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ECONOMIC DEVELOPMENT AGENCY
OF THE CITY OF SAN BERNARDINO
ORIGINAL
FROM: Maggie Pacheco
Deputy Director
SUBJECT: GROW SAN BERNARDINO FUND
DATE: April?,2005
SvnoDsis of Previous CommissionlCounciVCommittee Action(s):
On April 5, 2005, Redevelopment Committee Members Estrada, Longville, and McGinnis unanimously voted to
recommend that the Community Development Commission consider this action for approval.
------------...-------------...-------------.--------------------------------------------------------------------------
Recommended Motion(s):
(Communitv DeveloDment Commission)
MOTION:
RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF
SAN BERNARDINO APPROVING AND AUTHORIZING AMENDMENT NO. I TO THE
CAPITAL GRANT PARTICIPATION AGREEMENT BY AND BETWEEN THE
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO AND GROW
AMERICA FUND, INC., FOR THE GROW SAN BERNARDINO FUND PROGRAM
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Contact Person(s):
Project Area(s)
Gary Van OsdeUMaggie Pacheco
Phone:
(909) 663-1044
All
All
Ward(s):
Supporting Data Attached: iii Staff Report iii Resolution(s) 0 Agreement(s)/Contract(s) 0 Map(s) 0 Letters
FUNDING REQUIREMENTS
$
Source:
N/A
N/A
SIGNATURE: ~. ..t.... <: .
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P:\Agendas\Comm Dev Commission\CDC 2005\05-04-1 B Grow San Bernardino Fund SR.doc
COMMISSION MEETING AGENDA
Meeting Date: 04/18/2005
Agenda Item Number: R..,'J ,
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ECONOMIC DEVELOPMENT AGENCY
STAFF REPORT
GROW SAN BERNARDINO FUND
BACKGROUND:
The National Development Council (NDC) is a Washington D.C. based non-profit consulting
organization with whom the Agency has had a contractual relationship for the last 21 years. Grow
America Fund, Inc. (GAF), a wholly owned subsidiary of the National Development Council, was
created as a small business lending company to increase access to capital and to meet the small business
financing challenges within the NDC's client communities. Grow America Fund, Inc. is the nation's
only small business lending company authorized by the Small Business Administration (SBA) as a
lending institution and is recognized by the United States Treasury Department as a community
development financial institution. Grow America Fund, Inc. is capitalized with equity contributed by
the community in which it operates and all contributed capital is earmarked for lending in that
community under the community's name. Through the Small Business Administration's secondary
market, Grow America Fund, Inc. is able to "multiply" a community's investment 400%+ in small
business loans.
On November I, 1999, the Community Development Commission (the "Commission") adopted
Resolution CDC/1999-39 approving a Capital Grant Participation Agreement between the
Redevelopment Agency of the City of San Bernardino and Grow America Fund, Inc., establishing the
Grow San Bernardino Fund (the "Fund"). Initially, $200,000 in CDBG funds was deposited in the fund.
Three months later, on February 22, 2000, the Commission approved the deposit of an additional
$300,000 in proceeds from the sale of the property at 701 North "E" Street. On April 4, 2002, the
Commission approved a further deposit of $250,000 from the sale of the Public Enterprise Building and
on December 6,2004, another $250,000 was authorized from the proc~eds of the sale of2055 Hallmark
Parkway. To further assist the Agency, NDC also set aside $200,000 of GAF unrestricted capital as
well. These actions by the Commission totaling $1.2 million effectively result in a leveraging capacity
of$4.8 million.
All funds loaned by the Fund ultimately returp to the Fund to be re-loaned, either through the sale of the
SBA guaranteed portion of the loan (which can be as high as 80%) or through normal principal and
interest repayment. Demand for this program has been high and to date, loans in the amount of
$2,791,000 have been made against the Agency commitment of$1 million with another $1 million loan
in the process. All of the loans have been for the expansion of existing businesses in San Bernardino
and have added approximately 200 jobs to the workforce.
CURRENT ISSUE:
The current agreement expires on July I, 2005. As this small business loan program fulfills a key need
within the local business community, Staff proposes that the original agreement to be extended to allow
this program to continue until July I, 2010. Staff also proposes that the administrative fee that GAF
collects be raised from 2% to 3% per annum on the amount of the outstanding loans to help defray the
costs of the intensive portfolio management services carried out throughout the life of the loans made
under the program.
P:1Apadu1Conm IJcy ConmiuionlCDC 2005\05-44-11 Grow Soallenadiao Puad SR.doc:
COMMISSION MEETING AGENDA
Meetina Date: 0411812005
Aaenda Item Number: R;:J 1_
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Economic Development Agency Staff Report
Grow San Bernardino Fund
Page 2
ENVIRONMENTAL IMPACT:
The proposed activity is exempt under CEQA.
FISCAL IMPACT:
None.
RECOMMENDATION:
That the Community Development Commission adopt the attached Resolution.
P:\AF8dII1Comm Jloy CGom1iaiooICOC 2005\OS-04-18 Grow Son _ Fuad SIldoc
COMMISSION MEETING AGENDA
Meetina Date: 04nsnoo5
Aaenda Item Number: nL
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RESOLUTION NO.
RESOLUTION OF THE COMMUNITY DEVELOPMENT
COMMISSION OF THE CITY OF SAN BERNARDINO APPROVING
AND AUTHORIZING AMENDMENT NO.1 TO THE CAPITAL
GRANT PARTICIPATION AGREEMENT BY AND BETWEEN THE
REDEVELOPMENT AGENCY OF THE CITY OF SAN
BERNARDINO AND GROW AMERICA FUND, INC., FOR THE
GROW SAN BERNARDINO FUND PROGRAM
WHEREAS, the Redevelopment Agency (the "Agency") and Grow America Fund, Inc.
(the "OAF") are parties to that certain Capital Grant Participation Agreement dated as 0
November 1, 1999 (the "Base Agreement"); and
9
10
WHEREAS, the OAF originates and services certain Small Business Administratio
loans to qualified borrowers in the City of San Bernardino which is generally described as th
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"Grow San Bernardino Fund Program"; and
WHEREAS, Grow San Bernardino Fund have made six (6) loans to San Bernardin
businesses since November 1999 totaling $2,791,000 retaining or creating approximately 20
jobs for the community; and
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WHEREAS, the OAF's operation and management of the San Bernardino Fund for th
past five (5) years has resulted in the San Bernardino business community receiving significan
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benefits in the form of capital which has allowed new ventures to be established and th
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expansion of existing businesses; and
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WHEREAS, the Agency and the OAF wish to amend the Base Agreement for th
principal purpose of extending the time period covered thereby for another five (5) years endin
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July 1,2010 and modify the Administrative Fee.
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NOW, THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION OF THE
CITY OF SAN BERNARDINO DOES HEREBY RESOLVE, DETERMINE, AND ORDER, AS
3 FOLLOWS:
4
Section 1.
The Commission herby acknowledges receipt of the Agency Staff report dated
5 April 18, 2005, which describes the relevant features of the Grow San Bernardino Fund Loan Program.
6
Section 2.
The Commission hereby approves Amendment No. 1 to the Capital Grant
7 Participation Agreement by and between Grow America Fund and the Redevelopment Agency
8 of the City of San Bernardino in the form as presented at this meeting. The Chairperson of the
9 Community Development Commission is hereby authorized and directed to execute
Amendment No. 1 to the Capital Grant Participation Agreement on behalf of the Agency,
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together with such technical and conforming changes as may be recommended by the Executive
Director in consultation with the Agency Counsel. The effective date of the Amendment shall
be set forth in Section 2 of the Amendment thereof.
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013 Section 3.
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The Resolution shall become effective immediately upon its adoption.
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RESOLUTION OF Till: COMMUNITY DEVELOPMENT
COMMISSION RESOLUTION OF THE COMMUNITY
DEVELOPMENT COMMISSION OF THE CITY OF SAN
BERNARDINO APPROVING AND AUTHORIZING AMENDMENT
NO.1 TO THE CAPITAL GRANT PARTICIPATION AGREEMENT
BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE
CITY OF SAN BERNARDINO AND GROW AMERICA FUND, INC.,
FOR THE GROW SAN BERNARDINO FUND PROGRAM
01
2
4
5
6
I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the
7
Community Development Commission of the City of San Bernardino at a
meeting
, 2005, by the following vote to wit:
Navs
Abstain
Absent
16
17
18
Secretary
19 The foregoing resolution is hereby approved this
20
day of
,2005.
21
22
Judith Valles, Chairperson
Community Development Commission
of the City of San Bernardino
23
24 APprOVed~as fOlmandLc~.I?~:
By: _ _1I.I.A/111Ai4
o 2S Agency unsel
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AMENDMENT NO.1 TO THE
CAPITAL GRANT PARTICIPATION AGREEMENT
THIS AMENDMENT NO. 1 TO THE CAPITAL GRANT PARTICIPATION
AGREEMENT (this "Agreement") is made as of April_, 2005, by and between the
Redevelopment Agency of the City of San Bernardino, a body corporate and politic (the
"Agency") and Grow America Fund, Inc., a Delaware non-profit corporation ("GAF")
WHEREAS, the Agency and GAF are parties to that certain Capital Grant Participation
Agreement dated as of November 1,1999 (the "Base Agreement"); and
WHEREAS, the Agency and GAF wish to amend the Base Agreement for the principal
purpose of extending the time period covered thereby and to increase the administrative fee per
Section 3(B) hereof.
NOW, THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt and legal sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:
1. Tenns. Capitalized tenns defined in the Base Agreement and not otherwise defined
herein, shall have the meanings given to them in the Base Agreement.
2. Effective Date. This Agreement and the changes to tenns of the Base Agreement
described in Sections 3 and 4 hereof shall become effective as of the later of June 30, 2005, or
the date upon which all of the conditions specified in A2 of the Base Agreement have been
fulfilled or reiterated for purposes of this Agreement (the "Effective Date").
3. Amendments to Base Agreement. As of the Effective Date, the Base Agreement is
amended in the following respects:
A Restatement of Certain Dates. Each existing reference in the Base Agreement to
the year 2005 shall be revised to refer to the year 2010.
B. Section D.1.d. Notwithstanding the provisions of Section 3(A) above, Section
D.1.d of the Base Agreement is amended to replace "2%" with "3%" effective
from and after July 1, 2005.
4. Reoresentations.
A GAF hereby reiterates and affirms its representations set forth in Section A3 of
the Base Agreement as if made as of the Effective Date. GAF hereby
acknowledges that the Agency has prior to the Effective Date made Agency
Grants aggregating $1,000,000.00.
B.
The Agency hereby reiterates and affinns its representations set forth in Section
AS of the Base Agreement as ifmade as of the Effective Date.
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5. General. The foregoing amendments to the Base Agreement are limited as provided
herein and do not extend to any other provisions of the Base Agreement not specified herein, or
to any other matter. The Base Agreement, which shall continue in full force and effect as
amended hereby, is hereby ratified and confirmed. This Agreement may be executed in any
number of counterparts with the same effect as if the signatures hereto were upon the same
instrument.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed
as of the date first above written.
THE REDEVELOPMENT AGENCY OF
THE CITY OF SAN BERNARDINO
By:
Chairperson
Community Development Commission
of the City of San Bernardino
Attest:
APPROVED AS TO FORM:
By:
Agency Secretary
A!~~
GROW AMERICA FUND, INC.,
A Delaware non-profit corporation
By:
Name:
Title:
2
(BOIS0862; I)
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5. General. The foregoing amendments to the Base Agreement are limited as provided
herein and do not extend to any other provisions of the Base Agreement not specified herein, or
to any other matter. The Base Agreement, which shall continue in full force and effect as
amended hereby, is hereby ratified and confirmed. This Agreement may be executed in any
number of counterparts with the same effect as if the signatures hereto were upon the same
instrument.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed
as of the date first above written.
THE REDEVELOPMENT AGENCY OF
THE CITY OF SAN BERNARDINO
By:
Chairperson
Community Development Commission .
of the City of San Bernardino
Attest:
APPROVED AS TO FORM:
By:
Agency Secretary
GROW AMERICA FUND, INC.,
A Delaware non-profit corporation
By:
Name:
Title:
2
{BOIS0862; II
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S. General. The foregoing amendments to the Base Agreement are limited as provided
herein and do not extend to any other provisions of the Base Agreement not specified herein, or
to any other matter. The Base Agreement, which shall continue in full force and effect as
amended hereby, is hereby ratified and confirmed. This Agreement may be executed in any
number of counterparts with the same effect as if the signatures hereto were upon the same
instrument.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed
as of the date first above written.
THE REDEVELOPMENT AGENCY OF
THE CITY OF SAN BERNARDINO
By:
Chairperson
Community Development Commission
of the City of San Bernardino
Attest:
APPROVED AS TO FORM:
By:
Agency Secretary
~~
GROW AMERICA FUND, INC.,
A Delaware non-profit corporation
By:
Name:
Title:
2
(80150862; I)
P:\ApodII"","",~Amoad :I005\05-04-11 __ 1 toClpilll an. "--GAP.DOC
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** FOR OFFICE USE ONLY - NOT A PUBLIC DOCUMENT **
RESOLUTION AGENDA ITEM TRACKING FORM
Meoting D.te (Dare ~ Jig 10\ Item # fJ.., 31 ....olution # Me / :Jv IJS" - rs
Vote: Ayes L Nays Abstain Abs~t)f I +-tL]
Change to motion to amend original documents 0 Companion Resolutions
NulllVoid After: days /
Resolution # On Attachments: 0 Note on Resolution of attachment stored separately: 0
PUBLISH 0
POST 0
RECORD W/COUNTY 0
By:
Date Sent to Mayor: ~t ~ //
D.te nfM.",,', Sign'lme' ~ /'
Date of Clerk/CDC Signature: ,/ / ttf)
Reso. Log Updated: rl/
Seal Impressed: -6'
Date Memo/Letter Sent for Signature:
I st Reminder Letter Sent:
Date Returned: 1;/ I'll f~ot Returned: 0
2nd Reminder Letter Sent:
Request for Council Action & Staff Report Attached:
Updated Prior Resolutions (Other Than Below):
Updated CITY Personnel Folders (6413,6429,6433, 10584, 10585, 12634):
Updated CDC Personnel Folders (5557):
Updated Traffic Folders (3985, 8234, 655, 92-389):
Yes
Yes
Yes
Yes
Yes
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No By_
No/" By_
NO~ By_
NO~_
No_ By_
Copies Distributed to:
Animal Control 0
City Administrator 0
City Attorney 0
Code Compliance 0
Development Services 0
Others:
EDA Information Services 0
Facilities 0 Parks & Recreation 0
Finance 0 Police Department 0
Fire Department 0 Public Services 0
Human Resources 0 Water Department 0
Notes: ~
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Ready to File: /
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Date: b/l3t r:{'
Revised 12/18/03
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, City of San Bernardino
~eDEVELOPMENTAGENCY
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Redevelopment. Community ,.,tWft. .~Ultm8nt, Relwntion, Revitalization. Me/n Street Inc,
...
June 14,2005
Virginia Ruiz Badillo, Controller
Grow America Fund
51 East 42nd Street, Suite 300
New York, New York 10017
RE: Amendment No.1 to the Capital Grant Participation Agreement
Dear Ms. Badillo:
Enclosed for your records is the fully executed Agreement as referenced above that was approved
by the Community Development Commission on April 18, 2005.
Thank you for your assistance in this matter. If you should have any questions, I can be reached at
(909) 663-1044.
Wasana A. Chantha
Secretary
Enclosure
cc: Barbara Lindseth (with 0ri8inal Executed Agreement)
Eileen Gomez (with 0ri8inal Executed Agreement)
Colin Strange (with Copy of Executed Agreement)
Maggie Pacheco (with Copy of ExeCuted Agreement)
201 North E Street, Suite 3(H . San Bernardino, California 92401- 1507' (909) 663- 1044 . Fax (909) 888.9413
www.sanbernardino-eda.org.