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CITY OF SAN BERNARDINO ORIGINAL
ECONOMIC DEVELOPMENT AGENCY
FROM: Emil A.Marzullo SUBJECT: Assistance League of San Bernardino
Interim Executive Director Amendment No. 2 (Central City North
Redevelopment Project Area)
DATE: July 24,2008
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Synopsis of Previous Commission/Council/Committee Action(s):
On July 24,2008,Redevelopment Committee Members Estrada,Baxter,and Alternate Member McCammack unanimously voted
to recommend that the Community Development Commission consider this action for approval.
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Recommended Motion(s):
(Community Development Commission)
Resolution of the Community Development Commission of the City of San Bernardino approving and authorizing the
Interim Executive Director of the Redevelopment Agency of the City of San Bernardino ("Agency") to execute
Amendment No. 2 to the Maintenance and Operation Contract by and between the Agency and the Assistance League
of San Bernardino(580 West 6th Street, San Bernardino-Central City North Redevelopment Project Area)
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Contact Person(s): Brian Turnbull Phone: (909)663-1044
Central City North
Project Area(s): Redevelopment Project Area Ward(s): 1
Supporting Data Attached: Q Staff Report R1 Resolution(s)0 Agreement(s)/Contract(s) ❑ Map(s) ❑ Letter(s)
FUNDING REQUIREMENTS: Amount: $ 400,000 Source: Community Reinvestment Funds
Budget Authority: 2008-2009 EDA Budget
Signature: G Fiscal Review: Chu �G�s�
Emil A. a ,Interim Executive Director Barbara Lindseth,Administrative Services Director
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Commission/Council Notes: /�ESa
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F:\Docs2008a\SB EDA\08-04-08 Assistance League-Amendment No 2 SR.doc COMMISSION MEETING AGENDA
Meeting Date: 08/04/2008
Agenda Item Number:
ECONOMIC DEVELOPMENT AGENCY
STAFF REPORT
ASSISTANCE LEAGUE OF SAN BERNARDINO AMENDMENT NO. 2
(CENTRAL CITY NORTH REDEVELOPMENT PROJECT AREA)
BACKGROUND:
On November 21, 2005, the Community Development Commission of the City of San Bernardino
("Commission") authorized the Commission Chairperson to execute a Rehabilitation, Maintenance and
Operation Agreement ("Agreement") by and between the County of San Bernardino ("County"), the
Assistance League of San Bernardino ("League") and the Redevelopment Agency of the City of San
Bernardino ("Agency") for the rehabilitation of the League's headquarters at 580 West 6th Street. The
foundation on the east side of this 100 year old building had sunk 4 inches, and several other serious
health and safety issues also existed such as an unusable fire escape and a lack of handicap access.
The League is a non-profit organization, which for 58 years has provided essential dental services to
lower income children at the Earl Crane Dental Center, which is located at the facility, as well as
"Operation School Bell", a school clothing program. As with the majority of local non-profits, their
financial resources are limited. Based upon an initial engineering assessment, which was provided
pro-bono by a local structural engineer, the cost was estimated to be approximately $450,000 to
rehabilitate the facility. This funding amount was an estimate in the absence of a more extensive
engineering assessment.
In as much as the League is located in downtown San Bernardino, it also provides assistance to
children outside the city limits of San Bernardino; thus, the County of San Bernardino Department of
Community Development and Housing contributed 50% of the funds in the amount of$225,000 while
the Agency funded the other 50% from the Community Reinvestment Fund, provided that the League
continued to provide the same level of philanthropic service to the community for a minimum of 10
years following the date of completion of the improvements.
Once approved by the Commission, Agency Staff initiated expert architectural and engineering
evaluations of the building, including its method of construction and an assessment of its needs
together with a complete set of structural and engineering drawings. The cost of these studies and
plans amounted to $41,000. After Agency Staff was in possession of the information required to
prepare a comprehensive bid document, the scope of work was publicly bid. Only 1 bid was
subsequently received from Felix Francisco of Francisco Construction. Francisco Construction's bid
was $454,200 which combined with the $41,000 spent on design and engineering brought the total
project cost to $495,200. Due to the funding shortfall, on February 11, 2008, the Commission
approved an additional $53,000 in Community Reinvestment Funds for the project.
CURRENT ISSUE:
Francisco Construction was issued a Notice to Proceed on October 19, 2007. They completed stucco
demolition and stripping of the exterior framing and began the leveling process. However, they were
unable to provide the required Performance and Payment Bonds and on April 28, 2008, their contract
was terminated. The leveling and stabilization of the building revealed additional deficiencies with the
interior wall surfaces that will require unexpected patching and repairs to the interior walls and
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F:\Docs2008a\SB EDA\08-04-09 Assistance League-Amendment No 2 SR.doc COMMISSION MEETING AGENDA
Meeting Date: 08/04/2008
Agenda Item Number:
Economic Development Agency Staff Report
Assistance League-Amendment No. 2
Page 2
additional foundation repairs to minimize future problems. The removal of the exterior stucco also
revealed pockets of damage to framing including the front porch and selected wall areas, that while
repairable and not ultimately compromising to the structure, is resulting in additional costs that were
not originally expected. On May 27, 2008, Agency Staff recommended another contractor, Phillips
Construction, to work with the design and engineering professionals and Agency Staff to reevaluate
the projects status and seek solutions to the issues mentioned above. Based on current expenditures
and unforeseen issues uncovered to date, the original funding will not be adequate based upon the
current estimates to complete the project. Phillips Construction has submitted a bid of $754,886 to
complete the entire rehabilitation and restoration of this historic structure.
Not only is rehabilitation of this historic old house a vital link to preserving the history of our
community for generations to come, it is also regarded as an integral part of the Agency's efforts to
revitalize the Central City North Redevelopment Project Area. Members of the League donate an
inordinate amount of time to raise funds to provide for the Dental Center and Operation School Bell
which serve thousands of underprivileged children in the community.
At the Redevelopment Committee meeting as held on Thursday, July 24, 2008, it was recommended
by the Committee members that Amendment No. 2 should contain a provision requiring a 20-year
covenant with an annual amortization of the $400,000 additional grant amount over this 20-year
period. A new Section 2 was added to Amendment No. 2 which also requires recordation of
Amendment No. 2 or recordation of a notice of the covenant prior to any disbursements of this
additional $400,000 amount.
ENVIRONMENTAL IMPACT:
Categorically exempt under California Environmental Quality Act("CEQA") Section 15301.
FISCAL IMPACT:
$175,000 from Community Reinvestment Funds, and $225,000 from tax increment funds.
RECOMMENDATION:
That the Community Development Commission adopt the attached Resolution.
Emil-A. , terim Executive Director
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F:\Docs2008a\SB EDA\08-04-08 Assistance League-Amendment No 2 SR.doc COMMISSION MEETING AGENDA
Meeting Date: 08/04/2008
Agenda Item Number:
C -60,
` 1 RESOLUTION NO.
2 RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF
3 THE CITY OF SAN BERNARDINO APPROVING AND AUTHORIZING
THE INTERIM EXECUTIVE DIRECTOR OF THE REDEVELOPMENT
4 AGENCY OF THE CITY OF SAN BERNARDINO ("AGENCY") TO
EXECUTE AMENDMENT NO. 2 TO THE MAINTENANCE AND
5 OPERATION CONTRACT BY AND BETWEEN THE AGENCY AND THE
6 ASSISTANCE LEAGUE OF SAN BERNARDINO (580 WEST 6th STREET,
SAN BERNARDINO — (CENTRAL CITY NORTH REDEVELOPMENT
7 PROJECT AREA)
8 WHEREAS, the Community Development Commission of the City of San Bernardino (the
9 "Commission") is the governing board of the Redevelopment Agency of the City of San
10 Bernardino (the "Agency"),- and
11 WHEREAS, the subject property is located at 580 West 6th Street, San Bernardino,
12 California, within the Central City North Redevelopment Project Area(the "Property"); and
13 WHEREAS,on November 21, 2005, the Commission adopted Resolution No. CDC/2005-40
14 approving a Maintenance and Operation Contract (the "Contract") by and among the Agency, the
15 County of San Bernardino with the Assistance League of San Bernardino (the "Grantee") in the
16 amount of$225,000 in order to perform much needed repairs to the building; and
17 WHEREAS, on February 19, 2008, the Commission adopted Resolution No. CDC/2008-7
18 approving Amendment No. 1 to the Contract in the amount of$53,000 in order to meet additional
19 costs needed for the completion of the Project; and
20 WHEREAS, certain unforeseen additional expenses have increased the total Project funding
21 amount by an additional $400,000; and
22 WHEREAS, it is appropriate for the Commission to approve Amendment No. 2 to the
23 Contract solely as between the Agency and the Grantee ("Amendment No. 2").
24 NOW, THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY
25 OF SAN BERNARDINO DOES HEREBY RESOLVE, DETERMINE AND ORDER,AS FOLLOWS:
26 Section 1. The Commission hereby approves the attached Amendment No. 2 in the form
27 presented at the meeting at which this Resolution is adopted. The Interim Executive Director of the
28 Agency is hereby authorized and directed to execute Amendment No. 2 on behalf of the Agency,
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F.iDocs2008a�SB EDAM-04-08 Assistance Leaeue Amendment No 2 CDC Reso.doc
1 together with such technical and non-material conforming changes as may be recommended by Agency
2 Counsel.
3 Section 2. This Resolution shall become effective immediately upon its adoption.
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f.'0ocs200WSB EDA\08-04-08 Assistance League Amendment No 2 CDC Reso.doc
I RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION
OFTHE CITY OF SAN BERNARDINO APPROVING AND AUTHORIZING
2 THE INTERIM EXECUTIVE DIRECTOR OF THE REDEVELOPMENT
3 AGENCY OF THE CITY OF SAN BERNARDINO ("AGENCY") TO
EXECUTE AMENDMENT NO. 2 TO THE MAINTENANCE AND
4 OPERATION CONTRACT BY AND BETWEEN THE AGENCY AND THE
ASSISTANCE LEAGUE OF SAN BERNARDINO (580 WEST 6`h STREET,
5 SAN BERNARDINO - CENTRAL CITY NORTH REDEVELOPMENT
6 PROJECT AREA)
7 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Community
8 Development Commission of the City of San Bernardino at a meeting
9 thereof, held on the day of , 2008, by the following vote to wit:
10 Commission Members: Aves Nays Abstain Absent
11 ESTRADA
BAXTER
12
BRINKER
13
DERRY
14
KELLEY
15
JOHNSON
16
MC CAMMACK
17
18
19 Secretary
20 The foregoing Resolution is hereby approved this day of , 2008.
21
22 Patrick J. Morris, Chairperson
23 Community Development Commission
of the City of San Bernardino
24
25 Approved as to Form:
26 --AA /
By: ZA
27 AgenVy Jounsel
28
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AMENDMENT NO. 2
TO THE MAINTENANCE AND OPERATION CONTRACT
(Assistance League of San Bernardino)
THIS AMENDMENT NO. 2 TO THE MAINTENANCE AND OPERATION
CONTRACT (this "Amendment No. 2") is dated as of August 4, 2008, by and between the
Assistance League of San Bernardino, a California non-profit corporation (the "Grantee"), and
the Redevelopment Agency of the City of San Bernardino, a public body, corporate and politic
(the "Agency"), and the County of San Bernardino Department of Community Development and
Housing (the "County") shall not be a party to this Amendment No. 2 nor bound by any
provision hereof, and this Amendment No. 2 is entered into in light of the facts set forth in the
following Recital paragraphs:
-- RECITALS --
A. The Grantee, the Agency and the County have previously entered into an
agreement entitled, "Maintenance and Operation Contract," dated November 21, 2005 (the
"Contract"),- and
B. As of the effective date of the Contract, the Grantee has, in collaboration with
Agency Staff, commenced the improvements ("Project"), as this term is defined in the Contract,
to correct the structural deficiencies of the building and rectify all health and safety and
Americans with Disabilities Act ("ADA") requirements; and
C. The Grantee and the Agency have previously entered into Amendment No. I to
the Contract which provided an additional Fifty-Three Thousand Dollars ($53,000) to the Project
for a total Agency contribution of Two Hundred Seventy-Eight Thousand Dollars ($278,000);
and
D. Section 4 of the Contract anticipated that additional funding may be provide either
by the Agency or the County. Said provision reads in part as follows: "This condition, however,
does not preclude the County and the Agency from respectively providing additional funding at
the sole and absolute discretion of either the County or the Agency, as applicable"; and
E. The Grantee and the Agency believe it is appropriate to consider and approve this
Amendment No. 2 in order that the Grantee may complete the Project as specified in the Project
description as approved in the original Contract.
After construction of the improvements began, the leveling and stabilization of
the building revealed additional deficiencies with the interior wall surfaces that will require
unexpected patching and repairs to the interior walls and additional foundation repairs to
minimize future problems. The removal of the exterior stucco also revealed pockets of damage
to framing, including the front porch and selected wall areas, that while repairable and not
♦'"'*� ultimately compromising to the structure, is resulting in additional costs that were not originally
expected. Based on current expenditures and unforeseen issues uncovered to date, the original
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funding will fall short of the funding necessary to complete the Project. Phillips Construction,
which has completed the initial phase of the Project, has submitted a fixed price contract bid of
Seven Hundred Fiftv-Four Thousand Eight Hundred Eighty-Six Dollars ($754,886) to complete
j the entire rehabilitation and restoration of this historic structure.
NOW, THEREFORE, THE GRANTEE AND THE AGENCY DOES HEREBY AGREE
AS FOLLOWS:
i
Section 1. The Grantee and the Agency hereby acknowledge and agree that
notwithstanding any term of the Contract to the contrary, the Agency shall increase its
contribution by Four Hundred Thousand Dollars ($400,000) for a total of Six Hundred Seventy-
Eight Thousand Dollars ($678,000) plus the Two Hundred Twenty-Five Thousand Dollars
($225,000) as previously approved by the County pursuant to the Contract. The Grantee agrees
to utilize such additional Agency funds for the purposes of completing the Project.
Section 2. The Grantee covenants and agrees with the Agency that for a period of
time equal to twenty (20) years from and after the date of this Amendment No. 2, in
consideration of the additional $400,000 of grant funds as provided pursuant to this Amendment
No. 2, as follows:
(i) the Grantee shall continue to utilize the facility that is the subject of the
Contract to provide dental services to children within the San Bernardino
community; and
(ii) the Grantee shall not abandon the use of the facility identified in the
Contract, or otherwise cease to function as a California non-profit
corporation in good standing with the State of California and continuing to
provide a community service within the downtown area of the City of San
Bernardino; and
(iii) the Grantee shall not sell. transfer, mortgage, assign or otherwise dispose
of the real property asset identified in the Contract without the prior
express written consent of the governing body of the Agency at its sole
and absolute discretion; and
(iv) the Grantee shall provide such written reports and responses to inquires
submitted in writing by the Agency Executive Director from time-to-time
regarding the activities and functions of the Grantee occurring at the
property identified in the Contract.
In the event the Grantee should violate any of the covenants and agreements set forth in this
Section 2, the Grantee shall have thirty (30) days after a receipt of a written notice of default
from the Agency specifying the nature of the alleged default in which to cure such default or to
commence such cure and prosecute such cure to completion in an expeditious manner as possible
if the nature of the default is such that it cannot be cured within said 30-day period of time.
Upon a final determination by the Agency that a default has occurred as set forth in this Section
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P.'Docs2008a\SO EDA108-04-08 Assistance Leaeue Amendment No 2 doc
2, the Grantee agrees to repay to the Agency, immediately upon demand, the unamortized
portion of the additional $400,000 of grant funds authorized pursuant to this Amendment No. 2.
Such amortization shall occur during the twenty (20) years of this grant covenant at a dollar
amount equal to $20,000 per year with such amortization occurring as of the last day of each 1-
year period of time following the date of this Amendment No. 2.
The Grantee further agrees to execute in recordable form and cause to be recorded in the real
property records of the County of San Bernardino, either a copy of this Amendment No. 2 or a
notice of covenant as contained in this Amendment No. 2, which recordable document shall
remain as a lien against the property identified in the Contract during the 20-year duration of the
use and restrictive covenant as contained in this Amendment No. 2.
Section 3. Except as modified or amended by this Amendment No. 2, all of the
provisions of the Contract shall remain in full force and effect following the Effective Date of
this Amendment No. 2.
IN WITNESS WHEREOF, the Assistance League of San Bernardino and the
Redevelopment Agency of the City of San Bernardino executed this Amendment No. 2 as of the
dates written next to the signatures of their duly authorized representatives below.
AGENCY
Redevelopment Agency of the City of San Bernardino,
a public body, corporate and politic
Date: By:
Emil A. Marzullo, Interim Executive Director
Approved as to Form an Legal Content:
By:
Agency C nsel
GRANTEE
Assistance League of San Bernardino
a California non-profit corporation
Date: By:
Donna Hoffman
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