HomeMy WebLinkAbout07- Development Department DEVELOPMENT DEPARTMENT OF THE
CITY OF SAN BERNARDINO
REQUEST FOR COMMISSION/COUNCIL ACTION
From: KENNETH J. HENDERSON Subject: WELLS FARGO LINE OF
Executive Director CREDIT EXTENSION
Date: March 12, 1993
-------------------------------------------------------------------------------
Synopsis of Previous Commission/Council/Committee Action(s):
On July 2, 1990, the Community Development Commission authorized the
execution of a Letter of Acceptance for a Line of Credit with Wells
Fargo.
On October 1, 1990, the Community Development Commission authorized the
negotiation of an agreement with Wells Fargo Bank for investment
services.
On December 10, 1990, the Community Development Commission authorized
lines of credit with Wells Fargo Bank.
(Synopsis Continued to Next Page. . .)
-------------------------------------------------------------------------------
Recommended Motion:
(Community Development Commission)
MOTION: That the Community Development Commission authorize a one year
extension of certain Lines of Credit with Wells Fargo Bank and
authorize the execution of said documents.
Administrator KENNETH J. HENDE SON, Executive Director
Development Department
-------------------------------------------------------------------------------
Contact Person: Ken Henderson/Barbara Lindseth Phone: 5065; 5081
Project Area: All Ward(s): 1 through 7
Supporting Data Attached: Staff Report
FUNDING REQUIREMENTS: Amount: N/A Source: N/A
Budget Authority: N/A
-------------------------------------------------------------------------------
Commission/Council Notes:
-------------------------------------------------------------------------------
KJH:BJL:1679A COMMISSION MEETING
Meeting Date: 3/22/1993
Agenda Item Number: --
DEVELOPMENT DEPARTMENT
REQUEST FOR COMMISSION/COUNCIL ACTION
Wells Fargo Line of Credit Extension
Page —2—
-------------------------------------------------------------------------------
Synopsis of Previous Commission/Council/Committee Action(s) Continued
On April 17, 1991, the Community Development Commission authorized the
Executive Director to make certain financial guarantees with regard to the
West Side Plaza Project.
On June 3, 1991, the Community Development Commission authorized the
amendment of certain lines of credit with Wells Fargo Bank and the
execution of certain documents in connection therewith.
On February 17, 1992, the Community Development Commission approved a one
year extension of the Lines of Credit with Wells Fargo Bank.
On March 11, 1993, the Redevelopment Committee recommended to the
Community Development Commission approval of this item.
-------------------------------------------------------------------------------
KJH:BJL:1679A COMMISSION MEETING
Meeting Date: 3/22/1993
Agenda Item Number:
DEVELOPMENT DEPARTMENT
STAFF REPORT
-------------------------------------------------------------------------------
Wells Fargo Line of Credit Amendment
In 1990, the firm of Wood-Husing and Associates was directed to assist
the Department with the maximization of yields the Department could
earn on its investment portfolio by undertaking a review of the cost,
risk and rate of return from alternate investment strategies available,
consistent with the Department's existing investment policies. The
firm was also directed to maximize the leverage which that portfolio
gives the Department in obtaining loanable funds from the banking
community by assisting in negotiating with Wells Fargo Bank a maximum
line of credit for use on redevelopment projects.
As approved on July 2, 1990 by the Commission, and as amended on June
3, 1991, the Line of Credit was designed to extend credit to the
Department in the aggregate principal amount of $10,000,000. This is a
secured line of credit payable at prime rate minus .50% to be repaid at
the Department's terms, with a current maturity date of March 1, 1993,
and with collateral of secured interest in cash or cash equivalents of
not less than the line commitment. There are no commitment or loan
fees.
As collateral, $10,000,000 was approved by the Commission to be
invested through Wells Fargo Bank Investment Services. These funds are
tax increment funds, not bond proceeds, and the funds are invested in
accordance with the Department's Investment Policy. Investment of
these funds with Wells Fargo meets the requirement that the Department
secures any remaining draws on the $10,000,000, and any outstanding
draws on the line of credit.
In addition, the Commission adopted benefit resolutions (5266 and 5292)
authorizing the deposit of funds from the Southeast Industrial Park
project area to be invested with Wells Fargo as collateral for the
lines of credit issued to the Northwest and South Valle project area.
Said benefit resolutions are still in effect; however, the Lines of
Credit will expire on March 1, 1993 (Wells fargo has granted the
Department a thirty (30) day extension pending final approval).
It is proposed to extend the maturity date of the line of credit for
one year, until March 1, 1994, with the same terms and conditions and
stated above.
-------------------------------------------------------------------------------
KJH:BJL:1679A COMMISSION MEETING
Meeting Date: 3/22/1993
Agenda Item Number: r
DEVELOPMENT DEPARTMENT STAFF REPORT
Line of Credit With Wells Fargo Bank
March 12, 1993
Page Number -2-
-------------------------------------------------------------------------------
Staff recommends extension of the Line of Credit for one year, until
March 1, 1994, because the Line is critical to the West Side Plaza
project, the HAB Development and the Portugal and Neal Development.
Staff recommends adoption of the form motion.
YALJVW-�h
KENNE J.' IHENOERSON, Executive Director
Development Department
-------------------------------------------------------------------------------
KJH:BJL:1679A COMMISSION MEETING
Meeting Date: 3/22/1993
Agenda Item Number:
WELLS FARGO BANK
Flair Industrial Park
Regional Commercial Banking Office
9000 Flair Drive,4th Floor
El Monte,CA 91731 March 1, 1993
Mr. Kenneth J. Henderson, Executive Director
Redevelopment Agency of the City of San Bernardino
201 N. "E" Street, 3rd Floor
San Bernardino, CA 92401-1507
Dear Mr. Henderson:
This letter is to confirm the changes agreed upon between
Wells Fargo Bank, National Association ("Bank") and the
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO ("Borrower")
to the terms and conditions of that certain letter agreement
between Bank and Borrower dated as of April 1, 1992 (the
"Agreement") . Bank and Borrower hereby agree that the Agreement
shall be amended as follows to reflect said changes.
1. The Agreement is hereby amended by deleting "twelve
(12) " as the number of redevelopment project areas referenced in
the second paragraph on Page 1, and by substituting "ten (10) "
therefor. Said redevelopment project areas are listed on Exhibit
A attached hereto, which "Exhibit All hereto is deemed by this
reference to be "Exhibit All to the Agreement.
2 . The Agreement is hereby amended by deleting "March 1,
1993" as the last day on which Bank will make advances under the
Secured Line of Credit, and by substituting for said date "March
1, 1994, " with such change to be effective upon the execution and
delivery to Bank of a promissory note substantially in the form
of Exhibit B attached hereto (which promissory note shall replace
and be deemed the Secured Line of Credit Note defined in and made
pursuant to the Agreement) and all other contracts, instruments
and documents required by Bank to evidence such change.
3 . The Agreement is hereby amended (a) by deleting "March
1, 1993" as the last day on which Bank will issue Letters of
Credit under the subfeature therefor under the Secured Line of
Credit, and by substituting for said date "March 1, 1994, " and
(b) by deleting "June 1, 1994" as the last date on which any such
Letter of Credit may expire, and by substituting for said date
"March 1, 1995. "
4 . The Agreement is hereby amended by deleting "June 30,
1991" as the date of the financial statement heretofore delivered
by Borrower to Bank, and by substituting for said date "June 30,
1992" .
Primed on Recycled Paper
5. The sentence in sub-paragraph (d) of Section I 1. of the
Agreement, which begins with the words "For the purpose of" and
ends with the words, "same manner as an advance" is deleted
hereby and the following is substituted therefor:
"For the purposes of paragraph 1 (b) hereof as
it relates to requests for and limitations on
advances, paragraph 1 (c) hereof as it relates
to security for advances and paragraph 2
hereof as it relates to security for
advances, each request by Borrower for a
Letter of Credit shall be treated in the same
manner as a request for an advance, and
Borrower's obligations and liabilities to
Bank in connection with each Letter of Credit
shall be secured in the same manner as an
advance. "
6. Except as specifically provided herein, all terms and
conditions of the Agreement remain in full force and effect,
without waiver or modification. All terms defined in the
Agreement shall have the same meaning when used herein. This
letter and the Agreement shall be read together, as one document.
7. Borrower hereby remakes all representations and
warranties contained in the Agreement and reaffirms all covenants
set forth therein. Borrower further certifies that as of the
date of Borrower's acknowledgment set forth below there exists no
default or defined event of default under the Agreement or any
promissory note or other contract, instrument or document
executed in connection therewith, nor any condition, act or event
which with the giving of notice or the passage of time or both
;would constitute such a default or defined event of default.
8. It is a condition precedent to the accommodations
granted Borrower by Bank hereunder, that in connection with this
letter Borrower shall have executed, or cause to be executed and
delivered to Bank this letter, the new promissory note described
above, and any and all other contracts, instruments and documents
deemed necessary by Bank to evidence Bank's extension of credit
to Borrower pursuant to the terms and conditions hereof. All
such documents shall be part of the "Loan Documents" as that term
is used in the Agreement. Without limiting the foregoing, in
connection herewith Borrower shall deliver to Bank such documents
as Bank may require to assure Bank that Borrower has the right,
power and authority to enter into this Agreement. Without
limiting the foregoing, Borrower shall also furnish Bank with a
legal opinion from counsel to Borrower acceptable to Bank,
assuring Bank as to such matters as Bank may require, including
without limitation, assurances that Borrower has the power to
borrow and pledge assets in accordance with this letter.
-2-
�j
Your acknowledgment of this letter shall constitute
acceptance of the foregoing terms and conditions.
Sincerely,
WELLS FARGO BANK,
NATIONAL ASSOCI ON
Ir
By: 'Aal- -
Rick Lo a
Vice President
Acknowledged and accepted as of , 1993 :
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
By:
Kenneth J. Henderson
Executive Director
-3-
EXHIBIT A
Redevelopment Project Areas
State College
Central City North
Central City West
Southeast Industrial Park
Northwest
Tri-City
South Valle
Central City Projects
Uptown Project Area
Mt. Vernon Business Corridor
PLEASE
(C222)
-4-
REVOLVING LINE OF CREDIT NOTE
$10, 000, 000. 00 Rancho Cucamonga, California
March 1, 1993
FOR VALUE RECEIVED, the undersigned REDEVELOPMENT AGENCY OF
THE CITY OF SAN BERNARDINO ("Borrower") promises to pay to the
order of WELLS FARGO BANK, NATIONAL ASSOCIATION ("Bank") at its
office at 10535 Foothill Blvd. Ste. #270, Rancho Cucamonga,
California, or at such other place as the holder hereof may
designate, in lawful money of the United States of America and in
immediately available funds, the principal sum of Ten Million
Dollars ($10, 000, 000. 00) , or so much thereof as may be advanced
and be outstanding, with interest thereon, to be computed on each
advance from the date of its disbursement at a rate per annum
(computed on the basis of a 360-day year, actual days elapsed)
one-half percent ( . 50%) below the Prime Rate in effect from time
to time. The "Prime Rate" is a base rate that the Bank from time
to time establishes and which serves as the basis upon which
effective rates of interest are calculated for those loans making
reference thereto. Each change in the rate of interest hereunder
shall become effective on the date each Prime Rate change is
announced within the Bank.
This Note is not a debt of the City of San Bernardino, the
State of California or any of its political subdivisions, and
neither said City, and State nor any of its political
subdivisions is liable hereon, nor in any event shall this Note
or any interest hereon or any redemption premium hereon be
payable out of any funds or properties other than those of
Borrower. This Note does not constitute an indebtedness within
the meaning of any constitutional or statutory debt limitation or
restriction, and neither the members of Borrower nor any persons
executing this Note shall be personally liable on this Note by
reason of its issuance.
Borrower may from time to time during the term of this Note
borrow, partially or wholly repay its outstanding borrowings, and
reborrow, subject to all of the limitations, terms and conditions
of this Note and of any document executed in connection with this
Note; provided however, that the outstanding principal balance of
this Note shall at no time exceed the principal amount stated
above. The unpaid principal balance of this obligation at any
time shall be the total amounts advanced hereunder by the holder
hereof less the amount of principal payments made hereon by or
for Borrower, which balance may be endorsed hereon from time to
time by the holder.
Interest accrued on this Note shall be payable on the first
day of each month, commencing April 1, 1993.
EXHIBIU B, Page 1 of 3
(Z7
The outstanding principal balance of this Note, shall be due
and payable in full on March 1, 1994 .
From and after the maturity date of this Note, or such
earlier date as all principal owing hereunder becomes due and
payable by acceleration or otherwise, the outstanding principal
balance of this Note shall bear interest until paid in full at an
increased rate per annum (computed on the basis of a 360-day
year, actual days elapsed) equal to four percent (4%) above the
rate of interest from time to time applicable to this Note.
Advances hereunder, to the total amount of the principal sum
stated above, may be made by the holder at the written request of
Borrower's Chairman, or Co-Chairman, or any elected Council
Member of Borrower, plus Borrower's Executive Director, or Agency
Administrator, or any appointed Deputy of Borrower. Such two
persons are authorized to request advances and direct the
disposition of such advances until written notice of the
revocation of such authority is received by the holder at the
office designated above. Any such advances shall be conclusively
presumed to have been made to or for the benefit of Borrower when
the holder believes in good faith that such requests and
directions have been made by authorized persons, or when said
advances are deposited to the credit of any account of Borrower
with the holder regardless of the fact that persons other than
those authorized hereunder may have authority to draw against
such account.
The occurrence of any of the following shall constitute an
"Event of Default" under this Note:
1. The failure to pay any principal, interest, fees or
other charges when due under this Note or any contract,
instrument or document executed in connection with this Note.
2 . The filing of a petition by or against Borrower under
any provisions of the Bankruptcy Reform Act, Title 11 of the
United States Code, as amended or recodified from time to time,
or under any similar or other law relating to bankruptcy,
insolvency, reorganization or other relief for debtors; the
appointment of a receiver, trustee, custodian or liquidator of or
for any part of the assets or property of Borrower; or Borrower
becomes insolvent, makes a general assignment for the benefit of
creditors or is generally not paying its debts as they become
due; or any attachment or like levy on property of any Borrower.
3 . The dissolution or liquidation of Borrower.
-2-
EXHIBIT B, Page 2 of 3
4 . Any default in the payment or performance of any
obligation, or any defined event of default, under any provisions
of any contract, instrument or document pursuant to which
Borrower has incurred any obligation for borrowed money, any
purchase obligation, or any other liability of any kind to any
person or entity, including the holder.
5. Any financial statement provided by Borrower to Bank
proves false.
6. Any sale or transfer of all or a substantial or
material part of the assets of Borrower other than in the
ordinary course of business.
7. Any violation or breach of any provision of, or any
defined event of default under, any addendum to this Note or any
loan agreement, security agreement, or other document executed in
connection with or securing this Note.
Upon the occurrence of any Event of Default, the holder of
this Note, at the holder's option, may declare all sums of
principal and interest outstanding hereunder to be immediately
due and payable without presentment, demand, protest or notice of
dishonor, all of which are expressly waived by Borrower, and the
holder shall have no obligation to make any further advances
hereunder. Borrower shall pay to the holder immediately upon
demand the full amount of all costs and expenses, including
reasonable attorneys' fees (to include outside counsel fees and
all allocated costs of the holder's in-house counsel) , incurred
by the holder in connection with the enforcement of the holder's
rights and/or the collection of any amounts which become due to
the holder under this Note, and the prosecution or defense of any
action in any way related to this Note, including without
limitation, any action for declaratory relief.
This Note shall be governed by and construed in accordance
with the laws of the State of California, except to the extent
Bank has greater rights or remedies under Federal law, whether as
a national bank or otherwise, in which case such choice of
California law shall not be deemed to deprive Bank of any such
rights and remedies as may be available under Federal law.
SAN BERNARDINO
k LCCj d I
-3-
EXHIBIT B, Page 3 of 3
`'l
REVOLVING LINE OF CREDIT NOTE
$10, 000, 000. 00 Rancho Cucamonga, California
March 1, 1993
FOR VALUE RECEIVED, the undersigned REDEVELOPMENT AGENCY OF
THE CITY OF SAN BERNARDINO ("Borrower") promises to pay to the
order of WELLS FARGO BANK, NATIONAL ASSOCIATION ("Bank") at its
office at 10535 Foothill Blvd. Ste. #270, Rancho Cucamonga,
California, or at such other place as the holder hereof may
designate, in lawful money of the United States of America and in
immediately available funds, the principal sum of Ten Million
Dollars ($10, 000, 000. 00) , or so much thereof as may be advanced
and be outstanding, with interest thereon, to be computed on each
advance from the date of its disbursement at a rate per annum
(computed on the basis of a 360-day year, actual days elapsed)
one-half percent ( . 50%) below the Prime Rate in effect from time
to time. The "Prime Rate" is a base rate that the Bank from time
to time establishes and which serves as the basis upon which
effective rates of interest are calculated for those loans making
reference thereto. Each change in the rate of interest hereunder
shall become effective on the date each Prime Rate change is
announced within the Bank.
This Note is not a debt of the City of San Bernardino, the
State of California or any of its political subdivisions, and
neither said City, and State nor any of its political
subdivisions is liable hereon, nor in any event shall this Note
or any interest hereon or any redemption premium hereon be
payable out of any funds or properties other than those of
Borrower. This Note does not constitute an indebtedness within
the meaning of any constitutional or statutory debt limitation or
restriction, and neither the members of Borrower nor any persons
executing this Note shall be personally liable on this Note by
reason of its issuance.
Borrower may from time to time during the term of this Note
borrow, partially or wholly repay its outstanding borrowings, and
reborrow, subject to all of the limitations, terms and conditions
of this Note and of any document executed in connection with this
Note; provided however, that the outstanding principal balance of
this Note shall at no time exceed the principal amount stated
above. The unpaid principal balance of this obligation at any
time shall be the total amounts advanced hereunder by the holder
hereof less the amount of principal payments made hereon by or
for Borrower, which balance may be endorsed hereon from time to
time by the holder.
Interest accrued on this Note shall be payable on the first
day of each month, commencing April 1, 1993 .
r�
1
The outstanding principal balance of this Note, shall be due
and payable in full on March 1, 1994 .
From and after the maturity date of this Note, or such
earlier date as all principal owing hereunder becomes due and
payable by acceleration or otherwise, the outstanding principal
balance of this Note shall bear interest until paid in full at an
increased rate per annum (computed on the basis of a 360-day
year, actual days elapsed) equal to four percent (4%) above the
rate of interest from time to time applicable to this Note.
Advances hereunder, to the total amount of the principal sum
stated above, may be made by the holder at the written request of
Borrower's Chairman, or Co-Chairman, or any elected Council
Member of Borrower, plus Borrower's Executive Director, or Agency
Administrator, or any appointed Deputy of Borrower. Such two
persons are authorized to request advances and direct the
disposition of such advances until written notice of the
revocation of such authority is received by the holder at the
office designated above. Any such advances shall be conclusively
presumed to have been made to or for the benefit of Borrower when
the holder believes in good faith that such requests and
directions have been made by authorized persons, or when said
advances are deposited to the credit of any account of Borrower
with the holder regardless of the fact that persons other than
those authorized hereunder may have authority to draw against
such account.
The occurrence of any of the following shall constitute an
"Event of Default" under this Note:
1. The failure to pay any principal, interest, fees or
other charges when due under this Note or any contract,
instrument or document executed in connection with this Note.
2 . The filing of a petition by or against Borrower under
any provisions of the Bankruptcy Reform Act, Title 11 of the
United States Code, as amended or recodified from time to time,
or under any similar or other law relating to bankruptcy,
insolvency, reorganization or other relief for debtors; the
appointment of a receiver, trustee, custodian or liquidator of or
for any part of the assets or property of Borrower; or Borrower
becomes insolvent, makes a general assignment for the benefit of
creditors or is generally not paying its debts as they become
due; or any attachment or like levy on property of any Borrower.
3. The dissolution or liquidation of Borrower.
-2-
Ij
4. Any default in the payment or performance of any
obligation, or any defined event of default, under any provisions
of any contract, instrument or document pursuant to which
Borrower has incurred any obligation for borrowed money, any
purchase obligation, or any other liability of any kind to any
person or entity, including the holder.
5. Any financial statement provided by Borrower to Bank
proves false.
6. Any sale or transfer of all or a substantial or
material part of the assets of Borrower other than in the
ordinary course of business.
7. Any violation or breach of any provision of, or any
defined event of default under, any addendum to this Note or any
loan agreement, security agreement, or other document executed in
connection with or securing this Note.
Upon the occurrence of any Event of Default, the holder of
this Note, at the holder's option, may declare all sums of
principal and interest outstanding hereunder to be immediately
due and payable without presentment, demand, protest or notice of
dishonor, all of which are expressly waived by Borrower, and the
holder shall have no obligation to make any further advances
hereunder. Borrower shall pay to the holder immediately upon
demand the full amount of all costs and expenses, including
reasonable attorneys' fees (to include outside counsel fees and
all allocated costs of the holder's in-house counsel) , incurred
by the holder in connection with the enforcement of the holder's
rights and/or the collection of any amounts which become due to
the holder under this Note, and the prosecution or defense of any
action in any way related to this Note, including without
limitation, any action for declaratory relief.
This Note shall be governed by and construed in accordance
with the laws of the State of California, except to the extent
Bank has greater rights or remedies under Federal law, whether as
a national bank or otherwise, in which case such choice of
California law shall not be deemed to deprive Bank of any such
rights and remedies as may be available under Federal law.
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
By:
Kenneth J. Henderson
Executive Director
(Legal)
-3-
r�