HomeMy WebLinkAboutR03-Redevelopment Agency
RF~EVELOPMENT AGENCY.r""1QUEST FOR,~OMMISSION/COUNCIL .r;ION
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From:
Glenda Saul, Executive Director
Subject:
ROGER HARMON MOTORS - REVISION to
LOAN AGREEMENT
~~pt: Redevelopment Agency
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'uste:
November 10, 1986
Synopsis of Previous Commission/Council action:
12-16-85
6-2-86
6-21-86
9-2-86
9-22-86
Central City South Study Team designated.
Resolution #4888, Agreement with URS to develop Overlay Zone.
Council Workshop - Overlay Zone.
Council Workshop - Overlay Zone
Resolution 4933 approved Loan Agreement with Roger Harmong Motors
Recommended motion:
(COMMUNITY DEVELOPMENT COMMISSION)
MOVE TO ADOPT RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN
BERNARDIO AUTHORIZING AND DIRECTING THE EXECUTION OF A LOAN AGREEMENT BETWEEN THE
REDEVELOPHENT AGENCY OF THE CITY OF SAN BERNARDINO AND ROGER HARMON MOTORS, INC.,
THOMAS J. HARMON AND ROGER P. HARMON; AND REPEALING RESOLUTION NO. 4933.
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Signature
Contact person:
Glenda Saul or Sandy Lowder
Phone: 383.5081
Supporting data attached:
YES
Ward:
1
FUNDING REQUIREMENTS:
Amount: $
300,000
Project: CCS
No edverse I mpact on City:
Date:
11-17-86
Council Notes:
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Agenda
Item No. _R :3
\
, CI{:t OF SAN BERNARDQO - REQULT FOR COUNCIL AC'~N
STAFF REPORT
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Staff and Redevelopment Committee are recommending an amendment to the Loan
Agreement approved on September 22, 1986 for Roger Harmon Motors.
BACItGROUND
On September 22, 1986 the Commission approved a loan Agreement with Roger Harmon
Motors to assist them in their relocation to the new Auto Plaza and to further the
objectives of the Central City South Overlay Zone. The loan agreement provides
that Harmon would not renew his existing lease on "E" Street as well as their
right to purchase the leased premises.
The Loan Agreement approved September 22, 1986 has been reviewed by the attorney
for the Harmons, Phillip M. Savage. Mr. Savage has requested that an additional
paragraph be inserted in the agreement as follows:
"9. All Commitments and obligations set forth in this agreement are to take place
and become effective upon close of escrow. Escrow is to close on or before July
31, 19a7, or all rights and obligations under this agreement shall be of no
further force and effect."
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The modification is required by their attorney to cover the period between the
execution of the agreement and the date of the construction loan for the
improvement at the Auto Plaza. The inclusion of this language will allow the
Harmons to remain at their current location (extending the lease) until they are
ready to move to their new location.
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AGREEMENT
Al Briggs has redrafted the loan agreement to include the above mentioned
paragraph 9.
Below is a summary of the agreement for your easy reference:
Agency Oblication
Lend to Roger Harmon Motors, Inc.
$300,000
Terms:
12.5% interest amortized 10 years monthly payments.
Third Trust Deed on New site.
equivalent sewer capacity rights for total purchase
price of
Security:
Sell 8.55
$19,323.
Harmon Obligation
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Develop two dealerships in San Bernardino Auto Plaza.
Execute promissory note secured by trust deed in new sites.
Purchase 8.55 equivalent sewer capacity rights.
Provide to Agency assurance that it will not exercise its options to
renew its present lease on "E" Street after such time as they have
relocated to their new site.
0598R
71-0264
0598R/SL
11-17-86
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DONALD "', .lORD.""
JOHN II.LONERQAN
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TEUCOPIEJi
(714j 888-eJiO
October 23, 1986
Mr. John Hager
Redevelopment Agency of the
City of San Bernardino
300 North -D- street
Ban Bernardino, california 92401
Re: Roger Harmon Motors, Inc.
Dear John:
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EnClosed please find a copy of the Loan Agreement
designed for being entered into by and between the Redevelopment
Agency of the City of San Bernardino and Roger Harmon Motors,
Inc. Agency counsel, Allen R. Briggs, and I have discussed this
agreement, and we both concur that a modification should be made.
Accordingly, it is requested that the following paragraph be
added to said agreement:
9. All commitments and obligations set
forth in this agreement ar~ to take place an~
become @ffective uoon cln~~ ~~ ~~~rnw. ~SC[OW is
to close on or before July 31, 1987, or all rights
and obligations under this agreement shall be of
no further force or effect.
If there are any questions or concerns about this, please
let me know.
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eel Mr. Allen R. Briggs
Roger Harmon Motors, Inc.
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RESOLUTION NO.
RESOLUTION OF THE COM~UNITY DEVELOPMENT COMMISSION OF THE
CITY OF SAN BERNARDINO AUTHORIZING AND DIRECTING THE EXECUTION OF
A LOAN AGREEMENT BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF
SAN BERNARDINO AND ROGER HARMON MOTORS, INC., THOMAS J. HARMON
AND ROGER P. HARMON; AND REPEALING RESOLUTION NO. 4933.
BE IT RESOLVED BY THE COMMUNITY DEVELOPMENT COMMISSION OF
THE CITY OF SAN BERNARDINO AS FOLLOWS:
SECTION 1. The Chairman and Secretary of the Community
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Development Commission of the City of San Bernardino are hereby
authorized and directed to execute for and on behalf of the
Redevelopment Agency of the City of San Bernardino a Loan
Agreement between the Redevelopment Agency of the City of San
Bernardino and Roger Harmon Motors, Inc., Thomas J. Harmon and
Roger P. Harmon, with such non-substantive changes to said
Agreement as may be approved by the Chairman and Agency Counsel.
A copy of said Agreement is attached hereto as Exhibit ftlft and
incorporated herein by this reference as though fully set forth
at length.
SECTION 2. Resolution No. 4933 is hereby repealed.
Dated:
Approved as to form:
AGENCY COUNSEL
BY~~~~
Allen R. Briggs
The foregoing resolution was duly adopted by the following
vote, to wit:
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AYES:
NAYS:
ABSENT or
ABSTAIN:
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LOAN AGREEMENT
THIS AGREEMENT, effective the
day of
, 1986, by and between ROGER HARMON MOTORS, INC.,
and THOMAS J. HARMON and ROGER P. HA&~ON, individually,
hereinafter collectively "Harmon's", and the REDEVELOPMENT AGENCY
OF THE CITY OF SAN BERNARDINO, CALIFORNIA, hereinafter "Agency"
sets forth the terms of a Loan Agreement between the parties
hereto.
RECITALS
A. Harmon's is presently occupying a site located on South
"E" Street, sometimes identified as 240-280 South "E" Street, in
the City of San Bernardino, which site located in the area
proposed for development in the Central City South Study Area.
B. Harmon's presently operates new vehicle dealerships for
selling Pontiac automobiles, as well as AMC, Jeep, and Renault
motor vehicles, on the site. Portions of Harmon's site are
leased by Harmon's from Bank of America National Trust and
Savings Association as Trustee, and another portion is leased by
Harmon's from the City of San Bernardino. Combined, Harmon's
leasehold represents approximately 709 feet of frontage on the
west side of "E" Street.
C. The site presently occupied by Harmon's is considered by
the Agency to be a vital part of the redevelopment of the Central
City South Study Area, presently being pursued by Agency. Agency
is convinced that a higher and more intensive use of this
property will be of great benefit to the overall development of
the Central City South Study Area, and Agency considers it of
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great importance that this site be freed up and made available
for such higher and more intensive use. Harmon's is willing to
agree not to exercise its right to renew the leases presently in
existence on its property from Bank of America National Trust and
Savings Association, as Trustee, and agrees to surrender to the
City of San Bernardino or assign its interest in the lease with
the City of San Bernardino to the Agency, whichever the Agency
prefers, upon Harmon's occupancy of two new sites to be obtained
by Harmon's in the Orange Show Plaza Auto Center.
D. Harmon's desires to obtain and develop two sites for
dealerships in the Orange Show Plaza Auto Center, being
established in the Southeast Industrial Park Project Area,
provided the Agency makes available to Harmon's a loan of
$300,000.00. Such funds are needed by Harmon's to purchase the
property and to complete the development of two separate
dealerships thereon.
E. Harmon's relocation into two separate dealerships in the
Orange Show Plaza Auto Center will be of significant benefit to
the Agency and to the City of San Bernardino, and will help
assure the success of the Orange Show Plaza Auto Center.
F. Harmon's represents that it is unable to relocate its
facility to the Orange Show Plaza Auto Center without financial
assistance in the amount of approximately $300,000.00, which
Agency proposes to loan to Harmon Motors on terms specified
hereinafter.
G. Harmon's also requires sewer capacity rights for the
development, which Agency is willing to sell to Harmon Motors
from its allotment.
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IMPLEMENTATION
1. The Agency agrees to loan to Harmon's through escrow on
purchase of two dealership sites in the Orange Show Plaza Auto
Center the sum of $300,000.00, to be repaid over a period of ten
(10) years and to bear interest at the rate of 12.5% per annum.
The loan shall be fully amortized by monthly payments over 120
months and secured by a third deed of trust, to be subordinate to
the first deed of trust being taken by the bank providing primary
financing, and a second deed of trust in favor of United States
of America, acting through the Small Business Administration.
2. Agency further agrees to sell to Barmon's those sewer
capacity rights required by Harmon's for establishment of the two
dealerships in the Orange Show Plaza Auto Center, estimated at
4.72 equivalent dwelling units of sewer capacity rights for one
dealership, and 3.83 equivalent dwelling units of sewer capacity
rights for the other dealership, comprising a total of 8.55
equivalent dwelling units of sewer capacity rights. The price
for such rights is $19,323.00, based upon the rate of $2,260.00
per equivalent dwelling unit of capacity, being the price
presently charged by the City for such rights as it has
available. The $19,323.00 for the 8.55 equivalent dwelling units
of sewer capacity rights shall be deducted from the loan proceeds
made hereunder, or paid in cash by Harmon's to Agency, at
Harmon's option.
3. Harmon's agrees to execute and deliver to Agency through
escrow a promissory note secured by a trust deed shall be
subordinate to the security interests of the Bank which will be
providing the primary financing to Harmon's, and also subordinate
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I to the interests of the United States of America, acting through
2 the Small Business Administration. The promissory note and trust
3 deed shall be in form approved by Agency Counsel.
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4. Harmon's agrees to purchase 8.55 equivalent dwelling
5 units of sewer capacity rights from Agency, at the rate of
6 $2,260.00 per equivalent dwelling unit, for a total price of
7 $19,323.00.
8 5. Harmon's further agrees to provide the Agency, in a form
9 approved by Agency Counsel, an assurance that it will not
10 exercise its options to renew its present leases on the property
I] located on South "E" Street, in the City of San Bernardino, which
]2 leases are presently outstanding from Bank of America Trust and
]3 Savings Association, as Trustee, as lessor, with Roger Harmon
]4 Motors, Inc., as lessee. The assurance shall further provide
]5 that Harmon's shall not operate any business on its present site,
]6 identified as 240-280 South "E" Street in the City of San
]7 Bernardino, or on any of the property presently occupied by it at
]8 that location, after the Orange Show Plaza Auto Center site is
]9 available for development, and after such time as Harmon's has
20 had reasonable time to develop automobile dealerships thereon.
21 6. Harmon's further agrees to terminate and surrender to
22 the City, or assign to the Agency, any and all right, title, or
23 interest which Harmon's may have in and to a lease of certain
24 property on the west side of "E" Street, north of the westerly
25 extension of Athol Street, which lease was amended on the 20th
26 day of December, 1984, extending the term for a period of thirty
27 (30) years ending December 31, 2014. Harmon's agrees to exec~te
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10 the benefit of any such separate entity or entities, but that, in
11 any event, Roger Barmon Motors, Inc., and Thomas J. Barmon and
12 Roger P. Barmon, individually, shall execute the promissory note,
13 and that the deed of trust shall be executed by the entity taking
14 ownership of the real estate. If the entity taking title to the
15 real estate is different from Roger Barmon Motors, Inc., any
16 entity so taking title shall also execute the promissory note.
17 8. This Agreement shall be effective only in the event that
18 it is executed by Barmon's and returned to the Redevelopment
19 Agency of the City of San Bernardino within ten (10) days from
20 the date of receipt of this Agreement for execution by Harmon's
2] from the Redevelopment Agency.
22 9. All commitments and obligations set forth in this
23 Agreement are to take place and become effective upon close of
24 escrow. Escrow is to close on or before July 31, 1987, or all
25 rights and obligations under this Agreement shall be of no
26 further force or effect.
27 IN WITNESS WHEREOF, the parties hereto have executed this
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therein to the Agency, in form approved by Agency Counsel, to be
effective as of the date that Harmon's commences operations in
the Orange Show Plaza Auto Center.
Such document shall be
delivered to Agency through the escrow provided for hereinabove.
7. The parties acknowledge that Harmon's may create one or
6 more entities separate from Roger Harmon Motors, Inc., to assume
7 the ownership of the land, or the ownership and operation of the
8 dealerships in the Orange Show Plaza Center or some combination
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thereof.
The parties agree that this Agreement shall inure to
~ 28 Agreement on the day and year first written above.
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