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HomeMy WebLinkAbout06- Development Department DR V E L O P ME NT D E P A R T ME NT OF THE CITY OF SAN BERNARDINO REQUEST FOR COMMISSION/COUNCIL ACTION From: KENNETH J. HENDERSON Subject: SAN BERNARDINO Executive Director MITSUBISHI CERTIFICATE OF COMPLETION Date: September 15, 1993 ------------------------------------------------------------------------------- Synopsis of Previous Commission/Council/Committee Action(s): None. ------------------------------------------------------------------------------- Recommended Motion(s): (Community Development Commission) MOTION: That the Community Development Commission ratify the execution of a Certificate of Completion and Waiver and Release of Right of Reentry in connection with a refinancing of San Bernardino Mitsubishi's automobile 4 dealership property. Administrator KENNETH J. REND SON Executive Direc or ------------------------------------------------------------------------------- Contact Person(s): Kenneth J. Henderson/John Wood Phone: 5081 Project Area(s): Southeast Industrial Park (SEIP) Ward(s): Three (3) Supporting Data Attached: Staff Report: Certificate of Completion; City Attorney Memorandum FUNDING REQUIREMENTS: Amount: $ None Source: N/A Budget Authority: N/A ------------------------------------------------------------------------------- Commission/Council Notes: ------------------------------------------------------------------------------- KJH:JMW:dle:6234R COMMISSION MEETING AGENDA Meeting Date: 09/20/1993 Agenda Item Number: D E V E L O P M E N T D E P A R T M E N T OF THE CITY OF SAN BERNARDINO STAFF REPORT SAN BERNARDINO MITSUBISHI CERTIFICATE OF COMPLETION At the time that the San Bernardino Auto Plaza was in the planning stage, the Redevelopment Agency was concerned about the possibility of automobile dealers purchasing lots within the Auto Plaza, but not following through with the construction of building improvements in a timely manner. It was decided that an acceptable solution was to include in the Grant Deed from the developer to the automobile dealer language reserving a right of reentry in the event construction targets were not met. The right of reentry was reserved for both the developer, Orange Show Plaza Associates, and the Redevelopment Agency. Thus, if the developer did not reenter, repossess and resell the land pursuant to this language, the Redevelopment Agency could. Fortunately, this right never had to be exercised, as all of the dealerships were completed within the respective time periods allowed. The sole exception was Friedlander Acura, which was subsequently satisfactorily completed pursuant to a separate Owner Participation Agreement. Any automobile dealer which completed construction on schedule could request a waiver and release of the developer's/Agency's right of reentry. Originally, it was envisioned that such a certificate would be provided by the developer, but it is staff's understanding that Orange Show Plaza Associates is no longer in business. While the Redevelopment Agency has no development agreements with any of the Auto Plaza dealers (except Friedlander Acura, as noted above, and Obershaw Toyota, which purchased an already-constructed dealership), as a third party beneficiary of the grant deeds between the developer and the automobile dealerships, and given the defunct status of the developer, it seems incumbent upon the Agency to issue the subject waivers and releases. San Bernardino Mitsubishi is the first Auto Plaza dealership to request such a document and has done so to satisfy a lender requirement in connection with a refinancing. Staff confirmed that the construction obligations were complied with and consulted with the office of the City Attorney regarding the propriety of issuing the requested certificate. Given the tight timeframe for closing the refinancing escrow, the City Attorney's staff advised that the Executive Director could execute the document and have the action ratified by the Community Development Commission at a later date. This item seeks said ratification. ------------------------------------------------------------------------------- KJH:JMW:dle:6234R COMMISSION MEETING AGENDA Meeting Date: 09/20/1993 Agenda Item Number: i 0 i { DEVELOPMENT DEPARTMENT STAFF REPORT RE: SAN BERNARDINO MITSUBISHI CERTIFICATE OF COMPLETION Septembrt 15, 1993 Page Number —2— Attached for reference are copies of the Certificate of Completion and Waiver and Release of Right of Reentry and memorandum from the City Attorney's office advising staff of how to proceed in this matter. Staff recommends adoption of the form motion. KENNETH J. HEN ERSON, Executive Director Development De artment 1 a i i i a 1 i 3 I i I 1 i 1 ----------------- ------- -------------------------------------- KJH:JMW:dle:6234R COMMISSION MEETING AGENDA Meeting Date: 09/20/1993 Agenda Item Number: RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: MATLO, LTD. c/o Richard E. Gattis, Esq. 2729 4th Avenue, Suite 2 San Diego, California 92103 CERTIFICATE OF COMPLETION AND WAIVER AND RELEASE OF RIGHT OF REENTRY This Certificate of Completion and Waiver and Release of Right of Reentry (hereinafter referred to as "Certificate") is given this 24th day of August , 1993 by the Redevelopment Agency of the City of San Bernardino (hereinafter referred to as "Agency") to MATLO, LTD. , a California Limited Partnership (hereinafter referred to as "Owner") . WHEREAS, Owner acquired that certain real property located in the County of San Bernardino, State of California, more particularly described in Exhibit "A" attached hereto and incorporated herein by this reference (hereinafter referred to as "property") from Orange Show Plaza Associates, a California _ Limited Partnership ("Developer") pursuant to Grant Deed recorded November 13, 1986 in the official records of San Bernardino County as Instrument No. 86-336365 (hereinafter referred to as "Grant Deed") ; WHEREAS, the provisions of the Grant Deed provided that Developer and Agency would have a right of reentry to the property in the event that Owner failed to commence construction of an automobile dealership facility within six months from the date of the recordation of the Grant Deed or failed to complete construction of said automobile dealership within nine months from the date of commencement of construction; and WHEREAS, the Grant Deed further provides that upon satisfactory completion of the automobile dealership facility, Agency would provide Owner with a certificate in recordable form evidencing and acknowledging Owner's completion of the automobile dealership facility and waiving and releasing Agency's right of reentry to the property provided for in the Grant Deed; and WHEREAS Owner has satisfactorily completed construction of the automobile dealership facility in accordance with all MM- MAT2C 1 .DOC requirements of the Grant Deed; NOW, THEREFORE, Agency agrees as follows: 1. Agency acknowledges in this Certificate that Owner has satisfactorily completed construction of an automobile dealership facility on the property in accordance with all requirements contained in the Grant Deed. 2. Agency in this Certificate hereby waives and releases its right of reentry to the property and acknowledges and agrees that its right of reentry to the property pursuant to the express condition subsequent contained in the Grant Deed is hereby terminated. DATED: (f=e?�!- 9.3 REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO By: A"I " Title: h(c. �"400L MM- MAT2C 2 .DOC EXHIBIT "A" PARCEL 8 OF PARCEL MAP NO. 9713, IN THE CITY OF SAN BERNARDINO, AS PER PLAT THEREOF RECORDED IN BOOK 106 OF PARCEL MAPS, PAGES 91 THROUGH 93, RECORDS OF THE COUNTY RECORDER OF SAN BERNARDINO COUNTY, CALIFORNIA. EXCEPT ALL OIL, MINERALS, NATURAL GAS, AND OTHER HYDROCARBONS BY WHATEVER NAME KNOWN THAT MAY BE WITHIN OR UNDER THE PARCEL OF LAND HEREINABOVE DESCRIBED, TOGETHER WITH CERTAIN APPURTENANT RIGHTS THERETO, AS RESERVED BY THE CITY OF RIVERSIDE IN THE DEED TO THE STATE OF CALIFORNIA, RECORDED DECEMBER 29, 1955 IN BOOK 3820, PAGE 542, OFFICIAL RECORDS. STATE OF CALIFORNIA ) COUNTY OE=5 q&aMVa„y�d On .? 1993, before me/ a notary public in and for the State o California, personally appe?iFed (or proved to me on the basis of satisfactory evidence) to be the personW whose name W is/awe subscribed to the within instrument and acknowledged to me that he/shs� executed the same in his/.her it e i r authorized ca acit and that b his hor '��'= si nature P Y(-�') � Y /----, ----- g (-sj on the instrument the person(s}, or the entity upon behalf of which the person(s.}- acted, executed the instrument. WITNESS my hand and official seal. SIGNATURE• - JACQUEUNE M.ARNOLD _ COMM.#976440 • N010Y PubAc—Colifornio SAN BERNARDINO COUNTY My Comm.Expires NOV 1.1996 MM- MAT2C .DOC 3 �` 0 MEMORANDUM TO: Kenneth J. Henderson, Executive Director Attn: John Wood FROM: Dennis A. Barlow, Sr. Asst. City Attorney/ �.? RE: San Bernardino Mitsubishi �J DATE: August 20, 1993 The question presented is whether the Executive Director may sign a proposed "Certificate of Completion and Waiver and Release of Right of Reentry" for the owner to obtain refinancing. The background briefly is that the Agency entered into an OPA with the developers of the Auto Plaza on December 23, 1985. this Agreement provides that the Agency will provide a Certificate of Compliance to the developer either as each parcel is completed or when the entire project is finished. This Agreement was amended on July 24, 1986 and May 17, 1988, primarily to extend some of the dates. On October 9, 1986 the developer conveyed one of the parcels to Matlo, Ltd. (San Bernardino Mitsubishi) . This conveyance included a right of reentry and revesting in both the developer and the Agency in case certain completion dates were not met. This condition on behalf of the Agency was not required by the OPA and the deed was not signed by the Agency. as such the Agency becomes a third party beneficiary of the Agreement between the developer and the grantee. Now in order to obtain a refinance the parcel owner seeks waiver of these rights by the Agency. It seems to me that these are very real rights vested in the Agency (although - somewhat illusory since the project has been completed) . As such they must be waived only by the Commission unless the Commission has delegated such power to staff. I am not aware that such delegation has ever occurred, and especially so since this is the first time this specific issue has arisen. I present the following options: 1. Advise the parcel owner that Commission authorization must be obtained at the next commission meeting. This may jeopardize the refinance. 2. Have either the Executive Director or the Chairman sign the documents subject to later confirmation by the Commission. This is probably the best option since in reality this Agency is not giving up anything. there is no right to reenter since the project has been completed as required.