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Home My WebLink About18- Development Services DEVEI - PMENT DEPARTMENT OF T. -. CITY OF SAN BERNARDINO REQUEST FOR COMMISSION/COUNCIL ACTION F SUBJECT: UNIVERSTTY VILLAGE ROM: KENNETH J. HENDERSON ASSISTANCE REQUEST Executive Director DATE: August 30, 1993 --------------------------------------------------------------- Svnonsis of Previous Commission/Council/Committee Actions On August 19, 1993,the Redevelopment Committee recommended that the staff create alternative scenarios for Community Development Commission review and consideration. -------------------------------------------- Recommended Motions . (Community Development Comte—n MOTION: That the Community Development Commission consider possible Agency assistance to Camden Development,Ltd., in support of its proposed retail development located in the State College Project Area,together with a review of funding allocations and resources. � ��I r Admini ator KENNETH J. HENPERSON Executive Director -------------------------- -- ------------ - - -------------------------------- - - 5081 ----------------- Phone: Contact Person(s): Kenneth J_Henderson/John Hoeuer Ward(s): Five Project Area(s): State Colle e Supporting Data Attached: Staff Re ort FUNDING REQUIREMENTS: Amount: U 350.000 Source: Bond Proceeds and Tax Inc. Budget Authority: Re uested Commission/Council Notes: --------------------------------------------------------------------- -- ------- ------ COMMISSION MEETING AGENDA KJH:JBH:lag:uniwlg.cdc MEETING DATE: 09/07/1993 Agenda Item Number: --J- DEVELC MENT DEPARTMENT STAFF REPORT ----------- -------------------------------------------------------------------------------- Universe Vilta a Assistance Rawest Since February of year,, Camden Development, Ltd. has met with various Commission Y assistance with its proposal to Members and with Agency Staff in an effort to obtain Agency center project in the develop University Village Shopping Center, a convenience shopping P l State College Redevelopment Project Area. The project, as presented, requires assistance are foot of building), because it is unusually costly for this type of project ($122 per squ because first phase construction requiring costly site work cannot a site carried h is the to the first phase by itself, and because the developer has p develop due to extensive hillside management iss issues and d frontage area onulUn versitytParkway existing residential areas. Additionally, a relatively g must be improved to handle the additional traffic that its l imp ct he location the adopted pnorities Center's patronage. The Agency has constraints reatest possible return and limited available funds require that as sisted projects provide the g P for the investment. The project is located in an area that is relatively successful l and resumably, be possible again as that is able to proceed on private resources alone. Th ' p riorities are focused more in the economy recovers from its current downturn• The adopted p project areas. the downtown Central Business District and the Mount composed of a gasoline station, two fast food The project, as currently described, is primarily Ty, plus strip retail space. A bank branch operations, a family restaurant, and a childcare facile p e expansion can be attracted to the could be a possible tenant if a banking firm that can justify ositions with high turnover. All LE area. The jobs, however, are primarily part-time, low wage p of these factors have made it difficult to support the developer's request for a grant of assistance to facilitate the development. Without taking steps to encumber additional Agency and would reeal ecati use existing most priorities and programs, the requested assistance for this project of the remainder of the Agency's forecasted tax increment and out bond funds, a mined, o the next three years. This could leave the Agency essentially we likely needs. THE DEVELOPER'S REQUEST In its most recent form, the developer has requested $1,350,000 in assistance made up of an Agency contribution to the project plus a loan: A. A contribution of $1.1 million based upon its costs cost f k it has that results from the character of the land p urchased and the constructing a quality development; and, ---------------------------------------------------------------------------COMMISSION MEETING AGENDA KJH:JBHJag:univvlg.cdc MEETING DATE: 09/07/1993 Agenda Item Number: --&L DEVELOPMENT DEPARTMENT cTAFF REPORT , University Village Assistance Req,-st August 27, 1993 PageNumber=2---------------------------------_------------------------------ ---__- —"- ect (the B. A loan of $250,000 to reduce the developer's plus balloon developer envisioned terms of 3 years, i nterest only payments p payment at the end). On August 19, 1993, the Redevelopment Committee heard the developer's most recent assistance request and asked that staff develop several alternative assistance scenarios for consideration by the Commission. ALTERNATIVE SCE S: 1. A contribution of 65$ 0,0 0• A. A contribution of $650,000 in the form of reimbursements for pe ifi pluse improvements based upon estimated tax increment receipts o Y ears, an allowance for production of 200 new full-time jobs in San Bernardino. u. A contribution of M 00 plus a loan au�antee of 70�0 000. A. A contribution of $650,000 in the form of reimbursements for fpveiyears,pluse improvements based upon estimated tax increment re an allowance for production of 200 new full-time jobs in San Bernardino. B. An Agency guarantee of $700,000 to facilitate acquisition of additional private financing for the project. contribution of 650 0_00>J l�an a enc loan of 70$ 0,00 • A. A contribution of $650,000 in the form of reimbursements for specified five years, plow improvements based upon estimated tax increment an allowance for production of 200 new full-time jobs in San Bernardino. B. An Agency loan of $700,000 for additional project financing. Term of seven years, interest rate of prime plus two points (8 0/6), quarterly payments of interest only for two years changing to amortized payments for the remaining five years. ------------- -- _ _ ----------------------------------------------------- --C ObVIISSION MEETING AGENDA KJH JBH:1ag:univv1g.cdc MEETING DATE: 09/07/1993 Agenda Item Number: —,d- DEVELOPMENT DEPARTMENT TAFF REPORT University Village Assistance Request August 27, 1993 Page Number_3---------------------------------- -- -------------------- ------------------ °- ------_._ IV. A contribution of $650,000 plus an A enc loan of 70$_4 O00 �'�'h___1c_h can be Daid ��by_perf�e• A. A contribution of $650,000 in the form of reimbursements ment receipts for specified ve five years,me improvements based upon estimated tax an allowance for production of 200 new full-time jobs in San Bernardino. B. An Agency loan of $700,000 to complete the project financing. Term of seven years, interest rate of prime plus two points (8%), quarterly payments of interest only for two years changing to amortized payments for the remaining five years. C. The Agency loan could be partially paid through credits for: 1 Tax Increment generation that exceeds $400,000 during the first five years after completion of Phase I. 2. A credit of $1,000 per job for each new and additional full-time equivalent (FTE) permanent job created in San Bernardino in excess of 200 within the first five years after completion of Phase r I. 3 A return by the City of San Bernardino of 50% of the net increase in sales tax due to the project during its first five years after completion of Phase I. V. A contribution of 650 0_0� A enc purchase of the hillside area for 75�__0 0_00. A. A contribution of $650,000 in the form of reimbursements for specified off-site improvements based upon estimated tax increment 'obs in San B rnardino.plus an allowance for production of 200 new J B. The Agency to purchase the improved hillside area for $750,000. C. The developer to provide a satisfactory guarantee of maintenance of the hillside landscaping. -------------------------------------------------------------------------- -----------------° COMMISSION MEETING AGENDA KJH:JBH:lag:uniwlg.cdc MEETING DATE: 09/07/1993 Agenda Item Number: - University Village Assistance RequP--t August 27, 1993 Fage Number_4------------------------------------------------------------_-------------------------------- SOURCE OF FUNDS On August 9, 1993, the Commission met to consider its established priorities and current the work in progress. At that meeting, an action was taken to allocate additional ss not complete,oand no wo p construction of the new Central Police Station. Although process which has bids have been received, an estimated amount That number will soon be revised as we near continued to be the goal for the project cost. the completion of working drawings which will allow more precise quantities and specifications. Based upon the Commission's actions a total of $9,8d00,u00 n)of thelStationf for was construction (not including furnishings, fixtures, an equipment) from 80% monies to obtained by shifting $1 million in a mobile home park funding priority e revenues from street tree 20% set aside monies, by redirecting $300,000 in golf course leas min and by reducing the adopted priority (at least temporarily) for the Vernon and the tnm g, Demolition Loan Program in the amount of $250,000e ac . totals u followsrecaste tax increment and bond funds, combined, for the next three Y Fore_ casted Tag Increment and Bond Proceeds ALL PROJECT AREAS (Three Years, Ending June 30, 1996) FORECASTED UNALLOCATED: $8,037,792 LESS ADOPTED PRIORITIES. $1,250,000 Community Hospital $1,750,000 Mt. Vernon $1,000,000 Performing Arts Center LESS INITIATED PROJECTS: $ 700,000 Sm Bus Loans (2 add'l yrs) $ 175,000 Court & E Prkg Impvts $ 200,000 Court St. Diag Perm Impvts $ 75,000 "E" St Diag Experiment $ 750,000 "E" St Diag Perm Impvts $ 58,000 "E" St Terrace Impvts $ 225,000 201 Bldg Tenant Impvts FORECASTED BALANCE (FY1996) $1,874,792 ------------ ---------------------------------------------------------------------------COMMISSION MEETING AGENDA KJHJBH:lag:univvlg.cdc MEETING DATE: 09/07/1993 t Agenda Item Number: —44L University Village Assistance Req,- -t E August 27, 1993 Page Number------------------------------------------------------ 5 ---------- -------------- --------------------------------- ------ L While this indicates that there are surplus funds available, there is actually no provision for a number of important probable costs and contingencies during the next three years. Some of these are: State Bu Requirements. The forecast does for not poses a for additional money (beyond the current year) pure balancing the State's budget• ibutions level ould t million total as much l uch as $2 4 two years alone, future contr million for three years. Site AssAss=lv. Additional site assembly on the east one-half of the Government Center block has been discussed, but an additional $3 million or more may be needed for this assembly. Business Attraction/Develonment. Any programs other than the • existing ones do not have designated funding. Potential Tax Allocation Bond Issue. A $16 million issue has been discussed but would require $4.5 million for three year's debt service. provision_For Bad Debts. The forecast assumes that more than $4 million owed by developers will be paid to the Agency in a timely manner n delayed eand sometimes forgiven ent t m ely. This debts have bee is not provided for. Central Police Sta=Furni—gs• The forecast does not provide funds for the furniture, fixtures, and equipment needed in the facility. Detailed analysis of furniture, security system,other requirements document imaging, s are not included ed in the forecast underway. Th ese cost and may exceed $1,800,000. Real Estate Dever Assiae• The forecast does not have any additional provisions for assistance to new development projects, such as University Village, or for rehabilitation/reuse projects or for additional assistance needed by existing projects. ------------------ --------------------------------------------------------------------------COMMISSION MEETING AGENDA KJH:JBH:lag:univvlg.cdc MEETING DATE: 09/07/1993 f Agenda Item Number: Jf- r f DEVELOPMENT DEPARTMENT STAFF REPORT University Village Assistance Request August 27, 1993 Page Number -6- _____________-__- ------------------------------------------------------- A enc Loan Gua=es• The Agency serves as guarantor for more than $4.5 million in loans that banks have made to developers. No provision is made in the forecast for pay ments that would be required if any of these guarantees are called upon. Based upon these potential requirements, staff has been already below those needed for the contribution as it would further reduce reserves which are next three years. The Redevelopment Committee recommended wishtto reexamine the current alternative scenarios for consideration and the Commission y allocations of Agency resources and potential requirements for e ter project sgdeemed t three years if a decision to assist the University Village Shopping appropriate. Staff recommends adoption of the form motion. n KENNETH J. HEN ERSON, Executive Director Development Department ________________ ------------------ ------------ COMMISSION MEETING AGENDA KJH JBH:1ag:univvlg.cdc MEETING DATE: 09/07/1993 Agenda Item Number: —ZY-