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HomeMy WebLinkAboutR07-Economic Development Agency . . . . - -- ---- ..,. . . IIr9BIDRIINr IZPARDIBNl' ~ 'DIB cr.rr ~ SIB ~ ".I~.'IDR ~UJUI"I".I."""""'" Fran: mHm1H J. JmlIERSCIl' '/l!vaoIltive Dimctor SUbject: c-.maL cr.rr ~ fJIa-.,_2TU ~ Date: FeI::lruaIy 12, 1991 8yDclpIIIis of Pnvious ~ -~""""l/OlIIIIIittee Iaticm: on Dec-.l.er 17, 1985, the Mayor and ()o ..... '. 0r:A.lncil a,w..wed and adcpted Resolution Number 84-547 prcvidiJJ] for the i_JanCe of Irdlstrial Devel............,L Revenue Bonis, Series 1984A, Oeld.uu. City Pl:'aIIanBde project. on NoveaIi:ler 30, 1989, the Mayor and ()o......\ 0r:A.lncil ~ AJeudlllelll Number "1" to the lam ..................L and SUl:PlBDent Number "1" to the In:Jenture. on Februa%y 19, 1990, the Mayer and n......, 0r:A.lncil ~ J\mBI.dlu...,L Number "2" to the lam .................,L and SUl:PlBDent Number "2" to the In:Jenture. on August 23, 1990, the Mayer and l"l_._..~ 0r:A.lncil ~ J\mBI.dlu....L Number "3" to the lam .................L and SUl:PlBDent Number "3" to the In:Jenture. ~Lo --"-5 Ibtian: OIInDr .",. n -.-.-"" nr....,..-I1) RBSOIDrIttI ~ 'DIB IIUOR MID CXIIII:B ~ ~ 'DIB cr.rr ~ SIB ~ lmlB:lRXZ- IH3 'DIB ~r.LU.f ~ IIII!RICBN1' ~ "4" m 'DIB ItlIN ~ RIla1mIlI3 CBNl'RAL cr.rr l'lDII!lNNlB. RBSOIDrIttI ~ 'DIB IIUOR MID CDIDI ~ ~ 'DIB cr.rr ~ SIB ~ lmlB:lRXZ- IH3 'DIB ~.I:.LU.f ~ 8lJP1'IBal' ....... "4" m 'DIB .uuur"'wa5 IlBLaTDIJ m CBNl'RAL cr.rr P1DIBNI\IlE. -:-~--- DlMtl _ . Contact Person: Ken ~1Ro_...... T.inr'l_h Rx:ae: 5065: 5081 Project Area: All ~ Data A'tt.actled: !tlNDIl<<; ~: Ward(s) : 1 thraJah 7 Sbof'f' ~ ort: -""'1utia'lS Amount: S MIA Sam:le: aJdget Authority: e Ol:IIIIIiIllliClll/~""""l 1Iotes: ~ Itsn No: +- KlH: BL: lab: 4246 . . . . . ----...------- - -- - - . . DBVBLOPMDr DBPAa.uma.r STAFF REPORT Central City P"---de/SclInram Deve10maent On December 17, 1984, the Mayor and Common Council approved Resolution 84-547 providing for the issuance of Industrial Development Revenue Bonds, Series 1984A, Central City Promenade Project, along with approving the Trust Indenture, the Loan Agreement, the Bond Purchase Agreement and other related documents. In December 1984, the Central City Promenade Bonds were issued in the BJDount of $7,200,000 with a maturity date of December 1, 2024 to assist the Best/Marshall development. Chase Manhattan Bank, the sole purchaser of the Bonds, exercised its right to cause a mandatory redemption of the Bonds on December 1, 1989, pursuant to Section 3.01 (d) of the Trust Indenture dated December 15, 1984. On November 7, 1989, Mr. Arlen Gunner, the attorney for Central City Promenade, contacted Stradling, Yocca, Carlson and Rauth, at that time, the Agency's Special Counsel, and stated that Chase Manhattan Bank was willing to extend the due date on the Bonds past the mandatory redemption date of December 1, 1989. Mr. Gunner also believed that the City need not be a part of this extension, but the opinion of the Development Department's Special Counsel was that the City must approve changes to the Trust Indenture and amend the Loan Agreement. Late on November 20, 1989, the Development Department's Special Counsel informed staff that to extend the due date on the Bonds, a City Council action must take place prior to December 1, 1989. On November 30, 1989, Amendment Number One to the Loan Agreement and Supplement Number One to the Indenture extending the December 1, 1989 date to February 1, 1990 to provide Central City Promenade the necessary time to discuss, negotiate and further BJDend the Loan Agreement were approved by the Mayor'and Common Council. On February 19, 1990, Amendment Number Two to the Loan Agreement and Supplement Number Two to the Indenture were approved by the Mayor and Common Council extended the February 1, 1990 date to September 1, 1990. On August 23, 1990, Amendment Number Three to the Loan Agreement and approval of Supplement Number Three to the Indenture were approved by the Mayor and Common Council to extend the Loan Agreement to March 1, 1991. Central City Promenade is now seeking approval of Amendment Number Four to the Loan Agreement and approval of Supplement Number Four to the Indenture to extend the Loan Agreement to July 1, 1991 to provide additional time to negotiate with Chase Manhattan Bank. COtIfiSSIOII IlBETING Meeting Date: February 18, 1991 . . .. . - . . COIMISSIOB IIBBTIlIG Central City Praaenadel Schurgin Deve1o~ent February 12, 1991 Page - 2- Currently, Schurgin Development Corporation is in default on its notes payable to the Development Department. The terms on these notes are as follows: Amount Date of Note Interest Rate Payments Start Monthly Payment All Due $150,000 March 19, 1985 lOX April 5, 1990 $1,611. 91 April 5, 1995 $540,000 September 16, 1985 lOX September 16, 1990 $5,802.88 September 16, 1995 Additionally, no interest accrued for the first two years and interest accrued for years three through five at the rate of lOX to be paid upon the maturity date. The extension of the bonds will allow the Chairman of the CODlDission and the staff of the Development Department additional time to negotiate with Chase Manhattan Bank to protect the interest of the Department concerning the notes receivable from Schurgin Development. COMMISSIOB IIBBTIlIG Meeting Date: February 18, 1991 e e . e 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 .. ... . . 1 RESOLUTION NO. RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO AUTHORIZING THE EXECUTION OF AMENDMENT NO. FOUR TO THE LOAN AGREEMENT RELATING TO CENTRAL CITY PROMENADE. 2 3 4 NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS: 5 6 SECTION 1. The Mayor of the City of San Bernardino is 7 hereby authorized and directed to execute Amendment No. Four to 8 9 the Loan Agreement between the City of San Bernardino and Central City Promenade, in the form of a copy of said Amendment attached hereto as Exhibit "A". 10 11 12 SECTION 2. Said Supplement shall not take effect until fully signed and executed by all parties. The City shall not be obligated hereunder unless and until the Amendment is fully executed and no oral agreement relating thereto shall be implied 13 or authorized. SECTION 3. This resolution is rescinded if the parties to the Amendment fail to execute it within Sixty (60) days of the passage of this resolution. / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / DAB/ses/Cen-City.res February 13, 1991 1 . e ~ . 12 13 14 15 16 17 18 19 20 - . . 1 RESOLUTION...AUTHORIZING THE EXECUTION...RELATING TO CENTRAL CITY PROMENADE. 2 3 4 I HEREBY CERTIFY that the foregoing resolution was duly 5 adopted by the Mayor and Common Council of the City of San Bernardino at a day of meeting thereof, held on the , 1991, by the following vote, to wit: 6 7 8 9 10 Council Members: AYES NAYS ABSTAIN ESTRADA REILLY FLORES 11 MAUDSLEY MINOR POPE-LUDLAM MILLER City Clerk The foregoing resolution is hereby approved this day of , 1991. w. R. Holcomb, Mayor 21 City of San Bernardino 22 Approved as to form and legal content: 23 24 25 26 27 28 JAMES F. PENMAN, City Attorney ~) DAB/ses/Cen-City.res February 13, 1991 2 . . . e 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ----~ . . 1 RESOLUTION NO. RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO AUTHORIZING THE EXECUTION OF SUPPLEMENT NO. FOUR TO THE INDENTURE RELATING TO CENTRAL CITY PROMENADE. 2 3 4 NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS: 5 6 7 8 9 SECTION 1. The Mayor of the City of San Bernardino is hereby authorized and directed to execute Supplement No. Four to the Indenture between the City of San Bernardino and Trust Services of America, Inc., in the form of a copy of said 10 11 12 Supplement attached hereto as Exhibit "A". SECTION 2. Said Supplement shall not take effect until 13 fully signed and executed by all parties. The City shall not be obligated hereunder unless and until the Supplement is fully executed and no oral agreement relating thereto shall be implied or authorized. SECTION 3. This resolution is rescinded if the parties to the Supplement fail to execute it within Sixty (60) days of the passage of this resolution. / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / DAB/ses/CenCity2.res February 13, 1991 1 . . , . 11 12 13 14 15 16 17 18 19 20 - .. - ~ -- - ~ . . 1 RESOLUTION...AUTHORIZING THE EXECUTION OF SUPPLEMENT... RELATING TO CENTRAL CITY PROMENADE. 2 3 4 I HEREBY CERTIFY that the foregoing resolution was duly adopted by the Mayor and Common Council of the City of San 5 6 Bernardino at a meeting thereof, held on the , 1991, by the following vote, to wit: day of 7 Council Members: AYES NAYS ABSTAIN 8 9 ESTRADA REILLY 10 FLORES MAUDSLEY MINOR POPE-LUDLAM MILLER City Clerk The foregoing resolution is hereby approved this day of , 1991. w. R. HOlcomb, Mayor 21 City of San Bernardino 22 Approved as to form and legal content: 23 24 25 26 27 28 JAMES F. PENMAN, City Attorney ~~ DAB/ses/CenCity2.res February 13, 1991 2 ~ . . e AMENDMENT NO. FOUR TO THE LOAN AGREEMENT This Amendment No. Four to the Loan Agreement, as amended, as of December 15, 1984 between the City of San Bernardino, a chartered city duly organized and existing under the Constitution of the State of California and its City Charter (the "Issuer") and Central City Promenade, a California Limited Partnership (the "Company"), (the "Loan Agreement") is made and entered into as of February 1, 1991 between the Issuer and the Company, with the consent of The Trust Services of America, Inc. a California corporation (the "Trustee") and the Chase Manhattan Bank, N.A. (the "Purchaser"),(the "Amendment"). Capitalized terms used in this Supplement and not otherwise defined shall have the same meaning as in the Loan Agreement. WIT N E SSE T H: WHEREAS, Section 9.06 of the Loan Agreement provides that the Issuer and the Company may supplement the Loan Agreement with the consent of the Trustee; and e WHEREAS, Section 1202 of the Trust Indenture dated as of December 15, 1984 between the Issuer and the Trustee (the "Indenture") provides that "neither the Issuer nor the Trustee shall consent to any . . .amendment of the Loan Agreement . . . without publication of notice and mailing and the written approval or consent of the Holder and Owners of not less than one hundred percent (100\) in aggregate principal amount of the Bonds .. ."; and WHEREAS, the Purchaser is the "Holder or Owner of every Bond"; and . . WHEREAS, the Purchaser's consent to this Amendment as indicated by its execution of this Amendment is sufficient to meet the consent and notice requirements of Section 1202 of the Indenture; and WHEREAS, Section 6.03(c) of the Loan Agreement provides that "prior to the Conversion Date, the Note is subject to Mandatory Prepayment, in whole, on March 1, 1991 . . . unless the Purchaser has given notice in writing evidencing its waiver of such redemption at least forty-five (45) days, but no more than sixty (60) days, prior to such Redemption Date to the Issuer, the Trustee and the Company"; and WHEREAS, the Company and the Purchaser desire to amend Section 6.03(c) of the Loan Agreement to provide the necessary time to amend possibly further the Loan Agreement. e e e . e - . . NOW, THEREFORE, in consideration of the mutual covenants and undertaking set forth herein. and other good and valuable consideration. the receipt and sufficiency of which are hereby aCknowledged, the Issuer and the Trustee hereby agree as follows: 1. Section 6.03(c) of the Loan Agreement is amended and restated as follows: M(C) Mandatory Prepayment Upon Demand of Purchaser. Prior to the Conversion Date. the Note is subject to mandatory prepayment, in whole, on July 1. 1991. and on December 1. 1995 and on each fifth December 1 thereafter until maturity. at a price equal to the principal amount of Outstanding Bonds plus accrued interest to the date of prepayment. without premium. unless the Purchaser shall have given notice in writing evidencing its waiver of such redemption. at least forty-five (45) days, but no more than sixty (60) days, prior to each such Redemption Date to the Issuer. the Trustee and the Company.M 2. This Amendment may be executed in several counterparts. each of which shall be an original and all of which shall constitute but one and the same instrument. IN WITNESS WHEREOF, the parties hereto have caused this Amendment to the Loan Agreement to be executed on their behalf by their duly authorized Officers. and. if applicable, their corporate seal to be affixed and duly attested all as of the day first above written. CITY OF SAN BERNARDINO By: Its: Mayor ATTEST: By: Its: City Clerk 3522u/2266/03 e e ~ e ATTEST: By: Its: . Assistant Secretary 3522u/2266/03 . CENTRAL CITY PROMENADE, a California limited partnership By: Mark Shurgin, General Partner By: Rosaland Jonas Shurgin, General Partner CONSENT OF THE TRUSTEE AS REQUIRED BY SECTION 9.06 OF THE LOAN AGREEMENT: TRUST SERVICES OF AMERICA, INC. By: Its: Authorized Representative CONSENT OF THE HOLDER OF EACH BOND AS REQUIRED BY SECTION 1102 OF THE INDENTURE: THE CHASE MANHATTAN BANK, N.A. By: Its: Authorized Representative . . . . . ----- . . February , 1991 City of San Bernardino San Bernardino, California Trust Services of America, Inc. Los Angeles, California Re: City of San Bernardino, Industrial Development Revenue Bonds (Central City Promenade Project) (the "Bonds") Ladies and Gentlemen: We have acted as counsel for the City of San Bernardino, a chartered city duly organized and existing under the Constitution of the State of California and its City Charter, (the "Issuer"), in connection with the supplementing and amending of the Indenture and Loan Agreement, as defined below. In that connection, we have examined originals or copies certified or otherwise identified to our satisfaction of (1) the Trust Indenture dated as of December 15, 1984 between the Issuer and Trust Services of America, Inc., a California corporation (the "Trustee"), as supplemented (the "Indenture"); (2) the Loan Agreement dated as of December 15, 1984 between the Issuer and Central City Promenade, a California limited partnership (the "Company"), as amended (the "Loan Agreement"); . . . . . . City of San Bernardino Trust Services of America, Inc. February , 1991 Page Two (4) Supplement No. Four to the Indenture dated as of February I, 1991 between the Issuer and the Trustee (the .Supp1ement No. Four"); (5) Amendment No. Four to the Loan Agreement dated as of February I, 1991 between the Issuer and the Company (the .Amendment No. Four.); and (6) the Internal Revenue Code of 1954 and 1986, as amended, and such regulations, revenue rulings and private letter rulings promulgated or issued thereunder (the .Code.) and predecessor statutes as we have deemed relevant to the rendering of this opinion. Based upon our examination of the foregoing, and in reliance thereon, and on allegations of fact as we deem relevant under the circumstances, we are of the opinion that: 1. The execution and delivery of the Amendment No. Four and the Supplement No. Four have been authorized by the Issuer and, assuming proper authorization, execution and delivery by the respective other parties thereto, including parties consenting thereto, are valid and binding obligations of the Issuer enforceable in accordance with their terms, except to the extent that enforceability may be limited by moratorium, bankruptcy, reorganization, insolvency or other laws affecting creditors' rights generally or by the exercise of judicial discretion in accordance with general principles of equity. Assuming that interest on the Bonds is exempt from federal income taxation currently, the Supplement No. Four and the Amendment No. Four will not cause interest on the Bonds to cease to be exempt from gross income for purposes of federal income taxation or from personal income taxes imposed by the State of California. 2. We note that this office did not serve as bond counsel in connection with the original issuance of the Bonds and has at . . . City of San Bernardino Trust Services of America, Inc. February ,1991 Page Three . no time rendered an opInIon regarding the exemption from federal or State income taxation of interest on the Bonds. We have not reviewed the documents or any underlying facts or circumstances relative to the tax exempt status of interest on the Bonds either at the date of original issuance of the Bonds or at any time since such date. Moreover, in order for interest on the Bonds to remain exempt from federal income taxation subsequent to the bond issuance date, it is necessary that the provisions of Section l03(b)(6)(D), among others, of the Internal Revenue Code of 1954, as amended, be complied with on a continuous basis. Because we have made no independent investigation as to whether there has been such compliance in the present case, for purposes of this opinion, we have assumed that interest on the Bonds is exempt from federal income taxation and State of California personal income taxation as of the date of this opinion and express no opinion as to whether interest on the Bonds is presently exempt from federal income taxation or State of California personal income taxation. We have not undertaken to verify through independent investigation the accuracy of the representations made to us or of the foregoing assumptions made by us in rendering this opinion. The opinions expressed herein may be relied upon by the addressee of this opinion and may not be relied upon by any other party. Respectfully submitted, ~ . 3524u e e . e . . SUPPLEMENT NO. FOUR TO THE INDENTURE This Supplement No. Four to the Trust Indenture, as supplemented, dated as of December IS, 1984 between the City of San Bernardino, a chartered city duly organized and existing under the Constitution of the State of California and its City Charter (the -Issuer-) and Trust Services of America, Inc., a California corporation (the -Trustee-) (the -Indenture-) is made and entered into as of February 1, 1991 between the Issuer and the Trustee, with the consent of The Chase Manhattan Bank, N.A. (the -Purchaser-), and Central City Promenade, a California Limited Partnership (the -Company-), (the -Supplement-). Capitalized terms used in this Supplement and not otherwise defined shall have the same meaning as in the Indenture. WIT N E SSE T H: WHEREAS, Section 1102 of the Indenture provides that the Issuer and the Trustee may supplement the Indenture -as shall be deemed necessary and desirable by the Issuer or the Trustee for the purpose of modifying, altering, amending, adding to or rescinding, in any particular, any of the terms or provisions contained. . .[therein] or in any supplemental indenture; provided, however, that nothing contained in . . . Section [1102] shall permit, or be construed as permitting, without the consent of the Holder or Owner of every bond, (i) an exte~sion of the maturity of the principal of or the interest thereon or of any redemption dates from the Bond Fund . . .-; and WHEREAS, the Purchaser is the -Holder or Owner of every Bond-; and WHEREAS. the Trustee or Issuer has deemed it -necessary and desirable- to modify the Indenture; and WHEREAS, Section 1102 of the Indenture provides further that -a supplemental indenture . . . which affects the rights of the Company shall not become effective unless and until the Company shall have consented to the adoption of such supplemental indenture-; and WHEREAS, this Supplement -affects the rights of the Company-; and WHEREAS. Section 301(d) of the Indenture provides that -prior to the Conversion Date, the Bonds are subject to mandatory redemption, in whole, on March 1, 1991. . . unless the Purchaser shall have given notice in writing to the . . . Issuer, the Trustee and the Company, stating that such redemption shall be waived, at least forty-five (45) but no more than sizty (60) days prior to each such redemption dateN; and WHEREAS, the Purchaser and the Company desire to further amend Section 30l(d} of the Indenture to provide the necessary time to supplement possibly further the Indenture. NOW, THEREFORE, in consideration of the mutual covenants and undertaking set forth herein, and other good and valuable consideration, the receipt and sUfficiency of which hereby are acknowledged, the Issuer and the Trustee hereby agree as follows: 1. Section 301(d) of the Indenture is amended and restated as follows: ~ Wed) Redemption Upon Demand Of Purchaser. Prior to the Conversion Date, the Bonds are subject to mandatory redemption, in whole, on July 1, 1991, and on December 1, 1995 and on each fifth December 1 thereafter until maturity, at a price equal to the principal amount of Outstanding Bonds plus accrued interest to the Redemption Date, without premium, unless the Purchaser shall have given notice in writing to the Issuer, the Trustee and the Company, stating that such redemption shall be waived, at least forty~five (45) but no more than sixty (60) days prior to each such redemption date.- 2. This Supplement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. . IN WITNESS WHEREOF, the parties hereto have caused this Supplement to the Indenture to be executed on their behalf by their duly authorized officers, and, if applicable, their corporate seal to be affixed and duly attested all as of the day first above written. CITY OF SAN BERNARDINO By: Its: Mayor . ATTEST: By: Its: City Clerk 35l8u/2266/03 . . ~ e ----- -----....-- ATTEST: . By: Its: Assistant Secretary 351Bu/2266/03 . TRUST SERVICES OF AMERICA, INC. By: Its: Authorized Representative CONSENT OF THE HOLDER OF EACH BOND AS REQUIRED BY SECTION 1102 OF THE INDENTURE: THE CHASE MANHATTAN BANK, N.A. By: Its: Authorized Representative CONSENT OF THE COMPANY AS REQUIRED BY SECTION 1102 OF THE INDENTURE: CENTRAL CITY PROMENADE, a California Limited Partnership By: Mark Shurgin, General Partner By: Rosiland Jonas Shurgin, General Partner . . . . - . . CITY OF SAN BERNARDINO INDUSTRIAL DEVELOPMENT REVENUE BONDS, SERIES 1984A (CENTRAL CITY PROMENADE PROJECT) CERTIFICATE OF THE COMPANY The undersigned as the sole general partners of Central City Promenade, a California Limited Partnership (the .Company.) hereby certifies that the Company has complied in all material respects as of the date hereof with the terms and conditions of the Indenture, as supplemented, the Loan Agreement, as amended and the Regulatory Agreement, as amended, and no event of default thereunder has been declared as of the date hereof. All capitalized terms used herein and not otherwise defined shall have the meaning given them in the Indenture relating to the above-referenced financing. Dated: February , 1991 CENTRAL CITY PROMENADE, a California limited partnership By: Mark Shurgin, General Partner By: Rosaland Jonas Shurgin, General Partner 3522u/2266/03