policy to receive 100% of the inclusionary/replacement housing credits for any
developed or newly rehabilitated housing unit undertaken by the member jurisdiction or its duly formed
redevelopment agency within the IVDA Project Area that is also within the territorial jurisdiction of such
member jurisdiction.
The Agency on November 7, 2005 adopted Resolution No. CDC 2005-38, which accepted the IVDA
Inclusionary Housing Policy. The Agency is now able to receive 100% of the inclusionary/replacement
housing credits for developed or rehabilitated housing units within the IVDA Project Area. As such, this
Implementation Plan encompasses both those units created/replaced within the San Bernardino Project
Areas and the IVDA Project Area, collectively referred to as the"Project Areas."
Although the IVDA has been transferring its 20 percent housing set-aside funds annually to the Agency,
it should be noted that the IVDA, the legislative body which controls its 20 percent set-aside, could
make a finding and determination to withhold these funds at any time. Consequently, any and all IVDA
funds should be treated and used as "estimates and projections." Future revenue streams from IVDA
funds are uncertain and therefore restrict the Agency's bonding capacity if supported by tax increment
revenue generated within the IVDA Project Area.
3 66
San Bernardino Redevelopment Agency 1-oll"11
Five Year 11111)lelilellt�jtioll pl�,111:FY 2009-10 th
AGENCY'S FIVE YEAR AFFORDABLE HOUSING GOALS
Community Affordable Housing Focus
In conjunction with the Mayor and Council members, the Agency completed an Integrated Housing
Strategy ("IHS") on October 20, 2008 to help focus implementation activities to meet the City's current
and future housing needs. As a result of the IHS and the goals indentified in the Redevelopment
Plans,the following details the Agency's housing goals over the remainder of the Compliance Period:
41 Notice of Funding Availability. Create a more objective and consistent system for
awarding funds for housing projects.
HELP
Invest, Promote, and Produce. Promote affordable housing development in the
Project Area(s) by providing housing resources for greater community sustainability.
Efficiently and creatively expend scarce housing resources.
INVEST
Encourage Community Engagement. Encourage private sector investment and
development of affordable housing by supporting the cooperation and participation
of residents, business owners, public agencies, and community organizations.
COLLABORATE
Housing Accessible to All Families. Increase, improve, and preserve the supply
of housing, especially housing affordable to very low, low, and moderate income
households. Increase home ownership in the residential portions of the Project
PRESERVE
Areas.
AGENCY AFFORDABLE HOUSING FIVE YEAR STRATEGY
Affordable Housing Strategic Programs
The following describes the Strategic Programs the Agency will undertake to achieve its affordable
housing goals in the Project Areas. The Strategic Programs were identified as part of the IHS and
Agency staff input on additional needs since the IHS was prepared. The Strategic Programs, including
the projects contained within, will be facilitated in all of the Project Areas to satisfy the Agency's
affordable housing requirements pursuant to the CRL.
Affordable Housing Project Solicitation: The Agency will allocate funds on an annual basis that
will be used to review development proposals, provide project gap funding, improve housing stock,
and ensure adequate affordable housing management. The purpose of this is to provide funding to
address housing needs throughout the City as they arise while meeting affordable housing needs.
67
s
San Bernardino Redevelopment Agency 20 13-1 1
$N tN
Single-Family Homeownershiop enhance'gresident as neighborhoods and The
promotec responsible
facilitate programs designed t
homeownership. This will create healthy and sustainable communities throughout the City.
Strategic Site Specific Development: The Agency will explore opportunities to acquire specific development. Sites
• strategically located sites for affordable multi-family single
family
will generally be chosen based p resenc of blight or thepotent I of being a catalytic project
spurring private investment.
Grant and Loan Procurement: The Agency will seek grant and loan opportunities that can be
Agency's delivery of
• immediately inserted into existing programs aopportunities thatlintegrate smoothly into housing production. By applying f or specific 9 rantt and loan
existing Agency activities, the speed of new development will increase without additional cost to the
Agency.
AFFORDABLE HOUSING WORK PROGRAM
The list below describes the sing strategies and related
be achieved,
projected timeframe, and estimated
Project Areas, including Housing G
costs to implement each Strategic
five over the
n accordance withlt Additional a Strategic Progra that are not
listed may be implemented over the next a yea
d Projected
Timetrame
Prjec
o t/Description
STRATEGIC PROGRAM ocatedFoOO ds tBhlis program l oGe ROJremai remainder a Cotnp�ancel Period.
'450,000 from the
Housing Fund has been al _ Ongoing
❑ Notice of Funding Availability: Program that provides for A
affordable housing development by informing potential
developers of the availability of housing funds from the 1 HE,. INVEST COLLARORAT9 PRESERVE I
Agency's various housing fund resources.
STRATEGIC PROGRAM H-2: SINGLE-FAMILY e HOMEOWNERSHIP� EA rNEIGHoORHOOD REVITALIZATION. Atotal
ce towards of$15,760,000 from the Housing Fund has
Period. FY 12-13 thru
L) Residential Revitalization Opportunities: Funds allocated FY 13-14
a
to neighborhood housing projects to lessen blight and
promote high quality affordable housing. INVEST COLLABORATE
Ongoing
❑ Homebuyer Assistance Program: Citywide housing
®
program that promotes home ownership through a deferred
.RESERVE
payment second trust deed loan targeted to income eligible INVEST COLLABORATE
home buyers.
3
Ongoing
❑ Code Compliance Receivership of the California Program: Program that and Safety •
utilizes Section 17980
'i INVEST
o� to
overall neighborhood retalzaton�s for rehabilitation and i
target blighted
Costs are subject to change,and completion of these projects may require future action by the Agency.
68
San Bernardino Redevelopment Agency
Projected
• B 1 • • / Goals
Timeframe
❑ Single Family Rehabilitation Program: Program provides j Ongoing
grants of$10,000 to income eligible homeowners for exterior i •
rehabilitation within designated target areas. Grant may be I ,„vEfT COLLABORATE/REfERVE
used for exterior painting, landscaping, sprinklers, fencing,
j driveway,security lighting or roofing.
❑ Old Timers Grant Program: The Old Timers Foundation, a Ongoing
local non-profit corporation, performs minor and emergency
repairs to low-income homeowners (80% and below median ,NVOST COLLABORATE/REfERVE
income). The repairs generally do not exceed $1,600 per
house. Eligibility requirements require that the applicant be a
senior age 60,disabled, handicapped, or a recipient of Social
Security Income.
STRATEGIC PROGRAM H-3: STRATEGIC SITE SPECIFIC DEVELOPMENT. A total of$16,800,000 from the Housing
Fund has been allocated towards this program over the remainder of the Compliance Period.
❑ Land Acquisition, Relocation, and Demolition Program: ! Ongoing
Program that promotes ancillary development and site 0
preparation activities for future development of Agency avwT
properties.
❑ Stn and Meridian Project: Project located along the 2600 FY 09-10 thru
block of W. 5th Street that is targeted for acquisition, tenant FY 11-12
relocation, and a RFP soliciting an affordable housing �NVaT eoLLA�eBAn MBBEBVE
developer.
❑ 49th Street Housing: urther acquisition and FY 09-10 thru
o Q I FY 11-12
demolition for future housing development through the
acquisition of blighted properties to be replaced by up to INVEST COLLABORATE PRESERVE
seven new affordable and market rate single family
homes.
th__ , 9 0 thru
—__------.----_-._-- FY 09-10 thru
❑ 19 and Sunrise Project: Acquisition, relocation, ! FY 12-13
rehabilitation and/or demolition of a series of bli hted
four-plexes to be followed by affordable rental housing i nNnT COLLABORATE PRESERVE
and newly built for-sale single family homes.
I
Magnolia-Highland Senior Housing: New construction of j 09-10 thru
13 80 units of affordable senior housing to be built on a I Jo• * FY10 t
previously blighted commercial site. This represents the first •a” IeBT
project from the Agency's NOFA program.
STRATEGIC PROGRAM H-4: GRANT AND LOAN PROCUREMENT. A total of$250,000 from the Housing Fund has
been allocated towards this program over the remainder of the Compliance Period ,
C —❑ Tax Credit Procurement: Technical assistance funds Ongoing
allocated to develop and submit competitive low-income i
housing tax credit applications. I INVEST PRESERVE
69
i
San Bernardino Redevelopment Agency
Five Ye�ir Implementation Plan: FY2009-10 throulgh 2013-11
:Sae w
Project/Description
Timeframe
❑ Action Programs and Applications: Technical assistance ® Ongoing
funds allocated to secure federal, state and other affordable
! housing grants and related resources.
i INVEST COLLMBRATE PREfERVE
"ANN ST dal of 337,670 from
th l 1 r od
___-E _._ _-
❑ Casa Ramona / Highland Stand by: Funds allocated on a FY 09-10 thru
stand-by basis to assist developer financing of an affordable
0
® FY 13-14
senior housing project previously assisted with Agency INV[sT •REfERVE
housing set-aside funds.
❑ Utility Rebate Program:Program provides sewer,water,and Ongoing
refuse rebates to eligible owner-occupied households.
0
I
I � INVEST
❑ Mobile Home Inspection Program: Funds used to pay a Q Ongoing
portion of the salary of a city building inspector whose job it is
to identify health and safety violations in the city's network of INVEST !
mobile home parks and to cite those violators.
❑ Emergency Relocation/ Rent Assistance: Funds used by Ongoing
the City Attorney's Office to pay for emergency relocation of
low-income tenants of residential rental properties cited for ; INVEST
severe health and safety code violations. 1
�Irr�
❑ Casa Ramona Grant. Grant funds made available to an FY 09-10 thru
affordable senior housing project previously assisted with ® FY 13-14
Agency housing set-aside funds. INVEST PRESERVE
70
San Bernardino Redevelopment
AFFORDABLE HOUSING COMPLIANCE
BLUEPRINT FOR AGENCY HOUSING ACTIVITIES
The Housing Compliance Plan serves as a blueprint for current and future Agency activities within the
Project Areas and outlines how it will meet its low and moderate income housing responsibilities and
eliminate blight. This Housing Compliance Plan presents a summary of the Agency's inclusionary and
replacement housing programs as mandated by Sections 33413(b)(4) and 33490(a)(2) and (3) of CRL
Sections 33000 et seq. Specifically, it presents a forecast of the number of affordable housing units
that may be required over the ten-year Compliance Period, and assesses the Agency's plans to
facilitate the creation of the required number of affordable housing units within this timeframe.
Adoption of a Housing Compliance Plan does not constitute approval of any specific project, program,
or expenditure, and it does not change the need to obtain any required approval of a specific program,
project, or expenditure from the Agency or community. The Housing Compliance Plan is a general
statement of direction rather than an unalterable course of action. As such, in order to effectuate its
purposes due to unknown circumstances or new opportunities that arise from time to time, the Agency
may amend the Housing Compliance Plan during the five-year term of the Implementation Plan at any
point, including but not limited to the mid-term opportunity as required by CRL.
HOUSING PRODUCTION
Since 1976, redevelopment agencies have been required to assure that, for all units developed in a
project area by entities other than an agency, at least 15% of these new or substantially rehabilitated
dwelling units be made available at affordable costs to very low, low, or moderate income households.
Of these affordable units, not less than 40% are required to be available at affordable costs to very low
income households. These requirements are applicable to housing units as aggregated, and not on a
project-by-project basis to each dwelling unit created or substantially rehabilitated unless so required by
an agency.
These affordable housing production requirements differ for Agency-developed housing versus
privately-developed housing. The CRL requires that at least 30% of all new or substantially
rehabilitated units directly developed by an agency (within a project area) be available at affordable
costs to households of very low, low, or moderate income. Of this 30%, not less than 50% are required
to be available at affordable costs to very low income households. It is the practice of this Agency to
enter into agreements with third party developers to build all affordable housing units in the Project
Areas, and not directly develop housing. The Agency intends to continue this practice through the
remaining life of the Redevelopment Plans. Appendix 2 provides a glossary of terms related to
affordable housing covenants, affordability limits, and inclusionary unit satisfaction.
Table 111-1 on the following page shows the total amount of affordable units that have been or are
anticipated to be produced in the Project Areas. Those affordable units already produced have
documented covenants appropriate to the time in which they were produced and have been counted
towards the inclusionary requirements triggered by development in the Project Areas pursuant to CRL
Section 33413(c)(1). These affordable units which have been counted towards inclusionary
requirements cannot also be used to replace affordable units destroyed within the Project Areas. At this
time, no affordable units produced outside the Project Area are expected to be counted towards
inclusionary housing requirements. However, in the future, housing units restricted to lower income
households produced outside the project Areas may be used towards satisfying inclusionary housing
requirements on a 2-for-1 basis according to Section 33413(b)(2)(ii) of the CRL.
i
71
i
San Bernardino Redevelopment Agency
M\-e Year Implementation Plan: FY2009-10 throulgh 201.3-1-1
Production of Affordable Units Table III-1
San Bernardino Economic Development Agency
Total Low&
Very Low
Affordable Units Moderate
Units' Units
Produced From Adoption through 626 537 89
6/30/2009
Projected To Be Produced From
7/1/2009 through the End of the 404 163 241
Redevelopment Plans
Total Affordable Units Produced 1,030 700 330
' Does not include units that are to replace demolished affordable units
As of June 20, 2009, there have been 537 very low income and 89 low and moderate income units
produced in the Project Areas since the adoption of the Redevelopment Plans. From July 1, 2009
through the termination of the Redevelopment Plans, it is projected that 163 very low and 241 low or
moderate income restricted units will be produced. Therefore, throughout the entire life of the
„ Redevelopment Plans, it is estimated that a total of 1,030 very low, low, or moderate income restricted
units will have been produced in the Project Areas.
The Inclusionary Housing Obligations table on the following page (Table III-2) summarizes the
production goals over various time periods as required by the CRL; a summary by Project Area may be
found in Appendix 3. The number of affordable units required is based on statutory thresholds
prescribed by the CRL, and the Agency is responsible for ensuring that the appropriate number of
affordable units is created during the Compliance Period.
Pursuant to CRL Section 33413(d)(1), project areas adopted before 1976 are exempt from the
production requirements previously described for very low, low, and moderate income housing
("inclusionary units"). This exemption is removed if a 10-year extension of the project area's
effectiveness is adopted under CRL Section 33333.10. Meadowbrook / Central City, State College,
and Central City North Project Areas were adopted in 1970 and 1973, respectively, and are being
amended pursuant to CRL Section 33333.10. Therefore, housing units built in these Project Areas prior
to the amendment do not generate inclusionary housing obligations. However, these Project Areas will
generate an inclusionary obligation upon adoption of the 10-year extension. Since the Agency has
aggregated its housing production obligations across all Project Areas, affordable units produced in
these Project Areas may be used to satisfy obligations generated in other Project Areas in the City.
To estimate the number of housing units that need to be affordable to low and moderate income
households, the Agency estimated the total number of units to be constructed or substantial
rehabilitated in the Project Areas and applied formulas established in the CRL. The following
inclusionary housing analysis takes into account all residential construction or substantial rehabilitation
that occurred within the Project Areas since their adoptions to determine affordable housing production
needs, and includes projections for the number of additional dwelling units to be constructed or
72
F
San Bernardino Redevelopment Agency
Five Year lnipleineiitatioii Plan:FY 2009-10 throu,-di 2013-I'll
Sa Ni
substantially rehabilitated during the Compliance Period, the next ten years, and over the life of the
Redevelopment Plans. Appendix 4 shows a complete listing of all housing units counted towards the
Agency's Inclusionary Housing Obligations through June 30, 2008 as well as the affordability covenants
associated with each of the units.
73
San Bernardino Redevelopment
mild& Five Year hiii)lenient ation Plan:F�'2009-10 t hrough 201 11
Inciusionary Housing Obligations Table lil-2
San Bernardino Economic Development Agency_
Aggregate of All Project Areas
Total
Units Low a
Privately Affordable Very Low Moderate
Units Units
Developed Required Units
Housing Units Developed 4 6 138 58 80
a Adoption through 6/3011994
C"
°- m Affordable Units Built or Covenanted
0 M SO Adoption Through 6/30/1994
Affordable Units Surplus(Deficit)
Adoption Through 6/3011994 a•.
a Housing Units Developed 4 253 45 22 23
°e , a 7/1/1994-6/30/2004
a! a o enanted m v$ Affordable Units Built or Co = s
> Z ro 7/1/1994-6/3012004
`O Affordable Units Surplus(Deficit)
2 8
7/1/1994-6/30/2004 3
CUMULATIVE AFFORDABLE UNIT SURPLUS (DEFICIT)
ADOPTION THROUGH 613012004 p.; U„
Housing Units Developed 4 280 46 22 24
y rn 7/112004-6/30/2009
Affordable Units Built or Covenanted0$� A'8
u' L" c 711/2004.613012009 u k
F.
C N A m s
M Affordable Units Surplus(Deficit)
7/112004-6/30/2009 r,
V Housing Units to Be Developed(Est.)
0 251 43 22 21
o > 0 0 7/112009-6/30/2014
Affordable Units To Be Built or Covenanted(Est.) 1'
H N 7/1/2009-6/3012014
Affordable Unit Surplus(Deficit)Over 2nd 10 Year
Compliance Period(Est.)7/1/2004-6/30/2014
CUMULATIVE AFFORDABLE UNIT SURPLUS (DEFICIT) (Est.)
ADOPTION THROUGH 613012014
} -0 a� Housing Units to Be Developed(Est.)4 190 32 1s 17
o 0 o Q 7/1/2014-6/30/2019
a c2 Affordable Units To Be Built or Covenanted(Est.) ° 0 0 0
0 7/1/2014-6/3012019
CUMULATIVE AFFORDABLE UNIT SURPLUS (DEFICIT) (Est.) 726 561 165 -
ADOPTION THROUGH 613012019 /
y
Housing Units to Be Developed(Est.)4 268 44 22 22
c a 7/1/2019-End of Redevelopment Plans
`= W Affordable Units To Be Built or Covenanted(Est.) k
r: 71112019-End of Redevelopment Plans , 0 0 0
s , a
CUMULATIVE AFFORDABLE UNIT SURPLUS (DEFICIT) (Est.) 'i `
ADOPTION THROUGH THE END OF REDEVELOPMENT PLANS ri +662 4539 ry+x13
0,
)
'Due to the proposed Amendment to the Redevelopment Plan which will extend the effectiveness of the Plan for the Project Area by 10 years,Project Area will
begin to trigger inclusionary housing requirements in 2010-11 pursuant to CRL Section 33333.10.
Pursuant to CRL Section 33413(d)(1),project areas adopted before 1976 are exempt from the requirement to restrict as affordable to very low,low,and moderate
income households.
'15%of All Units Developed or Substantially Rehabiliated
°Housing Units Developed/To be Developed include both newly constructed units and substantially rehabilitated units per CRL Section 33490(a)(2)(B).
g3
74
San Bernardino Redevelopment Agency
Fi�v Year Implement atioli Plan: FY 2009-1.0 t hrough 2013-1-1
Table III-2 shows that development over the past five years has generated a need for 22 very low and
24 low or moderate income restricted units. As 89 very low income units and 17 low and moderate
income units were produced during this time, there remains a surplus of 67 very low income units but a
deficit of 7 low or moderate income units. Development that is anticipated to occur over the next five
years in the Project Areas will generate the need for 43 affordable units, 22 of which must be restricted
to very low income households. The Agency further anticipates that during the same time period, 404
affordable units will be produced, 163 units of which are expected to be restricted to very low income
households and 241 to low or moderate income households. Therefore, during the course of the current
ten-year Compliance Period, it is estimated that the Project Areas will have produced a total surplus of
423 affordable units, 209 of which are very low and 214 are low or moderate units. Taking this surplus
into account, it is projected that, from adoption of the Redevelopment Plans through June 30, 2014, the
Project Areas will likely have a total surplus of 758 affordable units, 576 of which will be restricted to
very low income households and 182 to low or moderate income households.
Through the remaining effective term of the Redevelopment Plans, the Agency has projected that the
number of housing units that are to be produced will be based on historical development trends and
amounts of available land in each of the Project Areas. During the first five years of the next
Compliance Plan period, fiscal years 2014-15 through 2018-19, the Agency anticipates that
development will generate the need for 15 very low and 17 low income units. Similarly, development
that will occur from fiscal year 2018-19 through the term of the Redevelopment Plans will generate the
need for 22 very low and 22 low income units. Taking into account the surplus of affordable units at the
end of the current Compliance Plan Period, there will still remain a surplus of 539 very low and 143 low
income units at the expiration of the Redevelopment Plans.
fi
As described earlier in this Implementation Plan, the Agency anticipates development of affordable
housing projects in the Project Areas over the Compliance Period that may result in sufficient units to
meet the housing production goal. Included in Appendix 2 is a breakdown of projected housing
production by Project Area. The fulfillment of the projected housing needs is anticipated to be
accomplished through the completion of the programs listed in Work Program.
75
San Bernardino Redevelopment
iv
:Sit t11
REPLACEMENT HOUSING
Summary of Replacement Units Versus Demolished Units Table III-3
San Bernardino Economic Development Agency
#of Units #of Bdrms Very Low Units Low&Mod Units
C5 Demolished 366 714 272 94
0
0 o Replaced 1122 2314 751 371
to Surplus (Deficit) 756 1600 479 277
o o Demolished 187 333 80 107
�
N
N Replaced 40 81 11 29
iZ� O
iB Surplus (Deficit) (147) (252) (69) (78)
Cumulative Surplus(Deficit) 609 1348 410 199
Through June 30,2009
Source:San Bernardino Development Services Department
The CRL requires that whenever housing occupied by low and moderate income persons or
households are destroyed as part of an Agency project, the Agency is responsible for ensuring that an
equivalent number of replacement units are constructed or substantially rehabilitated. These units must
provide at least the same number of bedrooms destroyed, and 100% of the replacement units must be
affordable to the same income categories (very low, low, and moderate) as those removed. The
Agency receives a full credit for replacement units created inside or outside the Project Areas. Table
III-3 above summarizes the units that have been demolished and subsequently replaced in the Project
Areas.
According to Agency records, there were 366 affordable units that were destroyed in the Project Areas
from the adoption of the Redevelopment Plans through June 30, 2004. Of these, 272 units were
occupied by very low and 94 were occupied by low or moderate income households. However, during
the same time period, 751 very low and 371 low or moderate replacement units were built or
covenanted in or outside the Project Areas, generating a surplus of 479 and 277 very low and low or
moderate income affordable units, respectively.
Similarly, from July 1, 2004 through June 30, 2009, records show that 80 very low and 107 low or
moderate income units were destroyed and were replaced by 11 very low and 29 low or moderate
income units. This left a deficit for this period of 69 and 78 very low and low or moderate income
affordable units, respectively. However, the surplus from the previous period was sufficiently large to
offset this period's deficits. Therefore, from adoption of the Redevelopment Plans through June 30,
2009, there were a total of 609 more affordable units produced than were destroyed in the Project
Areas. A complete listing of all the replacement units quoted in the above table can be found in
Appendix 5.
During the remaining Compliance Period through June 30, 2014, the Agency anticipates one additional
project that will result in the displacement or removal of affordable housing units in the Project Areas.
The 5'h and Meridian Avenue Project contains 68 housing units and a Replacement Housing Plan was
adopted by the Agency on September 8, 2009. When the Agency purchased the property, 38 units
were in such disrepair (lack of plumbing and electrical wiring) that they could not be inhabited without
substantial rehabilitation and thus were not viable market units. Of the remaining 30 viable units, 29
very low income units and one moderate income unit will be removed from the housing market and will
76
San Bernardino Redevelopment
11Y
need to be replaced by the Agency. As depicted in Table III-3, the Agency currently has a surplus of
609 replacement housing units that will be more than sufficient to replace displaced units resulting from
the 5'"and Meridian Project.
HOUSING PROGRAM CASH FLOW ANALYSIS
The Agency's primary source of funding for housing projects and programs is the annual deposit of
20% (30% in the M/CC and CNN Project Areas) of its tax increment revenue into a special housing set-
aside fund. The CRL requires that these funds be used to increase, improve, and preserve the
community's supply of housing available, at affordable housing cost, to persons and families of very
low, low, and moderate incomes. Other sources of Housing Fund revenues include interest earnings,
bond proceeds, IVDA housing revenue, loan repayments, and other miscellaneous revenue. The
following table presents the Agency's Housing Fund projected cash flow over the next ten years. The
first five years represent the remainder of the Compliance Period (FY 2004-05 through 2013-14) and
the subsequent five years represent the beginning of the next compliance period (FY 2014-15 through
2023-24) and is included to assist the Agency with planning for future affordable housing projects and
programs.
3
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San Bernardino Redevelopment Agency
Due to the State's actions to take redevelopment funds to balance the State Budget, the Agency may
be required to make Educational Revenue Augmentation Fund ("ERAF") payments during the planning
period. In 2008, the State approved the prior budget contingent upon a $350 million shift of tax
increment monies from redevelopment agencies to be applied to ERAF. The California Redevelopment
Association filed a lawsuit on behalf of all redevelopment agencies asserting that the take from
redevelopment was unconstitutional. On April 30, 2009, a judgment in favor of redevelopment
agencies was rendered, affirming that the take was unconstitutional and therefore illegal. The State
has since dropped their appeal of the court decision.
Following this judgment, the State of California approved the FY 2009-10 budget egregiously relying on
a $2.05 billion ERAF shift from redevelopment agencies over the next two years. The additional shift to
ERAF (referred to as the Supplemental Educational Revenue Augmentation Fund or "SERAF") is
estimated to result in a payment of $11,000,000 in 2009-10, and $2,453,000 in 2010-11 from the
Agency. The budget trailer bill, Assembly Bill 26 4x, contains a provision by which the Agency has the
option to suspend its fiscal 2009-10 20% housing set-aside contribution in order to assist the ERAF
shift in that year; however the loan will need to be repaid by June 30, 2015. If the Agency elects this
option, the loan could potentially delay many of the housing programs and projects anticipated over the
next five year period.
EXPENDITURES BY HOUSEHOLD TYPES
Effective January 2002, expenditure of housing set-aside revenues is subject to certain legal
requirements. At a minimum, the Agency's Housing Fund revenue is to be expended in proportion to
the community's need for very low and low income housing, as well as the proportion of the low income
- population under the age of 65. New legal requirements took effect in 2006 that modified the previous
limitation on spending Housing Fund monies on households under the age of 6512. Prior to 2006,
'? Section 33334.4(b) of CRL required that an agency spend its Housing Fund monies "in at least the
same proportion as the population under age 65 bears to the total population based on the most recent
census." The 2006 changes provide a higher level of specificity to spend "in at least the same
proportion as the number of low-income households with a member under age 65 bears to the total
number of low-income households of the community as reported in the most recent census."
A community's proportionate need is based on statistics from the local regional planning agency, in this
case the Southern California Association of Governments, to meet the requirement for affordable
housing by category, and the US Department of Housing and Urban Development Comprehensive
Housing Affordability Strategy ("CHAS") allocation numbers. However, as data relating to low income
k persons under the age of 65 is not readily available from the US Census, the metric that closest
approximates it is from the CHAS database which represents data of low income persons below the
age of 62.
Table III-5 on the following page represents the minimum Housing Fund expenditure thresholds for very
low and low income households and the maximum housing expenditure thresholds for households 62
years of age over the term of the Compliance Period. The moderate income category represents a
maximum figure for expenditures for moderate income households, although such funds (within this
category) can be spent on very low or low income households. The chart specifically details the
Agency's Housing Fund expenditure during the first five years of the Compliance Period and the
11 The intent of the legislation was to ensure that Housing Funds were not exclusively or extensively used by a community senior
housing projects and programs.
s
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San Bernardino Redevelopment Agency
Five Year linplenientat ion Plan:FY 2009-10 throw-1) 2013-1-1
projected expenditures during the remainder of the Compliance Period. The Agency anticipates
meeting their Housing Fund targeting requirements by the end of the Compliance Period.
Housing Fund Proportional Expenditure Allocation Table III-6
City of San Bernardino
RHNA Targeting 2004-05 to 2008-09 I 2009-10 to 2013-14 2004-05 to 2013-14
Allocation Requirement
Income Level Units' %of Total Expenditure % Expenditure % Expenditure %
Very-Low Income(minimum) 1,275 39.0% $5,373,649 23.2% $24,899,491 45.7% $30,273,140 39.0%
Low-Income(minimum) 913 27.9% $5,941,569 25.7% $15,736,374 28.9% $21,677,943 27.9%
Moderate-Income maximum 1,079 33.0% 1 $11,817,582 51.1% $13,801805 25.4% $25619,387 33.0%
3,267 $23,132,801 $54,437,670 $77,570,471
CHAS Targeting 2004-05 to 2008-09 2009-10 to 2013-14 2004-05 to 2013-14
Age Category of Income Allocation Requirement
Restricted Households (Households)2 %of Total Expenditure % Expenditure % Expenditure
Non-Senior 25,431 82.7% $22,804,730 98.6% $41,379,251 76.0% $64,183,980 82.7%
Senior limitation 5,304 17.3% $328,071 1.4% $13,058419 24.0% $13,386,490 17.3%
30,735 $23,132,801 $54,437,670 $77,570,471
Southern California Regional Housing Needs Assessment,Final 2007
Z Data of low income households under the age of 65 is not readily available from the Census. The nearest metric for such Census data represents
households under the age of 62(available via the Comprehensive Housing Affordability Strategy at hftp://socds.huduser.org/chas/index.htm).
Source:SCAG;State of Cities Data System;and HUD
As shown in Table III-5, the Agency expended the majority of Housing Fund revenues on moderate and
non-senior households during the first five years of the Compliance Period (FY 2004-05 through 2008-
09). The Agency has projected $54.4 million of Housing Fund expenditures for projects and programs
implemented over the remainder of the Compliance Period (the second five years from FY 2009-10
through 2013-14). Future Housing Fund expenditures will be spent in the proportions detailed in Table
III-5 to ensure that Housing Fund Proportional Allocation targets are met by the end of the Compliance
Period. Although the Agency has a surplus of affordable housing units, the Housing Fund must be
expended in a timely manner to avoid penalties due to the Agency incurring an excess surplus in the
Housing Fund pursuant calculations defined in CRL Section 33334.10.13
PRIOR FIVE YEAR HOUSING FUND EXPENDITURES
Units Assisted by Housing Set Aside Fund
The CRL requires the Agency to report projects assisted by the Housing Fund to create extremely low,
very low, and low income housing units over the past implementation plan period (FY 2004-05 through
2008-09). The CRL also requires a recap of the number, location, level of affordability, and the amount
of Housing Funds expended on housing units. Table III-6 on the following page summarizes these
statistics.
13 An excess surplus is any unencumbered or unexpended amount in the Agency's Housing Fund that exceeds$1.0 million or the
aggregate amount of housing tax increment deposited into the Housing Fund for the four preceding fiscal years.
co 80
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San Bernardino Redevelopment
Five Year Niplemeii[atioti Plan:FY 2009-10 throu0i 20 13-1 1
Table III-6 above breaks down Housing Fund expenditures from the past five years by income category
and age group. As also shown in the Housing Fund Proportional Expenditure Allocation table (Table III-
5), $5,373,649 (or 23.2%) of the Housing Fund was expended on very low income housing and
$5,941,569 (or 25.7%) was expended on low income housing. To comply with proportional expenditure
allocation requirements per CRL Section 33334.4, the Agency will need to expend approximately $24.9
million and $15.7 million on very low and low income housing, respectively, over the next five years.
Similarly, $328,071 (or 1.4%) of the Housing Fund was expended on people over the age of 62 over the
past five years. Therefore,to comply with proportional expenditure requirements as outlined in Table III-
5, not more than $13.1 million of the $54.4 million anticipated total expenditure on housing projects
and programs can be expended on this population over the next five years.
Housing Units Constructed During Prior Implementation Plan Without Housing Set Aside Funds
Since fiscal year 2004-05, 78 affordable restricted units featuring long term covenants (affordable units
with covenants of at least 45 years for ownership housing or 55 years for rental housing) have been
created with funds other than tax increment. Of these, 48 were restricted to low, 22 were restricted to
very low, and 8 were restricted to extremely low income households. Table III-7 below outlines the
location, affordability breakdown, and funding source of these units.
Affordable Units Constructed from 2004 to 2009 Without Agency Assistance Table III-7
San Bernardino Economic Development Agency
Assessor Parcel Project Affordability Level Total Affordable Funding Amount of Date Covenant
Number Information Project Area Low Very Low EM_Low Units Source Assistance Com feted Term
AHEPA 377 East Gilbert St.(APN 0147-091-47) IVDA 43 1 45 89 HOME $1,200,000 3/20/2009 55 Years
82
x EXHIBIT "C"
Housing Related Projects/Programs Capital Needs Analysis
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HOUSING RELATED PROJ ECTS/PROG RAMS CAPITAL NEEDS ANALYSIS
PROJECT BUDGET
Residential Revitalization Opportunities(30-Year Programs)
I Single Family Beautification Grant $28,000,000
2 Single Family Rehabilitation Loan $12,000,000
3 Mobile Home Grant and Minor Home Repair $3,000,000
4 Home Buyer Education and Training $2,000,000
5 Citywide Homebuyer Assistance Program $28,000,000
6 Neighborhood Stabilization Program—tax increment contribution $12,000,000
Subtotal $85,000,000
NOFA&NOFA Created Projects
7 Magnolia @ Highland Senior Apartments(remaining balance) $3,000,000
8 Lugo Senior Apartments(remaining balance) $2,500,000
9 Annual Notice of Funding Availability(30-Year Program) $86,500,000
Subtotal $92,000,000
Site and/or Area Specific Redevelopment(including off-sites)
10 Meridian Redevelopment Project $8,000,000
11 19th and Sunrise—Eastpointe Village Project $10,000,000
12 Hillside and Fairfax Redevelopment Project $4,000,000
13 Ward 1 Redevelopment Project $3,000,000
14 The Urban Block $18,000,000
9th
15 4 Street Project $1,000,000
16 Mobile Home Park Acquisition and Redevelopment Project $9,000,000
17 Site Specific RFP Program (30-Year Program) $145,000,000
Subtotal $198,000,000
Grand Total $375,000,000
FY2011: RDA Housing Set Aside $7.4 million
IVDA Housing Set Aside Allocation=$5.1 million
(Based on FY2011 Budget Schedule 4801,Pg.8—Budget Line Detail)
EXHIBIT"D"
Additional Ongoing Agency Contractual Obligations to be undertaken by AHS
.rte+ '
— ':*endas\Comm Dev Commission=11 CDC Items\Special Joint Workshop\03-03-11 Agency&AHS-Housing Capitalization Funding Agreement.docx
Additional Ongoing Agency Contractual Obligations
to be Undertaken by the AHS
1. Staffing, Personnel, Consultants and other Professional Services to Imolement Funding
Agreement: including but not limited to, salaries and benefits to employees, fees and
reimbursable expenses to consultants.
2. Property Maintenance and Management of Agency/AHS Owned Properties; including but
not limited to, retaining of professional real estate consultants and service providers,
payment of utilities, repair and maintenance and required capital upgrades, marketing and
leasing, insurance and maintaining reserves and replacements for other property damage
and liability issues.
3. Master Services Agreement of Cijy with Agency: to be assigned by Agency to AHS and the
scope and anticipated expenditures to be annually approved by the Board of the AHS.
4. Housing Needs Analysis within Redevelopment Project Areas: determine deficiencies and
deferred maintenance and other safety hazards caused by inadequate housing stock;
determine frequency and extent of periodic repairs and maintenance requirements;
recommend capital improvement programs for these properties and recommended upgrades
and acquisitions.
5. Membership Subscriptions and Organizational Dues: including, but not limited to, state and
national organizations, ICSC, CRA, NAHRO, NDC, SCANPH and other industry
organizations.
6. Office Expenses/Administration: including, but not limited, office supplies, office
equipment and furnishings, computers and communications equipment and software, IT and
communications consultants,utilities, other supplies and other out-sourced services.
7. Administration of Housing related Agreements: contract compliance and monitoring for all
promissory notes and financial and performance obligations of parties pursuant to Loan
Agreements, Reimbursement Agreements, DDA's and OPA's and Affordability,
Maintenance and Use Covenants.
8. Property Disposition Expenses and Mana eg ment: including, but not limited to, all related to
sales and brokerage commissions, marketing, preparation of materials and agreements,
appraisals, surveys, environmental reports,title and escrow costs.
9. Periodic Reporting Requirements: including, but not limited to, all state and federal
reporting on housing redevelopment activities, filings with California Secretary of State,
compliance with all FPPC reporting forms, continuing disclosure requirements for all
Agency municipal housing bond issues and other bond issue related arbitrage and Trust
Indenture compliance matters,review of annual audits and preparation of annual budgets.
1
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EXHIBIT"E"
Agency Real Property Housing Assets
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AGENCY OWNED PROPERTIES ACQUIRED WITH
HOUSING FUNDS-LOW MOD AND RELATED
j Downtown Properties
1. W 5" St. 134-101-04, 05, 06-Vacant Land(L/M 20%)
2. 5"& G St. 134-054-24-Vacant Land(L/M 20%)
3. 575 W 5"' St. 134-093-07-Vacant Land-Retail(L/M 20%)
4. 673 W 5"' St. 134-101-02, 03 -Vacant Land (Beauty School) (L/M 20%)
5. 696 W 5t" St. 134-061-30-Restaurant(L/M 20%)
' 134-061-21, 22, 25 -Parking Lot(L/M 20%)
6. 701 W 5" St. 134-093-08, 09-Vacant Land(L/M 20%)
7. 745 W 5" St. 134-093-05, 06-Vacant Land (L/M 20%)
' 8. 755 W 5" St. 134-093-40-Vacant Land (L/M 20%)
9. 746 W 5`h St 134-054-07, 08, 09 Salvation Army (L/M 20%)
10. 770 W 5"' St. 134-054-26-Vacant Land (Las Portales Restaurant) (L/M 20%)
11. 795 W 5' St. 134-093-41 -Vacant Land (Paradise Motel)(L/M 20%)
12. 796 W 5`h Street 134-054-25-Vacant Land (Service Station)(L/M 20%)
5th&Meridian Properties:
1. 2619 W 5" St. 142-522-38 (L/M 20%)
2. 2624 W 5`h St. 142-522-25 (L/M 20%)
3. 2625 W 5`" St. 142-522-37 (L/M 20%)
4. 2632 W 5" St. 142-522-42 (L/M 20%)
5. 263') W 5"' St. 142-522-36(L/M 20%)
6. 2638 W 5" St. 142-522-4 1(L/M 20%)
7. 2639 W 5`h St. 142-522-35 (L/M 20%)
8. 2642 W 5" St. 142-522-13 (L/M 20%)
9. 2643 W 5"' St. 142-522-12 (L/M 20%)
10. 2656 W 51" St. 142-522-14 (L/M 20%)
11. 2657 W 5`h St. 142-522-11 (L/M 20%)
12. 2670 W 5`h St. 142-522-15 (L/M 20%)
13. 2682 W 5"' St. 142-522-16 (L/M 20%)
14. 2683 W 5' St. 142-522-09(L/M 20%)
15. 2694 W 5`h St. 142-522-17 (L/M 20%)
16. 2695 W 5`h St. 142-522-08 (L/M 20%)
I
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49th Street
1. 251 E 49"' St. 154-126-01 -Vacant Land (L/M 20%)
2. 255 E 49' St. 154-126-02-Vacant Land (L/M 20%)
3. 288 E 49" St. 154-125-07-Quadruplex (L/M 20%)
4. 299 E 491h St. 154-126-30-Vacant Land(L/M 20%)
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"F" Street
1. 939 N F St. 140-143-38—Vacant Land($1 Home)
2. 1045 N F St. 140-041-29—Vacant Land($1 Home)
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"G" Street
1. 495 N G St. 134-101-28—Vacant Land(L/M 20%)
2. West 6" St. 134-021-26 Vacant Land(L/M 20%)
3. 621 N G St. 134-021-28—Vacant Land$1 Home
4. 622 N G St. 134-014-24, 25, 26, 27 (L/M 20%)
5. 631 N. G St. 134-021-29—Vacant Land (L/M 20%)
6. 938 N G St. 140-134-06—Vacant Land($1 Home)
HWY 215-Adiacent
1. 261-111-21, 23, 29, 30, 35, 40 (L/M 20%)
2. 261-121-01, 02, 03, 13, 14 (L/M 20%)
7
North Clearview Avenue
1. 261-461-11 thru 21 (L/M 20%)
2. 261-461-24 thru 31 (L/M 20%)
North Parkview Court
1. 261-461-36 thru 45, 47(L/M 20%)
North Streamside Avenue
i
1. 261-451-39 thru 48 (L/M 20%)
d
West Sunset Lane
j1. 261-451-01 thru 06(L/M 20%)
2. 261-451-24 thru 38 (L/M 20%)
3. 261-461-01 thru 10(L/M 20%)
4. 261-461-32 thru 35 (L/M 20%)
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Q West Washington Avenue
1. 261-451-07 thru 23 (L/M 20%)
2. 261-461-22, 23,46 (L/M 20%)
3. 261-461-48-66(L/M 20%)
Miscellaneous
1. 676 W 10th St. 140-033-22—Vacant Land ($1 Home)
2. 815 W Orange St. 140-012-11 —Vacant Land ($1 Home)
3. Arden Guthrie Tract. 1191-021-11 thru 46& 1191-021-48 thru 69(L/M 20%)
4. 2105 E Sunrise Ln. 1191-051-55—Vacant Land(L/M 20%)
5. 1433 Lynwood Dr. 155-451-10—MF to Demo (L/M 20%)
6. Parcel at Medical Center Drive and Highland—unassigned parcel no. (L/M 20%)
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PAAgendes\Comm Dev Commission\2011 CDC Items\Special Joint Workshop\03-03-11 Exhibit E(Housing Assets)-Housing Capitalization Funding Agmatent.dom
IIII
o ®
1 RESOLUTION NO.
2 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF
SAN BERNARDINO APPROVING AND AUTHORIZING A CERTAIN
3 REIMBURSEMENT AND PROJECT IMPLEMENTATION AGREEMENT BY
4 AND BETWEEN THE CITY OF SAN BERNARDINO AND THE SAN
BERNARDINO ECONOMIC DEVELOPMENT CORPORATION, INC.,
5 AUTHORIZING THE FORM OF CERTAIN LEGAL DOCUMENTS RELATED
THERETO AND AUTHORIZING AND DIRECTING THEIR PREPARATION,
6 EXECUTION AND DELIVERY
7
WHEREAS,the City of San Bernardino,California(the"City"),is a municipal corporation and
8
charter city, duly organized and existing pursuant to the provisions of the constitution of the State of
9
California; and
10
WHEREAS, the Redevelopment Agency of the City of San Bernardino is a public body,
11
corporate and politic(the"Agency")duly organized and existing pursuant to the California Community
12
Redevelopment Law(Health and Safety Code Section 33000, et seq.) (the"CRL"); and
13
WHEREAS, the San Bernardino Economic Development Corporation (the "SBEDC") was
14
formed pursuant to the non-profit corporation laws of the State of California,and currently exists for the
15
purposes of assisting in the implementation of various redevelopment initiatives within the City and to
16
undertake such other activities,programs and projects of the Agency and the City as are then deemed
17
advisable by the SBEDC through its board of directors; and
18
WHEREAS, the City and the SBEDC intend to enter into a Reimbursement and Project
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Implementation Agreement(the"Reimbursement Agreement")for the purpose of assisting the City in
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the implementation and undertaking of various City Public Works Projects as further set forth on
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Exhibit"A"of the Reimbursement Agreement and for the reasons as described in the Reimbursement
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Agreement; and
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WHEREAS, the SBEDC has also entered into a certain Project Funding Agreement with the
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Agency dated as of March 2011 (the"Funding Agreement"),whereby the Agency has duly assigned and
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set over to the SBEDC certain current and future tax increment revenues of the Agency for the purposes
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of restructuring the manner in which the Agency, through the SBEDC, conducts its governmental
27
functions as a community redevelopment agency pursuant to the CRL, and for the purposes of having
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I the SBEDC, rather than the Agency,undertake and implement certain redevelopment related projects
2 and other Agency designated public works projects in a more efficient and expeditious manner than can
3 be accomplished through the operational and management structure utilizing solely the Agency
4 resources for the undertaking and implementation of all such projects; and
5 WHEREAS,the SBEDC has determined that the commitments entered into by the SBEDC with
6 the Agency pursuant to the Funding Agreement requires the SBEDC to enter into the Reimbursement
r
7 Agreement with the City in the form of the Reimbursement Agreement attached to this Resolution as
8 Exhibit"A"for the purposes of further defining and setting forth the manner in which the parties shall
9 pursue the undertaking and implementation of those City Public Works Projects as further set forth on
10 Exhibit"A"of the Reimbursement Agreement which are eligible for reimbursement from the Agency to
11 the SBEDC under the terms set forth in the Reimbursement Agreement as qualified redevelopment
12 expenses in furtherance of the above stated purposes; and
13 WHEREAS,the City is currently without adequate staff and financial resources to undertake the
14 City Public Works Projects and seeks the assistance of the SBEDC to implement and complete such
15 City Public Works Projects on behalf of the City; and
16 WHEREAS,the SBEDC has the expectation of receiving tax increment revenues to be generated
17 within the various redevelopment project areas(the"Project Areas")of the Agency that are each subject
18 to their own redevelopment plan(each a"Redevelopment Plan"for the Project Areas)as required by the
19 CRL.
20 WHEREAS, the Mayor and Common Council have duly considered the terms of such
21 transactions as contemplated herein and find that approval of the terms and obligations of the
22 Reimbursement Agreement at this time is in the best interests of the City.
23 NOW, THEREFORE, THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN
24 BERNARDINO DO HEREBY RESOLVE, DETERMINE AND ORDER, AS FOLLOWS:
25 Section 1. Findings and Determinations. The Mayor and Common Council hereby find and
26 determine that the Recitals contained hereinabove are true and correct and are incorporated herein by
27 this reference.
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I Section 2. Approval of the Reimbursement Agreement. The Mayor and Common Council
2 hereby approve the undertaking by the SBEDC of all or any number of the City Public Works Projects
3 in a principal amount not to exceed the Commitment Amount set forth in Exhibit"A"for the benefit of
4 the City, in addition to the reimbursement provisions, as set forth in Section 1 of the Reimbursement
5 Agreement, in the event the City undertakes and completes any of such City Public Works Projects in
6 lieu of such undertaking and completion having been accomplished by the SBEDC.
7 Section 3. Approval of City's Notice Requirements. The Mayor and Common Council hereby
8 approve the condition precedent to the ability of the City to receive eligible reimbursements in
9 accordance with the Reimbursement Agreement of providing written notice to the SBEDC pursuant to
10 Section 11 of the Reimbursement Agreement which notice shall be given for each project in the manner
11 as set forth therein.
12 Section 4. Approval of Terms of Repayment. The Mayor and Common Council hereby
13 approve the methods and terms of repayment of the principal for any amounts advanced by the City,and
14 interest thereon,pursuant to the Reimbursement Agreement,as more thoroughly described in Section 3
15 of the Reimbursement Agreement.
16 Section 5. Approval of Acceptance of the Payment Covenant of the SBEDC. The Mayor and
17 Common Council hereby approve the City's acceptance of the SBEDC's payment covenant described in
18 Section 4 of the Reimbursement Agreement in lieu of a security interest in the assets,funds,revenues or
19 properties of the SBEDC or an assignment of the rights of the SBEDC pursuant to the Funding
20 Agreement.
21 Section 6. Official Action. The Mayor and Common Council,the City Clerk and any and all
22 other officers of the City are hereby authorized and directed, on behalf of the City, to do any and all
23 things and to take any and all actions, including execution and delivery of assignments, certificates,
24 requisitions,agreements,notices,consents,instruments of conveyance,warrants and other documents
25 which any of such officers may deem necessary or advisable in connection with the fulfillment of the
26 City's obligations under the Reimbursement Agreement and the consummation of the transactions
27 described herein and therein.
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I Section 7. Effective Date. This Resolution shall take effect upon its adoption and execution
2 in the manner as required by the City Charter.
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1 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF
SAN BERNARDINO APPROVING AND AUTHORIZING A CERTAIN
2 REIMBURSEMENT AND PROJECT IMPLEMENTATION AGREEMENT BY
AND BETWEEN THE CITY OF SAN BERNARDINO AND THE SAN
3 BERNARDINO ECONOMIC DEVELOPMENT CORPORATION, INC.,
AUTHORIZING THE FORM OF CERTAIN LEGAL DOCUMENTS RELATED
4 THERETO AND AUTHORIZING AND DIRECTING THEIR PREPARATION,
5 EXECUTION AND DELIVERY
6 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and
7 Common Council of the City of San Bernardino at a meeting
8 thereof, held on the day of , 2011, by the following vote to wit:
9 Council Members: Ayes Nays Abstain Absent
10 MARQUEZ
11 VACANT
12 BRINKER
13 SHORETT
14 KELLEY
15 JOHNSON
16 MC CAMMACK
17
18
Rachel G. Clark, City Clerk
19
20 The foregoing Resolution is hereby approved this day of , 2011.
21
22
23 Patrick J. Morris, Mayor
24 City of San Bernardino
25 Approved as to Form:
26 By:
27 James F. Penman, 6ity Attorney Q 1
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1 EXHIBIT "A"
2 Reimbursement Agreement
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REIMBURSEMENT
AND PROJECT IMPLEMENTATION AGREEMENT
(City of San Bernardino and San Bernardino Economic Development Corporation, Inc.)
THIS REIMBURSEMENT AND PROJECT IMPLEMENTATION AGREEMENT (this
"Agreement") is entered into as of this day of March, 2011, by and between the City of San
Bernardino, California, a charter city duly incorporated pursuant to the Constitution and laws of the
State of California (the "City"), and the San Bernardino Economic Development Corporation, Inc., a
California non-profit corporation (the"SBEDC").
RECITALS
WHEREAS, the City and the SBEDC intend to enter into this Agreement for the purpose of
assisting the City in the implementation and undertaking of various City Public Works Projects as
further set forth on Exhibit "A" as attached hereto and incorporated by reference into this Agreement
and for the reasons as described in this Agreement; and
WHEREAS, the SBEDC has entered into a certain Project Funding Agreement with the
Redevelopment Agency of the City of San Bernardino (the "Agency") dated as of March_, 2011 (the
"Funding Agreement") whereby the Agency has duly assigned and set over to the SBEDC certain
current and future tax increment revenues of the Agency for the purposes of restructuring the manner
in which the Agency through the SBEDC conducts its governmental functions as a community
redevelopment agency pursuant to the Community Redevelopment Law, found at Health & Safety
Code Section 33000, et seq. (the "CRL"), and for the purposes of having the SBEDC rather than the
Agency, undertake and implement certain redevelopment related projects and other Agency designated
public works projects in a more efficient and expeditious manner than can be accomplished through
operational and management structure utilizing solely the Agency resources for the undertaking and
implementation of all such projects; and
WHEREAS, the SBEDC has determined that the commitments entered into by the SBEDC
with the Agency pursuant to the Funding Agreement requires the SBEDC to enter into this Agreement
with the City for the purposes of further defining and setting forth the manner in which the parties shall
pursue the undertaking and implementation of those City Public Works Projects as further set forth on
said Exhibit"A" which are eligible for reimbursement from the Agency to the SBEDC under the terms
set forth in this Agreement as qualified redevelopment expenses in furtherance of the above stated
purposes; and
WHEREAS, the City is currently without adequate staff and financial resources to undertake
the City Public Works Projects and seeks the assistance of the SBEDC to implement and complete
such City Public Works Projects on behalf of the City; and
WHEREAS, the SBEDC has the expectation of receiving tax increment revenues to be
generated within the various redevelopment project areas (the "Project Areas") of the Agency that are
each subject to their own redevelopment plan (each a "Redevelopment Plan" for the Project Areas) as
required by the CRL.
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NOW, THEREFORE, in consideration of the promises contained herein, and for such other
good and valuable consideration receipt of which is hereby acknowledged, the parties hereto agree as
follows:
Section 1. Reimbursement Agreement.
The SBEDC shall undertake for the benefit of the City all or any number of the City Public
Works Projects in a principal amount not to exceed that amount as set forth in the Exhibit "A" as
attached hereto (the "Commitment Amount"). In the event the City undertakes and completes any of
such City Public Works Projects in lieu of such undertaking and completion having been accomplished
by the SBEDC, the principal amount as expended by the City in furtherance thereof shall bear interest
at the rate of four percent (4%) per annum and shall be payable by the SBEDC to the City as herein
provided. Interest shall be paid quarterly in arrears for the term that any amounts remain outstanding
pursuant to this Agreement as of each January 1, April 1, July 1, and October 1 (each such date being
an "Interest Payment Date") for any period of time for which amounts remain due and payable by the
SBEDC to the City under this Agreement. Interest shall be calculated on the number of actual days
that any principal amount remains outstanding and unpaid in each year on the basis of 365/366 days in
a calendar year.
Section 2. Implementation and Funding;Notice for City to Proceed.
(a) The SBEDC has agreed to reimburse the City or to undertake any or all of the City
Public Works Projects as set forth on Exhibit "A" which shall necessarily include certain qualified
engineering design costs with third party private engineering firms, construction management with
third party private firms and actual construction costs for those City Public Works Projects which will
inure to the benefit of the City and the residents of the entire City and which will additionally
accomplish other public purposes of the City and the SBEDC. The SBEDC shall adhere to
substantially all public works requirements as are applicable to the City and in particular shall pay the
prevailing wage rates as may be applicable from time to time for the type of"public work" then being
undertaken by the SBEDC in accordance with the Public Contracts Code of the State. The SBEDC
shall adhere to such competitive bidding procedures and practices or other forms of procurement that
in the determination of the SBEDC will produce the lowest possible project cost but in conformity with
all requirements of State law.
(b) As a condition precedent to the ability of the City to receive eligible reimbursements
for a City Public Works Project in accordance with this Agreement, prior to the City commencing to
undertake or to expend any dollar amounts on a proposed City Public Works Project, the City shall
provide written notice to the SBEDC in the manner required by Section 11 hereof, and the SBEDC
shall have forty-five (45) days after receipt of such notice to reply in the affirmative that the SBEDC
intends to undertake such designated City Public Works Project and commence the expenditure of
funds with sixty (60) days thereafter. Failure of the SBEDC to timely respond to the City shall be
deemed to be a rejection of acceptance of the contractual obligation to proceed with such designated
City Public Works Project and the City shall be entitled to thereafter proceed utilizing City funds and
seek the reimbursements from the SBEDC in the manner as provided in this Agreement.
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Section 3. Repayment.
(a) Principal. Payment of the principal for any amounts advanced by the City
pursuant to this Agreement on the City Public Works Projects shall be payable to the extent that the
SBEDC has available tax increment revenues as may have been received pursuant to the Funding
Agreement during the term of each applicable Redevelopment Plan of the Agency for which tax
increment revenues are then being generated and are available to the SBEDC and actually received by
the SBEDC. The SBEDC may, without penalty, prepay all or any portion of the principal balance of
the amounts owed to the City pursuant to this Agreement and the SBEDC may remit periodic
payments of principal at any time and from time to time. The SBEDC, at the SBEDC's discretion,
may request that the City provide written evidence of the receipt of those amounts payable pursuant to
this Agreement and verification of the application of all such funds to the principal and interest, if any,
as may be due and payable pursuant to this Agreement.
(b) Interest.
(i) Interest shall be paid quarterly in arrears for the term of this Agreement
with the first quarterly interest payment due upon each Interest Payment Date
during the period of time that any amounts remain due and payable by the
SBEDC to the City pursuant to this Agreement, and the final interest payment
shall be due and payable upon the payment of the final principal payment
hereunder. Interest shall be payable in arrears in quarterly installments based
upon the principal amount that is then outstanding under this Agreement as of
each Interest Payment Date for the precise number of days calculated on a
i 365/366 year basis that the applicable principal amount payable under this
Agreement was outstanding during the applicable Interest Payment Calculation
Period (as defined below). Interest shall compound annually and shall be
calculated in arrears for the applicable calendar year ending as of the calendar
day immediately prior to each one (1) year anniversary date of each advance by
the City on a project by project basis and not on the basis of each periodic
advance (each such calendar year being defined herein as an "Interest Payment
Calculation Period").
(ii) On the final principal payment date, the SBEDC shall pay to the City at
the notice address set forth in Section 11 hereof the outstanding principal
amount due and payable pursuant to this Agreement, all accrued and unpaid
interest and all other amounts due and payable by the SBEDC to the City
pursuant to this Agreement.
(c) Quarterly Payment. Quarterly payments of principal shall be due and payable
on each Interest Payment Date to the extent that the SBEDC has received tax increment revenues
specifically for such purposes pursuant to the Funding Agreement from the applicable Redevelopment
Plan for the Project Areas within which such City Public Works Projects are located (each such
principal payment is herein defined as a"Quarterly Payment").
(d) Late Charges. If a Quarterly Payment is not timely made when tax increment
revenues are specifically available for such purposes and remains overdue for a period of thirty (30)
days after the same becomes due and payable from and after receipt of an invoice or notice from the
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{
I
City to the SBEDC delivered in the manner required by Section 11 hereof, the SBEDC,without further
notice or demand by the City, shall pay a late charge in an amount equal to five percent (5%) of the
delinquent payment due and owing to the City (the "Late Charge"). The SBEDC agrees that an
amount equal to the Late Charge is a reasonable estimate of the damage to the City in the event of a
late payment is remitted by the SBEDC under this Agreement. Each delinquent payment plus the
applicable Late Charge shall bear interest at a rate equal to ten percent (10%) per annum until such
amount is paid in full to the City.
Section 4. No Security' Payment Covenant of the SBEDC.
(a) The payments to be remitted by the SBEDC pursuant to this Agreement are not
secured by the pledge of, the assignment of, or the granting of any security interest in, the assets,
funds, revenues or properties of the SBEDC nor any assignment of the rights of the SBEDC pursuant
to the Funding Agreement.
(b) The SBEDC hereby agrees and covenants to appropriate funds with respect to
each fiscal year throughout the term of this Agreement in an amount sufficient to remit the required
interest payments during the applicable fiscal year if and to the extent the SBEDC did not undertake
one or more City Public Works Projects which were required to be undertaken and completed by the
SBEDC and such City Public Works Projects were in fact undertaken, funded and completed by the
City. In addition, the SBEDC agrees and covenants to appropriate funds with respect to the fiscal year
in which sufficient tax increment revenues are available for such purposes in an amount sufficient to
pay the outstanding principal of and interest on the amounts due and payable, if any, to the City
pursuant to this Agreement.
(c) The obligations of the SBEDC under this Agreement and under the Note are not
guaranteed by, nor payable either directly or indirectly by, nor are they the obligations of any other
governmental agency, but are the unsecured obligations solely of the SBEDC.
Section 5. Prior Indebtedness.
The City hereby acknowledges that the SBEDC has incurred certain prior contractual
performance and financial obligations to the Agency in accordance with the Funding Agreement. The
City acknowledges the financial condition of the SBEDC and recognizes that the SBEDC is presently
without any sources of funds other than those amounts, if any, as may be payable to the SBEDC
pursuant to the Funding Agreement.
Section 6. Representations of the SBEDC.
(a) The SBEDC has been duly organized as a non-profit corporation under the laws
of the State of California and has the power to enter into this Agreement and to incur the obligations
under this Agreement and maintains tax-exempt status pursuant to Section 501(c)(3) of the Internal
Revenue Code.
(b) Execution of this Agreement and of the Note have been duly authorized by the
governing board of the SBEDC.
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(c) No governmental or regulatory approvals that have not been previously obtained
by the SBEDC are required for the due approval, execution and delivery by the SBEDC of this
Agreement.
(d) This Agreement has been duly executed and delivered by the SBEDC and this
Agreement does constitute the valid and binding obligations of the SBEDC payable from the tax
increment revenues to be received by the SBEDC as set forth herein.
(e) The representations of the SBEDC contained in this Agreement shall be true and
correct in all material respects on and as of the date of execution and delivery of this Agreement, with
the same force and effect as though such representations and warranties had been made on and as of
the date of approval of this Agreement by the governing board of the SBEDC.
(f) On and as of the date of this Agreement, the SBEDC is not in default under any
other indebtedness of the SBEDC, and the execution, delivery or performance of the SBEDC of this
Agreement shall not, to the best of the SBEDC`s knowledge, contravene any provision of law, statute,
rule or regulation of any governmental instrumentality and shall not, to the best of the SBEDC's
knowledge, conflict or be inconsistent with or result in any breach of any terms, covenants or
provisions of, or constitute a default under, or result in the creation or imposition of a lien pursuant to
the terms of, any loan agreement, credit agreement or any other agreement, contract or instrument to
which the SBEDC is a party or by which they are bound or to which they may be subject.
Section 7. Events of Default.
(a) By the City. Failure to perform or a delay in performing any term or provision
of this Agreement with such failure or delay not being corrected within thirty (30) calendar days after
receipt of notice thereof from the SBEDC shall constitute a default by the City.
(b) By the SBEDC. Failure to perform or a delay in performing any term or
provision of this Agreement with such failure or delay not being corrected within thirty (30) calendar
days after receipt of notice thereof from the City shall constitute a default by the SBEDC.
Section 8. Remedies.
Upon a default by the City, (i) the SBEDC shall be released from any further obligations under
this Agreement except for the repayment of the principal of and interest on any dollar amounts
previously advanced, if any, by the City in furtherance of any of the City Public Works Projects which
are deemed to be advances to the SBEDC, and (ii) the SBEDC may seek appropriate legal, injunctive
or equitable relief. Upon a default by the SBEDC, the City may institute any proceeding at law or in
equity to enforce the obligations of the SBEDC under this Agreement and/or any covenants and
obligations of the SBEDC contained in this Agreement. In any action brought under this Agreement,
the prevailing party shall be entitled to reimbursement from the other party of its costs and expenses
(including reasonable attorney's fees) in bringing such action. Additionally, the City shall be entitled
to any costs, including reasonable attorney's fees, including those fees and costs of providing legal
services through the office of the City Attorney, incurred in collecting amounts due and payable to the
City under this Agreement.
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Section 9. No Assignment.
The City shall not be entitled to, and shall not, assign this Agreement nor its right to receive
payments under this Agreement to any other party without the prior written consent of the SBEDC first
having been obtained which consent shall not be unreasonably withheld.
Section 10. Term.
This Agreement shall terminate upon the payment in full by the SBEDC of all amounts due
under this Agreement during the period of time that the SBEDC is entitled to receive the tax interment
revenues from the Agency attributable to the redevelopment project areas as further set forth in the
Funding Agreement.
Section 11. Notices.
Notices shall be presented in person or by certified or registered United States mail, return
receipt requested, postage prepaid, or by overnight delivery made by a nationally recognized delivery
service to the addresses noted below. Notice presented by United States mail shall be deemed
effective the second business day after deposit with the United States Postal Service. This Section
shall not prevent giving notice by personal service or telephonically verified fax transmission, which
shall be deemed effective upon actual receipt of such personal service or telephonic verification.
Either party may change their address for receipt of written notice by so notifying the other party in
writing.
TO THE CITY: City of San Bernardino
City Hall, 6t'Floor
300 North"D" Street
San Bernardino, California 92418
Attn: City Manager
TO THE SBEDC: San Bernardino Economic Development Corporation, Inc.
201 North"E" Street, 3ta Floor
San Bernardino, California 92401
Attn: Executive Director
Section 12. Governing Law.
This Agreement shall be governed by the laws of the State of California, and in the event any
party seeks judicial relief or to enforce or to interpret any provision of this Agreement and the Note,
such actions shall be filed in the Superior Court of San Bernardino County, California, Main Branch,
in the City of San Bernardino, California.
Section 13. Entire Agreement.
This Agreement constitutes the entire agreement among the parties and may not be amended
without the prior written consent of the parties hereto. This Agreement supersedes all prior
negotiation, discussions and previous agreements between the parties concerning the subject matter
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herein. The parties intend this Agreement to be the final expression of their agreement with respect to
the terms herein and a complete and exclusive statement of such terms. No modification, amendment
or waiver of any term herein shall be binding unless executed in writing by the parties hereto.
Section 14. Amendment.
This Agreement may be amended as deemed necessary by written instruments duly approved
and executed by the parties hereto. Any such amendments or modifications shall be valid,binding and
legally enforceable only if in written form and executed by the parties hereto after the same have been
duly approved and authorized for execution.
Section 15. Severability.
Each and every section of this Agreement shall be construed as a separate and independent
covenant and agreement. If any term or provision of this Agreement or the application thereof shall be
declared invalid or unenforceable, the remainder of this Agreement, or the application of such term or
provision to circumstances other than those to which it is invalid or unenforceable, shall not be
affected thereby, and each term and provision of this Agreement shall be valid and enforceable to the
extent permitted by law.
[SIGNATURE PAGE FOLLOWS]
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