HomeMy WebLinkAbout1982-3561,087-2
6/1/82,
RESOLUTION NO. 82-356
RESOLUTION OF THE MAYOR AND COMMON COUNCIL
OF THE CITY OF SAN BERNARDINO APPROVING AN
APPLICATION FOR INDUSTRIAL DEVELOPMENT BOND
FINANCING; DIRECTING THE PREPARATION OF CER-
TAIN DOCUMENTS; AND MAKING CERTAIN OTHER
FINDINGS AND DETERMINATIONS IN CONNECTION
THEREWITH (STATE COLLEGE INVESTMENT COMPANY,
INC.)
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 "Ordinance") to finance various types of
projects, as defined in the Ordinance, and to issue its special revenue bonds for the
purpose of paying the cost of financing 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 for residents of the City and its tax and revenue base; and
WHEREAS, there has been presented to this Mayor and Common
Council an Application, attached hereto as Exhibit "A" and incorporated herein by
reference by State College Investment Company, Inc., a California corporation (the
"Applicant"), requesting the issuance of industrial development bonds in the
principal amount of not to exceed $10,000,000 for the purpose of financing, on
behalf of the Applicant, a certain Project, to wit: a 40,000 square foot industrial
manufacturing and warehouse facility, on a site located on lots 10 and 12, State
College Business Park, within the State College Project No. 4, in the City of San
Bernardino, California, including, without limitation, the acquisition of land and
equipment therefor and off-street parking for motor vehicles and all off-site and
on-site improvements necessary therefor and appurtenances and appurtenant work
(the "Project").
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NOW, THEREFORE, IT IS HEREBY RESOLVED, DETERMINED AND
ORDERED BY THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN
BERNARDINO 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 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 as described in the
recitals hereof.
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 which may be financed by the issuance of such special revenue bonds by the
City and located within the jurisdiction of the City.
Section 6. The Application referred to in the recitals hereof complies
with the provisions and requirements of said Ordinance No. 3815, as amended, and
the Project involved in such Application is hereby approved and the provisions of
Subsection (d) of Section 10 and Subsection (a) of Section 11 of said Ordinance No.
3815 shall not apply.
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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
Cite, 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 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, the Law Offices of Timothy J. Sabo 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
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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. This Resolution constitutes a proper exercise of the powers
of this Mayor and Common Council and conforms to State and local legal
requirements relating to the issuance of such special revenue bonds and other bonds
or debt obligations by a charter city in this State.
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 the Congress of the United States which may require
official action in order for the bonds to be exempt from Federal income taxation.
Section 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.
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 16th day of
August , 1982, by the following vote, to wit:
AYES: Council Members Castaneda . Reilly. Hernandez
_Quiel, Strickler
NAYS: None
ABSENT: Council Member Hobbs
==
The foregoing resolution is hereby approved this day of
August , 1982.
..-mac...
Mayor of e CitY, of
San Bernardino
Approved as to form:
0
ity Att ney
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1,087-3
.5/28/82
APPLICATION OF STATE COLLEGE INVESTMENT COMPANY, INC.
FOR INDUSTRIAL REVENUE BOND FINANCING
CITY OF SAN BERNARDINO, CALIFORNIA
PART I GENERAL AND BUSINESS INFORMATION
1.1 The corporate name of the Applicant is "State College Investment Company,
Inc."
1.2 The Applicant is engaged in the line of business which is the distribution of
builders' hardware.
1.3 The mailing address and the address of the corporate headquarters of the
Applicant are as follows:
284 South Palm Avenue
Rialto, California 92376
1.4 Employer Tax I.D. No. 95-3340244
1.5 Gene Pion is the principal contact for the Applicant.
1.6 Telephone Number (714) 875-0444
1.7 The Applicant is a California Corporation.
1.7.1 The Applicant is incorporated in the State of California.
1.7.2 The Applicant was duly incorporated on March 27, 1981.
1.8 The stock of the Applicant, including the percentage ownerships is as
follows:
Richard and Sylvia Crowther
George and Nancy Supthen
Peter Hauber
Percentage of Ownership
25%
25%
25%
Noran Company 25%
1.9 The names of the key officials are as follows:
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1.9.1 Richard Crowther, President, Chief Executive Officer
George Sutphen, Vice President
Nancy Sutphen, Vice President and Treasurer
1.9.2 Richard Crowther, Director
Sylvia Crowther, Director
George Sutphen, Director
Nancy Sutphen, Director
1.9.3 The principal stockholders and their respective ownership for those
owning ten percent (10%) or more of the stock of the Applicant are
as follows:
Name Percentage of Ownership
Richard and Sylvia Crowther 25%
George and Nancy Supthen 25%
Peter Hauber 25%
Noran Company 25%
1.10
1.11 Employees
1.11.1 The principal lessee of the Applicant currently has twenty (20)
employees in the State of California will ultimately transfer said
employees to the Project site in the City of San Bernardino upon
Project completion.
1.11.2 The Applicant is presently located in Rialto, California, and shall
relocate to the Project site in the City of San Bernardino.
1.12 Professional services will be provided by the following:
1.12.1 Jules Rothman shall serve as the accountant for the Applicant and
the contact person with said firm is same at (213) 990-3321.
1.12.2 Richard Spencer of Santa Ana is the attorney for said firm which is
the firm of attorneys for the Applicant.
1.13 The principal banking accounts of the Applicant are held by Bank of
America the officer of said bank responsible for such account is Mike
Wholley.
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1.14 The source of funding for the project will be from the proceeds of a private
placement of a tax-exempt bond or other obligation with a hereafter to be
obtained lender.
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 - $800,000
2.1.2 Legal, printing and related fees - $30,000
2.1.3 Financing costs and fees - $15,000
2.1.4 Capitalized interest - $110,000
2.1.5 Other miscellaneous costs - $40,000
2.1.6 Land acquisition - $ -0-
Total: $995,000
2.2 The estimated target date for the financing is presently anticipated to be
December, 1982, with construction to commence on March, 1983 and to be
completed within one (1) year thereafter.
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 construc-
tion 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
f inancing.
2.4 The present proposal anticipates that the tax-exempt bonds or other
obligations will be sold to a commercial bank or other such lender through a
private placement which would not involve any public offering of such
securities.
PART III FINANCIAL INFORMATION
3.1 The financial statements for the Applicant are included as Exhibit "A"
hereto, and have been prepared by the firm of accountants set forth in
Section 1.12.1 hereof.
3.2 The Applicant is a small business doing business as a corporation pursuant to
the laws of the State of California and the Applicant would be considered a
small business with regard to its relative size as to other such businesses
undertaking projects of this type. Although the Applicant is a small
business, no federal guarantees will be involved in the financing as con-
templated by this Application.
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PART IV PROJECT INFORMATION
4.1 The project as proposed by the Applicant will serve the purpose of providing
a light industrial building in the northern section of the City of San
Bernardino, and, in particular, within the Redevelopment Project Area of
the Redevelopment Agency of the City of San Bernardino known as the
State College Project No. 4. The objective of the proposed project is to
construct such light industrial building facility upon a 4.3 acre parcel known
as Lots 10 and 12, Parcel Map 5902, within the development known as the
State College Business Park in the City of San Bernardino, California. Such
building will be of approximately 40,000 square feet. The Applicant will
construct a 40,000 square foot light industrial building of which 15,000
square feet shall be leased to Prime -Line Products, Inc., and the remainder
to another lessee yet to be determined. The Project will generate
significant employment opportunities for approximately 45 new positions
within the City.
4.2 The components and the estimated total cost of the functional parts of the
project are as follows:
4.2.1 Land - $ -0-
4.2.2 Buildings - $800,000
4.2.3 Other equipment - $ -0-
4.2.4 Engineering and technical sevices - $60,000
4.2.5 Miscellaneous items such as construction interest - $110,000
4.3 The estimated construction period for the project is as follows:
4.3.1 Estimated construction date would be within five (5) months after
issuance of the tax-exempt obligations, which date of issuance in all
probability would be by December, 1982.
4.3.2 The scheduled completion date would be during approximately
November, 1983.
4.4 The supervising or consulting engineer responsible for the design of the
project on behalf of the Applicant shall be determined at a later date.
4.5 The project shall be located within the State College Business Park on a
parcel approximately 4.3 acres known as Lots 10 and 12.
4.6 The project site is a new location and is not an expansion or an alteration of
a present facility. The project site has or will have the necessary
infrastructure items and other public improvements installed and all that
the Applicant desires at this time is the obtaining of below market rate tax-
exempt construction and permanent financing of the private improvements
to be placed thereon.
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4.7 The ownership relationships between the Applicant as the owner of the
property and Prime -Line Products, Inc., as the principal lessee, are as
follows:
4.7.1 Said Lots 10 and 12 are presently owned by the Applicant which is
also the owner of Prime -Line Products, Inc.
4.7.2 The shareholders of the Applicant own one hundred percent (100%) of
the stock of Prime -Line Products, Inc.
4.8 The operations that are to be conducted at the site location with regard to
the proposed project are that the Applicant shall construct or cause to be
constructed a 40,000 square foot industrial building of which approximately
15,000 square feet shall be leased to Prime -Line Products, Inc., for the
purpose of wholesale distribution of window, door and other related hard-
ware items for sale nationally to major hardware stores and internationally
to small independent hardware stores.
4.8.1 Attached as Exhibit "B" 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:
N/A
4.9 A negative declaration pursuant to the provisions of the California Environ-
mental Quality Act of 1970, as amended, would in all probability be
satisfactory for the project as proposed by the Applicant. However, any
ultimate user which would cause any alteration or a significant adverse
effect upon the environment will be required to undertake their own
environmental considerations pursuant to CEQA.
4.10 There are no permits, water quality enforcement orders, air pollution
permits or variances or other evidence of actions demonstrating the need
for installation of this project.
4.11 There are no local, state or federal pollution control agencies which would
be imposing regulations, standards or requirements with regard to the
operations or disposal aspects 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 to be undertaken by the
Applicant 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 the
type of project contemplated by the Applicant is at such an extremely high
interest rate on conventionally borrowed funds, if available at all, neither
the Applicant nor any others are able to provide the type of light industrial
building space that is needed within the City of San Bernardino. Addi-
tionally, the City of San Bernardino and the Redevelopment Agency of the
City of San Bernardino will benefit as will the citizens of the City by
increasing the assessed valuation of property within the Redevelopment
Project Area known as the State College Project No. 4 which 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. The City likewise would benefit by obtaining a quality light
industrial building structure which will in its ultimate usage provide
employment opportunities for fifty (50) individuals and encourage other
industries to relocate within the City of San Bernardino and thus create a
upward spiraling effect on the economy of the City.
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
twenty (20) employment opportunities will be generated by the proposed
project during the construction phase and fifty (50) employment opportun-
ities after said project is leased to the ultimate users in part for distribution
purposes or other light industrial uses. 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. The proposed
project offers ready transportation access to the interstate freeway system
both to the Los Angeles area via Interstate 10 west and to the Las Vegas and
other western states through Interstate 15 and Interstate 10 east.
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 of the City of San Bernardino will receive substan-
tial benefits through increases in assessed valuation of property within a
redevelopment project area, plus the increased long-term employment
opportunities that will be available to the 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,
WE
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.
6.4 The Applicant will supply any additional information, agreements and
undertakings as the City may require as a result of conferences and
negotiations will be reproduced and supplied to the City and shall be deemed
as supplements or amendments to this Application.
PART VII SIGNATURE
7.1 The undersigned as an authorized officer of the Applicant as noted below is
the officer of the Applicant holding the prime responsibility for the
financing to be taken for the proposed project, and certifies that such
person has 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 represents by signing 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 appli-
cation 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
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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. The federal guarantees, if any,
enhance these revenues and income and the security of the bonds.
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.
STATE COLLEGE INVESTMENT
COMPANY, INC.
"Applicant"
By:
E. Gene Pion
Title: Controller
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Exhibit "B"
(8-1/2 inch map showing site location of
the proposed project)
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