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HomeMy WebLinkAboutS05-Community Development CITr OF SAN BERNARDIr-.? - REQUE~" FOR COUNCIL ACT'~N ~ ~. Dept: Community Development Subject: NEIGHBORHOOD HOUSING SERVICES, INC. SHORT-TERM LOAN AGREEMENT (INFILL HOUSING) From: Kenneth J. Henderson, Director Date: September II,I987 tyfrr Synopsis of Previous Council action: In July, 1984, the Mayor and Common Council approved a $50,000 loan to San Bernardino Neighborhood Housing Services, Inc., for the purpose of acquiring ten (10) vacant parcels for NHS's veterans Owner-Built Infill Housing Program. On November 18,1985, the Mayor and Common' Council approved a $20,000 short term loan with NHS to assist NHS with a cash flow problem relative to program start-up. The loan was secured by pre-development funds provided by Life Savings and Loan. On July 7, 1986, the Community Development Commission adopted Resolution Number #4896 directing the execution of an agreement between the Redevelopment Agency and NHS for participation in the Infill Housing Program. (SYNOPSIS CONTINUED TO NEXT PAGE) Recommended motion: ADOPT RESOLUTION. ~\~ Contact parson: Ken Henderson/Maurice Oliva Phone: 5065 Supporting data attached: Staff Report Ward: I FUNDING REOUIREMENTS: Amount: Sourca: (ACCT. NO.) (ACCT. DESCRIPTION) Finance: Council Notal: 75.C12U Agenda Item No. $...5" ." .., ) "- '."., ......,I SYNOPSIS OF PREVIOUS COUNCIL ACTION: (Continued...) In July 1986, the Mayor and Common Council authorized by resolution a $20,000 short-term loan with San Bernardino Neighborhood Housing Services, Inc. to assist them with administrative costs related to the Infill Housing Program. 9/10/87 CI~. OF SAN BERNARDt:)) - REQUE::f FOR COUNCIL ACTJ)N STAFF REPORT In July 1984, the Mayor and Common Council approved a $50,000 deferred loan to San Bernardino Neighborhood Housing Services, Inc., (NHS) for the acquisition of ten (10) vacant parcels for NHS's Owner-Built Infill Housing Program. In November, 1985, the Mayor and Common Council approved a $20,000 short term loan to assist NHS with a cash flow problem relative to start-up of the OWner-Built Program. Said loan was needed to facilitate the timely implementation of the program. The short term loan accrued interest at seven-percent (7%) per annum and was repaid in six (6) installments over a forty (40) week period. The loan was secured by pre-development funds provided by Life Savings and Loan and administrative funds provided by Neighborhood Reinvestment Corporation. The owner-built homes are now completed on five (5) of the ten (10) lots. The sale of the fifth owner-built home closed escrow August 18, 1987. On July 7, 1986, the Community Development Commission authorized the selection of NHS as one of two (2) developers for participa- tion in the City's Infill Housing Program. Later that month the remaining balance of the previous $20,000 loan was paid off as a condition of the Mayor and Common Council's approval to use the same $20,000 as a second loan to assist NHS's administration of the Infill Housing Program. The second $20,000 loan note, secured by a first deed of trust on five (5) lots, was to be paid out of the closing receipts from the sale of each home, with the entire loan due on September 5, 1987. Due to unforeseen difficulties pertaining to the completion of the five (5) owner-built homes, construction on the second five (5) homes was delayed. However, construction of the second five (5) infill homes is well underway now and completion is anticipated in December, 1987. Neighborhood Housing Services has requested an extension of the $20,000 loan until June 30, 1988 in order to provide enough time to close escrows after construction is complete. The proposed loan extension would be for the original $20,000 plus accrued interest to date and secured by a second deed of trust (subordinate to first deed of trust for construction loan in the amount of $240,000). An estimated $4,000.00 would be repaid from the sale of each house. The reason for placement of this item on the supplemental aaenda was that staff was not able to ascertain prior to the reaular aaenda deadline (September 10. 19871 whether or not NHS would be able to pav off its short term loan. Since the previous loan note was due on September 5. 1987. the Mavor and Common Council should act as soon as possible on NHS's reauest for an extension of the term of the loan aareement. 9/11/87 75-0264 r ~ ~ . \,...., Staff Report Cont~nued... ""'" .....,; '. , --,I Adoption of the resolution by the Mayor and Common Council would authorize the Mayor to execute an amendment to the loan agreement with NHS not to exceed $21,400 ($20,000 principal plus $1,400.00 accrued interest) and extending the term of said loan agreement to J ne 30, 1988. (]. Kenneth J. Henderson Director of Community Dev lopment KJH/MLO/lab/0477 9/11/87 , '- /'''' I...,.; o , ,j 1 2 RESOLUTION NO. RESOLUTION OF THE CITY OF SAN BERNARDINO APPROVING AND 3 AUTHORIZING AN AMENDMENT TO THE SHORT TERM LOAN AGREEMENT BETWEEN CITY OF SAN BERNARDINO AND SAN BERNARDINO NEIGHBORHOOD HOUSING 4 SERVICES, INC., FOR INFILL HOUSING PROGRAM, AND EXTENDING TERM OF AGREEMENT TO JUNE 30, 1988. 5 BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY 6 OF SAN BERNARDINO AS FOLLOWS: 7 SECTION 1. Recitals. The Mayor and Common Council of the 8 City of San Bernardino has appropriated $20,000 of its 1985/1986 9 community Development Block Grant funding to assist San 10 Bernardino Neighborhood Housing Services, Inc., with the 11 implementation of its various housing programs, particularly the 12 Infill Housing Program sponsored by the city of San Bernardino. 13 Said appropriation is evidenced by a loan agreement and a 14 straight note dated September 5, 1986, secured by a deed of trust 15 recorded as instrument number 86-259803 in the office of the San 16 Bernardino county Recorder. San Bernardino Neighborhood Housing 17 Services, Inc., (NHS) has made timely payments in accordance with 18 the terms, conditions and amortization schedule of that loan 19 agreement and note, and is current on such payments, NHS has 20 requested an extension of such loan agreement and note through 21 June 30, 1988. 22 SECTION 2. Imo1ementation. The Mayor of the City of San 23 Bernardino is hereby authorized and directed to execute, for and 24 on behalf of the City of San Bernardino, an amendment to the 25 above referenced loan agreement and note between the city of San 26 Bernardino and Neighborhood Housing Services, Inc., for short 27 term loan for Infill Housing Program, copies of which are annexed 28 hereto as Exhibits "1" and "2", and incorporated herein by 9/10/87 , --. ....,) ~..,I '""-"" ......... 1 reference. Upon execution thereof, the term of the agreement 2 between city and San Bernardino Neighborhood Housing Services, 3 Inc" and the note and deed of trust assuring payment of the loan 4 shall be continued for the period from September 5, 1987 to June 5 30, 1988. 6 I HEREBY CERTIFY that the foregoing resolution was duly 7 adopted by the Mayor and Common Council of the City of San 8 Bernardino at a meeting thereof, held on the 9 day of , 1987, by the following vote, to wit: 10 11 12 13 14 15 16 17 18 of 19 20 21 AYES: Council Members NAYES: ABSENT: CITY CLERK The foregoing resolution is hereby approved this , 1986. day Mayor, City of San Bernardino 22 Approved as to form and legal content: 23 ~~ ) 24 Sr. sst.City torney 25 flab 26 0478 27 28 9/10/87 '- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 /"""' '- .., -.I J - AMENDMENT TO SHORT-TERM LOAN AGREEMENT EXTENDING AGREEMENT FROM SEPTEMBER 5, 1987 TO JUNE 30, 1988 AND INCREASING THE PRINCIPAL AMOUNT OF THE LOAN. THIS AGREEMENT, is entered into on the ____ day of , 1987, by and between the CITY OF SAN BERNARDINO, a public body corporate, hereinafter "City", and NEIGHBORHOOD HOUSING SERVICES, INC., a California non-profit corporation, hereinafter "NHS", sets forth the agreement of the parties as specified herein. The parties hereto agree: 1. City has previously advanced to NHS the sum of $20,000 pursuant to a loan agreement and note of date September 5, 1986 which expires on or about September 5, 1987. The note is secured by a deed of trust recorded as document number 86-259803 in the office of the San Bernardino County Recorder. 2. City and NHS hereby agree to an extension of that 16 loan agreement and note upon the following terms. 17 a) NHS agrees to repay to City and the principal 18 amount of the note is hereby increased to the sum of $21,400. 19 Interest shall accrue thereon at a rate of seven-percent (7%) per 20 annum, from date of this amendment. said sums are to be paid 21 one-fifth (1/5) from the proceeds of the sale of each of the five 22 (5) parcels of real property and any improvement thereon securing 23 the note. Interest shall continue to accrue on all unpaid 24 amounts until the total debt is paid in full. 25 3, All other terms of the short-term loan agreement and 26 straight note dated September 5, 1986 and all security for same 27 shall continue as is and, shall remain in effect for the duration 28 of this extension except as otherwise specifically provided 9/10/87 1,.", c ~ ....,) ,....) 1 herein. 2 agreement effective the day and year set forth above. 3 4 IN WITNESS WHEREOF, the parties hereto have executed this CITY OF SAN BERNARDINO NEIGHBORHOOD HOUSING SERVICES, INCORPORATED 5 6 7 8 9 10 BY: BY: BY: Attest: 11 BY: 12 13 Approved as form and legal content: 14 / /) _ /J 15 BY: ~~~ S~Asst.City torney 16 City Clerk 17 flab 0479 18 19 20 21 22 23 24 25 26 27 28 9/10/87 1""''''"' fr.... '- I 2 3 4 [) ! G1 7! '-' --J effective the clay and year aet forth above. CITY OF SAN BERNARDINO "~~~li~ 8 Attest: 9i ..#7,.-7// /It?/~/'h BY 10 / City Clerk 11 Approved as to form: 12 BY~t~/t~ . .City Attorney 14 l254L 15 lG 17 18 19 20 21 22 23 241 25 26 27 28 9/10/87 , ,) I NEIGHBORHOOD HOUSING SERVICES, i INCORPORATED : BYtA~~ Pres1aent i BY Secretary "- DO NOT DESTROY'S NOTE.,. When paId thIS not<;..!'nd theed of Trust must be surrendered to the ....,)1 Amet' " Title In!lur~nce (omr wllh. _--Iues1 for reconveyance ~.., '-' ) STRAIGHT NOTE $ 20.000.00 San Bernardino, ., California, September 5, 198fi thin one year after this date, with periodic payments in intervals after date, for value received, Neighborhood Housing Services, Inc. promise~ to pay to the City of San bernardino, c/o Redevelopment Agency, 320 City Hall, San Bernardino, CA 92418, or elsewhere as notified by payee, ,or order, at San Bernardino, CA the Stlm of Twenty Thousand and nO/lOO- - - - - - - - - - ($20,000.00) - Dollars, with interest from date hereof until paid, at the rate of seven (7%) per cent, per annum, payable as follows: the sum of $4,000 payable upon sale of any house built upon the property covered by the trust deed securing this note; it being intended that five separate houses will be built upon such property and sold; in the event that not all five houses are sold within one year froy the date hereof, the entire principal sum with interest is due and payable il full one year from the date hereof. Interest shall accrue on the balance outstanding at any time; on sale of the fifth house, the total amount then due shall be forthw{th payable. Payee shall give separate partial releases (reconveyances) as to individual parcels at time of sale of individual house, This note is secured by a deed of trust executed coincident herewith, which deed of trust is subordinate to construction financing. Should interest not be so paid, it shall thereafter bear like interest as the principal, but such unpaid interest so compounded shall not exceed an amount equal to simple interest on the unpaid principal at the maximum rate permitted by law. Should default ~ made in the payment of any installment of interest when due, then the whole sum of principal and interest shall become Immediately due and payable at the option of the holder of this note. Should suit be commenced to collect this note ~r any portion thereof, such sum as the Court may deem reasonable shall be added hereto as attorney's fees. Principal and Interest payable in lawful money of the United States of America. This note is secured by a certain DEED OF TRUST to the FIRST AMERICAN TITlE INSURANCE COMPANY, a California corporation, as TRUSTEE. _NEIGHBORHOOD HOUSING SERVICES, INC. By: // -/,/ _/_ (.bUU.<<-- ~-J- Its Executive Director 9/10/87 EXHIBIT .Z. . ) 124 (4/12) I I I /",''''- ~ --- ,....,; lk .. '- I SHORT-TERM LOAN AGREEMENT 2 :l clay of ):J.~'l-- . tI ;) ,1986, by and between THE CITY OF SAN BERNARDINO, a public body corporate, G I hereinafter .City", and NEIGHBORHOOD HOUSING SERVICES, INC., a California THIS AGREEMENT, entered into effective the5Jti 4 7 non-profit corporation, hereinafter "NHS" ,sets forth the agreement of the 8 parties as specified herein. 9 The parties hereto agree: 10li 1. City shall forthwith advance to NUS the sum of $20,000, to assist 1111 NUS until such time as NUS is able to make various draws upon funds due from 12 I other entities. 13 2. NUS agrees to repay to City the sum of $20,000, with interest 14 accruing at a rate of seven-percent (7%) per annum, out of the closing 151 receipts from the sale of each home. 10 i 3. NUS shall execute and deliver to City, at such time as City is 17 prepared to issue a check or warrant to NUS, a Promissory Note in form 18 approved by City Attorney to assure repayment of the loan. NUS shall also 19 provide to City a Deed of Trust and assignment of rents pledging funds from 20 the sale of five (5) infi11 single family detached homes individually or 21 collectively. Such Promissory Note and Deed of Trust shall be in form 22 approved by City Attorney. Upon the sale of individual homes, the Community 23 Development Division staff will authorize partial release of the Deed of Trust. . 24 4. Upon presentation of the duly executed Promissory Note and Deed of 25 Trust, in form approved by City Attorney, the Comlll.tnity Development Division 26 staff shall deliver its check or warrant for $20,000, as specified 27 hereinabove, using Community Development Block Grant funds. 2M IN WITNESS WHEREOF, the parties hereto have executed this agreement 9/10/87 EXHIBIT "1"