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RB.....VELOPMENT AGENCY -OUEST FOR \JMMISSION/COUNCIL AC. .AON
,.It: Redevelopment Agency
Subject: CDBG LOAN TO ECONOMIC DEVELOPMENT
COUNCIL FOR LOAN TO PROGRESSIVE
MORTGAGE, INe.
From: GLENDA SAUL
Date: FEBRUARY 10, 1986
Synopsis of Previous Commission/Council action:
NONE
Recommended motion:
(MAYOR AND COMMON COUNCIL)
Redevelopment committee Recommendation:
RESOLUTION OF THE CITY OF SAN BERNARDINO AUTHORIZING GRANT OF $27,314 IN COMMUNITY
DEVEL'lP"ENT BLOCK GRANT FUNDS TO THE SAN BERNARDINO ECONOMIC DEVELOPMENT COUNCIL.
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Signature
Contact person: Gl enda Saul/Ken Henderson
Phone: 383-5081
Ward: 6
Project: NW
Date: ~ - /'"I-pl-,
FUNDING REQUIREMENTS:
Staff Report
Amount: $ 27,314
Supporting data attached:
No adverse Impact on City:
- 'uncil Notes:
Agenda Item No. W-
c~r OF SAN BERNARILIO - REQUUT FOR COUNCIL AC'I10N
STAFF REPORT
In the latter part of 1985, Harry Jacks, Owner, Progressive Mortgage, Inc.,
approached Agency staff regarding a commercial acquisition and rehabilitation
loan for the purpose of acquiring and rehabilitating property located at 1256
West Baseline in San Bernardino (see rendering).
After a number of lengthy meetings associated with the inspection by Agency
staff of the property in question, the scope of work and the financial impact
of prevailing wage rates applicable to this project (staff's conservative
estimate of the applicable wage rates based upon information supplied by the
director of the State Department of Industrial Relations increased the loan
amount by fifty percent), Mr. Jacks withdrew his request for a loan. However,
a concurrent loan request submitted to EDC for operating capital remained
active.
After Mr. Jacks withdrew his request from the Redevelopment Agency, staff
began consulting with Sam Henley of San Bernardino EDC to determine if
assistance to Progressive Mortgage could be structured in such a way as to
meet Progressive's needs and avoid Davis-Bacon. The scenario finally
developed and partially implemented is as follows:
Economic Development Council, after reviewing Progressive
Mortgage's loan request in the amount of $27,314 for
operating capital, approved the loan request with
unrestricted EDC funds, provided EDC is reimbursed by the
Agency with CDBG funds (see attached memo from Sam Henley
to Ken Henderson).
The above scenario enables the unrestricted loan proceeds to be used for any
purpose and avoids prevailing wage rates. Economic Development Council would
then be reimbursed with CDBG funds, contingent upon the Mayor and Common
Council's approval.
At its February 6, 1986 meeting, the Redevelopment Committee considered this
item and voted unanimously to recommend the Mayor and Common Council approval
of this item. Staff concurs with the Redevelopment Committee recommendation.
Adoption of the resolution by the Mayor and Common Council would authorize and
direct staff to transfer $27,314 in CDBG funds to the Economic Development
Council, so EDC can loan a like amount to Progressive Mortgage, Inc.
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2/86
75-0264
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RESOLUTION NO.
RESOLUTION OF THE CITY OF SAN BERNARDINO AUTHORIZING GRANT
OF $27,314 IN COMMUNITY DEVELOPMENT BLOCK GRANT FUNDS TO THE SAN
BERNARDINO ECONOMIC DEVELOPMENT COUNCIL.
BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY
OF SAN BERNARDINO AS FOLLOWS:
SECTION 1. The City of San Bernardino hereby grants to the
San Bernardino Economic Development Council the sum of $27,314 in
Community Development Block Grant funds, to be used by the San
Bernardino Economic Development Council for purposes consistent
with the requirements of the Community Development Block Grant
Program.
SECTION 2. The Executive Director of the Redevelopment
Agency is hereby authorized to transfer the sum of $27,314 to the
San Bernardino Economic Development Council forthwith from
Community Development Block Grant funds which are available. The
Executive Director is authorized to require from the San
Bernardino Economic Development Council reasonable assurances
that San Bernardino Economic Development Council will fully
comply with limitations on appropriate use of Community
Development Block Grant funds as imposed by federal regulations.
I HEREBY CERTIFY that the foregoing resolution was duly
adopted by the Mayor and Common Council of the City of San
Bernardino at a
day of
meeting thereof, held on the
, 1986, by the following vote, to
wit:
/ / / /
/ / / /
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AYES:
Council Members
NAYS:
ABSENT:
City Clerk
The foregoing resolution is hereby approved this
day
of
, 1986.
Mayor of the City of San Bernardino
Approved as to form:
tfZyi/J.t;tt:?~
City Attorney
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\' THE FUTURE HOME OF
PROGRESSIVE MORTGAGE CORP.
1256 W. Baseline St.
San Bernardino, CA 92411
,
INTER-OFFICE MEMORANDUM
TO . Ken Henderson, RDA
.
FROM . Sam Henley, EDC $~
.
SUBJECT : Progressive Mortgage Corporation Loan Request
DATE : January 30, 1986
Reference our telephone conversation January 30, 1986 concerning
the status of Mr. Harry Jacks loan request.
The following is a summary of the activity on this loan request:
Oct. 4, 1985
EDC received Loan Package. Request for
$78,942 to relocate business from 409 W.
6th Street to 1256 W. Baseline. Figure
included cost to acquire new site and re-
habilitate and equip new site office. Re-
quest was for a $62,942 grant and a $16,000
operating capital loan.
Oct. 4, 1985
EDC referred loan package to loan committee.
Oct. 8, 1985
EDC Executive Committee Review. Mr. & Mrs.
Jacks attended meeting.
Oct. 14, 1985
EDC letter to Mr. Jacks requesting additional
Tax Statements. Informed Mr. Jacks grant
request for $68,000 will be forwarded to RDA.
EDC can only consider $16,000 operating
capital loan request.
Nov. 4, 1985
Requested information received from Mr. Jacks.
Nov. 5, 1985
Additional information referred for Loan
Committee review.
Nov. 26, 1985
EDC Executive Committee review. Tabled decision
on $16,000 loan request until outcome of grant
request is known.
Jan. 8, 1986
Mr. Jacks submits revised loan request to EDC
for $41,200 (includes $20,000 operating capital
loan).
Mr. Jacks also submitted a $26,800 rehabilitation
loan request to RDA at this time.
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Jan. 16, 1986
Letter from Mr. Jacks to Ken Henderson, ROA,
informs him Progressive Mortgage- cannot service
the debt on the rehab loan when Davis-Bacon wage
formula is used.
EDC receives letter from Mr. Jacks, revising
loan amount to $27,314.
Jan. 17, 1986
ROA, Ken Henderson, indicates CDBG money, in the
amount of the request, could be transferred to
EDC if EDC was willing to fund the loan request
with unrestricted money.
Jan. 28, 1986
EDC Executive Committee approves a loan of
$27,413 to Progressive Mortgage Inc. pending
RDA transfer of $27,314 of ODBG funds to EDe.