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HomeMy WebLinkAbout02- Minutes 3 REDEVELOPMENT COMMITTEE MINUTES SPECIAL MEETING October 28, 1993 3:00 p.m. The special meeting of the Redevelopment Committee was called to order by Chairwoman Valerie Pope-Ludlam at 3:09 p.m. in the Economic Development Agency Board Room, 201 North "E" Street, San Bernardino, California. ROLL CALL Roll call was taken with the following members present: Chairwoman Valerie Pope-Ludlam and Committee Members Edward Negrete and Ralph Hernandez. Mayor Tom Minor was also in attendance. STAFF PRESENT Timothy C. Steinhaus, Administrator, Economic Development Agency; Kenneth J. Henderson, Executive Director, Development Department; Dennis A. Barlow, Senior Assistant City Attorney; Phil Arvizo, Executive Assistant to the Council; Lorraine Velarde, Executive Assistant to the Mayor; La Vonda M-Pearson, Recording Secretary, Development Department. OTHERS IN ATTENDANCE Roger Imbriani, Owner, Roger's Bindery; Bob Forrest, Chief Financial Officer, Roger's Bindery; Richard Brooks, The Sun Newspaper. 1. ROGER'S BINDERY Chairwoman Pope-Ludlam indicated that she had received several calls from citizens throughout San Bernardino who expressed concern regarding the initiation of foreclosure on Roger's Bindery. She spoke on the benefit of the bindery to the community which employed over 75% minorities. She felt if the City foreclosed on the bindery and took the equipment which was placed as collateral for the Agency's loan, it would still not cover the costs owed to the Agency. She stressed that other alternatives be viewed in lieu of foreclosure. Roger Imbriani, Owner of Roger's Bindery, indicated that he employed approximately 776 employees. He stated that the figure included both San Bernardino and Colton employees and that 90% of those employees lived in San Bernardino. SPECIAL MEETING REDEVELOPMENT COMMITTEE lmp:rminoct2 - 1 - OCTOBER 28, 1993 17 Bob Forrest, Chief Financial Officer, Roger's Bindery, informed the Committee that the Colton facility processed the Los Angeles Times Newspaper Mayor Minor questioned the number of employees in each facility. He asked Mr. Forrest what affect the foreclosure would have on the Colton facility. Mr. Forrest explained that the foreclosure would affect both facilities. He noted that the equipment originally placed as collateral had been replaced with new equipment and that the net worth of that equipment was 10% of the purchase price of$10.2 million. Dennis A. Barlow, Senior Assistant City Attorney, clarified that the VCC-1 placed on the old equipment would carry over to the new equipment. Mr. Forrest stated that the bindery was having a difficult time obtaining a loan to assist it with its finanial difficulties due to the publicity it has received regarding the foreclosure proceedings. Mayor Minor stated that he did not wish to foreclose on the bindery, but that the City had a fiduciary responsibility to the taxpayers to get their money back. He explained that a proposal was needed from the bindery that could assure the City that its funds would be repayed. Committee Member Negrete agreed that a committment was needed from the bindery that staff would be able to work with. Committee Member Hernandez stated that if a guarantee was given from the bindery that it would remain in business in the City, and that it would maintain the same payroll, the City could possibly give them credit for years in the City. He indicated that this type of payback had been done in the past. Mr. Barlow recommended that the collateral for that type of agreement be real property. Mr. Forrest briefed the Committee on poor business practices by the bindery in the past. He said that the bindery has been in business for over 27 years, in San Bernardino for 10 years and now supports over 165 vendors. He indicated that Mr. Imbriani had recently signed another 10 year lease. He explained that the bindery had lost its real property and that the owner had placed all of his private funds into the business. He agreed to the recommendation proposed by Committee Member Hernandez. Kenneth J. Henderson, Executive Director, Development Department, provided comments regarding actions taken by the Commission at the October 21, 1993 meeting. He noted that Mr. Gene Wood, Consultant, had been retained by the Agency to review the financial records of the bindery as requested by the Commission. He emphasized that the bindery had been very cooperative in allowing Mr. Gene Wood access to its files. Mr. Henderson stated that the original three (3) motions placed on the Agenda were scheduled to be resubmitted at the next meeting. He said those motions would accomplish what the Committee was suggesting. SPECIAL MEETING lmp:r'minoct2 REDEVELOPMENT COMMITTEE 2 - OCTOBER 28, 1993 Chairwoman Pope-Ludlam expressed concern regarding the amount of employees at Roger's Bindery and how a foreclosure would affect them. A lengthy discussion ensued regarding the party who held first position to the loan provided to Roger's Bindery. Mr. Forrest believed that first position belonged to Fremont Bank. Mayor Minor reviewed the chronology of events provided by the Agency. He revealed that the bindery began having financial difficulties in 1985, before the decline in economic conditions. He questioned the bindery's plan of action to resolve its financial problems. Mr. Forrest summarized the past history of the bindery since he was hired five (5) years ago. He stated that when he was first hired, the bindery was upside down approximately $500,000. Since that time, they have began making profits which were adequate for binding businesses. Mr. Forrest recommended the bindery be given partial pardon for the interest payments it has made to the Agency. He stated that his records listed interest payments of approximately $268,000. He requested a pardon of approximately 50% of that amount and asked that the balance of the loan be amortized over the amount of time the bindery has been in San Bernardino. Mr. Henderson recalled interest payments of approximately $158,000, but stated the dollar figure could be clarified by staff and Mr. Forrest. Committee Member Negrete recommended the foreclosure proceedings be stopped and that staff and representatives for the bindery meet and come up with alternative solutions for the business. Discussion ensued regarding the impact foreclosure proceedings have on a business. RECOMMENDATION The Committee recommended to the Community Development Commission to rescind the actions taken at the October 21, 1993 meeting. It also recommended that the original motions placed on the October 21 agenda be reconsidered. 2. ADJOURN TO CLOSED SESSION There were no items for discussion in closed session. SPECIAL MEETING REDEVELOPMENT COMMITTEE Imp:rminoct2 - 3 - OCTOBER 28, 1993 1 3. ADJOURNMENT There being no further business, the meeting of the Redevelopment Committee was adjourned at 4:05 p.m. APPROVED BY: VALERIE POPE-LUDLAM, Chairwoman Redevelopment Committee SPECIAL MEETING REDEVELOPMENT COMMITTEE %OPP° 1mp:rminoct2 - 4 - OCTOBER 28, 1993 I