HomeMy WebLinkAbout2017-0901
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RESOLUTION NO. 2017-90
RESOLUTION OF THE MAYOR AND CITY COUNCIL OF THE CITY OF SAN
BERNARDINO, CALIFORNIA, APPROVING THE SETTLEMENT AND RELEASE
AGREEMENT BETWEEN THE CITY OF SAN BERNARDINO AND ACAA
LIMITED PARTNERSHIP RELATED TO 542 N. MT. VERNON AVENUE, SAN
BERNARDINO, AND APPROVING CERTAIN RELATED ACTIONS
WHEREAS, pursuant to Health and Safety Code (the "HSC") § 34172 (a) (1), the
Redevelopment Agency of the City of San Bernardino was dissolved on February 1, 2012; and
WHEREAS, consistent with the provisions of the HSC, on January 9, 2012 the Mayor
and City Council of the City of San Bernardino (the "City") elected to serve in the capacity of
the Successor Agency to the Redevelopment Agency of the City of San Bernardino (the
"Successor Agency"); and
WHEREAS, the Oversight Board for the Successor Agency ("Oversight Board") has
been established pursuant to HSC § 34179 to assist in the wind -down of the dissolved
redevelopment agency; and
WHEREAS, on September 15, 2015, the Successor Agency submitted its Oversight
Board -approved Long -Range Property Management Plan (the "LRPMP") to the California
Department of Finance (the "DOF"); and
WHEREAS, on December 31, 2015, the DOF approved the Successor Agency's
LRPMP and notified the Successor Agency that pursuant to HSC § 34191.3, the approved
LRPMP shall govern, and supersede all other provisions relating to the disposition and use of all
the real property assets of the former redevelopment agency; and
WHEREAS, the approved LRPMP, which addresses the disposition and use of the real
property assets held by the Successor Agency, includes 230 parcels of land grouped into forty-
six (46) separate sites, eighteen (18) of which were designated as government use sites, seven
(7) of which are designated as future development sites and twenty-one (21) of which were
designated to be sold; and
WHEREAS, per DOF's letter of May 17, 2016, on August 1, 2016, the Mayor and City
Council adopted Resolution No. 2016-165, which authorized the transfer from the Successor
Agency and the acceptance by the City of the seven (7) sites identified within the LRPMP as
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future development sites (the "Future Development Sites") subject to the City accepting all of
the Successor Agency's obligations to comply with the applicable provisions of the HSC
governing the later transfer of future development -designated real property to third -party
entities; and
WHEREAS, consistent with the foregoing, the Successor Agency transferred the
Future Development Sites to the City via quitclaim deed on August 16, 2016 and the City is now
responsible for compliance with the applicable provisions of the HSC governing the later
transfer of the Future Development Sites to third -parties; and
WHEREAS, consistent with the foregoing, the City is the owner of record as to that
certain real property consisting of approximately 0.95 acres of improved land located at 542 North
Mt. Vernon Avenue, San Bernardino, California (APN 0138-115-13) (the "Property"), which
pursuant to a lease is currently occupied by ACAA Limited Partnership, a California Limited
Partnership (the "ACAA"); and
WHEREAS, within the LRPMP, the Property is: i) identified as Site No. 25; ii) described
as an ARCO gas station site; iii) designated for future development; and iv) more fully described
within Exhibit "A" attached hereto, which is an excerpt from the LRPMP; and
WHEREAS, ACAA holds a secured promissory note dated May 19, 2011 (the "Note"),
I evidencing a loan (the "Loan") made to the San Bernardino Economic Development
("SBEDC") in the principal sum of One -Million, Nine -Hundred Thousand Dollars ($1,900,000.00),
which the SBEDC used to finance the acquisition of the Property; and
WHEREAS, the Note is secured by a Deed of Trust with Assignment of Rents recorded
June 3, 2011 in the San Bernardino County Recorder's Office (the "Deed of Trust") as a lien on the
Property; and
WHEREAS, according to its terms, the Note required the SBEDC to make full payment
the principal balance to ACAA on or before the maturity date of the Note; however, the SBEDC
ACAA originally intended the Loan amount to equal the purchase price for the Property and
effectively be extinguished in exchange for the transfer of the Property to ACAA pursuant to
disposition and development agreement; and
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WHEREAS, because of the dissolution of the former redevelopment agency, the SBEDC
[ was unable to: i) transfer the Property to ACAA as originally intended; and ii) make the
I payment on the Note by the maturity date; and
WHEREAS, pursuant to its letter of May 22, 2013, ACAA notified the SBEDC: i) of
default under the Note; ii) that ACAA may proceed with the foreclosure process on the Property;
and iii) of its offer that the SBEDC transfer the Property to ACAA in exchange for cancellation
the Note; and
WHEREAS, although ACAA has alleged that pursuant to the rights granted to ACAA as
creditor under California law and rights of recourse available under the Note and Deed of Trust,
ACAA may proceed with the foreclosure process on the Property, ACAA has provided forbearance
in doing so to allow for the redevelopment wind -down process affecting the Property to
concluded; and
WHEREAS, consistent with the provisions of the LRPMP, a Compensation
with respect to the Property was approved by the affected taxing entities, effective September 27,
2016, which was the final LRPMP-related prerequisite to permitting the Property to be transferred to
ACAA; and
WHEREAS, the purpose of the Compensation Agreement was to allow for the transfer of
I the Property to ACAA to extinguish the financial obligation of the Note; and
WHEREAS, prior to the transfer of the Property, ACAA has requested that the City
discharge certain property tax liabilities related to the period of time that the Property was owned by
the SBEDC that ACAA believes should not be attributable to ACAA; and
WHEREAS, the current property tax liability attributable to the period of time that the
Property was owned by the SBEDC, including penalty and interest through May 1, 2017, is Eighty -
Thousand Fifty -Seven Dollars ($80,057) plus interest accruing after May 1, 2017 (the "Tax
Liability"); and
WHEREAS, throughout the term of the lease, ACAA has remained current with respect to
the payment to the County of San Bernardino Tax Collector of all possessory interest/unsecured
taxes related to the Property; and
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WHEREAS, the City previously requested the County of San Bernardino ("County") tol
I remove from the tax rolls and cancel the taxes related to all properties included within the LRPMP,I
inclusive of the Property; and
WHEREAS, the County subsequently removed all properties included within the LRPMP,J
inclusive of the Property, from the tax rolls; and
WHEREAS, the County has advised the City that it will consider the cancellation of thel
taxes, interest and penalties related to all properties included within the LRPMP, inclusive of thel
Tax Liability, subject to a Mutual Release and Settlement Agreement provided by the County,J
which the County and City continue to refine; and
WHEREAS, based on ACAA's request and the expectation of the County and
entering into a final Mutual Release and Settlement Agreement, it may be appropriate to resolve any
claims, disputes and/or controversies with respect to the Note, Deed of Trust, and Tax Liability; and
WHEREAS, adoption of this Resolution will approve the Settlement and Release
Agreement (the "Agreement") with ACAA, a copy of which is attached to this Resolution as
"B", that will resolve any claims, disputes and/or controversies with respect to the Note, Deed
Trust, and Tax Liability; and
WHEREAS, all actions required by all applicable law to be taken by the City with
to the Agreement have been taken in an appropriate and timely manner; and
WHEREAS, the Mayor and City Council have reviewed the staff report in connection wi
this matter and has evaluated other information provided to it pertaining to the findings proposed to
be made hereunder; and
WHEREAS, this Resolution has been reviewed with respect to applicability of the
California Environmental Quality Act (the "CEQA"), the State CEQA Guidelines (California Code
of Regulations, Title 14, § 15000 et seq., hereafter the "CEQA Guidelines"), and the City's
environmental guidelines; and
WHEREAS, this Resolution does not constitute a "project" for purposes of CEQA, as that
term is defined by CEQA Guidelines § 15378, because this Resolution is an organizational or
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administrative activity that will not result in a direct or indirect physical change in the environment,
per § 15378 (b) (5) of the CEQA Guidelines; and
WHEREAS, all of the prerequisites with respect to the approval of this Resolution have
been met.
NOW, THEREFORE, BE IT RESOLVED by the Mayor and City Council of the City of
San Bernardino, as follows:
Section 1. The foregoing recitals are true and correct and are a substantive part of this
Resolution.
Section 2. The Settlement and Release Agreement between the City and ACAA, a copy
of which is attached to this Resolution as Exhibit `B", is approved.
Section 3. The City Manager, or designee, is authorized to administer the Settlement
and Release Agreement on behalf of the City and to take such actions and execute such documents
as are necessary to effectuate the Settlement and Release Agreement and the intent of this
Resolution.
Section 4. This Resolution is not a "project" for purposes of CEQA, as that term is
defined by CEQA Guidelines § 15378, because this Resolution constitutes general policy and
procedure making and is an organizational or administrative activity that will not result in a direct
or indirect physical change in the environment, per § 15378 (b) (2) and (5) of the CEQA
Guidelines.
Section 5. This resolution shall take effect upon its adoption and execution in the
manner as required by the City's Municipal Code.
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RESOLUTION OF THE MAYOR AND CITY COUNCIL OF THE CITY OF SAN
BERNARDINO, CALIFORNIA, APPROVING THE SETTLEMENT AND RELEASE
AGREEMENT BETWEEN THE CITY OF SAN BERNARDINO AND ACAA
LIMITED PARTNERSHIP RELATED TO 542 N. MT. VERNON AVENUE, SAN
BERNARDINO, AND APPROVING CERTAIN RELATED ACTIONS
I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and
City Council of the City of San Bernardino at a Joint Regular Meeting thereof, held on the 15th
day of May 2017, by the following vote, to wit:
Council Members: AYES
MARQUEZ X
BARRIOS X
VALDIVIA X(M)
SHORETT X
NICKEL X(S)
RICHARD X
MULVIHILL X
NAYS ABSTAIN ABSENT
Georgeann H 4a, CMC, Ci Clerk
The foregoing Resolution is hereby approved this 15"' day of May 2017.
R. Carey Davis, ayor
City of San Be ardino
Approved as to form:
Gary D. Saenz, City Attorney
By:.
n