HomeMy WebLinkAbout07.A- City Attorney 7.A
RESOLUTION (ID # 4503) DOC ID: 4503 A
CITY OF SAN BERNARDINO — REQUEST FOR COUNCIL ACTION
Agreement/Contract
From: Jolena E. Grider M/CC Meeting Date: 06/20/2016
Prepared by: Jolena E. Grider, (909) 384-
5355
Dept: City Attorney Ward(s): N/A
Subject:
Resolution of the Mayor and Common Council of the City of San Bernardino Acting as
the San Bernardino Joint Powers Financing Authority Authorizing the Execution of a
Pay Off Agreement for the Facility at 120 S. "D" Street and Authorizing the Transfer of
Said Property to the San Bernardino County Fire District. (#4503)
Current Business Registration Certificate: Not Applicable
Financial Impact:
Not Applicable.
Motion: Adopt the Resolution.
Synopsis of Previous Council Action:
® August 24, 2015 -- Mayor and Common Council adopted Resolution No. 2015-195,
authorizing the filing of an application to the Local Agency Formation Commission
(LAFCO) for annexation of the City to the San Bernardino County Fire Protection District
(County Fire).
Action Requested:
As a condition of the annexation referred to above, the City is to transfer to County Fire
all property and facilities held by the City for the purpose of providing fire protection.
Among those facilities is real property located at 120 South D Street in the City of San
Bernardino (Property). The Property is owned by the San Bernardino Joint Powers
Financing Authority (JPFA), a joint powers authority consisting of the City of San
Bernardino and the former Redevelopment Agency of the City of San Bernardino, now
the City of San Bernardino as Successor Agency to the former Redevelopment Agency.
The JPFA acquired the Property in June 2009 from Tim Burgess (Burgess) for use as a
fire department maintenance facility for firefighting equipment. In connection with the
purchase, the JPFA executed a promissory note to Burgess for $1,200,000 and a deed
of trust securing payment of the note. Also in June 2009, the JPFA leased the Property
to the City for use as a maintenance facility.
The City's lease payments for the use of the Property are paid directly to Burgess and
are applied against the outstanding balance of the promissory note. The current
Updated: 6/16/2016 by Georgeann "Gigi" Hanna A L Packet Pg.420
4503
principal amount due under the promissory note is $1,100,000. The City, JPFA, and
Burgess have agreed to a discounted payoff of the outstanding balance in a amount of
$990,000 principal plus accrued and unpaid interest of$25,361.48, for a total amount of
$1,015,361.48. Payment of the discounted amount will allow the promissory note and
deed of trust to be retired and reconveyed, making it possible for clear title to the
Property to be conveyed to County Fire.
The agreement creating the JPFA designates the Council as the JPFA governing board
and the Mayor as the chairperson of the JPFA. Accordingly, it is requested that the
Council, acting as JPFA governing board, authorize the Mayor to sign the Discounted
Payoff Agreement attached to this report on behalf of the JPFA, and that the Council
further authorize the City Manager to sign the agreement on behalf of the City. In
addition, it is requested that the Council acting as JPFA governing board approve the
transfer of the Property to County Fire and authorize the Mayor to sign all necessary
documents and take all necessary actions to effectuate the transfer.
City Attorney Review:
Supporting Documents:
Burgess Property Payoff and Transfer Reso (DOC)
Disco unted_Payoff_Agreement -_Burgess (DOCX)
Updated: 6/16/2016 by Georgeann "Gigi" Hanna A Packet Pg.421
7.A.a
1
RESOLUTION NO.
2 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN
BERNARDINO ACTING AS THE SAN BERNARDINO JOINT POWERS FINANCING
3 AUTHORITY AUTHORIZING THE EXECUTION OF A PAY OFF AGREEMENT FOR
4 THE FACILITY AT 120 S. "D" STREET AND AUTHORIZING THE TRANSFER OF
SAID PROPERTY TO THE SAN BERNARDINO COUNTY FIRE DISTRICT.
5
6 BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY 0
7 OF SAN BERNARDINO AS FOLLOWS: a
s SECTION 1. The Mayor of the City of San Bernardino acting as the Chairperson of the
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San Bernardino Joint Powers Financing Authority is hereby authorized to execute a Discounted
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Payoff Agreement with Tim Burgess, attached hereto as Exhibit"A" and incorporated herein. ii
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12 SECTION 2. The Mayor of the City of San Bernardino acting as the Chairperson of the v
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13 San Bernardino Joint Powers Financing Authority is hereby authorized to transfer the property at
14 120 S. "D" Street via Quitclaim Deed to the San Bernardino County Fire District. v
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Packet Pg.422
0 1 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN
BERNARDINO ACTING AS THE SAN BERNARDINO JOINT POWERS FINANCING
2 AUTHORITY AUTHORIZING THE EXECUTION OF A PAY OFF AGREEMENT FOR
3 THE FACILITY AT 120 S. "D" STREET AND AUTHORIZING THE TRANSFER OF
SAID PROPERTY TO THE SAN BERNARDINO COUNTY FIRE DISTRICT.
4
5 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and
Common Council of the City of San Bernardino at a meeting thereof, held on the
7 a.
day of , 2016, by the following vote, to wit: '
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9 Council Members: AYES NAYS ABSTAIN ABSENT
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10 MARQUEZ a
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BARRIOS c
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VALDIVIA 0
13 to
14 SHORETT
15 NICKEL
16 RICHARD v
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MULVIHILL a
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Georgeann Hanna, City Clerk a.
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The foregoing Resolution is hereby approved this day of , 2016. c,
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23 R. Carey Davis, Mayor
City of San Bernardino
24 Approved as to form: a
25 Gary D. Saenz, City Attorney
26 By:
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7.A.b
DISCOUNTED PAYOFF AGREEMENT
This Discounted Payoff Agreement (this "Agreement"), is dated effective as of
June 20, 2016 (the "Effective Date"), by and between Tim Burgess ("Lender"), on the one hand,
and the San Bernardino Joint Powers Financing Authority(the "Borrower") and the City of San
Bernardino, California("City"), on the other(Lender, Borrower and the City are collectively
referred to herein as the "Parties"). o
RECITALS a.
A. Borrower and Lender are parties to that certain "Agreement for Purchase and Sale
of Real Property" ("Purchase Agreement") dated June 15, 2009, executed by and between U.
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Borrower and Lender for the purchase of the real property commonly known as 120 S. D Street, LL
San Bernardino, California(the "Property") as more particularly described in the Purchase o
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Agreement.
B. Pursuant to the Purchase Agreement, Borrower executed:
1. A "San Bernardino Joint Powers Financing Authority, San Bernardino 00i
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City Fire Department Maintenance Facility Note" in the original principal sum of$1,200,000
("Note") dated as of August 1, 2009; and
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2. An "Indenture and Loan Agreement" ("Indenture") dated as of August 1, Qi
2009 by and between the Borrower and Lender. o
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C. Borrower's obligations under the Note are secured by a "Deed of Trust, Security
Agreement, Assignment of Leases and Rents, and Financing Statement" ("Deed of Trust") c
recorded on September 8, 2009 as Instrument No. 2009-0393309 in the Official Records of the y
County of San Bernardino, California, executed by Borrower for the benefit of Lender, and
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covering the real and personal property more particularly described therein. E
D. The Purchase Agreement, Note, Indenture, and Deed of Trust are collectively
referred to as the "Loan Documents." a
E. On or about June 1, 2009, the City and Borrower entered into a"Lease
Agreement" ("Lease") for the Property pursuant to which the City makes lease payments in
amounts sufficient to provide for the payment of the amounts due under Note for the period of
the Lease Agreement. The City makes such lease payments directly to Lender.
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F. On August 1, 2012,the City filed a petition for relief under Chapter 9 of the
Bankruptcy Code, and on September 17, 2013, the Bankruptcy Court entered an order for relief
determining that the City was eligible to be a debtor under Chapter 9.
G. The City requested that Lender agree to accept less than the full repayment of the
outstanding principal due under the Loan Documents in full satisfaction of the Note, and on
April 21, 2016, Lender agreed to do so on the following terms and conditions:
1. The City is granted the option ("Option") until April 30, 2017 to pay the o
principal amount of$1,100,000 due under the Note at a 10%discount("Discounted Payoff'), 0.
plus all accrued and unpaid interest at the rate set forth in the Note through the date that the
Discounted Payoff payment is made;
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2. If the Discounted Payoff payment(plus all accrued and unpaid interest at a
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the rate set forth in the Note) is not made on or before April 30, 2017, the Option will expire L!-
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automatically without any action required by Lender; and C
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3. Lender's agreement to the foregoing is conditioned upon the City U)
amending the Second Amended Disclosure Statement and the Second Amended Plan of
Adjustment to make more clear that if the City elects not to exercise the Option, then the only
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modification that is being made by the City's Second Amended Plan of Adjustment is that the
maturity date of the Note(currently July 1, 2019) is extended for 3 years (to July 1, 2022), and
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interest will continue to accrue through the entire 3 year extension period on the unpaid balance Q�
due under the Note at the interest rate set forth in the Note (5%) and paid on January 1 and July 1 01
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as is currently required by the Note. ai
H. On May 27, 2016, the City filed its Third Amended Plan for the Adjustment of c
Debts of the City of San Bernardino, California, and its Third Amended Disclosure Statement N
with respect to the Third Amended Plan for the Adjustment of Debts of the City of San
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Bernardino, California, which satisfies the condition set forth in paragraph G (3) above. E
I. The City has elected to exercise the Option and make the Discounted Payoff
payment to Lender.
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AGREEMENT
NOW, THEREFORE, in consideration of the above recitals and for other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parties hereby agree as follows:
1. Incorporation of Recitals. The foregoing recitals are true and correct,
incorporated herein by reference.
2. Discounted Note Payoff. On or before the payoff deadline of June 24, 2016 (the o
"Payoff Deadline"), Burgess agrees to accept a cash payment of the sum of$990,000, plus a.
accrued and unpaid interest at the rate of$152.78 per day beginning on January 1, 2016 through
the later of the date that: (1)the City and the Borrower approve and execute this Agreement; and
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(b) deliver sufficient funds to Lawyer's Title to pay the indebtedness (the "Payoff Amount"), in U-
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full satisfaction of the indebtedness owed by Borrower to Lender under the Loan Documents. LL
Burgess further agrees to: (1) execute a request for reconveyance in a form substantially similar CD
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to Exhibit 1, and consent to the execution by the trustee under the Deed of Trust of the Full
Reconveyance in a form substantially similar to Exhibit 2; and (2) deliver the Note, request for
reconveyance and a payoff demand consistent with this agreement to Lawyer's Title located at 00i
3480 Vine Street, Suite 300, Riverside, CA 92503 on or before June 17, 2016.
3. Effect of Payof£ Upon receipt by Lender of(a) the Payoff Amount, and (b) a
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fully executed counterpart of this Agreement signed by Borrower and the City(the time at which a�
the foregoing conditions shall first be satisfied is herein referred to as the"Payoff Effective C
Time"), (1) the Loan Documents shall automatically terminate, (2) all liabilities, obligations and a.i
indebtedness of the Borrower to Lender shall be deemed satisfied in full, and(3)all liens and
security interests of Lender in any and all of the Property shall be deemed released and U
terminated.
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4. Termination of Security Instruments and Indenture. In addition to the foregoing E
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provided for in Section 3 above, upon the Payoff Effective Time, Borrower and the City will be
authorized to file any or all UCC financing statement terminations and to file and deliver to the
appropriate parties all other release and termination documents necessary to terminate the
perfection of Lender's liens and security interests in the Property including, but not limited to,
the executed Full Reconveyance of the Deed of Trust. Lender agrees that Lender will take such
further actions and execute and deliver such other documents and agreements as may be
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reasonably requested by Borrower to further evidence the satisfaction of the indebtedness under
the Loan Documents and the release of any of Lender's liens or security interests.
5. Releases.
(a) Release by Borrower. Borrower, for itself and its successors and assigns
hereby releases and discharges Lender and, as applicable, Lender's past, present and future
officers, directors, shareholders, members, partners, principals, managers, employees, agents,
accountants, attorneys, insurers, representatives, trustees, administrators, beneficiaries, affiliates, o
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subsidiaries, heirs, personal representatives, successors and assigns (individually and a-
collectively, the "Lender Released Parties") from any and all claims, liabilities, demands,
damages, losses, debts, obligations, accounts, offsets, actions, causes of action, defenses, costs,
fees and expenses of whatsoever kind or nature, whether in law or equity, whether known or LL
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unknown, whether disclosed or undisclosed, whether anticipated or unanticipated, whether LL
asserted or unasserted, whether direct or indirect, whether contingent or liquidated, which
Borrower ever had, now has or may have in the future(collectively, the`Borrower Claims")
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against all or any of the Lender Released Parties arising out of, or relating to the Loan and the
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Loan Documents. Borrower hereby represents and warrants that it has not assigned or otherwise 0 I
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divested itself of all or any part of the Borrower Claims being released hereby and that it hereby
agrees to defend, indemnify and hold harmless any and all of the Lender Released Parties against m
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whom any Borrower Claim so assigned or divested is asserted. a�
(b) Release by Lender. Contingent upon the full execution of this Agreement, 0,
and the receipt by Lender of the Payoff Amount, Lender, for itself and its successors and assigns v�
hereby releases and discharges Borrower and the City, and, as applicable, Borrower's and the c
City's past, present and future officers, directors, partners, principals, managers, employees, N
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agents, accountants, attorneys, insurers, representatives,trustees, administrators, beneficiaries,
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affiliates, subsidiaries, personal representatives, successors and assigns (individually and E
collectively, the `Borrower Released Parties") from any and all claims, liabilities, demands, cc
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damages, losses, debts, obligations, accounts, offsets, actions, causes of action, defenses, costs,
fees and expenses of whatsoever kind or nature, whether in law or equity, whether known or
unknown, whether disclosed or undisclosed, whether anticipated or unanticipated, whether
asserted or unasserted, whether direct or indirect, whether contingent or liquidated, which Lender
ever had, now has or may have in the future(collectively,the "Lender Claims") against all or
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any of the Borrower Released Parties arising out of, or relating to the Loan and the Loan
Documents. Lender hereby represents and warrants that it has not assigned or otherwise divested
itself of all or any part of the Lender Claims being released hereby and that he hereby agrees to
defend, indemnify and hold harmless any and all of the Borrower Released Parties against whom
any Lender Claim so assigned or divested is asserted.
6. Reinstatement. Notwithstanding anything to the contrary contained herein, in the
event the Payoff Amount or any portion thereof is avoided, rescinded, set aside or must o
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otherwise be returned or repaid by Lender, whether in any bankruptcy, reorganization, a
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insolvency or similar proceeding involving Borrower or the City, the indebtedness intended to be v
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repaid thereby shall be reinstated (without any further action by any party) and shall be
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enforceable against Borrower and its successors or assigns. In such event, Borrower shall be and '1
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remain liable to Lender for the amount so repaid or recovered to the same extent as if such LL
amount had never originally been received by Lender with interest accruing thereon from and
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after the date such amount is so repaid or recovered. N
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7. Effectiveness. This Agreement shall become binding and effective only at such
time as this Agreement shall have been executed and delivered by each of the Borrower, the City
and Lender.
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8. Representations, Warranties Covenants Each of Lender, Borrower and the City 4)
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represents to the other party that: a
(a) It or he has all requisite power and authority to execute, deliver, and perform all ;,
of their respective obligations under this Agreement. dl
(b) The execution, delivery and performance of this Agreement has been duly c
authorized by all necessary action on the part of itself or himself and will not(i) require any
consent or approval of any other party that has not been obtained, or(ii) violate any law, rule,
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regulation, order, writ,judgment, injunction, decree, determination or award presently in effect E
having applicability to it or any provision of its charter.
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(c) This Agreement constitutes a legal, valid and binding obligation of such party,
enforceable against it in accordance with its terms.
(d) It or he (i) has been represented by competent counsel of its choice in the
negotiation and execution of this Agreement or has chosen not to obtain counsel; (ii) read and
fully understood the terms hereof; (iii) has been afforded an opportunity to review, negotiate, and
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modify the terms of this Agreement and (iv) intends to be bound hereby. In accordance with the
foregoing,the general rule of construction to the effect that any ambiguities in a contract are to
be resolved against the party drafting the contract shall not be employed in the construction and
interpretation of this Agreement.
9. Effect on Loan Documents; No Waiver or Modification by Lender. Except as
expressly provided herein, (i) neither the provisions of, nor any performance under, this
Agreement shall amend, modify, supplement, extend, renew, terminate, waive or release any of o
the Loan Documents, all of which shall continue in full force and effect and (ii) neither the a
execution and delivery of this Agreement by Lender nor any actions taken by Lender pursuant to
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the terms, conditions and provisions of this Agreement shall constitute a modification, waiver,
termination, discharge, or abandonment of any term or provision of the Loan Agreement or any 'L
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of the other Loan Documents, except as specifically set forth herein and then only until the U_
Payoff Deadline (unless the Payoff Amount is received by Lender on or prior to the Payoff
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Deadline, in which case the Loan Documents shall terminate in accordance with the provisions
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hereof and thereof). If Lender does not receive the full Payoff Amount by the Payoff Deadline,
then this Agreement shall terminate and Lender shall have all remedies at law or equity or any
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other Loan Document. _
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10. Notices. Any and all notices given in connection with this Agreement shall be
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deemed adequately given if given in accordance with the requirements of the Loan Agreement. ae
11. Counterparts; Facsimile Signatures, Non-Paper Records. This Agreement may 0,
be signed or otherwise authenticated in any number of counterparts and by different Parties to a.I
this Agreement on separate counterparts, each of which, shall be deemed an original, but all such c
counterparts shall constitute one and the same Agreement. Any signature or other authentication 0
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delivered by facsimile or electronic transmission shall be deemed to be an original signature ;
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hereto. Each party who signs or otherwise authenticates this Agreement hereby: (i) agrees that E
Lender may create a duplicate of this Agreement by storing an image of it in an electronic or
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other medium (hereinafter referred to as a"Non-Paper Record"); (ii) agrees that, after creating
the Non-Paper Record, Lender may discard or destroy the original in reliance on this paragraph;
(iii) agrees that the Non-Paper Record shall be treated as the original for all purposes; and
(iv) expresses its present intent to adopt and accept the Non-Paper Record as an authenticated
record of this Agreement. This Agreement shall be evidence of the existence of this Agreement
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and may be receved in all courts and public spaces as conclusive evidence of the existence of
this Agreement and that this Agreement was duly executed by the parties to this Agreement.
12. Successors and Assigns; No Third Party Beneficiaries. This Agreement will be
binding upon and inure to the benefit of Borrower, the City and Lender and their respective
successors and assigns. No claims or rights are intended to be created hereunder for the benefit
of any third-party beneficiary.
13. Binding Agreement. This Agreement shall be binding upon the respective heirs, o
executors, administrators, personal representatives, successors and assigns of the Parties hereto; a.
provided, however, the foregoing shall not be deemed or construed to confer any right, title,
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benefit, cause of action or remedy upon any person or entity not a party hereto.
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14. Severability. If any clause or provision of this Agreement is held to be illegal, U_
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invalid or unenforceable under any law applicable to the terms hereof, then the remainder of this U_
Agreement shall not be affected thereby, and in lieu of each such clause or provision of this
Agreement that is illegal, invalid or unenforceable, such clause or provision shall be judicially
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construed and interpreted to be as similar in substance and content to such illegal, invalid or
unenforceable clause or provision, as the context thereof would reasonably suggest, so as to mi
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thereafter be legal, valid and enforceable. c
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15. Time of the Essence. Time is of the essence in the execution and performance of
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this Agreement and of each provision hereof. a
16. Saturday, Sunday or Legal Holiday. If any date set forth in this Agreement for 0
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the performance of any obligation by Borrower or Lender or for the delivery of any document or a.i
notice should be on other than a Business Day,the compliance with such obligation or delivery c
shall be deemed acceptable on the next following Business Day. N
17. Further Assurances. Lender will, whenever and as often as shall be reasonably
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requested to do so by Borrower, and Borrower will, whenever and as often as shall be reasonably E
requested so to do by Lender, execute, acknowledge and deliver, or cause to be executed,
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acknowledged and delivered, any and all conveyances, assignments and all other instruments and
documents as may be reasonably necessary to complete the transaction herein contemplated and
to carry out the intent and purposes of this Agreement.
18. Amendments. This Agreement shall not be amended except by a writing signed
by each of the Parties.
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19. Governing Law; Consent to Jurisdiction. This Agreement shall be governed by
and construed in accordance with the laws of the State of California without regard to principles
of conflicts of law. In addition, the Parties each hereby consent and submit to the jurisdiction of
the federal and state courts located in the County of San Bernardino, State of California or the
Central District of California, as applicable, in any action or proceeding arising out of or related
to this Agreement or the subject matter hereof and each party hereby waives (to the extent o
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permitted by applicable law) any objection which it may now or in the future have to the laying a
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of venue for any such action or proceeding in any such court.
20. Interpretation. In this Agreement, unless the Parties otherwise agree in writing,
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the singular includes the plural and the plural the singular; words importing any gender include U.
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the other genders; references to statutes are to be construed as including all statutory provisions LL
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consolidating, amending or replacing the statute referred to; the word"or" shall be deemed to
include "and/or", the words "including", "includes"and "include" shall be deemed to be
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followed by the words "without limitation"; references to articles, sections (or subdivisions of
sections) or exhibits are to those of this Agreement; and references to agreements and other 00i
contractual instruments shall be deemed to include all subsequent amendments and other
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modifications to such instruments, but only to the extent such amendments and other
modifications are not prohibited by the terms of this Agreement. Section headings in this ¢�
Agreement are included for convenience of reference only and shall not constitute a part of this ;,
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Agreement for any other purpose. In addition, the parties hereto acknowledge that each party 0.i
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and its counsel has reviewed this Agreement, and the parties hereby agree that normal rules of c
construction to the effect that any ambiguities are to be resolved against the drafting party shall y
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not be employed in the interpretation of this Agreement or any amendments or exhibits hereto.
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[SIGNATURES CONTAINED ON FOLLOWING PAGE] M
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7.A.b
IN WITNESS WHEREOF, Lender,the City and Borrower have executed this Agreement as of
the date first above written.
LENDER:
TIM BURGESS
By:
Name:Tim Burgess o
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BORROWER:
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SAN BERNARDINO JOINT POWERS
FINANCING AUTHORITY U-
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Name: R. Carey Davis LO
Its: Chairperson
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® TENANT: m
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CITY OF SAN BERNARDINO, CALIFORNIA
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By:
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Name: Mark Scott Qi
Its: City Manager o
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