HomeMy WebLinkAboutR10- Economic Development ECONOMIC DEVELOPMENT AGENCY
OF THE CITY OF SAN BERNARDINO
REQUEST FOR COMMISSION ACTION
From: Barbara J. Lindseth Subject: ARROWHEAD HEALTH CARE
Acting Director SYSTEM
Date: January 13, 1995
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Synopsis of Previous Commission/Council/Committee Action(s):
On February 22, 1993, the Community Development Commission approved in
concept a $8.6 million loan guarantee for Arrowhead Health Care System
for the purpose of developing a professional office building.
(Synopsis Continued on Page 3)
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Recommended Motion(s):
OPEN PUBLIC HEARING (SCHEDULED AT 11:00 A.M.)
CLOSE PUBLIC HEARING
(Community Development Commission)
MOTION A: RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION APPROVING
THAT CERTAIN PURCHASE AGREEMENT, THAT CERTAIN OWNER
PARTICIPATION AGREEMENT AND DOCUMENTS RELATED THERETO IN
CONNECTION WITH THE PROVISION OF FINANCIAL ASSISTANCE TO
ARROWHEAD HEALTH CARE SYSTEMS, INC. AND AUTHORIZING CERTAIN
ACTIONS IN CONNECTION THEREWITH.
(Motions Continued on Page 2)
i
Adminis rator Barbara J. Lindseth
Acting Director
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Contact Person(s) : Tim Steinhaus/John Wood Phone: 5081
Project Area(s): Northwest (NW) Ward(s): Sixth
Supporting Data Attached: Staff Report; Resolutions; OPA; Agreement (on file)
FUNDING REQUIREMENTS: Amount: $1,250,000 Source: Tax Increment
Budget Authority: Agency 1993-941993-94 Budget
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Commission Notes:
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BJL:1985A COMMISSION MEETING AGENDA
Meeting Date: 1/23/1995
Agenda Item Number: �� /G
Recommended Motion(s) Continued
(Community Development Commission)
MOTION B: RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION MAKING
CERTAIN DETERMINATIONS IN ACCORDANCE WITH HEALTH AND
SAFETY CODE SECTION 33679.
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BJL:1985A COMMISSION MEETING AGENDA
Meeting Date: 1/23/1995
Agenda Item Number:
Synopsis of Previous Commission/Council/Committee Action(s) Continued
On November 15, 1993, the Community Development Commission approved an
Agency loan guarantee related to the construction of a professional
office building.
On December 19, 1994, the Community Development Commission set a public
hearing for January 9, 1995 at 11:00 a.m.
On January 9, 1995, the Community Development Commission adjourned to
January 12, 1995 at 9:30 a.m.
On January 12, 1995, the item was continued until January 12, 1995.
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BJL:1985A COMMISSION MEETING AGENDA
Meeting Date: 1/23/1995
Agenda Item Number:
ECONOMIC DEVELOPMENT AGENCY
OF THE CITY OF SAN BERNARDINO
STAFF REPORT
Arrowhead Health Care System
On February 22, 1993, the Community Development Commission approved in
concept the guarantee by the Agency of an $8.6 million construction
loan from the Whitehall Group to Arrowhead Health Care System (parent
company of San Bernardino Community Hospital) for the purpose of
developing a 59,000 square foot professional office building with such
conceptual approval subject to the drafting and review of all
appropriate documents and subsequent approval by the Commission.
On November 15, 1993, the Commission approved a loan guarantee related
to the construction of the professional medical office building for the
San Bernardino Community Hospital and authorized execution of related
documents. However, that transaction was not completed.
Currently, Arrowhead Health Care System has secured a new lender, North
Atlantic Life Insurance Company of America and Northern Life Insurance
Company ("the Lenders"), to finance the project and the parties are
preparing documents for the transaction. The amount of the loan is
estimated at $9.8 million, including certain costs and fees. The
Agency guarantee is in the form of a purchase contract/put option, and
due to the form of the transaction, the Lender's counsel has requested
that the Agency hold a public hearing pursuant to Health and Safety
Code Section 33679, which requires a public hearing prior to the use of
tax increment revenues to purchase real property.
Arrowhead Health Care Systems has requested that the Agency provide the
following assistance: (i) a purchase agreement/guarantee of a loan on
behalf of Arrowhead for the construction of the office building
(the"Project"), and (ii) certain off-site improvements which will
benefit the construction of the Project. The Project, as mentioned, is
a three-story, 59,000 square foot medical office building which will be
located across the street from the San Bernardino Community Hospital.
The office building will be connected to the hospital by a pedestrian
bridge on the second floor of each building. The pedestrian bridge
will also provide for public crossing. In order for Arrowhead Health
Care Systems to obtain construction financing of the property, the
Agency must guarantee a loan through a purchase agreement/put option in
an amount not-to-exceed $9.8 million. The medical office building is
projected to attract qualified physicians and support staff from within
the City and across the United States in order to increase the quality
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BJL:1985A COMMISSION MEETING AGENDA
Meeting Date: 1/23/199!5
Agenda Item Number: ( �'
Economic Development Agency
Arrowhead Health Care Systems
Staff Report
Page - 2 -
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of health care provided to the residents of the City, and will benefit
the San Bernardino Community Hospital in order to allow it to maintain
its existence within the Northwest Redevelopment Project Area.
Whereby, the increase in physicians and support staff from outside of
the area will increase the tax base of the Northwest Project Area and
the surrounding project areas. The total cost of the Project shall be
$11,375,000. The sources of payment of said costs will be as follows:
$9,200,000 plus certain costs and fees, which is a loan from
Northern Life Insurance company and the North Atlantic Life
Insurance Company of America. The loan shall be secured by an
Agency Purchase Agreement/Guarantee (the Agency shall guarantee up
to an amount not-to-exceed $9.8 million).
$1,250,000 from the Agency for off-site improvements (said
improvements include construction of the bridge, traffic lights,
utilities, street improvements, water hookup fee, and new code
requirements) . In February 1992, the Commission prioritized,
through the mid-year budget process, the amount of $1,250,000 to
be set-aside for the purpose of assisting Arrowhead Health Care
Systems with off-site improvements, as outlined in the Owner
Participation Agreement, of which, approval is now sought.
$925,000 - hospital funds.
On December 19, 1994, a public hearing was set for January 9, 1995 at
11:00 a.m. However, notice of the public hearing could not be
published on time for the 'January 9, 1995 meeting and was therefore
published for a public hearing on January 12, 1995 at 9:30 a.m. . The
January 9, 1995 meeting was adjourned to January 12, 1995 at 9:30 a.m.
On January 12, 1995, the item was continued until January 23, 1995 at
11:00 a.m. for the City's public hearing, which hearing may be held at
any time thereafter, and January 23, 1995 at 11:00 a.m. for the
Commission's public hearing.
Based upon the foregoing, staff recommends adoption of the form motion.
r `
Barbara J. Lindseth, Acting Director
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BJL:1985A COMMISSION MEETING AGENDA
Meeting Date: 1/23/19915
Agenda Item Number: } �,
1 RESOLUTION NO.
2 RESOLUTION OF THE COMMUNITY DEVELOPMENT
3 COMMISSION APPROVING THAT CERTAIN PURCHASE
AGREEMENT, THAT CERTAIN OWNER PARTICIPATION
4 AGREEMENT AND DOCUMENTS RELATED THERETO IN
CONNECTION WITH THE PROVISION OF FINANCIAL
5 ASSISTANCE TO ARROWHEAD HEALTHCARE SYSTEMS, INC.
AND AUTHORIZING CERTAIN ACTIONS IN CONNECTION
6 THEREWITH
7 WHEREAS, the Redevelopment Agency of the City of
8 San Bernardino (the "Agency") is a public body corporate and
9 politic organized and existing pursuant to Health and Safety Code
10 Section 33000, et secf. , and has certain redevelopment powers
11 pursuant thereto; and
12
13 WHEREAS, in or about November 15, 1993 , the Commission
14 approved a loan guaranty to Arrowhead Healthcare System, Inc.
15 ("Arrowhead") in connection with the construction of a
16 professional medical office building (the "Project" ) which would
17 provide support to the San Bernardino Community Hospital; and
18
19 WHEREAS, Arrowhead has secured lenders, Northern Life
20 Insurance Company, a Washington corporation, and the North
21 Atlantic Life Insurance Company of America, a New York
22 corporation ("Lenders") , which have agreed to finance the
23 construction of the Project if the Agency provides a guaranty in
24
the form of a purchase agreement/put option; and
25
26 WHEREAS, in order to complete the Project, Arrowhead
27 has requested that the Agency provide other assistance for off-
28
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1 site improvements in the amount of One Million Two Hundred Fifty
2 Thousand Dollars ($1, 250, 000) (the "Agency Assistance") ; and
3
4 WHEREAS, the Agency deems it desirable and in the best
5 interests of the Agency, City and its residents, to assist
6 Arrowhead at this time in order to promote development within the
7 Northwest Redevelopment Project Area; and
8
9 WHEREAS, the purchase agreement/put option provided by
10 the Agency shall be in the form of a Purchase Agreement (the
11 "Purchase Agreement") by and among the Agency, Arrowhead and the
12 Lenders; and
13
14 WHEREAS, the Agency Assistance to be provided shall be
15 evidenced by an Owner Participation Agreement ( "OPA") by and
16 between the Agency and Arrowhead; and
17
18 WHEREAS, the Commission has duly considered such
19 transactions and wishes to approve said transactions in the
20 public interests of the Agency.
21
22 NOW, THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION
23 ACTING ON BEHALF OF THE REDEVELOPMENT AGENCY OF THE CITY OF
24 SAN BERNARDINO DOES HEREBY RESOLVE, DETERMINE AND ORDER AS
25 FOLLOWS :
26 //✓
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1 Section 1. Determinations. The Commission hereby
2 finds and determines that the provision of the Purchase Agreement
3 to assist in the financing of the Project and the OPA in order to
4 provide the Agency Assistance will be of benefit to the Agency,
5 City and its residents as follows : the Project is projected to
6 (i) attract qualified medical professionals to the City and
7 therefore increase the quality of healthcare provided to its
8 residents; (ii) increase the number of physicians associated with
9 the San Bernardino Community Hospital in order for it to maintain
10 its existence; and (iii) create jobs for residents and increase
11 the tax base with the influx of new physicians and support staff
12 and therefore result in significant public benefits .
13
14 Section 2 . Authorization and Approval of Purchase
15 Agreement . The Commission hereby authorizes and approves the
16 purchase Agreement in the total principal amount of not to exceed
17 $9, 800, 000 pursuant to and in accordance with the terms of the
18 Purchase Agreement for the purpose of assisting Arrowhead in the
19 construction of the Project . The Commission hereby approves the
20 form of the Purchase Agreement as presently on file with the
21 Secretary of the Commission, together with any changes therein or
22 additions thereto as may be approved by the Chairman or Agency
23 Administrator or as necessary to incorporate other terms and
24 conditions when such terms and conditions have been ascertained.
25 The Commission hereby further authorizes and directs that the
26 form of the Purchase Agreement be converted into the final form
27 thereof . The Chairman, Vice-Chairman or such other members of
28 the Commission and the Agency Administrator are hereby authorized
3 -
1 and directed to execute and deliver, and the Secretary or
2 Assistant Secretary is hereby authorized and directed to attest
3 to and affix the seal of the Commission to, the final form of the
4 Purchase Agreement when the same has been prepared for and in the
5 name of and on behalf of the Agency and such execution and
6 delivery shall be deemed to be conclusive evidence of the
7 approval thereof. The Commission hereby authorizes the delivery
8 and performance of the Purchase Agreement .
9
10 Section 3 . Authorization and Approval of Deed of
11 Trust and Other Security. The Commission hereby authorizes
12 and approves the Second Deed of Trust (the "Deed of Trust") to be
13 provided by Arrowhead for the benefit of the Agency and any other
14 documents required to provide adequate security to the Agency
15 (the "Security Documents" ) for the provision of the Purchase
16 Agreement . The Commission hereby approves the forms of the Deed
17 of Trust and Security Documents as presently on file with the
18 Secretary of the Commission, together with any changes therein or
19 additions thereto as may be approved by the Chairman or Agency
20 Administrator or as necessary to incorporate other terms and
21 conditions when such terms and conditions have been ascertained.
22 The Commission hereby further authorizes and directs that the
23 forms of the Deed of Trust and Security Documents be converted
24 into the final forms thereof. The Chairman, Vice-Chairman or
25 such other members of the Commission and the Agency Administrator
26 are hereby authorized and directed to execute and deliver, and
27 the Secretary or Assistant Secretary is hereby authorized and
28 directed to attest to and affix the seal of the Commission to,
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a `,
1 the final forms of the Deed of Trust and Security Documents when
2 the same has been prepared for and in the name of and on behalf
3 of the Agency and such execution and delivery shall be deemed to
4 be conclusive evidence of the approval thereof. The Commission
5 hereby authorizes the delivery and performance of the Deed of
6 Trust and Security Documents.
7
8 Section 4 . Authorization of OPA and Agency
9 Assistance . The Commission hereby authorizes and approves the
10 Agency Assistance as evidenced by the OPA in the total principal
11 amount of not to exceed $1, 250, 000 pursuant to and in accordance
12 with the terms of the OPA for the purpose of assisting Arrowhead
13 with off-site improvements for the Project . The Commission
14 hereby approves the form of the OPA as presently on file with the
15 Secretary of the Commission, together with any changes therein or
16 additions thereto as may be approved by the Chairman or Agency
17 Administrator or as necessary to incorporate other terms and
18 conditions when such terms and conditions have been ascertained.
19 The Commission hereby further authorizes and directs that the
20 form of the OPA be converted into the final form thereof. The
21 Chairman, Vice-Chairman or such other members of the Commission
22 and the Agency Administrator are hereby authorized and directed
23 to execute and deliver, and the Secretary or Assistant Secretary
24 is hereby authorized and directed to attest to and affix the seal
25 of the Commission to, the final form of the OPA when the same has
26 been prepared for and in the name of and on behalf of the Agency
27 and such execution and delivery shall be deemed to be conclusive
28 Ill
5 -
i,'
1 evidence of the approval thereof. The Commission hereby
2 authorizes the delivery and performance of the OPA.
3
4 Section 5. Official Actions. The Chairman, Vice-
s Chairman and other members of the Commission, the Secretary,
6 Assistant Secretary, counsel to the Commission, the Agency
7 Administrator, Agency Counsel and any and all other members and
8 officers of the Commission and the Agency are hereby authorized
9 and directed, for and in the name and on behalf of the Agency, to
10 do any and all things and to take any and all actions, including
11 but not limited to, execution and delivery of any and all
12 assignments, certificates, requisitions, agreements, notices,
13 consents, instruments of conveyance, warrants and other documents
14 which they, or any of them, may deem necessary or advisable in
15 connection with the execution and delivery of the Purchase
16 Agreement and supporting documentation, the OPA and the
17 consummation of the transactions described therein.
18
19
20
21
22
23
24
25
26
27
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1 RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION APPROVING THAT
2 CERTAIN PURCHASE AGREEMENT, THAT CERTAIN OWNER PARTICIPATION
AGREEMENT AND DOCUMENTS RELATED THERETO IN CONNECTION WITH THE
3 PROVISION OF FINANCIAL ASSISTANCE TO ARROWHEAD HEALTHCARE
SYSTEMS, INC. AND AUTHORIZING CERTAIN ACTIONS IN CONNECTION
4 THEREWITH
5 Section 6 . Effective Date. This Resolution shall
6 take effect from and after the date of its passage and adoption.
7
8 I HEREBY CERTIFY that the foregoing Resolution was duly
9 adopted by the Community Development Commission of the City of
10 San Bernardino at a meeting
11 thereof, held on the day of
12 1995, by the following vote, to wit :
13 Commission Members: AYES NAYS ABSTAIN ABSENT
14 NEGRETE
15 CURLIN
HERNANDEZ
16 OBERHELMAN
DEVLIN
17 POPE-LUDLAM
MILLER
18
19 Secretary
20 The foregoing resolution is hereby approved this
21 day of 1995 .
22
23 Tom Minor, Chairman
Community Development Commission
24 of the City of San Bernardino
25 Approved as to form and legal content :
26 B Y: ✓ � A-4
27 Agency Qdjnsel
SBEO\0001-66\DOC\2002
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JAN 17 195 03:53PM P.2
I RESOLUTION NO.
2 RESOLUTION OF THE COMMUNITY DEVELOPMENT
COMMISSION MAILING CERTAIN DETERMINATIONS IN
ACCORDANCE WITH HEALTH AND SAFETY CODE
4 SECTION 33679
5 WHEREAS, the Redevelopment Agency of the City of San
6 Bernardino (the "Agency") , is a redevelopment agency, a public
7 body, corporate and politic of the State of California, organized
8 and existing pursuant to the Community Redevelopment Law (Part 1
9 of Division 24 commencing with Section 33000) of the Health and
10 Safety Code of the State of California (the "Act") ; and
11 WHMMS, pursuant to Section 33679 of the Act, the
12 Agency may, with the consent of the Mayor and Common Council of
13 the City (the 'Council") , pay all or a part of the value of land
14 and construction of any publicly owned building if the Council
15 determines: (1) that such buildings, facilities, structures or
16 other improvements are of benefit to the redevelopment project
17 area or the immediate neighborhood in which the project is
18 located, regardless of whether such improvement is within another
19 project area, or in the case of a project area in which
20 substantially all the land is publicly owned that the improvement
21 is of benefit to an adjacent project area of the Agency, (2) that
22 no other reasonable means of financing such buildings,
23 facilities, structures or other improvements is available to the
24 community, and (3) that the payment of funds for the cost of the
25 facilities, structures or other improvements will assist in the
26 elimination of one or more blighting conditions inside the
27 project and said payment is consistent with the implementation
28 plan pursuant to Section 33490; and
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I WHEREAS, the City and the Agency have previously
2 approved and adopted the Redevelopment Plan for the Northwest
3 Project Area (the "Redevelopment Plan") ; and
4
5 WHEREAS, the Agency has been requested to assist
6 Arrowhead Healthcare Systems, Inc. ("Arrowhead" ) in the financing
7 of the development of certain property (the "Property" ) within
8 the Agency' s Northwest Project Area (the "Project Area") , and in
9 order for Arrowhead to obtain construction financing of the
10 property, the Agency must guarantee a loan through a purchase
11 agreement/put option (the "Purchase Agreement") in the amount not
12 to exceed $9, 800, 000; and
13
14 WHEREAS, the redevelopment purposes of the provision of
15 said Purchase Agreement are to promote development, eliminate
16 blighting conditions and create jobs and services for the
17 residents of the Project Area and the citizens of the City; and
18
19 WHEREAS, Arrowhead proposes to construct a physicians,
20 office building which is projected to attract qualified
21 physicians and support staff from within the City and across the
22 United States in order to increase the quality of health care
23 provided to residents of the City; and
24
25 WHEREAS, it is projected that said increase in
26 physicians will benefit the San Bernardino Community Hospital in
27 order to allow it to maintain its existence within the Project
28 Area; and
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1 WHEREAS, the increase in physicians and support staff
2 from outside of the area will increase the tax base of the
3 Project Area and the surrounding project areas; and
4
5 WHEREAS, Arrowhead has attempted to obtain financing
6 for this project for several years, but has been unsuccessful
7 until now and said financing will not be feasible without the
8 Agency Purchase Agreement; and
9
10 WHEREAS, there are currently a number of blighting
11 conditions existing within the Project Area, namely buildings
12 which are unsafe or unhealthy for persons to work or live, nearby
13 uses which are incompatible, high crime, vacant buildings and
14 lack of necessary commercial facilities and the increase of
15 health care professionals, and the development of the vacant
16 property will promote the health, safety and welfare of the
17 residents of the City and increase the tax base; and
18
19 WHEREAS, it is appropriate at this time for the Agency
20 to make certain findings and determinations and take certain
21 action with respect to the foregoing.
22
23 NOW, THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION
24 ACTING ON BEHALF OF THE REDEVELOPMENT AGENCY OF THE CITY OF
25 SAN BERNARDINO DOES HEREBY RESOLVE, DETERMINE AND ORDER AS
26 FOLLOWS :
27
28
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1 Section 1. The Recitals hereinabove are true and
2 correct and are incorporated herein by this reference.
3
4 Section 2 . The Agency authorizes the use of tax
5 increment revenues to fund the purchase of the Project under the
6 Purchase Agreement and finds that said Purchase Agreement is of
7 benefit to the Project Area and other neighborhoods within the
8 City for the reasons set forth in the Recitals hereinabove. The
9 Agency also finds and determines that no other reasonable means
10 of financing the Project is presently available. The Agency
11 further finds that the Project will provide economic growth,
12 employment opportunities and necessary healthcare services which
13 will in turn enhance economic investment in the Project Area and
14 surrounding areas and thereby eliminate existing blighting
15 conditions.
16
17 Section 3 . The Agency Secretary is hereby
18 authorized and directed to cause this Resolution to be
19 transmitted to the City for consideration in connection with
20 appropriate action by that body.
21
22 1/1
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24
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1 RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION MAKING CERTAIN
2 DETERMINATIONS IN ACCORDANCE WITH HEALTH AND SAFETY CODE SECTION
33679
3 Section 4 . This Resolution shall take effect from
4 and after the date of its passage and adoption.
5
6 I HEREBY CERTIFY that the foregoing Resolution was duly
7 adopted by the Community Development Commission of the City of
8 San Bernardino at a meeting
9 thereof, held on the day of
10 1995, by the following vote, to wit :
11 Commission Members : AYES NAYS ABSTAIN ABSENT
12 NEGRETE
13 CURLIN
HERNANDEZ
14 OBERHELMAN
DEVLIN
15 POPE-LUDLAM
MILLER
16
17 Secretary
18 The foregoing resolution is hereby approved this
19 day of 1995 .
20
21 Tom Minor, Chairman
Community Development Commission
22 of the City of San Bernardino
23 Approved as to form and legal content :
24 By:
25 Agency Wnsel
26 SBEO\0001-66\DOC\2003
2p7
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