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HomeMy WebLinkAbout1980-151 San Bernardino 60 ,009-9-1 RESOLUTION NO. RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO APPROVING AN APPLICATION FOR THE ISSUANCE OF INDUSTRIAL DEVELOPMENT REVENUE BONDS OF THE CITY AND THE PROJECT REFERRED TO THEREIN; FINDING THAT THERE WAS NO EVIDENCE PRESENTED AT A PUBLIC HEARING HELD ON SAID APPLICATION IN OPPOSITION TO SAID APPLICATION OR SAID PROJECT; DIRECTING THE PREPARATION OF A PROJECT AGREEMENT, RESOLUTION OF ISSUANCE AND OTHER LEGAL DOCUMENTS AS MAY BE NECES- SARY TO CARRY OUT SAID PROJECT AND PROVIDE FOR THE ISSUANCE OF INDUSTRIAL DEVELOPMENT REVENUE BONDS THEREFOR; AND MAKING CERTAIN OTHER FINDINGS AND DETERMINATIONS IN CONNECTION THEREWITH WHEREAS, there has been presented to this Mayor and Common Council an Application by VT'N Consolidated, Inc. and Eastern Pacific Financial Group, A Joint Venture, requesting the issuance of industrial development revenue bonds in the principal amount of $7,120 ,000 for the purpose of financing multi-tenant industrial buildings to be located in the Southwest Industrial Park Project Area of the Redevelopment Agency of the City of San Bernardino, including the land necessary therefor and for the providing of parking spaces for the use and convenience of the tenants of and visitors to said buildings; and WHEREAS, said Mayor and Common Council preliminarily reviewed said Application, and, on the 17th day of March, 1980, adopted a Resolution entitled: D125-1 (ap) 4/1/80 -San Bernardino 60 ,009-9-1 "RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO FINDING THAT AN APPLICATION FOR INDUSTRIAL DEVELOPMENT BOND FINANCING HAS BEEN SUBMITTED PURSUANT TO THE PROVISIONS OF ORDINANCE NO. 3815 OF THE CITY BY VTN CONSOLIDATED, INC. , AND EASTERN PACIFIC FINANCIAL GROUP, A JOINT VENTURE; FINDING THAT SAID APPLICATION COMPLIES WITH THE PROVISIONS AND REQUIREMENTS OF SAID ORDINANCE NO. 3815; PRELIMINARILY APPROVING SAID APPLICATION AND THE PROJECT TO WHICH IT REFERS; FIXING • TIME AND PLACE FOR THE HOLDING OF • HEARING THEREON; ORDERING THE PUBLICATION OF A NOTICE OF HEARING IN THE FORM AND MANNER PROVIDED BY SAID ORDINANCE NO. 3815; AND MAKING CERTAIN OTHER FINDINGS AND DETER14INA- TIONS IN CONNECTION THEREWITH" and WHEREAS, pursuant to said Resolution following a notice duly published in the time and manner of said Ordinance No. 3815, said Mayor and Common Council conducted a Public Hearing on said Application and said Project, in the manner required by said Ordinance No. 3815; and WHEREAS, at said Public Hearing there was no evidence presented, either written or oral, in opposition r to said Application or said Project; -2- D125-2 (ap) 4/1/80 San Bernardino 60 ,009-9-1 NOW, THEREFORE, THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO DO HEREBY FIND, RESOLVE, DETER- MINE AND ORDER AS FOLLOWS: Section 1. That the recitals set forth herein- above are true and correct in all respects . Section 2 . That said Application and the Project to which it refers are hereby approved. Section 3. That the City Staff, Bond Counsel , Underwriters, the Applicants and the Agents and Representa- tives 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. Section 4. That the City Clerk is hereby authorized and directed to mail a certified copy of this Resolution to the Applicants at their address as shown on said Application. -3- D125-3 (aP) 4/1/80 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 ��/ day of 0 1980 , by the following vote, to-wit: AYES : Councilmen NAYS : ABSENT: J� —� City Clerk The foregoing resolution is hereby approved this day of 1980 . Mayo o e City ofOSan Bernardino Approv6 ,/p4o ,form: :.�_; City Attorney INDUSTRIAL DEVELOPMENT BOND We herewith make application for $7,120,000 Industrial Development Bond financing to construct 240,800 square feet of industrial buildings on 15 acres of industrial zoned land fronting on Cooley Avenue in the Southeast Industrial Park in the city of San Bernardino, consistent with the following applicant responses to the Industrial Development Bond Application: 1.1 Legal name of the applicant VTN Corporation, a Delaware Corporation (hereinafter referred to as VTN) , and Eastern Pacific Financial Group, a California corporation (hereinafter referred to as EP) , as co-venturers. 1.2 Line of Business VTN - Civil Engineering EP - Land Development 1. 3 Mailing address for purposes of application liaison, and address of headquarters. VTN - 2501 Campus Drive, Irvine, California 92713 EP - 3575 Cahuenga Boulevard, West, Los Angeles, California 90028 1.4 Employer I.D. Number VTN - 95-2784907 EP - 95-3073052 1.5 Name and title of principal contact. VTN - C. Richard Nelson, President, VTN Corporation EP - David Doremus, President, Eastern Pacific Financial Group 1.6 Phone number (s) . VTN - (714) 851-5200 EP - (213) 876-4181 Industrial Development Bond Application Page Two 1.7 Type of business organization: 1.7.1 Place of organization VTN - Delaware EP - California 1.7.2 Date of organization, and VTN - November 22 , 1972 EP - October 1, 1969 1.7. 3 The nature of legal affiliation or relationship with other entities (Parent - subsidiary, division, common owernship, etc. ) . VTN Corporation - parent company owns all of the stock of the following corporations: VTN, Colorado VTN Consolidated, Inc. VTN, Inc. VTN, International VTN, Louisiana VTN, Oregon VTN Pacific, Inc. VTN Wyoming, Inc. VTN Consolidated in addition to doing business under its own name has three active companies doing business as : VTN, San Bernardino VTN, Los Angeles VTN, San Diego VTN, San Bernardino is the only active company in San Bernardino County. It owns no property other than minor office furnishings and employs seven people in the county. EP - None 1. 8 Constitution of ownership of the company, including percent- age of holdings by general public. VTN - 34% publicly owned by many stockholders ono more than 5%) ; 66% privately owned. Industrial Development Bond Application Page Three 1. 8 (Continued) EP - Stock corporation privately held by David Doremus 1.9 Names and locations of key officials , including: 1.9.1 Principal officers , VTN - J. J. Trindle, Chairman of the Board 35395 Beach Road Capistrano Beach, California 92624 C. R. Nelson, President & Director 20 Pine Hearst Road Newport Beach, California 92660 R. W. Carlson, Vice Executive Officer & Director 13142 Laurinda Way Santa Ana, California 92705 R. L. Weaver, Executive General Manager 19492 Sierra Lago Irvine, California 92715 M. J. Ruston, Director 2465 Campus Drive Irvine, California 92715 R. W. Gay, Director 626 North Pioneer Drive Anaheim, California 92805 EP - David Doremus, President & Director 3791 Multiview Drive Los Angeles, California 90028 Valerie Doremus, Director 3791 Multiview Drive Los Angeles, California 90028 L. M. Lilly, Vice President 886 Hillside Drive Long Beach, California 90815 Julie Hueftle, Treasurer ,• - 1090 Mission Drive Costa Mesa, California 92626 Industrial Development Bond Application Page Four 1.9.1 (Continued) Barbara Peterson, Secretary 23469 Victory Boulevard Canoga Park, California 91307 1.9.2 Directors, and Included in 1.9.1 above 1.9.3 Principal stockholders (over 10% ownership) . VTN - C. Richard Nelson 22%, James R. Trindle 22%, and Kenneth Carlson 22%; remaining 34% of stock is publicly owned and is widely disbursed. EP - David Doremus 100% 1. 10 Description of other business affiliations of principal officers, directors, and principal stockholders. VTN - J. J. Trindle, C. R. Nelson, and K. W. Carlson are the three shareholders of the Cotter Corporation, which owns improved properties in Orange County and Los Angeles County, and VTN, Nevada, which operates a civil engineering company in Nevada. EP - David Doremus, in addition to owning 100% of the outstanding stock of Eastern Pacific Financial Group, also owns 100% outstanding stock of Doremus Development, Inc. , a California corporation which is a real estate development company, 13.3% of the outstanding stock of Pathfinder Mortgage Corporation, a California corporation which is a mortgage banker, and is general partner of the following limited partnerships engaged in the development and management of real property in California: E. P. Investments Eastern Pacific I E. P. Investments III Santa Maria Industrial E. P. Investments VII E. P. Hamlin Pathfinders Investments DYL Investments Eastern Pacific Management Company t Industrial Development Bond Application Page Five 1.10 (Continued) None of the affiliated corporations or entities are presently involved in the development of any property within the county or city of San Bernardino and no projects are anticipated during the term of the bond issuance. 1.11 Employees VTN - Number of employees in San Bernardino - 7 Number of employees in California - 327 Total number of employees worldwide - 521 EP - Number of employees in California - 30 1.11.1 Number of employees in California, and Included in 1.11 above 1.11.2 Locations in California. VTN - 2301 Campus Drive, Irvine, California 92713 5919 Van Nuys Boulevard, Van Nuys, California 91401 71-301 Highway 111, Suite 1, Rancho Mirage, California 92770 VTN, San Diego, 4845 Ronson Court San Diego, California 92111 VTN, San Bernardino, 353 West 6th Street, San Bernardino, California 92402 EP - 3573 Cahuenga Boulevard, West, Los Angeles, California 90028 14724 Ventura Boulevard, Sherman Oaks, California 91403 1.12 Expert Services: 1.12.1 The applicant's accountant and principal contact at such firm, c ' Industrial Development Bond Application Page Six 1.12.1 (Continued) VTN - Ernst and Whinney 4000 MacArthur Boulevard, Suite 800 Newport Beach, California 92660 Contact: Mr. Robert Vernon (714) 851-1700 EP - Herbert A. Lampert, C.P.A. 14724 Ventura Boulevard Sherman Oaks, California 91403 Contact: Mr. Herbert A. Lampert (213) 990-5644 1.12 .2 The applicant's attorneys and principal contact at such firm, and VTN - Robert Bachman 2361 Campus Drive Irvine, California 92713 Contact: Mr. Robert Bachman (714) 851-5206 EP - Kadison, Pfaelzer, Woodard, Quinn, & Rossi 707 Wilshire Boulevard, 40th Floor Los Angeles , California 90017 Contact: Richard Smith, Esq. (213) 688-9000 1.12.3 Any experts or firms of experts that will be involved and the principal contacts at each firm. Miller and Schroeder Muncipals, Inc. 1200 Prospect Avenue La Jolla, California 92037 (714) 459-2661 James E. Iverson, Consultants and Bond Underwriters City of San Bernardino James Warren Beebe, Esq. 611 West 6th Street Los Angeles, California 90017 Contact: James Warren Beebe, Esq. , (213) 680-1406 Bond Counselor, City of San Bernardino 1.13 Principal bank of account and name of officers handling account. 'c VTN - Bank of America Irvine Industrial Office 1400 Dove Street Newport Beach, California 92660 (714) 759-4565 Industrial Development Bond Application Page Seven 1.13 (Continued) EP - Manufacturers Bank 9701 Wilshire Boulevard Beverly Hills, California 90212 Charles Solomon, Executive Vice President (213) 278-9120 1.14 The source of funding for the project. Bonds will be underwritten by Miller and Schroeder Municipals, Inc. PART II BOND ISSUE 2. 1 Provide the estimated total amount of the financing with a tabulation of proposed use of bond proceeds, including: 2 .1.1 through 2. 1.5 $ 97,000 Legal printing and related fees 260,000 Underwriting financing costs and fees 650,000 Capitalized interest 650,000 Interest reserve 472 ,500 Land 1,000,000 Land Development 3,516,000 Direct construction 150,000 Architectural. and engineering fees 324,500 Marketing and sales $7,120,000 Total Bond Proceeds 2.2 Estimated target date of financing. June 1, 1980 for underwriting of the $7,120,000 bond issue. There will be construction disbursements as required up to the aggregate phase disbursements of: $2,750,000 will be funded June 1, 1980, $2,600,000 is anticipated to be funded March 1, 1981, and $1,770,000 is anticipated to be funded March 1, 1982. In no event will the total develop- ment of the project not be completed by December 31, 1983. 2.3 Estimated times of financing. See 2.2 above c Industrial Development Bond Application Page Eight 2.4 Type of bond sale (private placement, underwritten offering) . Underwritten offering PART III FINANCIAL INFORMATION 3.1 Financial statements certified or prepared by a CPA, from three most recent fiscal years, including the following: 3. 1.1 Balance Sheet Attached hereto 3.1.2 Income (Profit and Loss) Statements, and Attached hereto 3.1.3 Analysis of sources and application of funds. Sources : Bond issuance underwritten by Miller and Schroeder Municipals, Inc. , plus required owners equity. Application: Purchase of approximately 15 acres of industrial zoned land, known as Parcel 3, Parcel Map 4781, as per map recorded in Book 48, Pages 87 - 89 of Parcel Maps in the Office of the County Recorder of the County of San Bernardino, state of California and construction of 240,800 square feet of free standing light industrial buildings, together with the necessary developmental, processing fees, bond underwriting and finance costs, merchandising and overhead costs. 3.2 Advise as to whether applicant is a small business, and a description of the applicant's ranking and relative size in its industry. VTN - A medium sized business ranked in the upper 10% of civil engineering firms in the United States. EP - A small business unranked in its industry. No Small Business Administration loan funds or guarantees are requested or will be issued in connection with this bond underwriting. Industrial Development Bond Application Page Nine PART IV PROJECT INFORMATION 4.1 A short summary of the purpose, objective and function of the proposed project. The industrial project will be developed with 34 buildings comprising 240,800 square feet. A pent-up demand exists for small (1,000 to 7,000 square foot) primary manufactur- ing and commercial users. These users are precluded from establishing themselves in the San Bernardino market for want of improved industrial space. We will build the project in three phases: Phase Total Footage Anticipation of Construction lst 92,400 June 1, 1980 2nd 94 , 400 March 1, 1981 3rd 54 ,000 March 1, 1982 The IDB will be issued in the aggregate amount of $7,120,000 with total phase disbursements of: lst Phase - $2 ,980,000 2nd Phase - 2,600,000 3rd Phase - 1,540,000 $7,120,000 Total The project will be built and the bonds guaranteed by the developer with the industrial buildings being both sold and leased to tenants who will be the primary users. 4.2.1 Land, Land Purchase $ 450,000 5% Commission 22,500 $ 472,500 Total Land Cost 1,000,000 Common Area Improvements (streets, street lighting, underground utilities, landscaping, etc.-) - . � $1,472,500 Total Developed Land Industrial Development Bond Application Page Ten 4.2.2 Buildings, 3,516,000 - 240,800 square foot buildings, including 10% of each building improved as offices . 4.2.3 A tabulation of equipment, None 4.2.4 Engineering and technical services, and $150,000 4.2.5 Other or miscellaneous items (describe and tabulate) . $260,000 Bond Underwriting Financing 97,000 Bond Underwriting Legal and Printing 650,000 Construction Period Interest 324 ,500 Marketing and Sales Cost 650,000 10% Interest Reserve 4.3 Estimated construction period: 4. 3.1 Scheduled starting date, and June 1, 1980, March 1, 1980, and March 1, 1982 4.3.2 Scheduled completion date. January 31, 1981, September 30, 1981, and September 30, 1982 4.4 Name and location of the applicant's supervising or consulting engineer responsible for design of the project. Civil Engineering - VTN Consolidated, Inc. 353 West 6th Street San Bernardino, California 92402 John Adams (714) 889-4431 Architectural - Johannes Van Tiburg & Partners 1101 Broadway Santa Monica, California 90401 Johannes Van Tiburg, AIA (213) 394-0273 4.5 The location of the proposed project. If duplicate installa- tions in several locations, list addresses of all. See Exhibit "A" attached hereto. Industrial Development Bond Application Page Eleven 4.6 Advise as to whether the project site is a new location. If not, describe what expansion or alteration will be made. The project site is the first land acquisition and develop- ment by either the joint venture or the co-venturers in the city of San Bernardino. 4.7 Name of legal owner of location: 4 .7.1 If not owned by applicant, advise terms and nature of occupancy, and The joint venture is in escrow to purchase the referenced property from the Re-Development Agency, City of San Bernardino. The purchase price will be $450,000, plus a 5% broker's commission to be paid by the buyer to Pathfinder Mortgage. Escrow to close upon issuance and disbursement of the industrial development bond proceeds, anticipated to be June 1, 1980. 4.7.2 If there is or will be a legal relationship between the applicant and owner of the location, describe the relationship. Not applicable 4.8 A description of operations that are or are to be conducted at the location of the proposed project, and the scope, magnitude and process relationships of the proposed project, including: 4.8. 1 An 8 1/2" X 11" map showing plant site and location of the project, and See Exhibit "B" attached hereto. 4. 8.2 A description of the plant process. The project is being built as a speculative develop- ment to be leased and/or sold upon completion. The anticipated tenants and owners will be light manufacturers and suppliers. No loud, obnoxious, or toxic materials will be produced, manufactured or handled on-site. 4.9 List the environmental quality regulations, standards or requirements which are to be met within this project. Industrial Development Bond Application Page Twelve 4.9 (Continued) All applicable environmental quality standards and regulations will be met and no special permits or waivers are anticipated by the subsequent users of the project. Strict standards will be established and administered by the owners association, prohibiting future variances from the developers ' requirements. 4.10 A list and copies of all permits, water quality enforce- ment orders, air pollution permits and variances or evidence of other actions evidencing need for installation of this project. See Section 4.9 above. 4.11 List pollution control agencies (local, state and federal) imposing the applicable regulations, standards or require- ments for operations or disposal. South Coast Air Quality Management Board, State and Federal Water Quality Acts, and State of California Department of Health. 4.12 Describe the regional county or basin plan to which this project is to conform, and the manner in which it will provide conformance. The general plan for the city master, for the county are consistent with zoning and uses established for the property. 4.13 Describe the by-products or residues of the project, and where and how ultimate disposal will be accomplished. If recycling or salvage is to be a function, advise as to market opportunities. See Section 4.9 above. In addition, the non-recyclable trash from operations of the manufacturing facilities will be collected weekly, and disposed of by the city contracted refuse service. PART V PUBLIC BENEFITS 5.1 Describe the benefits that will accrue to the City and its citizens as a results of the installation of this . . facility and the use of this method of financing;, vis-a-vis a conventional method. Industrial Development Bond Application Page Thirteen 5.1 (Continued) The developer anticipates the following cumulative long term effects : the creation of 480 new jobs (assumed to be two direct jobs per 1,000 square feet of manufacturing facility) ; together with the addition of 6 .5 million dollar base for city and county taxation purpose: the attractiveness of the project, and viability will not only provide industrial space for smaller users wishing to relocate in the city of San Bernardino, but should attract additional speculative developments which will further enhnace the tax base and employment opportunities ; and, as a result of the increased employment, all secondary service industries and primary manufacturing industries will benefit from the capital expenditures and discretionary personal income available to the employees and owners . An immediate developmental effect will be the establishment of approximately 150 on-site construction jobs together with the capital purchases by the developer, which will impact the discretionary income levels in service and construction industries in the city and county of San Bernardino. 5.2 In particular, the application should address the findings in Section 1 of the Ordinance, and should show that the applicant is locating in the City for long-term business reasons and not merely because of any financial inducement offered by the Ordinance. Specific responses to items addressed in the findings of Section 1 are as follows: By creation of industrial space to house industrial users, job opportunities will be created and in order to fill the employment situation, the locally unemployed and persons requiring job assistance will be called upon to fill the positions. The addition of job opportunities will have an incremental effect upon the reoccurring problems of crime and juvenile delinquency due to the income and alternative sources of gainful employment and further the urban deterioration will be abated through the construction of aesthetically pleasing and attractive buildings, which will enhance the city and surrounding areas. As developers, we have noted the significant need for.-small (3,000 to 6,600 square foot) industrial space whisch, although it will not attract national firms to San Bernardino, will result in regional relocations to the market and the Industrial Development Bond Application Page Fourteen 5.2 (Continued) regionally relocated firms will provide the support facilities necessary to attract the national firms into the market place. Without the smaller industrial facilities, many firms wishing to relocate are being excluded due to lack of space and facilities. It is not the specific intent of the developer of the city to realize profit from the bond underwriting, but it must be recognized that there will be income derived by the city from bond administration reimbursements in excess of out-of-pocket expenses by the city and additionally, the city and county will realize tax revenues in excess of incremental increases for the municipal services such as police and fire protection. All development and financing costs will be borne exclusively by the developer and all on-site landscaping and roads will be paid for and maintained by the developer and the subsequent owners association, which will be established. The development and financing program will be self-supporting. PART VI COMMITMENTS 6.1 through 6 .4 The applicant hereby agrees to comply with and/or assist the city in complying with and to provide staff additional information and supplemental schedules, plans and documents of whatever nature so as required by the city in order to comply with all provisions of Paragraph 6.1, 6.2, 6.3, and 6.4 of the Industrial Development Bond Application. This application is submitted by Eastern Pacific Financial Group, and Eastern Pacific Financial Group warrants that it has the prime responsibility and authority to bind the co-venturers to all provisions of the application and to the best of our knowledge and belief it contains no false or inaccurate information or data and is totally descriptive of the project. We have been counseled and are familiar with Ordinance No. 3815 of the City of San Bernardino. EASTERN PACIFIC FINAN AL GROUP, Co-Venturer . a oremus, Preerrdent c wo mo S••••• #i t t , m iVV/ rl %stall z c - m ! 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