HomeMy WebLinkAbout10- Development Department LI
DEVELOPMENT DEPARTM1; i4T
OF THE CITY OF SAN BERNARDINO
REQUEST FOR COMMISSION/COUNCI • ACTION
FROM: KENNETH J. HENDERSON SUBJECT: ARROW VIEW PLAZA LTD -
Executive Director REFINANCING REQUEST
DATE: December 16, 1993
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S_ynopsis of Previous Commission/Council/Committee Action( )•
On October 5, 1992, the Community Development Commission approved a request for financial assistance to
Arrowview Plaza, Ltd., contingent upon loan approvals from Chino Valley Bank.
I On December 9, 1993, the Redevelopment Committee recommended to the Community Development
Commission approval of the Arrowview Plaza Ltd., refinancing request subject to the terms set forth in the staff
report and Chino Valley Bank approval.
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Recommended Motion(s):
(Community Development Commission)
MOTION: That the Community Development Commission approve, and authorize the Executive Director to
draft and execute documents to implement, a restructuring of the Agency's interim construction
loan of$900,000 to Arrowview Plaza, Ltd., subject to Chino Valley Bank approval, which, after
repayment to the Agency of$400,000 will result in a medium term loan of$500,000 on terms as
described in the attached staff report.
Administrator KENNETH J. HE DERSON
Executive Director
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Contact Person(s): Kenneth J Henderson/John Hoeger Phone: 5081
Project Area(s): Northwest (NW) Ward(s): Six (6)
Supporting Data Attached: Staff Report:
FUNDING REQUIREMENTS: Amount: $No Additional Source: N/A
Budget Authority: N/A
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Commission/Council Not c:
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KJH:JB H:lag:arwvwplz.cdc COMMISSION MEETING AGENDA
MEETING DATE: 12/20/1993
Agenda Item Number: _
DE ELOPMENT DEPART , ENT
STAFF REPORT
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ARROWVIEW PLAZA LTD - Refinancing Request
The attached letter from Mr. Michael Geber, President of Arrowview Plaza Ltd., requests that
the Agency restructure its existing junior loan for construction of a 33,792 square foot office
building at Highland Avenue and Massachusetts Street (the letter mentions an Agency
guarantee, but the actual transaction is that Chino Valley Bank loans the money to the
Agency and the Agency reloans the money to Arrowview). The proposal is that Arrowview
will pay off $400,000 of the existing loan to reduce the principal amount from $900,000 to
$500,000. The remaining $500,000 will be loaned for 5 years. Arrowview will pay the
Agency 1% interest (or $5,000) per year over and above the bank's interest charge which is
paid directly to the bank. The loan would be subordinate to primary financing also supplied
by Chino Valley Bank. The Agency's $7,500 amendment fee is applicable and Arrowview
will also pay the Agency 1% ($5,000) as additional consideration for the conversion of the
loan to intermediate status. Arrowview will pay all costs imposed by the bank.
Staff has not received any of the bank documentation or details for financial analysis of the
project. Arrowview, however, has asked that the Commission consider this matter at its next
meeting so that action can be taken in December. The project has provided development of a
vacant site in the Northwest Project Area and houses 220 jobs provided by the County's
Department of Public Social Services. The project is projected to produce $25,000 per year
in tax increment to the Agency and also results in utility tax revenue to the City.
For the foregoing reasons, it is appropriate that the Community Development Commission
consider approval of Arrowview's request. Documents are not currently available for detailed
review. Staff, however, can complete and execute the necessary agreements based upon the
Commission's direction.
Staff recommends adoption of the form motion.
'`K o
KENNETH J. H NDERSON, Executive Director
Development De artment
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KJH:JBH:1ag:arwvwplz.cdc COMMISSION MEETING AGENDA
MEETING DATE: 12/20/1993
Agenda Item Number: % O
APUCWVIEW PLAZA LIMITED
A CALIFORNIA LIMITED PARTNERSHIP
111.
1111 1950 SAWTELLE BOULEVARD
IM114114 11111
114141111 11111
I III 111114 11111
141111114
11111
1,11111111 iii:: SUITE 280 Tel: (310)479-4933
LOS ANGELES, CA 90025 Fax: (310)312-0830
Mr. Timothy C. Stienhaus;
Agency Administrator,
ECONOMIC DEVELOPMENT AGENCY
201 North E Street, '\OV 2 9 1 93
Third Floor,
San Bernardino, CA- 92401-1507
November 26, 1993
Re: Economic Development Agency
Guarantee $500,000 Permanent Loan
Office Building on
Highland Avenue at Massachusetts
Dear
Tim
With
reference to the above and our meeting f
g November
24th with you and Councilwoman Pope-Ludlum, I am writing to
set out the substance of our discussion.
In our current arrangement the EDA provided a $900,000
loan guarantee for construction of the building on the above
site. This loan was made available by Chino Valley Bank and
the City did not use its own money. During the construction
period the City earned $9000. 00 in fees and approximately
$4600. 00 in interest fees for acting as guarantor. The
building is now complete and we are arranging for a permanent
loan.
As discussed, we will i) pay down $400,000 of the $900,000
guarantee ii) pay a point amounting to $5000. 00 on the reduced
guarantee iii) pay 1% above the rate the bank charges us
amounting to $5000.00 per annum. In exchange, the City
through the EDA will agree to leave a reduced guarantee of
$500,000 for a period of five years, to coincide with the
length of the permanent loan.
It is unlikely that the extension of the guarantee will
run for the full five year period. The building may be sold
prior to that or a different permanent loan may be obtained
after a lease renegotiation.
Since the permanent loan is now in discussion with the
bank, I would be pleased if you would place this request for
an extension of the guarantee for the reduced amount of
$500,000 on the agenda for the Agency's meeting on December
9th, 1993 .
Ir
� e
Should you require any additional information please
contact me. Thank you for the courtesy and time extended to
me at our last meeting.
Sincerely,
a .j , resident
Arrowview aza, Ltd. ,
a Califo nia Limited Partnership
Michael John Enterprises, Inc.
General Pa4tner
c.c. Councilwoman V. Pope-Ludlum
i
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