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Home My WebLink AboutR26-Economic Development CITY OF SAN BERNARDINO ECONOMIC DEVELOPMENT AGENCY ORIGINAL FROM: Emil A. Marzullo Interim Executive Director SUBJECT: Maya Cinemas North America, Inc. Amendment No.1 to the 2008 Disposition and Development Agreement (Central City North Redevelopment Project Area) DATE: May 12, 2009 __________________.__.________________________________________________._n______________________________.__._____________________________.____________________________._____________________________.______________ Svnopsis of Previons Commission/Council/Committee Action!s): On October 20, 2008, the Community Development Commission of the City of San Bernardino ("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"). 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 2008 Disposition and Development Agreement (DDA) by and between the Agency and Maya. On February 2, 2009, the Council authorized the submittal ofa HUD Section 108 Loan Application to the U.S. Department of Housing and Urban Development ("HUD"), and on March 6, 2009, the Community Development Citizen Advisory Committee recommended to forward the Pre. Application for the HUD Loan Guarantee for the re.finance and rehabilitation Project to the Council for approval. On April 6, 2009, in a Public Hearing, the Council approved and authorized the submittal of the HUD Loan Guarantee application for Maya to HUD. Recommended Motion!s): (Communitv Develonment 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. I to the 2008 Disposition and Development Agreement by and between the Agency and Maya Cinemas North America, Inc., (Central City North Redevelopment Project Area) Contact Person(s): Colin Strange Central City North Redevelopment Project Area Phone: (909) 663.1044 Project Area(s): Supporting Data Attached: Ward(s): o Staff Report 0Resolution(s) 0 Agreement(s)/Contract(s) 0 Map(s) 0 Letter(s) Funding Requirements: Amount: $ .0. Source: N/A Budget Authority: N/A Fiscal Review: Ruo;S Inte . es Director ~ Signature: Emil A. Marzullo, Imerlm utive Director /, - --c;;.;;;;;;i~sion/c.o-;;n~iiN;;.tes.:...mmn..s:;}m--(?.J~7.;iC0.9..:.;:QO__...mmm.............mmmm.m__mmm..mm.......____mm.mm --_._------------------~~--------------~-~--~--------------------~--~--~-------------------~------------------------~~-~--~--~----------------------------~-----~-~--~----~----------------------- COMMISSION MEETING AGENDA Meeting Date: 05/18/2009 Agenda Item Number: m(l.2J.P P:\A.gendas\Comm Dev CommissionlCOC 2009\05-18-09 Maya Cinemas - Amendment No. I to DDA SR.doe ECONOMIC DEVELOPMENT AGENCY STAFF REPORT MAYA CINEMAS NORTH AMERICA, INC. - AMENDMENT NO.1 TO THE 2008 DISPOSITION AND DEVELOPMENT AGREEMENT (CENTRAL CITY NORTH REDEVELOPMENT PROJECT AREA) BACKGROUND: On September 28, 2008, CinemaStar Luxury Theaters, Inc. ("CinemaStar"), the tenant of the Redevelopment Agency of the City of San Bernardino ("Agency") owned the 20-Plex movie theater building (the "20-Plex") located at 450 North "E" Street in downtown San Bernardino, ceased operations. On November 7, 2008, the Agency filed an unlawful detainer action with the Superior Court of California which held CinemaStar to be in default ofthe terms of their lease, declared the lease to be terminated and granted possession of the 20-Plex to the Agency as of December 1,2008. On October 20, 2008, the Community Development Commission of the City of San Bernardino ("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"). On December 15, 2008, the Mayor and Common Council of the City of San Bernardino ("Council") consented to the disposition ofthe 20-Plex to Maya and the Commission approved the sale of the 20-Plex and authorized the Interim Executive Director of the Agency to execute the 2008 Disposition and Development Agreement ("DDA") by and between the Agency and Maya. On February 2, 2009, the Council authorized the submittal of a HUD Section 108 Loan Application to the U.S. Department of Housing and Urban Development ("HUD"), and on March 6, 2009, the Community Development Citizen Advisory Committee recommended to forward the Pre-Application for the HUD Loan Guarantee for the re-finance and rehabilitation Project to the Council for approval. On April 6, 2009, in a Public Hearing the Council approved and authorized the submittal of the HUD Loan Guarantee application for Maya to HUD and the application has been submitted to HUD and is currently under review by HUD. CURRENT ISSUE: Section 2.03(g) of the DDA states that escrow shall close for the transfer of the 20-Plex which is referred to as the Phase I Property in the DDA no later than July I, 2009. Unfortunately, the court actions to gain possession of the 20-Plex from the previous tenant, and then the subsequent court action to gain possession of the furniture, fixtures and equipment, took approximately two months longer than anticipated. The new purchaser was unwilling to commence loan negotiations without secure knowledge that the building and its contents were legally in the possession of the Agency. These delays have also delayed the commencement date of the public notice period for the HUD loan application resulting in the loan application only being submitted at the beginning of April, 2009. In addition, the current financial ________________________________u._______________._______________.__________________________________________._____------------.....-------------------...--.----------------------------------------------------- P\Agendas\Comm Dev CommissionlCDC 2009\05-18-09 Maya Cinemas - Amendment No. ] to DDA SRdoe COMMISSION MEETING AGENDA Meeting Date: 05/18/2009 Agenda Item Number: (l1.C9 Economic Development Agency Staff Report Maya Cinemas - Amendment NO.1 Page 2 climate has also made obtaining financing more complex with lenders being more cautious. Agency staff is now anticipating an even longer review period by HUD. Amendment No.1 to the DDA would extend the close of escrow to October 31, 2009, and the date for completion of Phase I and Phase IA to December 31,2009, and all other terms and conditions of the DDA will remain the same. ENVIRONMENTAL IMP ACT: The action of amending a Disposition and Development Agreement does not meet the definition of a Project under Section 15378 of the California Environmental Quality Act ("CEQA"), which states that a "Project" means the whole of an action, which has a potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment. FISCAL IMP ACT: Approval of Amendment No. I to the DDA will have no further fiscal impact upon the Agency. RECOMMENDATION: That the Community Development Commission adopt the attached Resolution. ~. ~2~ Emil A. Marzullo, Interim Executive Director P\AgendaslComm Dev Commission\CDC 2009\05_18_09 Maya Cinemas - Amendment No Ito DDA SR. doc COMMISSION MEETING AGENDA Meeting Date: 05/18/2009 Agenda Item Number: -11..211 I 2 3 4 5 6 7 8 , l (C(Q)[P~ RESOLUTION NO. 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. 1 TO THE 2008 DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN THE AGENCY AND MAYA CINEMAS NORTH AMERICA, INC., (CENTRAL CITY NORTH REDEVELOPMENT PROJECT AREA) 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 Bernardino 10 (the "Agency"); and 11 WHEREAS, on December 15, 2008, the Commission approved a 2008 Disposition and 12 Development Agreement ("Agreement") by and between the Agency and Maya Cinemas North 13 America, Inc., a Delaware Corporation (the "Developer"), and authorized the Interim Executive 14 Director of the Agency to execute the Agreement relating to the sale and development of the 20- 15 Plex Cinema building located at 450 North "E" Street and referred to as Assessor's Parcel Nwnbers: 16 0134-131-24, 25, 26, 27, 28 (the "Property") and made certain findings thereto related to the 17 development of the Property; and 18 WHEREAS, the Developer has performed diligently in order to carry out and submit all 19 required documentation, as called out in the Agreement in a timely manner; and 20 WHEREAS, the Developer has experienced unforeseen delays caused by certain time 21 constraints involved in obtaining financing from the U.S. Department of Housing and Urban 22 Development ("HUD"); and 23 WHEREAS, the action of amending a Disposition and Development Agreement does not 24 meet thedefinition ofa "Project" under Section 15378 of the California Environmental Quality Act 25 "CEQA") which states that a "Project" means the whole of an action, which has a potential for 26 resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect 27 physical change in the environment; and 28 P\Agendas\Re:solulionslResolul;ons\2009\05_18_09 Maya Cinemas - Arnenrlmelll No I CDC Re<;o doc 1 WHEREAS, it IS appropriate for the Commission to approve Amendment No.1 to the 2 Agreement. 3 NOW, THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION OF THE 4 CITY OF SAN BERNARDINO DOES HEREBY RESOLVE, DETERMINE AND ORDER, AS 5 FOLLOWS: 6 Section 1. The Commission hereby approves the attached Amendment No. I in the form 7 presented at the meeting at which this Resolution is adopted and as attached to this Resolution as 8 Exhibit "A" and incorporated herein by reference. The Interim Executive Director of the Agency is 9 hereby authorized and directed to execute Amendment No. I on behalf of the Agency, together with 10 such technical and conforming changes as may be recommended by the Executive Director of the 11 Agency and approved by the Agency Counsel. 12 Section 2. 13 Commission. 14 /1/ 15 1// 16 1// 17 1// 18 /1/ 19 /1/ 20 1// 21 /1/ 22 1// 23 1// 24 /1/ 25 1// 26 1// 27 28 This Resolution shall take effect from and after its date of adoption by this 2 P\Agendas\Rcsolutions\ResoJulions\2009\05_18_09 Maya Cinemas - Amendment No I CDC Resodoc 1 2 3 4 5 6 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. 1 TO THE 2008 DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN THE AGENCY AND MAYA CINEMAS NORTH AMERICA, INC., (CENTRAL CITY NORTH REDEVELOPMENT PROJECT AREA) I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Community 7 Development Commission of the City of San Bernardino at a 8 thereof, held on the day of 9 Commission Members: Aves 10 ESTRADA 11 BAXTER 12 BRINKER 13 SHORETT 14 KELLEY 15 JOHNSON 16 MC CAMMACK 17 The foregoing Resolution is hereby approved this 20 21 22 23 24 18 19 25 meeting , 2009, by the following vote to wit: Navs Abstain Absent Secretary day of ,2009. Patrick J. Morris, Chairperson Community Development Commission of the City of San Bernardino Approved as to Form: 26 ~ 27BY:\~ ~Agency C sel 28 ., EXHIBIT "A" 1 Amendment No.1 to DDA 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4 AMENDMENT NO.1 TO THE 2008 DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO AND MAYA CINEMAS NORTH AMERICA, INC. This Amendment No. I (this "Amendment") is dated as of May 18,2009, by and between the Redevelopment Agency of the City of San Bernardino, a public body, corporate and politic (the "Agency"), and Maya Cinemas North America, Inc., a Delaware corporation (the "Developer"), and is an amendment to the 2008 Disposition and Development Agreement (the "Agreement") by and between the Agency and the Developer dated December 15,2008. The Agreement is for the purchase and sale of Agency owned property generally located at 450 North "E" Street and referred to as Assessor's Parcel Numbers: 0134-131-24, 25, 26, 27, 28 (the "Property") in the Central City North Redevelopment Project Area. This Amendment is entered into in light of the facts set forth in the following Recital Paragraphs. RECITALS 1. The Redevelopment Plan for the Central City North Redevelopment Project ("Redevelopment Plan") provides for the purchase and redevelopment of property by private parties such as the Developer. The Property and certain adjoining parcels are part of the redevelopment project area included within the scope of the Redevelopment Plan adopted for purposes of, and with the intent to, revitalize and redevelop areas that are adversely affected by blight. 2. The Agency and the Developer desire to redevelop the Property as a 20 screen cinema complex to include an I-Max screen, enhanced decor, furniture and fixtures and digital audio-visual capabilities to the auditoriums (the "Project"). 3. The Agency and the Developer seek to make certain modifications to the Agreement in order to adjust certain dates, as set forth in the Agreement, based upon updated information received from outside entities responsible for financing the Project. NOW, THEREFORE, THE AGENCY AND THE DEVELOPER AMEND THE AGREEMENT AS FOLLOWS: I. Section 2.03(g) entitled "Opening and Closing of Escrow" shall be amended by changing the date of July 1,2009, to read October 30, 2009. 2. Section 3.01(5) entitled "Development of the Project by the Developer" shall be amended by changing the date of July 1,2009, to read December 31, 2009. P\Agenda~\Agendil"'lIachmenls\Agenda AnaehmenlS\Agenda Attachmenls\AgrmlS-Amend 2009\05-18-09 Maya Cinemas - Amendmenl No I doc 3. All other terms and conditions shall remain the same as are presently set forth in the Agreement; provided, however, that the parties recognize that there are other items contained in the Agreement that should be addressed in extensive detail at the time of approval of the HUD Section 108 loan financing with respect to the development plan for the Phase IA.Parcel, the Phase 11 Parcel and the Phase 111 Parcel, including required updates to the Schedule of Performance. 4. This Amendment may be executed in any number of counterparts, each of which shall constitute an original and all of which shall constitute but one and the same document, and this Amendment shall take effect from and after the date of execution and delivery by the Agency and the Developer of this Amendment. IN WITNESS WHEREOF, the parties have signed this Amendment as of the date first set forth 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 and Legal Content: By: \~/,~Ml_ Agency C~ DEVELOPER Maya Cinemas North America, Inc. a Delaware corporation By: Title: 2 P \Agendas\Agenda Anach'oents\Agenda Allachmenls\Agenda Attaehments\Allrmts-Arnelld 2009\05-18-09 Maya Cinemas _ Amendment No. I doe