HomeMy WebLinkAboutR14- Economic Development ECONOMIC DEVELOPMENT AGENCY
OF THE CITY OF SAN BERNARDINO
REQUEST FOR COMMISSION/COUNCIL ACTION
FROM: Gary Van Osdel SUBJECT: VERDEMONT COMMUNITY
Development Director FACITILIES DISTRICT NO.995
DATE: January26, 1999 ORIGINAL RESTRUCTURING
Synopsis of Previous Commission/CounciVCommittee Action(s):
None.
Recommended Motlonfs):
fSan Bernardino Joint Powers Financine Authority)
MOTION A: RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO AUTHORIZING THE
HIRING OF A FINANCE TEAM AND THE COMMENCEMENT OF PREPARATION OF
BOND DOCUMENTS FOR THE ISSUANCE OF BONDS TO FINANCE THE PURCHASE OF
CERTAIN REAL PROPERTY LOCATED WITHIN CFD 995 OF THE CITY OF SAN _
BERNARDINO
MOTION B: RESOLUTION OF THE SAN BERNARDINO JOINT POWERS FINANCING AUTHORITY
APPROVING THE HIRING OF A FINANCE TEAM AND THE COMMENCEMENT OF
PREPARATION OF BOND DOCUMENTS FOR THE ISSUANCE OF BONDS TO FINANCE
THE PURCHASE OF CERTAIN REAL PROPERTY LOCATED WITHIN CFD 995 OF THE
CITY OF SAN BERNARDINO
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Contact Person(s): Gary Van Osdel Phone: 5081
Project Area(s): Ward(s):
Supporting Data Attachcd:0 Staff Report❑ Resolution(s) 0 Agreement(s)/Contract(s) ❑ Map(s)O Ltr/Memo
FUNDING REQUIREMENTS: Amount: $ Source:
udget Authority:
SIGNATURE: l
GAR AN OSDEL
Executive Drector
Commission/Council Notes:
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GVO:lag:99-02-01 Verdemont COMMISSION MEETING AGENDA
MEETING DATE: 0210/1�/11999�9
Agenda Item NumberJC/'t
COMMUNITY DEVELOPMENT COMMISSION
SAN BERNARDINO JOINT POWERS FINANCING AUTHORITY
FROM: Gary Van Osdel SUBJECT: Verdemont Community
Executive Director Facilities District
No. 995 Restructuring
DATE: January 25, 1999
Synopsis of Previous Commission/Council/Committee Action (s) :
BACKGROUND
In 1991, the City of San Bernardino formed a Mello-Roos Community
Facilities District designated as CFD No. 995 (the "CFD") in an
effort to encourage single family residential development within
certain portions of the Verdemont Area of north San Bernardino east
of the I-215 Freeway. The CFD as structured included the
properties of four separate developers ("Developers") with four
noncontiguous housing tracts included within the original CFD.
The City issued bonds in a principal amount equal to $7 . 44M in 1991
(the "1991 CFD Bonds") for the purposes of paying school
development fees to the San Bernardino City Unified School
District, payment of a portion of the Verdemont Infrastructure Fee
as previously imposed by the City upon development within the
Verdemont area and to pay the other costs of issuance of the 1991
CFD Bonds .
Of the 428 housing units intended to be developed on the CFD
parcels, only 163 homes were built and sold to individual
homeowners . By the 1993-94 tax year, the City was required to levy
an override special tax on the 163 homes which ranged from $1, 100
to $2, 400 per house. The override special tax was required to be
imposed by the City for the first time during the 1993-94 tax year
because of the tax payment defaults of the other three who were
unable to develop their tracts by the tax year when the funded
interest on the 1991 CFD Bonds had been exhausted. The debt
service on the 1991 CFD Bonds was approximately $700, 000 per year
and the 163 homes could only generate approximately $200, 000 per
year without imposing the override special tax.
In early 1994, the City issued the 1994 $3 .315M refunding bonds
(the "1994 Refunding Bonds") to refund the 1991 CFD Bonds and
entered into Settlement Agreements with each of the defaulting . In
connection with the issuance of the 1994 Refunding Bonds, the San
Bernardino City Unified School District allowed for the release of
$2 . 3M of unspent school mitigation fees to reduce the principal
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amount of the 1999 Refunding Bonds. The City agreed to transfer a
20 acre Water Department parcel located immediately south of the
Western Little League facilities to the School District for $1 . OM
and agreed to accept $500, 000 as a prepayment of the middle school
development fees to the City.
The Developers agreed in the Settlement Agreements to pay fees to
the City that would allow the City to recapture the $2 .3M figure in
whole, and thus to repay the Water Department for the transfer of
the 20 acre site to the School District. They also agreed to remit
payments of the delinquent special taxes, plus interest and
penalties, in five annual payments from the date of the 1999
Refunding Bonds . Notwithstanding, the Developers were unable to
honor the terms of the Settlement Agreements and the City
foreclosed on the property of two of the three Developers .
BICE PROPERTY
The City acquired the property known as the "Bice Property" in
July, 1997 . The Bice Property was originally subdivided into 5, 000
square foot lots in the mid-1980 ' s. The Bice Property requires
significant engineering work to resolve the lot size issues and the
set-backs necessitated by the flood control channel that is located
thereon.
GLAZIERS FUND PROPERTY
The City obtained a final court order in July, 1998 for the
property known as the "Glaziers Fund Property". Title remains
vested in The Southern California Arizona Glaziers, Architectural
Metal & Glass Workers Pension Trust (the "Glazers Fund") until the
entire process has been completed to vest the property in the name
of the City. The Glaziers Fund Property currently has a tentative
tract map designed for 110 lots of 7, 800 square feet each. On
September 8, 1998, the City Council approved an extension of this
tentative tract map until July, 1999.
FELDKAMP SETTLEMENT AGREEMENT
The City negotiated and approved a revised Settlement Agreement
with Dr. Feldkamp in September, 1997 . At that time, the City sold
to Dr. Feldkamp the adjacent property known as the "SB V Property",
previously acquired by the City through a foreclosure action. Dr.
Feldkamp agreed to pay approximately $10, 800 per house for the 76
houses to be developed on the combined parcels . In addition, Dr.
Feldkamp agreed to make semiannual special tax payments to the City
equal to approximately $66, 000 per year to pay a portion of the
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$110, 000 current debt service shortfall on the 1994 Refunding
Bonds .
REASONS FOR FINANCIAL RESTRUCTURING
The City has already depleted a substantial portion of the original
Debt Service Reserve Fund for the 1994 Refunding Bonds, and will
likely draw the remaining balance within the current fiscal year in
the event the Feldkamp development does not proceed and the
property defaults back to the City. If the Feldkamp revised
Settlement Agreement remains in effect, but no development occurs
and Dr. Feldkamp remits the annual negotiated in lieu tax amount,
the Debt Service Reserve Fund will be depleted during the 1999-2000
fiscal year. Even if Dr. Feldkamp is successful in building and
selling the 76 housing units within a 2-year period, an
approximately $40, 000 to $50, 000 annual deficit will remain until
some portion of the Glaziers Fund Property or the Bice Property
develops an additional 45 to 60 houses.
PROPOSED FINANCIAL STRUCTURE
The Redevelopment Agency receives in excess of $3. OM per year
attributable to the 20% Low- and Moderate-Income Housing Funds from
the redevelopment project areas . Of this total amount, less than
$1 . OM is actually pledged for long-term or short-term debt
obligations to third parties, and approximately $455, 000 is the
annual amount due and payable to the State of California ("State")
for the 9th and DelRosa property acquisition note.
The Redevelopment Agency has negotiated an agreement with the State
to extinguish the 9th and DelRosa property acquisition note
obligation in return for the Redevelopment Agency providing a
credit to the State towards the purchase of certain property under
the Construction Project Management Operating and Development
Agreement (Caltrans Office Building and Parking Facility) .
To structure the financing the Redevelopment Agency can issue 15-
year tax-exempt notes (the "Notes") . The Note proceeds would be
paid to the City by the Agency to purchase the Bice and Glacier
Fund Properties . The Notes would be secured by the low- and
moderate-income housing funds of the Agency. The City would apply
the acquisition amount received from the Agency to redeem the 1994
Refunding Bonds and fund engineering costs for the Bice Property.
This would enable the City to adopt a lot design that complies with
the requirements imposed by a 1989 settlement agreement pertaining
to the 10, 800 square foot lot size on the Bice Property and to
initiate design of the flood control improvements which will be
required for development.
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The annual debt service on the Note issue would be approximately
$409, 000 from September 1, 1999 through September 1, 2014, with the
Debt Service Reserve Fund making the final payment on September 1,
2015 . Today' s estimated interest rates range from 3 . 6% to 5 . 1% .
RECOMMENDATION
Approve the following resolutions to commence preparation of the
financing transaction:
RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO AUTHORIZING THE
HIRING OF A FINANCE TEAM AND THE COMMENCEMENT OF PREPARATION OF
BOND DOCUMENTS FOR THE ISSUANCE OF BONDS TO FINANCE THE PURCHASE OF
CERTAIN REAL PROPERTY LOCATED WITHIN CFD 995 OF THE CITY OF SAN
BERNARDINO
RESOLUTION OF THE SAN BERNARDINO JOINT POWERS FINANCING AUTHORITY
APPROVING THE HIRING OF A FINANCE TEAM AND THE COMMENCEMENT OF
PREPARATION OF BOND DOCUMENTS FOR THE ISSUANCE OF BONDS TO FINANCE
THE PURCHASE OF CERTAIN REAL PROPERTY LOCATED WITHIN CFD 995 OF THE
CITY OF SAN BERNARDINO
P:\APPS\WPDATA\SBEO\0179\DOC\003.WPD
1/11/98 11:30 ew
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I RESOLUTION�.�_►�n n
2 � \U%
RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE
3 REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO AUTHORIZING THE
HIRING OF A FINANCE TEAM AND THE COMMENCEMENT OF PREPARATION OF
4 BOND DOCUMENTS FOR THE ISSUANCE OF BONDS TO FINANCE THE PURCHASE OF
CERTAIN REAL PROPERTY LOCATED WITHIN CFD 995 OF THE CITY OF SAN
5 BERNARDINO
6
7 WHEREAS, the Redevelopment Agency of the City of San
8 Bernardino (the "Agency") is organized and existing under the
9 Community Development Law (Health and Safety Code Section 33000, jLt
10 sea. ) and is authorized thereunder to purchase and sale property in
11 order to carry out its redevelopment purposes; and
12
13 WHEREAS, the City of San Bernardino (the "City") owns
14 property located within its Community Facilities District No. 995
15 (the "Property") and desires to sell said Property to the Agency;
16 and
17
18 WHEREAS, the Agency desires to purchase said Property
19 from the City and has therefore requested that the San Bernardino
20 Joint Powers Financing Authority (the "Authority") assist it with
21 said purchase; and
22
23 WHEREAS, the Authority was established for the purpose,
24 among other things, of issuing bonds to be used to make loans to
25 finance certain activities of the City and the Agency; and
26
27 WHEREAS, it has been determined that the most cost
28 effective means of financing the purchase of the Property is
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I through the issuance of tax exempt bonds secured and payable from
2 Low- and Moderate-Income Housing monies of the Agency; and
3
4 WHEREAS, in order to commence preparation of the bond
5 transaction the Agency desires at this time to hire the financing
6 team and authorize preparation of the financing documents .
7
8 NOW, THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION,
9 ACTING ON BEHALF OF THE REDEVELOPMENT AGENCY OF THE CITY OF
10 SAN BERNARDINO, DOES HEREBY RESOLVE, DETERMINE AND ORDER AS
11 FOLLOWS:
12
13 Section 1 . Recitals . The Recitals contained herein
14 are true and correct and are incorporated herein by reference.
15
16 Section 2 . Approval of Financing Team. The Agency
17 hereby approves the following firms for the financing described
18 herein:
19 Sabo & Green, P.C. Bond Counsel
20 Miller & Schroeder Financial Underwriter
21 Hinshaw & Culbertson Underwriter' s Counsel
22 U.S. Bank Trust Nat' l Assoc. Trustee
23
The above named firms are authorized on behalf of the Agency to
24
commence preparation of the financing transaction which shall be
25
subject to final approval by the Agency prior to closing.
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I Section 3 . Official Action. The Chairman, Executive
2 Director, Secretary, Counsel and any and all other officers of the
3 Agency are hereby authorized and directed, for and in the name and
4 on behalf of the Agency, to do any and all things and take any and
5 all actions, to assist the financing team with the preparation of
6 the bond transaction.
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I RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO AUTHORIZING THE
2 HIRING OF A FINANCE TEAM AND THE COMMENCEMENT OF PREPARATION OF
BOND DOCUMENTS FOR THE ISSUANCE OF BONDS TO FINANCE THE PURCHASE OF
3 CERTAIN REAL PROPERTY LOCATED WITHIN CFD 995 OF THE CITY OF SAN
BERNARDINO
4
5 Section 4 . This Resolution shall take effect upon the
6 date of its adoption.
7
8 I HEREBY CERTIFY that the foregoing Resolution was duly
9 adopted by the Community Development Commission of the City of
10 San Bernardino at an adjourned regular meeting thereof, held on the
11 day of February, 1999, by the following vote, to wit:
12 Commission Members : AYES NAYS ABSTAIN ABSENT
ESTRADA
13 LIEN
14 DEVLINZ _
EVLIN
15 ANDERSON _
MILLER
16
17
Secretary
18
The foregoing resolution is hereby approved this
19 day of February, 1999.
20
21 Judith Valles, Chairperson
Community Development Commission
22 of the City of San Bernardino
23
Approved] s for wend a al content:
24 By.
25 Agency Counsel
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28 SBE0\0179\D0C\001.wpd
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COPY
I RESOLUTION NO.
2
RESOLUTION OF THE SAN BERNARDINO JOINT POWERS FINANCING AUTHORITY
3 APPROVING THE HIRING OF A FINANCE TEAM AND THE COMMENCEMENT OF
PREPARATION OF BOND DOCUMENTS FOR THE ISSUANCE OF BONDS TO FINANCE
4 THE PURCHASE OF CERTAIN REAL PROPERTY LOCATED WITHIN CFD 995 OF THE
CITY OF SAN BERNARDINO
5
6
WHEREAS, the City of San Bernardino (the "City") and the
7
Redevelopment Agency of the City of San Bernardino (the "Agency")
8
have heretofore entered into a Joint Exercise of Powers Agreement
9
establishing the San Bernardino Joint Powers Financing Authority
10
(the "Authority") for the purpose, among other things, of issuing
11
bonds to be used to make loans to finance certain activities of the
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City and the Agency; and
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WHEREAS, the Agency is organized and existing under the
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Community Development Law (Health and Safety Code Section 33000, gt
16
sea. ) and is authorized thereunder to purchase and sale property in
17
order to carry out its redevelopment purposes; and
18
19
WHEREAS, the City owns property located within its
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Community Facilities District No. 995 (the "Property") and desires
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to sell said Property to the Agency; and
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WHEREAS, the Agency desires to purchase said Property
24
from the City and has therefore requested that the Authority assist
25
it with said purchase; and
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I WHEREAS, it has been determined that the most cost
2 effective means of financing the purchase of the Property is
3 through the issuance of tax exempt bonds secured and payable from
4 Low- and Moderate-Income Housing monies of the Agency; and
5
6 WHEREAS, in order to commence preparation of the bond
7 transaction the Authority desires at this time to approve the
8 hiring of the financing team and authorize preparation of the
9 financing documents .
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11 NOW, THEREFORE, THE SAN BERNARDINO JOINT POWERS FINANCING
12 AUTHORITY DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS :
13
14 Section 1 . Recitals . The Recitals contained herein
15 are true and correct and are incorporated herein by reference.
16
17 Section 2 . Approval of Financing Team. The Authority
18 hereby approves the following firms for the financing described
19 herein:
20 Sabo & Green, P.C. Bond Counsel
21 Miller & Schroeder Financial Underwriter
22 Hinshaw & Culbertson Underwriter' s Counsel
23 U . S . Bank Trust Nat' l Assoc. Trustee
24
The above named firms are authorized on behalf of the Authority to
25
commence preparation of the financing transaction which shall be
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subject to final approval by the Authority prior to closing.
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I Section 3 . official Ac ion. The Chairman, Executive
2 Director, Secretary, Counsel and any and all other officers of the
3 Authority are hereby authorized and directed, for and in the name
4 and on behalf of the Authority, to do any and all things and take
5 any and all actions, to assist the financing team with the
6 preparation of the bond transaction.
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RESOLUTION OF THE SAN BERNARDINO JOINT POWERS FINANCING AUTHORITY
°-- 2 APPROVING THE HIRING OF A FINANCE TEAM AND THE COMMENCEMENT OF
PREPARATION OF BOND DOCUMENTS FOR THE ISSUANCE OF BONDS TO FINANCE
3 THE PURCHASE OF CERTAIN REAL PROPERTY LOCATED WITHIN CFD 995 OF THE
CITY OF SAN BERNARDINO
4
5 Section . This Resolution shall take effect upon the
6 date of its adoption.
7
8 I HEREBY CERTIFY that the foregoing Resolution was duly
9 adopted by the San Bernardino Joint Powers Financing Authority at
10 an adjourned regular meeting thereof, held on the day of
11 February, 1999, by the following vote, to wit:
12
13 Council : EYES NAYS ABSTAIN ABSENT
ESTRADA
14 LIEN
15 SCHNETZ
DEVLIN
16 ANDERSON
MILLER
17
18 Secretary
19
The foregoing .resolution is hereby approved this day
20 of February, 1999 .
21
22 Judith Valles, Chairperson
San Bernardino Joint Powers
23 Financing Authority
24
Approved as to form and legal content:
25
26 By:
hority Counsel
27
SB 0179\DOC\002
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