HomeMy WebLinkAbout1985-290 1, 020-39/07305/cmh
07/22/85
RESOLUTION NO. 85-290
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE
CITY OF SAN BERNARDINO, CALIFORNIA, DECLARING ITS
INTENTION TO ISSUE ITS INDUSTRIAL DEVELOPMENT
REVENUE BONDS; DIRECTING THE PREPARATION OF
CERTAIN DOCUMENTS; AND MAKING CERTAIN OTHER
FINDINGS AND DETERMINATIONS IN CONNECTION
THEREWITH (SHANDIN HILLS PLAZA PROJECT)
WHEREAS, the City of San Bernardino, California ( "City" ) ,
is a "home rule city" duly organized and existing under and pursuant
to a Charter adopted under the provisions of the Constitution of the
State of California ; and
WHEREAS, pursuant to its home rule powers , the City duly
and regularly enacted Ordinance No . 3815 (the "Ordi-nance" ) to
finance various types of projects , as defined in the Ordinance, and
to issue its special revenue bonds for the purpose of enabling
various developers to finance the cost of such projects, and has
amended the same from time to time; and
WHEREAS, said Ordinance No . 3815 , as amended, is intended
to finance the development of industry and commerce and to thereby
broaden the employment opportunities and to increase the
availability of office facilities for residents of the City and to
broaden the tax and revenue base of the City without any liability
to the City whatsoever; and
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WHEREAS, there has been presented to the Mayor and Common
Council an Application, attached hereto as Exhibit "A" and
incorporated herein by reference by H & H Develoment, a sole
proprietorship (the "Applicant" ) , requesting the issuance of
industrial development revenue bonds in the principal amount not to
exceed ten million dollars ($10, 000 , 000) for the purpose of
providing financing, on behalf of the Applicant , for a certain
Project, to wit : the acquisition of land, and the construction
thereon of an approximately 157, 000 square foot hotel, restaurant
and office complex on a thirteen and nine-tenths ( 13 . 9) acre site
located on the north side of 27th Street between Little Mountain
Drive and Miramonte Drive in the City. The Project shall consist of
said complex, on-site vehicle parking spaces as required by the
City, appurtenant landscaping and other improvements .
NOW, THEREFORE, THE MAYOR AND COMMON COUNCIL OF THE CITY OF
SAN BERNARDINO, CALIFORNIA, DO HEREBY FIND, RESOLVE, DETERMINE AND
ORDER AS FOLLOWS:
Section 1. That the recitals set forth hereinabove are
true and correct in all respects .
Section 2 . The City of San Bernardino, California, is a
municipal corporation duly created, established and authorized to
transact business and exercise its powers , all under and pursuant to
the Constitution and laws of the State of California, and the City
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Charter of the City, and the powers of the City include the power to
issue bonds for any of its corporate purposes .
Section 3 . Pursuant to the Charter of the City and
Ordinance No . 3815 , as amended, of the City, the City is legally
authorized to issue special revenue bonds for the construction and
permanent financing of the Project as more fully described in the
recitals hereof and in the application for industrial development
revenue bond financing of the Applicant , as on file with the City.
Section 4 . This body constitutes the governing body of
the City and is legally authorized to provide for the issuance of
such special revenue bonds by the City.
Section 5 . The Project referred to in the recitals
hereof constitutes a project for which the City may provide
tax-exempt financing through the issuance of such special revenue
bonds by the City and located within the jurisdiction of the City.
Section 6 . The Council does hereby declare its
intention to issue industrial development revenue bonds of the City
to provide tax-exempt financing to the Applicant for the acquisition
of land and the construction, equipping and permanent financing of
the Project under and in accordance with the Ordinance, in amounts
sufficient to pay the costs of financing the Project and of paying
the costs of issuance for the industrial development revenue bonds
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and for the establishment of the necessary reserve funds to provide
for the financing of said Project . Said Project is presently
identified as the Shandin Hills Plaza Project . Any agreement for
such financing shall specify that the City' s general funds shall not
be liable for repayment of the bonds .
Section 7 . The City hereby declares its intention to
exercise the authority referred to in Section 3 hereof by issuing
bonds of the City in such amounts as will be adequate to implement
the City financing of the Project .
Section 8 . The bonds shall be payable from the revenues
described in said Ordinance No . 3815 , as amended.
Section 9 . The bonds shall be and are special
obligations of the City, and, subject to the right of the City to
apply moneys as provided in the applicable laws , are secured by such
revenues as are specified in the proceedings for the issuance of
such bonds and funds and accounts to be held by the trustee or
fiscal agent, and are payable as to principal , redemption price, if
any, and interest from the revenues of the City as therein
described. The bonds are not a debt of the City, the State of
California or any of its political subdivisions , and neither the
City, the State, nor any of its political subdivisions is liable
thereon, nor in any event shall the bonds be payable out of the
funds or properties other than all or any part of the revenues ,
mortgage loans , and funds and accounts as in this Resolution set
forth. The bonds do not constitute an indebtedness within the
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meaning of any constitutional or statutory debt limitation or
restriction. Neither the persons serving as the Mayor and Common
Council nor any persons executing the bonds shall be liable
personally on the bonds or subject to any personal liability or
accountability by reason of the issuance thereof .
Section 10 . The details of such bonds, including the
establishing of the aggregate face amount of such obligations, shall
be authorized by indenture, resolution or resolutions of the City at
a meeting or meetings to be held for such purpose. The City Staff ,
Sabo & Gondek, a Professional Corporation, as Bond Counsel to the
City, Underwriters , the Applicant and the agents and representatives
of same are hereby authorized and directed to prepare or cause to be
prepared the necessary legal documents , including the Project
Agreement, Resolution of Issuance, and such other documents as may
be necessary to effect said Project and the issuance of industrial
development revenue bonds therefor and to present same to said Mayor
and Common Council . The Mayor of the City is hereby authorized and
directed to coordinate the efforts of all concerned relating to the
issuance and sale of the bonds , and the City Staff , consultants ,
legal counsel to the City and Bond Counsel as referenced above are
hereby directed to take such steps as shall be appropriate to
implement such sale and delivery of the bonds including working with
persons who may acquire vested rights as the result of such actions .
Section 11 . The issuance of industrial development
revenue bonds may be authorized by appropriate resolution or
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resolutions of the City at a meeting or meetings to be held for
such purpose, subject to the execution of appropriate agreements by
the Applicant and the City as required by the Ordinance and thee
industrial development bond financing program of the City;
provided , further , that this Resolution shall be subject to and
conditioned upon the Applicant complying with the industrial
development ,Donis Zinancing program of the City.
,Section 12. It is intended that this Resolution shall
constitute such "official action" toward the issuance of the bonds
within the meaning of the United States Treasury Regulations , the
United States Tax Laws , and any legislation now or hereafter
pending in Congress of the United States which may require official
action in order for the bonds to be exempt from Federal income
taxation.
B—PQt.ion 13 . At the closing of the financing there shall
be paid to the City the fee set forth in Resolution No . 81-108 of
the Mayor and Common Council , adopted March 13 , 1981 , as amended by
Resolution No. 81-410 , of the Mayor and Common Council , adopted
September 24 , 1981 .
Section 14 . Adoption of this resolution shall not be
construed as approval of the plans or concept of the proposed
development , nor as an indication that the Mayor and Common Council
will take any particular action toward granting any planning,
zoning or other approval relating to a plan of development . The
Mayor and Common Council reserve their right to evaluate any future
administrative procedures and appeals based solely on the
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information available at the time of consideration , including any
actions or recommendations by or appeals from the Development
Review Committee and the Planning Commission . Nothing herein shall
be construed as advance commitment or approval as to any such
matter , and the Applicant is notified that normal planning
processing shall be required, in accordance with the standard
procedures of the City of San Bernardino , and that Applicant will
be required to comply with all applicable laws and ordinances of
the city, state and federal government .
Section 15. This Resolution shall take effect upon
adoption.
I HEREBY CERTIFY that the foregoing resolution was duly
adopted by the Mayor and Common Council of the City of San
Bernardino at a regular meeting thereof, held on the
5th day of Auguat 1985, by the following vote, to
wit:
AYES: Council Members Estrada R� eilly, Hernandoz ,
Marks Ouiel . Frazier, Strirklar
NAYS: None
ABSENT: None
CITY CLERK
The foregoing resolution is hereby approved this 7th day
of August 1985 .
Mayor of tlYe City of San Bernardino
Approved as to form:
City Attorney - 7 -
1,020-38/0739S/krp
06/08/85
APPLICATION OF H&H DEVELOPMENT
FOR INDUSTRIAL DEVELOPMENT REVENUE BOND FINANCING
CITY OF SAN BERNARDINO, CALIFORNIA
PART I GENERAL AND BUSINESS INFORMATION
1.1 The legal name of the Applicant is H&H Development, a sole
proprietorship.
1.2 The Applicant is a sole proprietorship and shall be engaged in
the development, leasing and ownership of a certain hotel,
restaurant and office complex located on the north side of 27th
Street between Little Mountain Drive and Miramonte Drive in the
City of San Bernardino, California (the "Project"). The
Applicant has an option to acquire the property necessary for
the proposed Project (the "Property") and shall develop said
Property and construct the Project thereon.
1.3 The mailing address and the address of the Applicant is as
follows:
H&H Development
1190 Rexford Avenue
Pasadena, California 91107
1.4 Employee Tax ID No. is 281342331
1.5 Mr. Charles Hanzo is the principal contact for the Applicant. _
1.6 Telephone Number (818) 351-9188.
1.7 The Applicant is a sole proprietorship.
1.7.1 The Applicant shall own property and conduct business
in the City of San Bernardino, State of California.
1.7.2 The Applicant began doing business in 1983.
1.7.3 The Applicant is not related to any other legal entity.
1.8 The Applicant is owned by Charles Hanzo.
1.9 Mr. Charles Hanzo shall be the individual who will have primary
responsibility for conducting the business of the Applicant with
respect to the Project.
1.10 The Applicant is currently engaged in the development of commercial
and residential property in California.
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1.11 Employees
1.11.1 The Applicant currently has three (3) employees. Although
the principal objective of the Project is to provide
157,000 square feet of hotel, restaurant and office space
within the City of San Bernardino, the construction and
operation of the Project will create certain employment
opportunities within the City. The Project shall create
approximately 327 employment opportunities.
1.11.2 The Applicant has offices at 1190 Rexford Avenue, Pasadena,
California 91107.
1.12 Professional services will be provided by the following:
1.12.1 Accountant services will be provided by an individual or
firm to be named later.
1.12.2 Robert Sloat, Esq. , of MacFarlane, Lambert & Sloat,
(818) 796-9647 is the attorney for the Applicant.
1.12.3 The law offices of Sabo & Gondek, a Professional
Corporation, shall serve as Bond Counsel to the City with
regard to the tax-exempt financing for the Project.
1.12.4 Principal Architect - McClellan/Cruz/Gaylord & Associates,
3452 East Foothill Boulevard, Suite 1100, Pasadena,
California 91107, (818) 793-9119.
1.12.5 Principal Civil Engineer - L.D. Lansing & Associates, Inc. , _
1881 Business Center Drive, San Bernardino, California
92408, (714) 889-0203.
1.13 The principal banking accounts of the Applicant shall be held by
Wells Fargo Bank, N.A. , corporate office in Los Angeles, main branch
and the officer at said bank responsible for such account is Mike
Nelson.
1.14 The source of funding for the Project is anticipated to be derived
from a variety of sources including the private placement of a
tax-exempt bond or other obligation with a lender to be obtained
hereafter or a letter of credit backed financing. The Project is
located in the State College Redevelopment Project and the Applicant
also intends to seek certain tax increment financing assistance for
certain public improvements which shall be required in connection
with the Project.
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PART II BOND ISSUE
2.1 The estimated total amount of the financing package and the proposed
use of bond proceeds is as follows:
2.1.1 Project cost - $6,250,000 ($1,700,000 tenant allowance not
included)
2.1.2 Legal, printing and related fees - $100,000
2.1.3 Financing costs and fees - $390,000
2.1.4 Capitalized interest - $460,000
2.1.5 Other miscellaneous costs - $500,000
2.1.6 Land acquisition - $1,700,000
Total: $9,400,000
2.2 The estimated target date for the financing is presently anticipated
in the final quarter of 1985, with construction to commence as soon
as possible after the financing package is completed and the Project
shall be completed in three (3) construction phases which shall take
between twelve (12) and eighteen (18) months to I complete.
2.3 It is proposed that the financing be in the form of a construction
loan during the construction period which would have the traditional
construction loan provisions in that drawdowns would be permitted as
construction proceeds upon submission of requisition vouchers. Upon
the completion of construction of the Project and the certification
that all improvements have been completed, the lender will then
permit an interest rate adjustment and a principal amount increase,
as warranted, and convert the construction loan to a permanent
financing.
2.4 The present proposal for the financing of the Project anticipates
that the tax-exempt bonds or other obligations will be sold to a
commercial bank or other such lender through a private placement or
that there be a public offering of such securities.
PART III FINANCIAL INFORMATION
3.1 The financial statements of the Applicant are included as Exhibit "A"
attached hereto.
3.2 The Applicant shall be doing business as a sole proprietorship
pursuant to the laws of the State of California and the Applicant
would be considered a small business with regard to its relative size
in comparison with other such businesses undertaking projects of this
type. No federal small business loan guarantees are proposed in
connection with the proposed financing as contemplated by this
Application.
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PART IV PROJECT INFORMATION
4.1 The Project as proposed by the Applicant shall include acquisition of
land and the construction thereon of approximately 157,000 square
feet of hotel, restaurant and office space on a portion of a thirteen
and nine-tenths (13.9) acre site located on the north side of 27th
Street between Little Mountain Drive and Miramonte Drive in the City
of San Bernardino. The Project is located within the Redevelopment
Project Area of the Redevelopment Agency of the City of San
Bernardino known as the State College Redevelopment Project and shall
include such onsite parking as required by the City and appurtenant
landscaping and other improvements. The Project shall be located on
land more particularly described and included as Exhibit "B" hereto.
4.1.1 The Project shall be leased at a proposed gross rental rate
of $1.00 - $1.10 per square foot.
4.2 The components and the estimated total cost of the functional parts
of the Project are as follows:
4.2.1 Land - $1,7001)000
4.2.2 Building construction - $5,000,000
4.2.3 Site Preparation - $800,000
4.2.4 Engineering and technical services - $240,000
Total: $7,740,000
4.2.6 Miscellaneous items -
a. Construction contingency - $340,000
b. Applicant's development overhead costs
and profit - $160,000
C. Interest during construction - $460,000
d. Real Estate Brokerage Commission - $100,000
e. Other miscellaneous costs - $600,000
Total: $9,400,000
4.3 The estimated construction period for the Project is as follows:
4.3.1 Construction of the Project would commence as soon as
possible after issuance of the tax-exempt obligations.
4.3.2 The planned construction shall occur in three (3) phases
and be completed within twelve (12) to eighteen (18) months
from the date of commencement.
4.4 The supervising architect responsible for the design of the Project
on behalf of the Applicant shall be McClellan/Cruz/Gaylord &
Associates.
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4.5 The Project shall be known as "Shandin Hills Plaza".
4.6 The Project is the development of a new hotel, restaurant and office
complex and is not an expansion or an alteration of an existing
facility. The necessary infrastructure items and other public
improvements must be installed on the Project site and the Applicant
desires to obtain a below market rate tax-exempt construction and
permanent financing of the improvements to be placed thereon from a
combination of sources. In addition to this Application for
tax-exempt financing, the Applicant intends to seek tax increment
financing in connection with obtaining the total financing package
for the Project.
4.7 The Property on which the Project is proposed to be located is
currently owned by Marlborough Development Corp. , a division of Block
Bros./USA Inc. , subject to a mortgage on the Property and the
Applicant has an option to acquire said property for a total
consideration not to exceed $1,700,000.
4.8 The Project will provide approximately 157,000 square feet of gross
leaseable hotel, restaurant and office space within the City of
San Bernardino to be leased to various tenants.
4.8.1 Attached as Exhibit "C" is an 8-1/2 x 11 inch map showing
the site location of the proposed Project.
4.8.2 A description of the plant process - not applicable.
4.9 A negative declaration pursuant to the provisions of the California
Environmental Quality Act of 1970, as amended, would in all
probability be satisfactory for the Project as proposed by the
Applicant. However, the Project shall comply with all applicable
provisions of said Act.
4.10 There are no permits, water quality enforcement orders, air pollution
permits or variances or other evidence of actions necessary in
connection with this Project. A sewer permit for the construction of
the Project shall be obtained.
4.11 There are no local, state or federal pollution control agencies which
impose regulations, standards or requirements with regard to the
operations of the proposed Project to be undertaken by the Applicant.
4.12 The proposed Project shall comply with all applicable City of San
Bernardino, County of San Bernardino, and other regional, county or
basin plans to which this Project shall conform and the appropriate
waste water and air quality requirements which shall be in conformity
with all of the above jurisdictions.
4.13 It is presently anticipated that the proposed Project will not
produce any by-products or residues which would involve the ultimate
disposal or the need for a plan to accomplish same. Recycling or
salvage will not be a function of the proposed Project nor will there
be any market opportunities generated with regard to same.
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PART V PUBLIC BENEFITS
5.1 The City of San Bernardino will receive significant benefits by the
initiation of this Project as proposed by the Applicant and
particularly through the utilization of the financing method as is
available under Ordinance No. 3815, as amended, of the City of San
Bernardino. Due to the fact that conventional interest rates for
construction and permanent financing for hotel, restaurant and office
projects as contemplated by the Applicant are at significantly higher
levels on conventionally borrowed funds than for tax-exempt financed
projects, neither the Applicant nor any other persons or legal
entities are able to provide the type of modern and attractive hotel,
restaurant and office complex that is needed within the City of San
Bernardino. Additionally, the City of San Bernardino, its
inhabitants and the Redevelopment Agency of the City of San
Bernardino will benefit from the increased assessed valuation of
property within the Redevelopment Project Area known as the State
College Redevelopment Project which will occur as a result of the
completion of the Project. This increase in the assessed valuation
of the property included in the Project will assure that the
Redevelopment Agency of the City of San Bernardino will have a more
viable means of undertaking its redevelopment activities within said
Project Area. In addition, it is estimated that the Project will
generate approximately $250,000 in sales tax revenues for the City
upon its completion. The City likewise would benefit by obtaining
quality hotel, restaurant and office structures which will, when
placed into use, provide full time employment and part time
employment opportunities. Other businesses will be encouraged to
locate or relocate within the City of San Bernardino and thus create
an upward spiraling effect on the economy of the City as a result of
the Project.
5.1.1 The Project will provide long term employment opportunities
for the inhabitants of the City of San Bernardino. When
fully leased and operational the Project will provide
employment opportunities for a substantial number of
persons. The category of jobs to be provided in the
Project after its construction include managerial, skilled,
semi-skilled and unskilled. The wages to be paid in the
various job categories meet local and regional standards
and will sustain a satisfactory level of financial
stability.
5.1.2 Construction of the Project is anticipated to add
approximately $7,500,000 to $8,000,000 of assessed
valuation to the tax rolls of the City. In addition, it is
anticipated that the Project will generate additional sales
tax and business license revenues for the City.
5.1.3 The useful method of financing provided for in
Ordinance No. 3815 of the City vis-a-vis the use of the
conventional method will permit the Applicant to complete
the financing and construction of the Project within an
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accelerated time frame. The method of financing provided
in Ordinance No. 3815 will provide new sources of financing
to the Applicant and such financing will be made available
at lower tax-exempt interest rates.
5.2 The City will benefit, as can be demonstrated pursuant to Section 1
of Ordinance No. 3815, as amended, of the City of San Bernardino, in
that needed hotel, restaurant and office space will be generated by
the proposed Project and the clearance of an underutilized and
blighted area will be implemented. The Applicant is not attempting
to construct said proposed Project merely for the financial
inducement that is offered pursuant to the Ordinance, but rather due
to the long-term business reasons that are significant due to the
location of the proposed Project and the real economic benefits
available to the community.
There are no detriments that can be incurred by the City with regard
to this type of financing for this Project, and the City of San
Bernardino and the Redevelopment Agency or the City of San Bernardino
will receive substantial benefits through increases in assessed
valuation of property, the redevelopment related goals to be served
by the Project, plus the increased long-term employment opportunities
that will be available to local residents of the City. _
PART VI COMMITMENTS
6.1 The Applicant by the submission of this Application agrees to comply
and/or to assist the City in complying with all state and federal
laws in the issuance of the bonds or other such tax-exempt
obligations to finance the Project, including, without limitation,
making of any required application to a governmental department, for
authorization, qualification or registration of the offer, issuance
or sale of the bonds or other tax-exempt obligations, and any
amendments thereto, and any permit or other authorization of such
governmental department, prior to the delivery by the City of such
bonds or other tax-exempt obligations.
6.2 The Applicant further commits to cause and/or to assist the City in
causing to be printed any prospectus or other written or printed
communication proposed to be published in connection with the
issuance, offer or sale of bonds or other tax-exempt obligations,
prior to the delivery by the City of such bonds or other tax-exempt
obligations, and, to the extent deemed necessary by the City,
following delivery of such bonds or other tax-exempt obligations.
6.3 The Applicant also commits to pay all expenses in connection with the
issuance, offer or sale of the bonds or other tax-exempt obligations,
whether or not such bonds or other tax-exempt obligations are finally
issued, and to hold the City harmless from any and all expenses
related thereto, to pay items on an ongoing basis so that neither the
City, nor its advisors, attorneys, employees and the like will
accumulate any claims against the City.
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6.4 The Applicant will supply any additional information, agreements and
undertakings as the City may require as a result of conferences and
negotiations and copies of such additional information shall be
forwarded to the City by the Applicant and shall be deemed to be
supplements or amendments to this Application.
PART VII SIGNATURE
7.1 The undersigned as authorized principals of the Applicant as noted
below, hold the prime responsibility for the financing to be taken
for the proposed Project, and certify that the undersigned have the
authority to bind the Applicant to contract terms; that this
Application to the best knowledge or belief of the undersigned,
contains no false or incorrect information or data, and this
Application, including exhibits and attachments hereto, is truly
descriptive of the proposed Project. The undersigned also represent
by the execution of this Application familiarity with Ordinance No.
3815, as amended, of the City of San Bernardino.
PART VIII FEE SCHEDULE
8.1 The Applicant acknowledges that the City requires a non-refundable
application fee of $50 for each Project to be considered for
eligibility, to be paid when the basic documents are requested. With
the submittal of this Application, $500 is payable to the City. If
this Application is accepted, an additional fee of $10,000 is payable
for administrative costs. The Applicant acknowledges that the
commitments in Part VI above are in addition to these fixed amounts.
Thus, in the event that no closing occurs, the City shall be
reimbursed for its processing costs.
8.2 All fees of the City may be capitalized and included in the bond
issue as acceptable to the bond purchaser.
8.3 The Applicant acknowledges that the City derives its entire support
from the fees for its services. The total function of the City is
conducted on a self-supporting basis, and involves no state general
revenues or expenditures from taxes from the state or any of its
political subdivisions. No indebtedness or taxing power of the City
is involved. Project revenues are the sole security for bonds of the
City.
8.4 Pursuant to Resolution No. 81-108 of the City, as amended by
Resolution No. 81-410 of the City, one percent (1%) of the principal
amount of the bond issue shall be deposited in the City Treasury in
the Industrial Revenue Bond Reserve and Development Fund, which shall
be used in such manner as the Mayor and Common Council may direct
from time to time.
"APPLICANT"
By:
Charles Hanzo
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Exhibit "A"
(financial statements of H&H Development)
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Exhibit "B"
(legal description of site location of
the proposed Project)
10 -
Exhibit "C"
(map of the proposed Project)
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