HomeMy WebLinkAbout07- Development Department D E V i O P M E N T D E P A R T M E
OF THE CITY OF SAN BERNARDINO
REQUEST FOR COMMISSION/COUNCIL ACTION
From: KENNETH J. HENDERSON Subject: TERMINATION AGREEMENT —
Executive Director AMERICAN NATIONAL CAN
Date: July 23, 1993
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Synopsis of Previous Commission/Council/Committee Action(s):
On July 22, 1993, the Redevelopment Committee recommended to the
Community Development Commission that the Executive Director be
authorized execute a Satisfaction and Termination Agreement with
American National Can for the termination of an Owner Participation
Agreement dated November 4, 1991.
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Recommended Motion(s):
(Community Development Commission)
MOTION: That the Community Development Commission authorize the
Executive Director to execute a Satisfaction and
Termination Agreement with American National Can Company
for the termination of an Owner Participation Agreement
dated November 4, 1993.
Administrator KE TH J. HEkfiE1ZSON
Executive Director
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Contact Person(s) : Ken Henderson/David J. Norman Phone: 5081
Project Area(s) : State College Ward(s) : 5
Supporting Data Attached: Staff Report
FUNDING REQUIREMENTS: Amount: $ N/A Source: N/A
Budget Authority: N/A
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Commission/Council Notes:
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KJH:DJN:rg:3246J COMMISSION MEETING AGENDA
AL Meeting Date: 08/02/1993
Agenda Item Number: I
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
Termination Agreement — American National Can
Staff seeks authorization from the Community Development Commission for
the Executive Director to execute a Satisfaction and Termination
Agreement of the Owner Participation Agreement (OPA) dated November 4,
1991) by and between the Redevelopment Agency and American National Can
Company. American National Can was to develop a 200,000 square foot
beverage can plant in the State College Redevelopment Project area.
Due, however, to current excess capacity and long term weakness in
demand in the Southern California beverage can business, American has
found it necessary to ask for termination of the OPA in accordance with
its terms and conditions. The OPA provides for termination in these
circumstances and American will repay the Agency for all of its costs
to date.
BACKGROUND
On November 4, 1991, American National Can Company entered into an OPA
with the Redevelopment Agency. American National Can was to construct
a plant with a minimum value of $45,000,000. In furtherance of this
objective the Company acquired land within the project area adequate to
develop the plant. The Participation Agreement committed the Agency to
provide American National Can with $604,000 of assistance for sewer
capacity charges at the time of construction. The OPA also provided
that if unforeseen changes in the circumstances surrounding the project
were so significant as to make it commercially impractical to complete
the project, American National Can could terminate the agreement upon
payment to the Agency of any costs it incurred in connection with the
Agreement.
At the time of the execution of this OPA, American National Can had two
plants in Southern California, one in Vernon and another in
Chatsworth. American National Can was planning to close the Vernon
plant and transfer its production to the new San Bernardino plant. The
Vernon plant has since been closed; however, a major decline in demand
for two piece beverage containers in Southern California forced
American to reconsider building any new plant in the Southwest.
Instead, American has covered its needs by constructing an additional
manufacturing line at its Chatsworth facility.
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KJH:DJN:rg:3246J COMMISSION MEETING AGENDA
Meeting Date: 08/02/1993
Agenda Item Number:
DEVELOPMENT DEPARTMENT STAFF REPORT
TERMINATION AGREEMENT
July 23, 1993
Page Number —2—
In September of 1992, the Mayor's Office received a letter from
American National Can asking to be relieved of the requirement for the
building of the can plant in San Bernardino. In the interim, the
company has worked with Agency staff and its own counsel/Administrators
to resolve termination of mutual contractural obligations.
Fortunately, none of the sewer capacity fee charges have been expended
and the Agency's administrative costs have been relatively minor. As
required by the OPA, American has offered to pay for all administrative
charges connected with this project which staff has calculated to be
$6,856.86.
RECOMMENDATION
Agency Special Counsel has drafted the attached Satisfaction and
Termination Agreement. American has reviewed and agreed to the terms
of the Agreement. In light of the foregoing it is appropriate that the
agreement be executed.
Staff recommends adoption of the form motion.
Vim` _
KENNETH J. HE RSON, Executive Director
Development De artment
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KJH:DJN:rg:3246J COMMISSION MEETING AGENDA
Meeting Date: 08/02/1993
Agenda Item Number: �_
SATISFACTION AND TERMINAC_JN
AGREEMENT
BY AND
BETWEEN
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
AND
AMERICAN NATIONAL CAN COMPANY,
a Delaware Corporation
THIS SATISFACTION AND TERMINATION AGREEMENT is entered
into by and between the REDEVELOPMENT AGENCY OF THE CITY OF SAN
BERNARDINO (the "Agency") and AMERICAN NATIONAL CAN COMPANY, a
Delaware Corporation (the "Participant") and is dated as of
1993 .
R E C I T A L S
WHEREAS, the Agency and the Participant have previously
entered into a certain Owner Participation Agreement ("OPA") dated
as of November 4, 1991 for the purposes of causing the development
of a two hundred thousand (200, 000) square foot beverage can plant
(the "Project") with an estimated assessed valuation of at least
Forty Five Million Dollars ($45,000,000) on certain property
designated as the Site as more fully described in the OPA; and
WHEREAS in order to assist in the development p nt of the
Project, the Agency was to assist the Participant in offsetting the
applicable sewer capacity charges by granting to the Participant
one hundred sewer capacity rights valued at Two Hundred Twenty Six
Thousand Dollars ($226, 000) and, in addition, the Agency was to pay
the remainder d;� 'the one time sewer capaci,;-'•charge to be imposed
on the Project ,ticipated by the Parties ,o be Three Hundred
Seventy Seven Thousand Seven Hundred Fifty Dollars ($377,750) ; and
40 WHEREAS, at the present time economic conditions have
negatively impacted the feasibility of development of the Project
and to date the Participant has not undertaken the construction of
the Project; and
WHEREAS, the Participant has requested that the Agency
terminate the OPA and deem the conditions therein satisfied and
completed; and
WHEREAS, the Agency deems it desirable to cause the
termination of the OPA upon payment to the Agency of the costs
incurred by the Agency in connection with the administration of the
OPA and in accordance with Section 202 of the OPA.
I
NOW, THEREFORE, in consideration for their mutual
covenants and provisions set forth hereinafter, the Agency and the
Participant hereby agree as follows:
Section 1. Upon payment to the Agency of the sum
of $6,856.86, representing administrative costs, Participant shall
be excused from any fprther performance under the terms of the OPA.
sg�-C • The A enc s
9 y �ereby agrees that upon
the satisfact n of the requirements of s tion 1 hereinabove and
in consideration therefore, the Agency shall not pursue any of the
rights or remedies that it may otherwise be entitled to under
default provisions contained in the OPA and the OPA shall be deemed
terminated and of no further force or effect.
Section 3 . The terms used herein unless
otherwise defined shall have the same meaning as in the OPA.
Section 4 . The terms covenants, conditions and
restrictions of this Agreement shall extend to and shall be binding
upon and inure to the benefit of the heirs, executors,
administrators, successors and assigns of the Participant.
B
A
IN WIC 'ESS WHEREOF, the parties h<<_eto have caused this
Agreement to be cecuted as of the date fir, above written.
"AGENCY"
REDEVELOPMENT AGENCY OF THE
CITY OF SAN BERNARDINO
By
Executive Director
APPROVED AS TO FORM AND LEGAL CONTENT:
By: Qfu--
Special nsel to the Agency
"PARTICIPANT"
AMERICAN NATIONAL CAN COMPANY
a Delaware Corporation
By:
President
By:
Secretary
SBBD=J/DOC/6d3
62553 345