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HomeMy WebLinkAboutR30- Economic Development ECONOMIC DEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO FROM: Ron Winkler,Director SUBJECT: 303 WEST THIRD-HUD 108 APPLICATION DATE: March 13,2000 ORI u I NAL - ----------- ---------------------------------_-------- ------ Synopsis of Previous Commission/Council/Committee Action(s): January 10,2000-The Common Council approved processing of an application for a Section 108 guaranteed loan for 303 West Third Street in the amount of$1,840,000. --------------------------------------------------------------------------------------------------------------------------------- Recommended Motion(s): OPEN PUBLIC HEARING CLOSE PUBLIC HEARING (Mayor and Common Council) MOTION: Affirm the circulated Proposed Application Under Section 108 of the Housing and Community Development Act(303 West Third-City of San Bernardino)and direct the filing of a Final Application that conforms to the circulated Proposed Application. Contact Person(s): Gary Van OsdeURon Winkler Phone: 663-1044 Project Area(s) Central City Ward(s): First Supporting Data Attached: ®Staff Report O Resolution(s) 13 Agreement(s)/Contract(s) 0 Map(s) 0 I.etter/Memo FUNDING REQUIREMENTS Amount: S None Source: n/a Budget Authority: n/a SIGNATURE: 4no Osdel,Exe:tiv ' eetor on Wits r,Director Development envy / Commission/Council Notes: ---- ----�--- -- ----------------------------------------------------'----__------------------—-----—----------- GVO:JBH:Iag:BRNK 00-0320 CDC agenda item.doc COMMISSION MEETING AGENDA Meeting Date: 03/20/2000 #930 ECONOMIC DEVELOPMENT AGENCY STAFF REPORT ----------------------------------------------------------------------------------------------------- 303 WEST THIRD- HUD 108 Application BACKGROUND Processing a HUD 108 loan application requires advertising the proposed application in a newspaper of general publication and holding a public hearing at which comments can be received from citizens. The attached notice has been advertised in the San Bernardino County Sun. Additionally, Staff has forwarded copies to obtain comments from HUD staff in Los Angeles and from Scott Rodde with the National Development Council. In addition to the text of the proposed application, the Final Application will contain the certifications and financial analysis that are attached following the advertisement text. CURRENT ISSUE Upon completion of the public hearing,the Mayor and Common Council may decide to forward a Final Application that conforms with the circulated Proposed Application. Alternately, because of the public testimony, changes may be directed for the Final Application. FISCAL IMPACT There is no fiscal impact from filing an Application. There can be no Council approval to execute loan documents until after all environmental work is completed (this will require both State CEQA and Federal NEPA clearances). At this time, the developer has elected to not proceed with environmental work until after more progress has been made in obtaining leases. RECOMMENDATION Staff recommends adoption of the form motion approving the form of the Final Application. on Wit'1 er, Director Development Department ------------------------------ --------------- -- — — — – – GVO:JBH:Iag:BRNK 00-0320 CDC agenda item.doc COMMISSION MEETING AGENDA Meeting Date: 03/20/2000 * RM NOTICE OF PUBLIC HEARING AND PROPOSED APPLICATION UNDER SECTION 108 OF THE HOUSING AND COMMUNITY DEVELOPMENT ACT (303 WEST THIRD - CITY OF SAN BERNARDINO) NOTICE IS HEREBY GIVEN that a public hearing will be held by the Mayor and Common Council of the City of San Bernardino regarding the following proposed application for loan guarantee assistance for the 303 WEST THIRD office building project under Section 108 of the Federal Housing and Community Development Act of 1974, as amended (Title 24). THE PUBLIC HEARING will be held at the following time and place: 2:00 p.m. on Monday, March 20, 2000 City Hall Council Chambers 300 North D Street San Bernardino, California Citizens may submit written comments before the hearing and may appear at the meeting to make oral comments. Written comments should be addressed to the applicant below. PROPOSED APPLICATION FOR HUD SECTION 108 LOAN GUARANTEE Section 108 of Title 24 of the Code of Federal Regulations authorizes a program of community development loan guarantee assistance (Section 108 financing). Under this program, the Housing and Urban Development Department (HUD) provides cities that receive entitlement grants with front-end financing for large community and economic development projects that cannot be financed from annual grants. Current and future annual grants are pledged as security for the Section 108 financing. As with all Community Development Block Grant (CDBG) program activities, the projects funded with Section 108 financing must either principally benefit low-moderate income persons, aid in the elimination or prevention of slums and blight, or meet other community development needs having a particular urgency. Applicant: City of San Bernardino Economic Development Agency 201 North E Street, Third Floor San Bernardino CA 92401-1507 Attn: John Hoeger, Project Manager Tel 909 663-1044 Fax: 909 888-9413 Project Name and Location: The 303 West Third Street Office Building (303 WEST THIRD) project is located on the southwest comer of Third Street and Arrowhead Avenue in the City of San Bernardino, California. The project also includes an auxiliary parking lot area located 600 feet southeasterly of the building on Second Street east of Arrowhead Avenue. Project Description: 303 WEST THIRD involve the acquisition, remediation, renovation and reuse of an empty, 77,165 square foot, six-story office building now owned by the State of California together with the acquisition and improvement of an auxiliary parking area to provide approximately 314 parking spaces. Remediation includes seismic strengthening, asbestos and lead removal or containment, and removal of underground hydrocarbon contamination. Renovation includes new mechanical, new interiors and new finishes throughout the building plus repair and replacement of parking lot improvements. Meeting the Community Development Objective: The project,when fiilly leased, should support approximately 200 employees, 51% or more of which will be members of low and moderate income households. Eligible Activity: As referenced in section 570.703(I)(1), this activity qualifies under section 570.203(6) as a Special Economic Development Activity based upon it resulting public benefits. This provision of assistance to a for-profit developer is based upon the City's determination that the assistance is both necessary and appropriate to create jobs for low and moderate- income residents in the City. Loan Request: Section 108 financing is requested in the amount of$1,840,000 for a term of 20 years. Other sources of financing for the project include the seller($700,000) and the developer ($135,000) and a private construction loan ($8,500,000). The Section 108 financing will be divided into two loans: Loan#1 for$1,340,000 and Loan #2 for 500,000. Loan Security (Collateral): The security for the Section 108 Financing will be first and second trust deeds on the building and parking lot properties plus personal guarantees of the principals and an A rated, irrevocable letter of credit. The letter of credit will be maintained until after construction is complete, a certificate of occupancy issued, and 95% of the net rentable space is leased to tenants who have commenced payment of monthly rent. The Section 108 Financing may be subordinated to a construction loan of no more than $8,500,000. Under section 570.705(b)(2)the City will pledge all grants made or for which it may become eligible under the CDBG Entitlement Program. Program Income: This project is not expected to produce program income other than that which results from payment of principal and interest on the loans. The loan interest rate will be the rate for like maturity Treasuries plus ''/percentage point. Additional Information: Additional information may be obtained by contacting the applicant at the address and telephone number given above. Application for Federal Assistance GR®'pp1Dna1 No. 0318-0043 2.Data Submiaed(mm/dd/yyyy) AWlicentldanatier S-99-MC-OMS39 1.Type of Submission 3.Data Received by State(mm/dd/yyyy) State Application derider Application Pre-appllcrtlon © Construction Construction 4.Dale Received by Federal Agency(mMdd/yyW) Federal ltlentRw Non-Construction Non-Construction S.Appgwnllnformaaon Legal Name Organizational Un t City of San Semardino Economic Development Agency Address (gon,cdy county,Mate,and zip code) Name and telephone number of the parsonbbe contacted anmallars involving mb 201 North"E"Street,State 301 application(give area code) San Bernardino CA 92401-1507 Ron Winkler,Development Manager (909)663-2772 6.Employer Identification Nupber(EIN)hat-yyyyyyy) 7.Type of Applicant(enter appropriate letter in box) 95 — 6000772 A. State J. Private University 9.Type dApplkatlan: B. County K. Indian Tribe C. Municipal L. Individual Q New [-I Continuation E] Revision D. Township M.Profit Organization E. Interstate N Nonprofit If Revision,enter appropriate leker(s)In b0x(ea): F. Inter-municipal O Public Housing Agency G.Special District P. Other(Specify) A. Increase Award B.Decrease Award C.Increase Duration H. Independent School Dist. D.Decrease Duration Other(specify) I. State Controlled Institution of Higher Leming 9.Nam.of Federal Ag..y Department of Housing and Urban Development 10.Catalog of Federal Do,m W A.datence Number jxx-M) 11.Descriptive Tlik of Applkams Project 14 — 216 HUD Section 108 Guaranteed Loan Title: (303 West Third Rehabilitation) Community Development Block Grant 12.Ana.Aeected by Pnj.M(citi a,coun6u,Slain,ek.) City of San Bernardino 13.Proposed Project 14.Congreuanal Dlstrkisof Start Dale(mrWdd/yyyy) I Ending Date(mnVddlyyyy) a.Applkant b.Projetl 08/01/2000 0610112001 Thirty Sixth TMriy Sixth 15.Estimated Funding i6. Is Application Subject to Review by State Executive a. Federal $ 1,840,000 .00 Order 12372 Process? a. Yes This pre-application/application was made available to the b. Applicant $ 135,000 .00 State Executive Order 12372 Process for review on: c. State $ .00 Date(mm/dd/yyyy)________ d. Local $ 00 b. No ® Program Is not covered by E.O.12372 e. Other $ 700,000 .00 or ❑ Program has not been selected by State for review. f. Program Income $ 00 17. It the Applicant Delinquent on Any Federal Debt? Yes If'Yes' attach an explanation ® No g. Total $ 2,675,000 .00 18. To the best of my knowledge and belief, all data In this application/pre-application are true and correct, the document has been duly authorized by the governing body of the applicant anti the applicant will comply with the attached assurances if the assistance is awarded. a.Typed Name dAuthorized Representative b.Title C.Telephone Number(rncluds Area Code) Judith Valles Mayor 9093845133 d.Signature of Authonzed Representative ..Data signed(mrNddlyyyy) Previous Edition Usable form SF424(7/97) Authorized for Local Reproduction Prescribed by OMB Circular A-102 ATTACHMENT A: CERTIFICATIONS C LL..MJ W2-92-10m. 303 WEST THIRD—CERTIFICATIONS I hereby certify to the following items, which are attached hereto and made a part hereof: 1. Certification Regarding Drug-Free Workplace Requirements 2. Statement Regarding Lobbying 3. Certification of Legal Authority to Pledge Grants 4. Entitlement Public Entity Certifications 5. Certification of Efforts to Obtain Other Financing 6. Certification Regarding Debarment, Suspension and Other Responsibility Matters JUDITH VALLES,Mayor City of San Bernardino Date .4 SECTION 108 LOAN GUARANTEE CERTIFICATION REGARDING DRUG-FREE WORKPLACE REQUIREMENTS The certification set out below is a material representation upon which reliance is placed by the U.S. Department of Housing and Urban Development in awarding the loan guarantee assistance. If it is later determined that the public entity knowingly rendered a false certification, or otherwise violates the requirements of the Drug-Free Workplace Act, the U.S. Department of Housing and Urban Development, in addition to any other remedies available to the Federal government, may take action authorized under the Drug-free Workplace Act. CERTIFICATION A The public entity certifies that it will provide a drug-free workplace by: (a) Publishing a statement notifying employees that the unlawful manufacture, distribution, dispensing, possession or use of a controlled substance is prohibited in the public entity's workplace and specifying the actions that will be taken against employees for violation of such prohibition; (b) Establishing a drug-free awareness program to inform employees about- (1) The dangers of abuse in the workplace; (2) The public entity's policy of maintaining a drug-free workplace; (3) Any available drug counseling, rehabilitation, and employee assistance programs; and (4) The penalties that may be imposed upon employees for drug abuse violations occurring in the workplace; (c) Making it a requirement that each employee in the statement required by paragraph (a) that, as a condition of employment under the loan guarantee, the employee will - (1) Abide by the terms of the statement; and (2) Notify the employer of any criminal drug statute conviction for a violation occurring the workplace no later than five (5) days after such conviction; A: Certifications-Page 2 of 9 PLACE OF PERFORMANCE FOR CERTIFICATION REGARDING DRUG-FREE WORKPLACE Name of Public Entity: City of San Bernardino Program Name: Section 108 - 3a3 cj Err. rti nn Project Number: Date: The public entity shall insert in the space provided below the site(s) expected to be used for the performance of work under the assistance covered by the certification: Place of Performance (include street address, city, county, state, zip code for each site): '303 W 'i c4 Street San Bernardino. California 92401 A: Certifications -Page 3 of 9 SECTION 108 LOAN GUARANTEE STATEMENT REGARDING LOBBYING THE AFORESIGNED STATES, TO THE BEST OF HIS OR HER KNOWLEDGE AND BELIEF, THAT: If any funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or any employee of a Member of Congress in connection with this commitment providing for the United States to ensure or guarantee a loan, the aforesigned shall complete and submit Standard Form-LLL, "Disclosure Form to Report Lobbying", in accordance with its instructions. Submission of this statement is a prerequisite for making or entering into this transaction imposed by Section 1352, Title 31, U.S. Code. Any person who fails to file the required statement shall be subject to a civil penalty of not less than $10,000 and not more than $100,000 for each such failure. A: Certifications- Pave 4 of 9 SECTION 108 LOAN GUARANTEE CERTIFICATION OF LEGAL AUTHORITY TO PLEDGE GRANTS The public entity hereby certifies and assures with respect to its application for a loan guarantee pursuant to Section 108 of the Housing and Community Development Act of 1974, as amended, that it possesses the legal authority to make the pledge of grants required under 24 CFR Subsection 570.705(b)(2). A: Certifications-Pa¢e 5 of 9 4 SECTION 108 LOAN GUARANTEE ENTITLEMENT PUBLIC ENTITY CERTIFICATIONS In accordance with Section 108 of the Housing and Community Development Act of 1974, as amended, (the "ACV) and with 24 CFR Subsection 570.740(b) the public entity certifies that: (i) It possesses the legal authority to submit the application for assistance under 24 CFR Part 570, Subpart M ("Subpart M") and to use the guaranteed loan funds in accordance with the requirements of Subpart M. (ii) Its governing body has duly adopted passed as an official act a resolution, motion or similar action authorizing the person identified as the official representative of the public entity to submit the application and amendments thereto and all understandings and assurances contained therein, and directing and authorizing the person identified as the official representative of the public entity to act in connection with the application to provide such additional information as may be required. (iii) Before submission of its application to HUD, the public entity has: (A) Furnished citizens with information required by Subsection 570.704(a)(2)(i); (B) Held at least one public hearing to obtain the views of citizens on community development and housing needs; and (C) Prepared its application in accordance with Subsection 570.704(a)(1)(iv) and made the application available to the public. (iv) It is following a detailed citizen participation plan which meets the requirements described in Subsection 570.704(a)(2). (v) The public entity will affirmatively further fair housing, and the guaranteed loan funds will be administered in compliance with: (A) Title VI of the Civil Rights Act of 1964 (Pub. L. 88-352, 42 U.S.C. 2000d et seq.); and (B) The Fair Housing Act (42 U.S.C. 3601-20) (vi) In the aggregate, at least 70 percent of all CDBG funds, as defined at Subsection 570.3(e), to be expended during the one, two, or three consecutive years specified by the public entity for its CDBG program will be for activities which benefit low and moderate income persons, as described in criteria at Subsection 570.208(a). C LLm1\9L'N-T-IOae A: Certifications-Page 6 of 9 r (vii) It will comply with the requirements governing displacement, relocation, real property acquisition, and the replacement of low and moderate income housing described in Subsection 570.606. (viii) It will comply with the requirements of Subsection 570.200(c)(2) with regard to use of special assessments to recover the capital costs of activities assisted with guaranteed loan funds. (ix) It will comply with the other provisions of the Act and with other applicable laws. C YiuVAY'WM-IGas A: Certifications-Page 7 of 9 SECTION 108 LOAN GUARANTEE CERTIFICATION OF EFFORTS TO OBTAIN OTHER FINANCING The City of San Bernardino hereby assures and certifies with respect to its application for a loan guarantee pursuant to Section 108 of the Housing and Community Development Act of 1974, as amended, that it has made efforts to obtain financing for the activities described herein without the use of such guarantee, it will maintain documentation of such efforts for the term of the loan guarantee, and it cannot complete such financing consistent with time execution of the project without such guarantee. A: Certifications-Page 8 of 9 CERTIFICATION REGARDING DEBARMENT, SUSPENSION, AND OTHER RESPONSIBILITY MATTERS -- PRIMARY COVERED TRANSACTIONS (1) The prospective primary participant certifies to the best of its knowledge and belief, that it and its principals: (A) Are not presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from covered transactions by any Federal department or agency; (B) Have not within a three-year period preceding this proposal been convicted of or had a civil judgement rendered against them for commission of fraud or a criminal offense in connection with obtaining, attempting to obtain, or performing a public (Federal, State or local) transaction or contract under a public transaction; violation of Federal or State antitrust statutes or commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, or receiving stolen property; (C) Are not presently indicated for or otherwise criminally or civilly charged by a governmental entity (Federal, State or local) with commission of any of the offenses enumerated in paragraph (1)(b) of this certification; and (D) Have not within a three-year period preceding this application/proposal had one or more public transactions (Federal, State or local) terminated for cause or default. (2) Where the prospective primary participant is unable to certify to any of the statements in this certification, such prospective participant shall attach an explanation to this proposal. C LLioU4i[WAi-IOa� A: Certifications-Page 9 of 9 ATTACHMENT B: CITIZEN PARTICIPATION PLAN f .4 CITY OF SAN BERNARDINO CITIZEN PARTICIPATION PLAN T*"''RODUCTION AND POLICY STATEMENT It is the policy of the City of San Bernardino to provide for community involvement in the planning, development, implementation,monitoring and evaluation of programs funded under the Housing and Community Development Acts of 1974 and 1977, as amended, and the Cranston- Gonzales Act of 1990. "Me Citizen Participation Plan sets forth the procedures and guidelines to be implemented by the City to provide for the continuing participation by the citizens of San Bernardino. While the City desires and'recogaizes the need for citizen involvement, it is the City Council which has final determination and responsibility for all aspects of the City's Housing and Community Development Programs. This plan, originally adopted in 1975,may be amended from time to time by the City Council and shall remain in effect until superseded by a new plan or until the City no longer participates in the Housing and Community Development Block Grant Program,Home Investment Partnership Program, Emergency Shelter Grant Program, or other programs that pertain to the consolidated planning process as required by 24 CFR Parts 91,et.al. 'PURPOSE A summary of the primary objectives of the Participation Plan are provided below: 1. Ensure that citizens are informed of the amount of funds available under the Consolidated Plan,the range of activities that may be undertaken, as well as the various program requirements. 2 Provide for public hearings on community development and housing needs. 3. Provide citizens with adequate opportunities to participate in the development of the Consolidated Plan with any required changes,revisions,or amendments to the plan. 4. Provide technical assistance to citizens in developing specific proposals for funding consideration. 5. Provide an on-going process for citizens likely to be effected by program activities,to articulate needs,express preferences about proposed activities, assist in selecting priorities, and participate in the.overall development of the Consolidated Plan. 6. Provide a process through which citizen's may participate in the monitoring and evaluation of community development and housing activities. CPITLEN PARTICIPATION PLAN March 10, 1995 Page-2- 7. Provide a process whereby citizens may comment with respect to any aspect of the City's housing and community development performance and be assured that written comments will be considered and responded to in accordance with federal regulations. STANDARDS OF PARTICIPATION AD aspects of the City's citizens participation efforts shall be conducted in an open manner with freedom of access to all interested parties. The City encourages the involvement of all groups including lbw and very low income persons,particularly those living in slum/blighted areas, and in areas where CDBG funds are proposed to be used including non-english speaking persons, as well as persons with mobility,visual or hearing impairments,members of minority groups,the elderly, the disabled,the business community, civic groups and the community at large. While this plan describes a specific citizen's organization(Community Development Citizen Advisory Committee), it is not intend to exclude any individual citizen input. All the citizens of San Bernardino are encouraged to participate in every public meeting and to contact the Development Department with any questions concerning the process and the programs pertaining to the Consolidated Plan including the Community Development Block Grant Program,Home Investment Partnership Program,Emergency Shelter Grant Program, or any other applicable future programs. TECHNICAL ASSISTANCE To help facilitate citizen input,the City will provide technical assistance through its staff to the Community Development Citizen Advisory Committee as well as to groups representative of low, very low and extremely low income residents who may require such assistance in developing proposals for federal funding as required by federal regulations. Technical assistance may be provided by telephone,meetings, and workshops throughout the year. TIUBL.IC INFORMATION In order for citizens to become informed and involved in the Consolidated Plan process,the City will make available all relevant information including the following: L Material concerning the amount of funds available for proposed community development and housing activities and the range of activities that may be taken including the amount that will benefit the persons of low and very low income. CITIZEN PARTICIPATION PLAN March 16, 1995 Page-3- 2 Applicable regulations and guidelines governing all aspects of the program. 3. Prior applications,final statements and amendments,grant agreements,grantee performance reports, citizens participation plan and any other reports required by the U.S. Department of Housing and Urban Development (HUD). d. Documents regarding other important program requirements such as contracting procedures,environmental policies, fair housing and other equal opportunity requirements and relocation provisions. 5. Mailings and promotional materials. 6. Minutes of meetings and hearings. 7. Any other documents the City believes is necessary to the consolidated planning process. The summary of the proposed Consolidated Plan will be published in one or more newspapers of general circulation. The summary will provide the contents and the purpose of the Consolidated Plan and a list of locations where copies of the entire plan may be examined. Copies of the entire proposed plan will be available to the public at the Economic Development Agency office,City Hall,and at least three(3) City Libraries. A summary of comments regarding the proposed Consolidated Plan will be attached to the final Consolidated Plan. Q[TCRF.ACH The City will attempt to achieve its level of public participation by organizations and the community through actively soliciting participation by these groups. Annual technical assistance workshops will be held in order to assist with the development of proposals for funding. Letters of invitation to attend the public hearing to receive input on housing and non housing community development needs will be sent to community service organizations,business organizations, Chamber of Commerce,religious organizations and any other applicable groups and affected parties showing an interest in the Consolidated Plan. The City will also coordinate its planning activities with the Housing Authority as well as any other applicable inter-governmental jurisdictions impacted by the Consolidated Plan. A Citizen Participation Plan-Paee 3 of 6 '4 CONSOLIDATED PLAN March 16, 1995 Page-- !COMP . INTS The City will make every reasonable effort to provide written responses to complaints within 15 working days. A copy of each written citizen comment or complaint regarding the City's housing and community development performance under the Consolidated Plan,the City's assessment of the comment or complaint and a description of any action taken or written response made will be kept on file as a public record. PUBLIC IVI ETINCS AND PUBLIC HEARINGS The City will conduct public meetings and public hearings during various phases of the Consolidated Plan process each fiscal program year. All public meetings and public hearings shall be open to the public. Meetings will be held at tunes and at locations in the City that are convenient and acceptable to potential and actual beneficiaries. Special accomendations shall be made for persons with disabilities upon advance notice and as necessary. In cases where a significant number of non-english speaking residents are reasonably expected to participate, an interpreter will be provided by the City upon advance notice and as necessary. The City Council shall conduct a total of three (3)public hearings during the fiscal program year. A public bearing will be held prior to publishing the proposed Consolidated Plan. The purpose of this public hearing is to obtain views of citizens on housing and cottununity development needs, including priority non-housing community development needs. A second public(rearing will be held to obtain views on the proposed Consolidated Plan prior to its review and adoption by the City Council. A third public hearing will be held in order to review program performance. Prior to each public hearing,a Iegal notice shall be published in one or more newspapers of general circulation within a reasonable time frame. The legal notice shall contain the following information L Date of hearing. 2 Time of hearing. 3. Place of hearing. -L Topic to be considered. S- Basic information about the program CONSOLIDATED PLAN March 16, 1995 Page-5- COMMUNITY DFVFL.OPMENT CITIZEN ADVISORY COMMITTEE (CDCAC) STR i T iRE Side and apnoin tment The Community Development Citizens Advisory Committee shall consist of 15 members. Each member of the City Council shall appoint one (1)member for a total of seven(7) members. The Mayor shall appoint the other eight (8)members. Term of Office Each member shall serve at the pleasure of his/her appointee. The tern of office shall automatically expire with the succession of their appointees service as City Council member or Mayor. The CDCAC shall have a chairperson and vice chairpersons. Both shall be elected from and by the members of the CDCAC each year. Meetings the CDCAC will meet as often as required during the period set aside for reviewing proposals and establishing needs and priorities, and as needed during the balance of the program year. All other regularly scheduled meetings are held on the third Thursday of a month on a quarterly basis (March,June,September,and December),and will be conducted in the Economic Development Agency Board Room (or other designated location as deemed necessary),located on the third floor of 201 North"E"Street,San Bernardino. All meetings are open to the public. Any member fairing to attend three(3)or more scheduled meetings per fiscal year without being excused by the committee,shall automatically cease to be a member of the committee and the Mayor or City Council shall fill such vacancy immediately. ROLL AND RESPONSIBILITIES OF THE COMMUNITY DEVELOPMENT CITIZEN ADVISORY COMMITT E ( .D A I The CDCAC is an advisory committee to the City Council which,by state law,is the responsible legislative body in matters relating to the programs associated with the Consolidated Plan and the Consolidated Plan process. The committee responsibilities shall include the following: CONSOLIDATED PLAN March 15, 1995 Page-6- 1. Scheduling public hearings on housing and community development needs and program performance. 2 Assisting in the identification of community needs,priorities and strategies. 3. Receiving and reviewing citizens comments on housing and commnunity development progress and performance. 4. Receiving and reviewing all housing and community development project proposals for specific funding to include Community Development Block Grant,Home Partnership Investment Program, Emergency Shelter Grant Program, Section 108 Guarantee Loans, and CDBG Float Loans. 5. Preparing specific funding and program recommendations to the Mayor and City Council on the use of grant funds. 6. Assisting,monitoring and evaluating ongoing housing and community development program activities. 7. Reviewing and preparing recommendations to the Mayor and City Council on all proposed program changes, revisions,or amendments. & Receiving and answering citizen complaints regarding housing and community development activities. In addition to the responsibilities listed above the CDCAC will act as liaison between the community and the City. 'Therefore,the committee will also be responsible for meeting with citizen groups which represent residents impacted by community development and housing activities,providing technical assistance to citizen groups when requested,and keeping the general community informed on housing and community development matters of importance. f .f ATTACHMENT C: FINANCIAL REVIEW THE NATIONAL DEVELOPMENT COUNCIL MEMORANDUM TO: Mr. Ron Winkler (FAX: 909-888-9413) DATE: 12/14/99 Development Director Economic Development Agency City of San Bernardino 201 No. E Street, Suite 301 San Bernardino, CA 92401 FROM: Scott Rodde RE: Appropriate Review for HUD-108 financing for Former State Office Building, 303 West Third Street, San Bernardino, CA 303, LLC has approached the City of San Bernardino for a two-stage program in connection with the redevelopment of the former State Office Building at 303 West Third Street.The purpose of the first stage of financing is the acquisition of the property including a related property (for parking), payment of asbestos remediation and interest reserves totaling $2,675,000. The proposed security for the pre-development financing is a letter of credit for $500,000 and a first deed of trust on both the parking site and the office building site.These properties have recently been appraised by Lidgard and Associates at a Fair Market Value of$1,675,000.The sources and uses planned for stage one are outlined as follows: Uses Sources Office Building City-108 $500,000 Acquisition $1,200,000 Seller 700,000 Parking Lot Acquisition 330,000 City-108 330,000 1500 Tkird Street,Suite C Napa,CA 94559 TEL(707)257-1020 FAX(707)257-1500 Nea York Office 51 Ew 42nd Street Suite 300 New York,NY 10017 Asbestos Removal 875,000 City-108 740,000 Owner Cash 135,000 HUD-108 Interest Reserve 270.000 City-108 270.000 $2,675,000 $2,675,000 The collateral security analysis for the first stage of financing is as follows: Fair Market Value of Real Estate Security' $1,675,000 Loan To Value Ratio 80% Net Security Value of Real Estate Plus 1,340,000 Net Security Value of Irrevocable, Direct Pay, A Rated Letter of Credit 500.000 Total Lendable Security $1,840,000 'MAI appraisal from Lidgard and Associates Dated 9/16/99. In order to implement this security structure, the City will break its 108 borrowing into two loans to 303 LLC. One will be for real estate acquisition ($830,000)and asbestos remediation ($510,000)totaling$1,340,000. This loan will require the seller to subordinate to a$1,340,000 deed of trust from the City on the office building. niTHE NATIONAL. DEVELOPMENT COUNCIL The second loan for$500,000 will be for the interest reserve ($270,000) and the balance of the asbestos remediation costs ($230,000) not covered by owner cash ($135,000) (which must be disbursed as the first funding for asbestos work)and the first City loan. Upon completion of the asbestos and soils remediation,the office building will be available for leasing and it is anticipated that leasing activity will create a substantial value to the property(in excess of$13,000,000). Upon completion of leasing,a construction loan is anticipated through Draper&Cramer Realty Advisor AFL- CIO Building Investment Trust who has worked with the developer previously. The conditions to the City's subordination to the combination construction takeout loan are 1)satisfactory review of the MAI appraisal supporting the construction and takeout loans,2)satisfactory review of construction loan documentation and takeout loan commitment, and 3)satisfactory review of all executed leases associated with the building. Reasonableness of Costs We have reviewed pro forma cost analyses which are attached in Exhibit A. Preliminary hard cost analysis has been prepared by Inland Construction Management. Land acquisition costs are supported by executed purchase agreements and soft costs are all reasonable given the nature of the rehabilitation project. Please refer to the Project Manual which is attached. Need For Financing We have reviewed personal financial statements for the three partners in 303, LLC.The partners are Kevin Brunk, Wilfred C. Lemann and Martin A. Matich.Although the developers have substantial cash resources, given the size and scope of this project,those cash resources must remain in reserve to support unforeseen T HE NATIONAL DEVELOPMENT UNCIL contingencies which may arise during the course of construction. Without the assistance of the City in financing the initial pre-development costs, it is highly likely that the LLC will not have the credit capacity to support a pre-development loan in the range of$1,840,000. Financial Feasibility Please see the feasibility study in Exhibit B. The study assumes a successful leasing program. Upon completion of leasing,financial feasibility of the second stage of the project and the related public benefit will be clearly documented. However, at this time, without leasing in place, we cannot determine financial feasibility for stage two. The market based appraisal report by Lidgard & Associates indicates that upon completion,the subject property will be worth$5.2.The renovation expenses, exclusive of acquisition costs, are estimated at approximately $8.3 million. Therefore, feasibility for stage two of the project is contingent upon pre-leasing completion. Nevertheless, the City HUD-108 loan as structured above is adequately protected during the first stage of work as outlined above. Public Benefit This building,when fully leased,should support approximately 200 employees,51%of which will be members of low and moderate income households. THE NATIONAL DEVELOPMENT UNCIL TERMS SHEET FOR HUD-108 FINANCING FOR 303 LLC Lender: City of San Bernardino Source of Funds: Federal Agency Paper Market supported by a 100% guaranty from HUD. HUD guaranty supported by unlimited pledge of City of San Bernardino CDBG. Borrower: 303 LLC. Purpose: Acquisition of State Office Building at 303 West Third Street.Acquisition of parking lot bounded by 2n°, Mountain View and King. Asbestos removal. HUD-108 interest reserve.Permanent financing subordinate to private construction and takeout loans. Uses and Sources: Uses Sources Office Building City-108 $500,000 Acquisition $1,200,000 Seller 700,000 Parking Lot Acquisition 330,000 City-108 330,000 Asbestos Removal 875,000 City-108 740,000 Owner Cash 135,000 HUD-108 Interest Reserve 270.000 City-108 270,000 $2,675,000 $2,675,000 .y a Loan Structure: Loan #1 Loan #2 Amount Acquisition $ 830,000 Remediation 510,000 $230,000 Interest 270.000 Total $1,340,000 $500,000 $1,840,000 Loan#1 Loan#2 Rate Both Loans at HUD-108 Rate Like Maturity Treasury Plus 1/2% Term Both loans 2 years interest only, followed by an 18 year amortization for a total of 20 years, with level principal amortization of$100,000 per year for years 3-19 and a final principal payment of$140,000 for year 20. Both loans shall be due and payable upon sale of more than a 30%interest in the project or any refinancing of the proposed private construction loan. Securi First trust deed on both Second trust deed on both the office building and the office building and parking lot site. parking lot site. Unlimited personal guaranty Until construction is completed, of: Kevin Brunk, Wilfred a certificate of occupancy issued C. Lemann and Martin A. and 95% of the net rentable Matich. space of the office building is leased to tenants who have commenced payment of full monthly rent borrower shall maintain an A rated, irrevocable, demand letter of credit naming the City of San Bernardino as beneficiary. Unlimited personal guaranty of: Kevin Brunk, Wilfred C. Lemann and Martin A. Matich. Future Subordination Both loans may be subordinated to a construction loan in an amount not to exceed$8,500,000 upon satisfactory review by City of an MAI appraisal supporting the construction and permanent loan.At a minimum,the appraisal must support a loan to value ratio for the construction and both City loans of less than 80%. Subordination shall also be subject to satisfactory City review of 1) construction loan documentation,2)takeout loan commitment and 3)executed leases representing 95%of the net rentable floor area of the office building. Release of Guarantees Upon completion of construction, issuance of a certificate of occupancy and 6 months of payments of full rent(6 months actual debt coverage for all secured debt of 1.2 to 1.0) City shall release all personal guarantees described above. Developer Fee Limitation Total developers fee is restricted to$450,000 from the proceeds of all project financing, until completion of construction and issuance of a certificate of occupancy. Developers fee in all events shall not