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REDeVELOPMENT AGENCY' -REQUEST FOR COMMISSION/COUNCIL ACTION
r ~: GLENDA SAUL
Subject: WEST S I DE COMMUN I TY DEVELOPMENT
CORPORATION CDBG LOAN OF $112,000
(OFFICE BUILDING)
Dept: Redevelopment Agency
Date: JANUARY 15, 1986
Synopsis of Previous Commission/Council action:
On April 12, 1984, the Community Development Commission adopted resolution #4603
authorizing the development of an Owner Participation and Loan Agreement with
West Side CDC for the construction of an office building complex.
On November 26, 1985, the Mayor and Common Council considered financial assistance
to West Side CDC and approved the staff recommendation to deny such financial
assistance. Staff was directed to meet again with West Side CDC to resolve the
problem.
Recommended motion:
(MAYOR AND COMMON COUNCIL)
That West Side Community Development Corooration be declared in default of their
Community Development Block Grant loan of $112,000
,
/dP-~ ~I
Signature
Contact person:
GLEND^ S^"L/H" IO.NnER~()M
Phone: 383-5081
Supporting data attached:
YES/STAFF REPORT
Ward:
6
FUNDING REQUIREMENTS:
Amount: $
tJ/A
Project:
N/W
No adverse Impact on City:
Date:
January 21, 1986
l .lcil Notes:
{)- /.t:)
-
CITY OF SAN BERNARDIIIIO - REQUEST FOR COUNCIL ACTION
STAFF REPORT
You will recall that in November, 1985, the Mayor and Common Council reviewed
and considered an emergency loan request by West Side CDC in the amount of
$100,000. You will also recall that after two (2) special meetings on the
subject, the Mayor and Common Council voted 5-1-1 to deny the loan request as
submitted. During those meetings, there was considerable discussion regarding
the nature of the CDBG assistance the Agency had provided to WSCDC on their
office building complex. Based upon the documentation submitted by staff
(including minutes, resolution and OPA/Loan Agreement) it was again,
determined that the nature of the CDBG assistance to West Side CDC was as
follows:
Grant:
Loan:
Term:
$ 50,000
S112,OOO
Thirty (30) year amortization
Due and Payable in fifteen (15)
years.
Seven percent (7%) per annum.
Rate:
In view of the above and their somewhat precarious financial position, the
Mayor and Common Council directed staff to meet again with West Side Community
Development Commission to determine if the repayment of the loan as described
above could be restructured. As a result of this meeting and several related
telephone conversations, the following restructured repayment plan was
developed for consideration by the Redevelopment Committee:
- Appraised value of building Sl,045,OOO.
- Anticipated tax increment per year SlO,450 (Sl,045,OOO x 1%).
- Actual tax increment
($10,450 and minus
districts.
received by Redevelopment per year $7,837.50
20% set-aside and 5% for other taxing
- West Side CDC to receive five (5) years tax increment totaling
$39,187.50 leaving outstanding balance of $72,812.50.
- Interest would not accrue.
- Outstanding balance of $72,812.50 would be retired under the
following scenario:
West Side CDC would be allowed to make a twenty percent (20%) net
profit on the operation of the office building complex. Any net
profit exceeding the twenty percent (20%) figure would be split
60% to the Agency and 40% to West Side CDC.
75.0264
After discussion by Committee members, staff was directed to place this
item on the Commission agenda along with the committee recommendation
that West Side CDC be declared in default and Agency Counsel directed to
take all appropriate legal actions to secure repayment and to protect the
City's interest.
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