HomeMy WebLinkAboutR22-Economic Development Agency
CITY OF SAN BERNARDINO
ECONOMIC DEVELOPMENT AGENCY
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FROM:
Emil A. Marzullo
Interim Executive Director
SUBJECT:
Implementation of the Maya Cinemas North
America, Inc., Disposition and Development
Agreement
DATE: January 29,2009
SvnoDsis of Previous Commission/CounciVCommittee Action(s):
On October 20, 2008, the Community Development Commission of the City of San Bernardino approved Resolution No.
CDC/2008-41 authorizing the Interim Executive director of the Agency to enter into a Redevelopment Project Study and
Exclusive Right to Negotiate Agreement with Maya Cinemas North America, Inc,
On December 15, 2008, the Mayor and Common Council of the City of San Bernardino consented to the disposition of the 20-
Plex to Maya and the Commission approved the sale of the 20-Plex and authorized the Interim Executive Director to execute
the Disposition and Development Agreement between the Agency and Maya.
Recommended Motion(s):
eMavor and Common Council)
MOTION: That the Mayor and Common Council of the City of San Bernardino authorize the submittal ofa HUD Section
108 Loan Application to the U.S. Department of Housing and Urban Development
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~ Contact Person(s):
Colin Strange
Phone:
(909) 663-1044
Project Area(s):
Supporting Data Attached:
Central City North
Redevelopment Project Area
Ward(s):
I"
Ii1I Staff Report 0 Resolution(s) 0 Agreement(s)/Contract(s) 0 Map(s) 0 Letter(s)
Budget Authority:
N/A
N/A
FUNDING REQUIREMENTS:
Amount: $
-0-
Source:
Fiscal Review: 6 a..<- ~ GU. <<- J <! _I '>;~
utive Director Barbara Lindseth, Administrative Services irector
Commission/Council Notes:
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P:\Agmdu:\Comm Dev CommiNitlll\CDC 2OO!M2-02~ Maya Cinemas. MUD IOS.doe
COMMISSION MEETING AGENDA
Meeting Date: 02/01/1009
Agenda Item Number: R ;}~
ECONOMIC DEVELOPMENT AGENCY
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STAFF REPORT
BACKGROUND:
On September 28, 2008, CinemaStar Luxury Theaters, Inc. ("CinemaStar"), the tenant of the
Redevelopment Agency of the City of San Bernardino ("Agency") owned 20-Plex movie theater building
(the "20-plex") located at 450 North "E" Street in downtown San Bernardino, ceased operations but
retained possession of the premises. As of that date, 14 months of forbearance of rent in the amount of
$574,000 was outstanding, the Agency therefore forwarded a termination notice to CinemaStar, but no
response was forthcoming. Accordingly, on November 7, 2008, the Agency filed an unlawful detainer
action with the Superior Court of California which held CinemaStar to be in default of the tenus of their
lease and restored the building to the Agency's possession on December 1,2008.
On October 20, 2008, the Community Development Commission of the, City of San Bernardino (the
"Commission") approved Resolution No. CDC/2008-41 authorizing the Interim Executive director of the
Agency to enter into a Redevelopment Project Study and Exclusive Right to Negotiate Agreement
("ERN") with Maya Cinemas North America, Inc. ("Maya"). The ERN provided for negotiating, and
entering into a Disposition and Development Agreement ("DDA") with the Agency for the purposes of
acquiring the vacant Agency owned 20-plex, refurbishing the building and updating the projection
equipment to include digital and 3-D projection equipment, converting one auditorium to an I-Max theater
and the development of the vacant pads in front of the 20-plex to retail and entertainment related uses.
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On December 15, 2008, the Mayor and Common Council of the City of San Bernardino ("Council")
consented to the disposition of the 20-Plex to Maya and the Commission approved the sale of the 20-Plex
and authorized the Interim Executive Director to execute the DDA between the Agency and Maya
CURRENT ISSUE:
The DDA requires that Maya acquire the 20-Plex for the sum of $4.6 million with additional new money
for the rehabilitation and upgrades to be provided in a new HOD Section 108 loan not to exceed $9.5
million. The amount outstanding on the Agency loan is not to exceed three years, after which the 20-Plex
is to be refmanced and the HOD Section 108 loan satisfied. The current HOD Section 108 loan on the
building in the amount of approximately $4.6 million will be retired from the proceeds of the new HOD
Section 108 loan.
ENVIRONMENTAL IMPACT:
The Agency has reviewed this project under the provisions of the California Environmental Quality Act
(CEQA). The Agency has determined that the proposed application submittal is exempt pursuant to
chapter 2.6, section 21080 of the Public Resources Code, California Environmental Quality Act (CEQA)
statutes, and Section 15061(b)(3), review for exemptions, of the CEQA guidelines.
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P:\Agcndas\Comm Dev CoouniuilXl\CDC 2OOWl2..()2-09 Maya Cinemas ~ HUD lOUoc
COMMISSION MEETING AGENDA
Meeting Date: 02/02/2009
Agenda Item Number:
Economic Development Agency Staff Report
Maya Cinemas North America, Inc. - HUD 108
Page 2
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The HUD Section 108 loan obligation for the 20-plex will increase from $4.6 million to between $9.0
million and $9.5 million as a seven-year interest only loan with a requirement for Maya to prepay the
HOD Section 108 loan within three years.
RECOMMENDATION:
That the Mayor and Common Council adopt the Motion.
Emil A. Marzullo, Interim E cuti e Director
P:\Agend.u\COIM1 Dev Commissi.on.\CDC 2009\02-02-09 Maya Cinemas _ HUD IOS.doc
COMMISSION MEETING AGENDA
Meeting Date: 02/02t:Z009
Al!enda Item Number: