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Home My WebLink About15- Development Department DEVELOPMENT DEPARTMENT OF THE CITY OF SAN BERNARDINO REQUEST FOR COMMISSION/COUNCIL ACTION FROM: KENNETH J. HENDERSON SUBJECT: SAN BERNARDINO Executive Director COMMUNITY HOSPITAL MEDICAL OFFICE BUILDING DATE: November 10, 1993 PROJECT --------------------------------------------------------------------------------------------------------------------------------------------- Synopsis of Previous Commission/Council/Committee Action(s): In February 1992, the Community Development Commission granted its conceptual approval to a loan guarantee for the San Bernardino Community Hospital Medical Office Building. --------------------------------------------------------------------------------------------------------------------------------------------- Recommended Motion(s): (Community Development Commission) MOTION: That the Community Development Commission approve a Redevelopment Agency loan guarantee related to the construction by San Bernardino Community Hospital of a 59,000 square foot medical office building based upon the terms and conditions set forth in the staff report and subject only to the review and approval of loan documents by Agency Counsel. Further, that the Chairman and Executive Director be authorized to execute all documents to effectuate said transaction. "Aw4m Administrator KE9NETfi J. HEN ERSON Executive Director I! --------------------------------------------------------------------------------------------------------------------------------------------- Contact Person(s): Kenneth J. Henderson Phone: 5081 Project Area(s): All Ward(s): Seven (7) Supporting Data Attached: Staff Report: Loan Agreement FUNDING REQUIREMENTS: Amount: lContingent Source: N/A Liability Budget Authority: Requested --------------------------------------------------------------------------------------------------------------------------------------------- Commission/Council Note -------------------------------------------------------------------------------------------------------------------------- KJH:lag:medoffc.cdc COMMISSION MEETING AGENDA MEETING DATE: 11/15/1993 Agenda Item Number: 1 �� DEVELOPMENT DEPARTMENT STAFF REPORT --------------------------------------------------------------------------------------------------------------------- San Bernardino Community Hospital Medical Office Building Project This staff report recommends to the Community Development Commission approval of a loan guarantee in connection with the financing of a new medical office building for the San Bernardino Community Hospital. Background In February of 1992, the Community Development Commission provided its conceptual approval of a construction loan guarantee with a private lender. Unfortunately, the ninety (90) day preliminary loan commitment expired without the transaction be consummated. Since that time, hospital administration and Agency staff have worked diligently to bring about this much needed project. Project The project is a three-story 59,000 square foot (49,100 square foot rentable) medical office building which will be utilized to house additional physicians on the campus of the Community Hospital, plus a pharmacy, laboratory and x-ray facilities. In addition, the project will cause the development and completion of a Thermal Energy Storage System for the entire Community Hospital campus. The anticipated benefits related to the successful completion of this project are significant, including the recruitment and retention of new physicians expected to utilize the services of the Community Hospital, which is critical to the long-term economic viability of the hospital. The Thermal Energy Storage System will allow the hospital to save as much as $100,000 annually in electricity charges. It is also important to note that, in our continuing effort to accelerate the accomplishment of specific redevelopment objectives in the Northwest Redevelopment Project area, the creation of construction and permanent jobs, required as a result of bringing new physicians to the Hospital campus and staffing the pharmacy, laboratory and x-ray facilities, will significantly assist in raising the economic base of the immediate surrounding area. ------------------------------------------------------------------------------------------------------------------------- KJH:1ag:medoffc.cdc COMMISSION MEETING AGENDA MEETING DATE: 11/15/1993 Agenda Item Number: DEVELOPMENT DEPARTMENT STAFF REPORT San Bernardino Community Hospital Medical Office Building November 10, 1993 Page Number -3- ------------------------------------------------------------------------------------------------------------------------- Deal Points: Term: Conditions The following summarizes the salient aspects of the transaction as proposed: • Loan Amount: $8.9 Million • Lender: Great Pacific Securities of Irvine, California (Private Placement) • Borrower: Arrowhead Health Care System (Parent Company of San Bernardino Community Hospital) • Interest Rate: 7.25% taxable annual interest • Term: Twenty-five (25) year amortization • Timing: Loan scheduled to close (fund) as early as December 15, 1993, but no later than December 31, 1993. Construction scheduled to begin no later than January 31, 1994. • Agency Participation Loan to be made directly to Arrowhead Health Care Liability: System. Loan to be guaranteed by Redevelopment Agency. If default occurs, lender will look first to Arrowhead Health Care System, secondly to San Bernardino Community Hospital and, lastly, to the Redevelopment Agency's guarantee. The guarantee from the Redevelopment Agency requires no pledging of assets (full faith and credit guarantee). It is important to note the Community Hospital has never missed a payment nor has it been late with a payment on the $40 million bond issue utilized to construct it 4-1/2 year old patient tower. -------------------------------------------------------------------------------------------------------------------------- KJH:1ag:medoffc.cdc COMMISSION MEETING AGENDA MEETING DATE: 11/15/1993 Agenda Item Number: 1 i DEVELOPMENT DEPARTMENT STAFF REPORT San Bernardino Community Hospital Medical Office Building November 10, 1993 Page Number -4- ------------------------------------------------------------------------------------------------------------------------ Recommendation Based upon the foregoing project description, project benefits and summary of deal points, staff recommends adoption of the form motion. KENNETH J. HE DERSON, Executive Director Development Department -------------------------------------------------------------------------------------------------------------------------- KJH:lag:medoffc.cdc COMMISSION MEETING AGENDA MEETING DATE: 11/15/1993 115 Agenda Item Number: 11/10/93 14:13 01 7' 887 6468 SB COMM HOSPITAL 191002 11/03/93 09:42 714 887 54M sB COt1M HOSPITAL WHITEHALL GROUP 0002 LOAN AGREEMENT The Whitehall Group VWhltehall")a private Irwestment banking firm JOGeted at goo N.Michigan Ave., lith Floor. Chlcno iL 80611 hereby agrees, subject to theterms and conditions heretnafterstated,to smnp Private Placernan't Funding for a loan to A~and mean Can System('Borrower to CanstrW an addttbn to the San Bernardino Community Hospital. 1,AMOUNT OF LOAN- $8,900,0W.00 2.TERM Of LOAM-and months & iNT9REST RATE-not to exceed 7.25%taxWe anneal into". 4. PAYMENT SCHEDULE-self amortizing dutlnp re ttlmt, 5. COLLATERAL- The Borrower shall provide security and credit enhencenlertt N in* form of W An Irrevocable,unconditional guarardeebytheR"evelopment AgencyoftheCityof San Samsrolno 'RDA')InetaWas 'in the event of default,for any reason whatsoever,the RDA*5 paydebt service when due•. The enhaimment shall be structured to be outside of the estate of the Borrower and me righis therelo snail De veiled In a&YYhftehalt doolunated trustee for the oenefit of um Note hoidere, The truates shall not be required to resort to!opal process in Omer to obtain timely sooeas to the enhancement vehicle. S. FeE TO WHITEHALL-Whitehali shoo Be wdRled to reoetve,at loan dosing,a tae equal 10 of 3%(three percerd)of the gross amount of Ire funding fin addition all reasonable loan processing and closing cows IttahAIng but not limited to lepni,ecoounttng.end appraise!costs shall be paid by Doroower at torn ctositp, l t pre—pa ent fee on unpaid bniance T. PREPAYMENT-Borrower may prepay the loan attar the twelfth(1')year subject to yield maintenamx rt 751,8313 points over US Treesury*m same maturity as the average remaining ilia of The loan. 0. STANDBY FEE-A payment in the amourd of Tlrerrty 19ve7housand U.S.Dollars($25,090.00)!a to be paid to Whitehall when Borrower signs this agreement Said$25.00.00 will be Credited againat the fea due Whitehall at loan closing. However,In the evern Borrower does Comply wM the terms and conditions of lhla aproament an& Ordoes not proceed with and execute lhis loan with in the terms and canditions of this agreement the standby rem shall then become Payment to VVhltehaR as ilquidated damages for 38MOSS rendered. In the event Mill"all does not provide funding for this loan with In the aforemerilloned terms and Conditions the standby fa!shall be returned to bormwar. 9. CLOSING DATE-The closing date 31:811 be on Of before 30 days after Som wer signs this agreement and has provided Whllehan with oonflrritation Of the Cotlatent requtrerheata(see above pats,i15)as wall a$ati other documentation as is standard ana customary for finwKMpa of this type. 10. JURISDICTION-All terms andcondKlansofthi sLoanAgreementshall begovernedbytherlawsofthetltoto or callf0mis. K Is understood thlswill Do privately Placed structured financing under a trust IndenWr4 and In rallanoe on the exemption from the registration requirements or the SecuritleaAct of 1933,as amended,forprfvate placements and Pwsuarn tv Rota 144A thereunder subject to the terms and oonmtlons as are standard and Customary for ftn andngn of this type. The WMTRtIALL Group Anawhaad Health Cars ZYZ4 F W TatuMA roa ant By: C.E Kraus,Prss tit Date Data / �� T001n dflOUD 'I'IVH3,bIHM £80L 8t•Z ZT£$ L4:TT £0/E9/TT