HomeMy WebLinkAbout05 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
REQUEST FOR COMMISSION/COUNCIL ACTION
From: KENNETH J. HENDERSON Subject: WATSON MEDICAL
Executive Director LABORATORIES, INC.
Date: November 2, 1992
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Synopsis of Previous Commission/Council/Committee Action(s):
On October 22, 1992, the Redevelopment Committee reviewed and
forwarded to the Community Development Commission a recommendation to
approve a development "gap loan" in the amount of $125,000 for the
construction of a new medical services building to be located at 4835
North Hallmark Parkway.
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Recommended Motion(s):
(Community Development Commission)
MOTION: That the Community Development Commission approve a
development "gap loan" in the amount of $125,000 to Mr.
Paul Watson of Watson Medical Laboratories, Inc. , for the
construction of a new medical services building to be
located at 4835 North Hallmark Parkway and authorize the
Chairman and Executive Director to develop an execute
appropriate contractual loan agreements.
Administrator J. HEND RSON
Executive Director
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Contact Person(s): Ken Henderson/James Sharp Phone: 5081
Project Area(s): State College Business Park Ward(s): Five(5)
Supporting Data Attached: Staff Report
FUNDING REQUIREMENTS: Amount: $ 125,000 Source: Tax Increment
Budget Authority: Reouested
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Commission/Council Notes:
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KJH:JWS:mkc:2641J COMMISSION MEETING AGENDA
Meeting Date: 11/02/1992
Agenda Item Number: -!L
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
WATSON MEDICAL LABORATORIES, INC.
In the spring of 1992, Mr. Bruce Varner of Gresham, Varner, Savage,
Nolan and Tilden contacted the Agency regarding assistance for the
development of a medical laboratory building to be located at 4835
North Hallmark Parkway. Mr. Varner represented Mr. Paul Watson of
Watson Medical Laboratories, Inc.
Mr. Watson currently leases facilities in the City of San Bernardino
and in the City of Colton. Due to the successful efforts of his
business, he has found it advantageous to both combine and enlarge his
facilities. After careful consideration, Mr. Watson selected and
purchased a vacant parcel of land within the State College Industrial
Park consisting of approximately 73,100 square feet. Upon reaching a
design concept, Mr. Watson found that the relative cost for developing
the new facility had grown beyond his expectations and ability to
adequately fund said development. Mr. Watson, therefore, contacted Mr.
Varner to represent him in his request to the Agency for assistance.
Staff has reviewed, analyzed and responded to the development pro
formas as provided by Mr. Watson. It is evident that based upon the
actual bidding of components for the development and after the initial
capital investment of approximately $400,000, there would be an
additional cash shortfall of approximately $125,000 to complete the
development. The following is a brief summary of the project:
Watson Medical Laboratory Building
4835 North Hallmark Parkway
Land Cost (Actual) 73,000 SF $ 290,000
Building Cost (Actual) 20,000 SF
Office Space - 3,000 SF
Laboratory - 12,000 SF
Warehouse - 5,000 SF 1,350,000
Tenant Improvements 465,000
Total Development Cost $2,105,000
Financed Portion (75%) $1580,000
Cash Requirements for Funding
Balance $ 525,000
Ownership Outlay to Date ( 400,000)
Additional Capitalization Requested $ 125,000
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KJH:JWS:mkc:2641J COM[rIISSION MEETING AGENDA
Meeting Date: 11/02/19
Agenda Item Number:
DEVELOPMENT DEPARTMENT STAFF REPORT
Watson Medical Laboratories, Inc.
November 2, 1992
Page limber -2-
Staff has thoroughly reviewed the pro forma and related construction
costs. Staff concurs with the costs as presented. It should be noted
that because of his banking relationships and successful business
history, Mr. Watson was able to obtain a favorable seventy-five percent
(75%) loan for the permanent financing of this facility.
Staff has determined that the most appropriate assistance would be an
"Interim Gap Loan" in the amount of $125,000. The proposed terms are as
follows:
A. Principal Loan Amount - $125,000
Interest Rate - 9%
Payments shall be principal and interest amortized over 20 years
with a balloon payment for the balance of the principal of said loan
at the end of year five. 5
B. Loan Origination Fee - 1.5%
To be paid by the borrower to the Agency prior to, and consecutively
with, the funding of the Interim Gap Loan.
C. Security - Second Deed of Trust
Mr. Watson is currently operating two leased facilities, one in the City
of Colton and the other in the City of San Bernardino. The approval of
said Gap Loan would provide the necessary capital for the successful
development and ownership of a new commercial property within the State
College Industrial Park area. With the completion of this project, the
City would enjoy an increased tax increment benefit of $21,050 annually
(of which $4,210 would go to the housing fund) and would gain an
additional fifty (50) jobs in the workforce.
Staff recommends adoption of the form motion.
QL44m
KENNETH J. HEND RSON, Executive Director
Development Department
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KJH:JWS:mkc:2641J COMMISSION MEETING AGENDA
Meeting Date: 11/02/199
Agenda Item Number:
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