The URL can be used to link to this page

Home My WebLink About07- 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 ------------------------------------------------------------------------------- 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. ------------------------------------------------------------------------------- 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 ------------------------------------------------------------------------------- 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 ------------------------------------------------------------------------------- Commission/Council Notes: ------------------------------------------------------------------------------- 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. ------------------------------------------------------------------------------- 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 ------------------------------------------------------------------------------- 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