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Home My WebLink About18- Economic Development ECG .. OMIC DEVELOPMENT A . .' NCY OF THE CITY OF SAN BERNARDINO REQUEST FOR COMMISSION/COUNCIL ACTION FROM: TIMOTHY C. STEINHAUS SUBJECT: ROGER'S BINDERY Agency Administrator DATE: November 10, 1993 ---------------------------------------------------------------------------------------------------------------------------------------- Synopsis of Previous Commission/Council/Committ Action(s): On October 21, 1993, the Community Development Commission authorized staff to foreclose on Roger's Bindery in connection with a $500,000 Agency loan. On November 1, 1993, the Community Development Commission rescinded its prior action authorizing staff to initiate foreclosure proceedings, directed staff to conduct its financial due diligence and continued the matter to November 15, 1993. --------------------------------------------------------------------------------------------------------------------------------------------- Recommended Motion(s): (Community Development Commission) Redevelopment Committee Recommendations MOTION A: That the Community Development Commission subordinate its "first"position on collateral used to secure this loan to allow Roger's Bindery to obtain an additional loan for operating capital, using the same collateral to secure the new loan. The Agency would then be in a "second" position. AWW�t-�-i TIMOTHY C. STEI US Agency Administrator -------------------------------------------------------------------------------------------------------------------------------------------- Contact Person(s): Timothy C. Steinhaus Phone: 5081 Project Area(s): Southeast Industrial Park (SEIP) Ward(s): Three Supporting Data Attached: Staff Report FUNDING REQUIREMENTS: Amount: $ N/A Source: N/A Budget Authority: N/A -------------------------------------------------------------------------------------------------------------------------------------- Commission/Council Notes: - ---------------------------------------------------------------------------------------------------- TCS:lag:rogers.cdc COMMISSION MEETING AGENDA MEETING DATE: 11/15/1993 .1 Agenda Item Number: i !. Request for Commission,,:ouncil Action Roger's Bindery November 10, 1993 0 ------------------------------------------------------------------------------------------------—----------------------- Page Number -2- Recommended Motion(s) Continued: MOTION B: That the Community Development Commission, using the existing principal balance, develop a new amortization schedule using an interest rate which reflects the current economic conditions. MOTION C: That the Community Development Commission build into the new amortization schedule a deferred period. The specific length of this deferred period is yet to be determined. TCS:lag:rogers.cdc COMMISSION MEETING AGENDA MEETING DATE: 11/15/1993 Agenda Item Number: ECONOMIC DEVELOPMENT AGENCY STAFF REPORT Roger's Bindery At its last meeting, the Community Development Commission rescinded its action authorizing staff to initiate foreclosure proceedings against Roger's Bindery, directed staff to conduct its financial due diligence and continued the matter to November 15, 1993. Since that time, Roger's officials have indicated a loan has been obtained which has allowed it to meet certain obligations to the Internal Revenue Service (IRS) and the State Employment Development Department (EDD). Also, during the interim, staff and E.H. Wood and Associates have conduced their due diligence (within the timeframe allotted) so as to be in a better position to respond to Commission inquiries. The report prepared by E.H. Wood and Associates has been provided previously to the Chairman and Commission Members under separate cover in an effort to assist the Commission in making decisions relative to certain complex, and some what controversial, issues. Based upon the foregoing, and the report on Roger's Bindery provided by E.H. Woods and Associates, it is appropriate for the Commission to consider the recommendations submitted to it by its Redevelopment Committee. TIMOTHY C. ST INHAUS, Agency Administrator Economic Development Agency ------------------------------------------------------------------------------------------------------------------------- TCS:lag:rogers.cdc COMMISSION MEETING AGENDA MEETING DATE: 11/15/1993 Agenda Item Number: 1 J I i Uiv 1J- LkJ LL•k-UUi q�-LL- ur r Ll r- i tl_ HU;=WJ Jd4'4bG M31=0 Nb�-A IF 19 CITY OF SAN BERNARDINO INTEROFFICE MEMORANDUM TO: Tim Steinhaus, Administrator, Economic Development Agency FROM: Council Office SUBJECT: Roger's Bindery DATE, October 25, 1993 COPIES. w w o a.+w s w w o■.-------------------------- Please place the following item on the November 1st agenda for reconsideration: ,0 'ER'S BIh_�Y NOTION A: That the Community Development Commission subordinate its "first position on collateral used to secure this lour to allow Roger's Bindery to obtain an additional loan for operating capital, using the same collateral to secure the new loan. The Agency would then be in a 'second" position on the assets used as collateral. MQTI0jj--R: That the Community Development Cornraission, using the existing principal balance, develop anew amortization schedule using an interest rate which reflects the current economic conditions. MQTIDN C: That the Community Development Commission build into the new amortization schedule a deferred period. The specific length of this deferred period is yet to be determined. VALERIE Pop -f.UDLAM Councilwoman, Sixth Ward VPL:sr ��a c STRADLING, YOCCA, CARLSON & RAUTB A PROFESSIONAL CORPORATION rRITZ R.STRADLING ERNEST C.MOWN ATTORNEYS AT LAW •� NICK[.TOCCA TRUCE D.MAY r -JOHN E.SRECKENRIOGE O.CRAIG CARL60N PEOI A.GROUNDWATER 660 NEWPORT CENTER ORrvE,SUITE 1600 � RENA C.ATONE WILLIAM R.RAUTH 111 DONALD J.HAMMAN �. COVN{[� K.C.SCHAAr JOHN J.SWIGART,JR. POST OFFICE SOX 7680 \ 1 CC RICHARD C.GOODMAN STEPHEN G.M[LI KIAN •��`I E� '� JOHN J.MURPHY MICHAEL A.ZA41LCCKI NEWPORT MACH,CALWORNIA 92660.64 1 '� THOMAS P.CLARK,JR. NEILA R.SERNSTEIN r ^� iA1rlM CIpCO OFIICE S[N A.FRYDMAN CELESTE STAHL SRAOY TELEPHONE (714) 640-7033 L V A( 1900 _ DAVID R:M.EWEN CHRISTOPHER J.KILPATRICK T[LECOPIER L,9 �SIiITE 1900 PAUL L.GALE JOEL H.OUT. 601 RONTGOMERY STREET RUDOLPH C.SHEPARD JULIE M.M-CO� (714)640.7 332.(714)640.7 335 TAN F N 15CO3 CA p411I.266S ROS(RT J.KAN[ DAWN C.HONEYWELL J� T } NE(41S17pi.7421 M.O.TALSOT LAWRENCE S.CONN 6RUCE C.STUAR7 STEPHEN T.FREEMAN � t�[ PIER(415)982.7372 DOUGLAS F..IGHAM PERRY J.TARNOFSKY , E.KURT YEAGER ROSERT A.WILSON ROS[RT J.WHALEN CHERYL A.DOW ROS[RT E.RICH NICHOLAS J.YOCCA PETER J.TENNYSON LISA M.KITSUTA THOMAS A.PISTONE JOHN D.STEIN6ERG SCOTT E.M<CONNELL ROSERT C.FUNSTEN RANDALL J.SHERMAN ALETA LOUISE SRYANT 6RUCE W.rEUCHTER J.MICHAEL VAUGHN MARK J.HU[SSCM CIN It.R.HUGHES December 29, 19 8 8 RIRK,,",F. MALDONADO DENISE .MAREAUGH KAREN A.ELLIS SAR6ARA L 2910 (� ILLILASETM C.GREEN ERIC T.SALTZMAN SD Mr . Steven H. Dukett J" — Executive Director Redevelopment Agency of the City of E San Bernardino -- 300 North "D" Street c San Bernardino, CA 92418 cK, Dear Steven: Pursuant to your request we have reviewed the Opinion of the City Attorney of the City of San Bernardino (dated February .,00l 14 , 1985) regarding whether the Community Development Commission may pay its members a fee greater than the thirty dollars ($30 . 00) per meeting as specified in Health and Safety Code Section 33114 . 5 . While a contrary argument can be made, in our view, the more reasonable interpretation of the relevant statutes yields the result that the $30.00 per meeting limitation of Section 33114 . 5 does not apply to a Community Development Commission. Health and Safety Code Sections 33114 and 33114 . 5 provide: (Section 33114) "Members shall receive their actual and necessary expenses, including traveling expenses incurred in the discharge of their duties. They may receive such other compensation as the legislative body prescribes . " AL_ �`1 Mr. Steven H. Dukett December 28, 1988 Page 2 (Section 33114 . 5) "Notwithstanding any other provision of law, whenever the legislative body of a city having a population of less than 200, 000 or the legislative body of a county declares itself to be the agency pursuant to Section 33100, the compensation provided for in Section 33114 shall not exceed thirty dollars ($30 . 00) per member for each meeting of the agency attended by the member. No member shall receive compensation for attending more than four meetings of the agency during any calendar month. In addition, members shall receive their actual and necessary expenses incurred in the discharage of their duties . " Health and Safety Code Section 34130, subsection (a) deals with the appointment and compensation of Commission members , and provides as follows : When a legislative body adopts an ordinance declaring the need for a commission, the mayor or chairman of the board of supervisors or similar official, with the approval of the legislative body, shall appoint the number of resident electors of the community as commissioners as the legislative body prescribes these by ordinance. This legislative body by ordinance may increase or decrease the number of commissioners . The legislative body, except as otherwise expressly provided in Subsection (b) , shall establish and Provide for the terms, compensation and removal of the commissioners . The legislative body shall provide for procedures for appointment or election of the officers of the commission (emphasis added) . a. Mr . Steven H. Dukett December 28, 1988 Page 3 By specifying that compensation of commission members is to be established by the legislative body, and without making any reference to Section 33114 . 5, Section 34130 and 33114 . 5 may be read to be in conflict . Section 34130 was adopted subsequent to the adoption of Section 34114 . 5 . At the same time Health and Safety Code Section 34160 , which was adopted concurrent with the adoption of Section 34130, was adopted which provides : Inconsistent provisions of the Community Redevelopment Law Part One (commencing with Section 33000) and the Housing Authority Law Chapter One (commencing with Section 34000) of Part Two are inoperative during the time an ordinance has been adopted declaring a need for the commission to function, commissioners have been appointed and qualified or the legislative body had declared itself to be the commission, and no suspension ordinance has been adopted. Based upon the terms of Section 34160, a strong argument can be made that the Legislature intended that the provisions of Section 34130 shall apply and control with respect to the compensation of the members of commissions . Section 33114 . 5 was enacted prior to Sections 34130 and 34160; it is presumed the Legislature knew of the provisions of Section 33114 . 5 when it adopted Sections 34130 and 34160, declaring inconsistent provisions of the Community Redevelopment Law Part One to be inoperative during the time a commission has been appointed. Based upon the foregoing, it is our view that if the question is posed to a court, a court should hold that the City is not precluded from approving that compensation be paid to members of the commission in excess of thirty dollars ($30 . 00) per meeting . However, when the City determines such fees compensation it should be careful not to decide upon a level of compensation that may be considered unreasonable as to amount so as to violate the constitutional prohibition against the making of gifts of public funds . Mr. Steven H. Dukett December 28, 1988 Page 4 If you have any further questions regarding this matter please don't hesitate to call . Very truly yours, STR�,?L IN, YOCCA, hRLSON & RAUTH �Ma ' �d. Huebsch MJH:tr 2741n/2266 . 00