Loading...
HomeMy WebLinkAbout02B- Redevelopment Agency MAYOR AND COMMON COUNCIL AND THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO M I N U T E S JOINT ADJOURNED REGULAR MEETING January 25, 1993 10:00 a.m. The Joint Adjourned Regular Meeting of the Mayor and Common Council and the Community Development Commission was called to order by Chairman W. R. Holcomb at approximately 10:02 a.m. on Monday, January 25, 1993, in the Council Chambers, City Hall, 300 North "D" Street, San Bernardino, California. ROLL CALL Roll call was taken with the following members present: Chairman W. R. Holcomb; Commission Members Esther Estrada (late) ; Jack Reilly; Ralph Hernandez; Michael Maudsley; Valerie Pope-Ludlam; and Norine Miller. Absent: Commission Member Tom Minor. STAFF PRESENT Timothy C. Steinhaus, Administrator, Economic Development Agency; Kenneth J. Henderson, Executive Director, Development Department; Dennis Barlow, Senior Assistant City Attorney; Phil Arvizo, Executive Assistant to the Council; Rachel Clark, City Clerk; Melanie Vale, Deputy City Clerk; and La Vonda M-Pearson, Recording Secretary, Development Department. OTHERS IN ATTENDANCE Gene Wood, Consultant, Wood and Associates; Timothy Sabo, Special Counsel, Sabo and Green; Carol Baker, The Sun Newspaper. 1. DUKES - DUKES AND ASSOCIATES LOAN AGREEMENT (Community Development Commission) Kenneth J. Henderson, Executive Director, Development Department, explained to the Commission that at the meeting of January 20, 1993, a special luncheon meeting of the Housing Committee was held to further discuss this issue. At 2:00 p.m. the Community Development Commission voted to continue this item to today, January 25, 1993. CHAIRMAN HOLCOMB WAS EXCUSED AT 10:09 A.M. JOINT ADJOURNED REGULAR MEETING COMMISSION MINUTES KJH:1mp:C-001-6a - 1 - JANUARY 25, 1993 Z6 Mr. Henderson stated that after discussions with staff and the loan applicant, the recommended actions had changed from a loan to a purchase of lots from Dukes - Dukes and Associates. CHAIRMAN HOLCOMB RETURNED AT 10:05 A.M. Mr. Henderson indicated that the Agency would purchase the Dukes owned parcel for $900, 000. The sale would include real property, soil reports, maps, drawings, grading and building permits and sewer control. He stated that the lots were valued at $25, 000 and permits and papers valued at $23, 000 per lot. He also indicated that escrow would not commence until the title papers were submitted for review. Mr. Henderson explained that staff had met with the Bank of San Bernardino and it would make an unsecured loan to the Agency to purchase the parcel and the Agency would repay the bank in 12 monthly - payments. He felt that the Agency could leverage its funds to repay the loan. John Dukes, President, Dukes - Dukes and Associates, stated that he was willing to sell the lots to the Agency for $900, 000, but felt the terms of the agreement should be modified to reflect a sell and not a loan. Mr. Henderson explained that Mr. Dukes was concerned over the agreement allowing the Agency the right to disperse funds as it sees fit. Chairman Holcomb stated that this was a rescue plan for Mr. Dukes. He indicated that the Agency had assisted Mr. Dukes approximately four (4) times. Mr. Dukes stated that his concern was not funds, only the terms of the agreement. Chairman Holcomb said that the Agency wanted to ensure that the funds would be used to pay for Mr. Dukes obligations. Commission Member Maudsley expressed concern over the Agency assisting Mr. Dukes in a financial rescue. Mr. Dukes reiterated that his association should be in charge of the dispersement of funds. Chairman Holcomb said the Agency was only trying to keep Dukes - Dukes and Associates a viable business organization in the community. He explained that Mr. Dukes initial request for assistance was for $350, 000 and he emphasized that it had risen to $900, 000. He said the Agency wanted to disperse the funds to make sure that all obligations were paid for. JOINT ADJOURNED REGULAR MEETING COMMISSION MINUTES KJH:1mp:C-001-6a - 2 - JANUARY 25, 1993 a Commission Member Hernandez asked Mr. Dukes when his loan payments were due to the Bank of San Bernardino. Mr. Dukes responded by stating that the Bank of San Bernardino had been very cooperative and considerate while working with him to repay the loan. He said that all debts would be paid before escrow closed. COMMISSION MEMBER ESTRADA ARRIVED AT 10:23 A.M. Mr. Dukes asked that the purchase agreement be approved and that the advancement of funds be different then what was earlier discussed. Commission Member Estrada stated that she was removing herself from discussion of this item due to a conflict of interest. COMMISSION MEMBER ESTRADA WAS EXCUSED AT 10:25 A.M. _ Commission Member Hernandez questioned the conflict between Dukes - Dukes and Associates and Commission Member Estrada. Dennis Barlow, Senior Assistant City Attorney, explained that if the Commission voted to assist Mr. Dukes in staying afloat, it would benefit the Casa Ramona Project. Mr. Dukes indicated that he had previously worked with Casa Ramona before its project went to bid. Commission Member Miller asked what the Agency would due with the 38 lots. Mr. Henderson stated that the Agency would attempt to sell the lots or send out an RFP for completion of the project. Chairman Holcomb stated if staff and the loan applicant could not come to terms with the agreement, the meeting would have to be adjourned. Mr. Henderson informed the Commission that Mr. Dukes had agreed to the terms of the agreement as written. Commission Member Pope-Ludlam made a motion, seconded by Commission Member Hernandez to purchase the Dukes-owned thirty-eight (38) lot subdivision located at the northeast corner of 16th and California Streets at a price not-to-exceed $900, 000, and authorize the Chairman and Executive Director to execute all such documents in connection with the implementation of the attached Real Property Purchase Agreement. Jeff Wright, Citizen, expressed concern over the Commission purchasing property to assist Mr. Dukes during these economic times. JOINT ADJOURNED REGULAR MEETING COMMISSION MINUTES KJH:lmp:C-001-6a - 3 - JANUARY 25, 1993 Chairman Holcomb explained that the Bank of San Bernardino was willing to fund this project. Commission Member Maudsley stated that he would like to view the appraisal to determine the current value of the land. He also questioned the Agency borrowing the $900, 000 at prime rate with a 60 day escrow and interim loan to Mr. Dukes at no cost. Chairman Holcomb explained that the funds would not be deposited until the day escrow closes. Mr. Henderson stated the interim loan would be used to pay for tax liens and interest rates to Bank of San Bernardino. He said the loan would not accrue interest because it was considered a business re-organization loan. Discussion ensued regarding the interim loan bearing interest. _ Mr. Dukes agreed to pay interest on the loan. Commission Member Maudsley asked for clarification of Page 8, Paragraph 2 of the purchase agreement which states, "Upon establishment of the escrow, the Agency shall deposit $900, 000 into the escrow which . . . ". After discussion regarding this statement, the Commission agreed to amend the agreement to state that the funds not be deposited until the close of escrow. Commission Member Maudsley asked when the last appraisal was done on the parcel. Mr. Henderson said that the Agency had never appraised the parcel because it was not Agency-owned. CHAIRMAN HOLCOMB WAS EXCUSED AT 10:37 A.M. Timothy C. Steinhaus, Administrator, Economic Development Agency, explained that the bank completed an appraisal on the parcel at approximately $24, 000 a lot a year ago. He stated that staff would have the appraiser update that appraisal to determine the fair value for the property. CHAIRMAN HOLCOMB RETURNED AT 10:39 A.M. Commission Member Maudsley stated it was prudent to establish the value of the parcel so it did not appear as if the Agency was giving Mr. Dukes a gift. Mr. Steinhaus recommended the funds be given to Mr. Dukes contingent upon the appraised value of the parcel. He said if the appraisal was less, staff would bring the item back to the Commission for recommendation. JOINT ADJOURNED REGULAR MEETING COMMISSION MINUTES KJH:1mp:C-001-6a - 4 - JANUARY 25, 1993 ZB Commission Member Pope-Ludlam made an amended motion, seconded by Commission Member Hernandez to purchase the Dukes owned thirty-eight (38) lot subdivision located at the northeast corner of 16th and California Streets at a price not-to-exceed $900, 000; and that the Chairman and Executive Director be authorized to execute all such documents in connection with the implementation of the attached Real Property Purchase Agreement with the following three modifications: 1) that the interim loan shall bear interest at the same rate as charged to the Economic Development Agency by the lending institution; 2) that funds shall not be deposited into the escrow account until escrow is ready to close; and 3) that approval of the Real Property Purchase Agreement is contingent upon an appraisal value of not less than $23, 680 per lot, and that if the appraisal is less than that amount per lot, then the agreement will return to the Community Development Commission. The motion carried by the following vote: Ayes: Commission _ Members Reilly; Hernandez; Maudsley; Pope-Ludlam. Noes: Commission Member Miller. Abstain: None. Absent: Commission Members Estrada; Minor. 2. ADJOURNMENT At 10:43 a.m. , the meeting of the Mayor and Common Council and the Community Development Commission was adjourned to Monday, February 1, 1993, at 11:00 a.m. , in the Council Chambers of City Hall, 300 North "D" Street, San Bernardino, California. Respectfully submitted: KENNETH J. HENDERSON Executive Director/ Secretary to the Commission JOINT ADJOURNED REGULAR MEETING COMMISSION MINUTES KJH:lmp:C-001-6a - 5 - JANUARY 25, 1993