HomeMy WebLinkAboutR26- Economic Development Agency ECONOMIC DEVELOPMENT AGENCY
OF THE CITY OF SAN BERNARDINO
FROM: Maggie Pacheco,Director SUBJECT: Approval of a City CDBG Economic
Housing&Community Development Development Loan to Inland Valley
DATE: December 27, 1999 Development Agency�O rat,n
S nopsis of Previous Commission/Council/Committee Action(s):
On December 6, 1999,the Mayor and Common Council approved the reallocation of Community Development Block
Grant (CDBG) funds and conceptually authorized the use of a portion of these reallocated funds for a loan to the
Inland Valley Development Agency(IVDA)in the amount of$120,000.
Recommended Motion(s), '--"
(Community Development Commission)
MOTION:
Resolution of the Mayor and Common Council Approving and Authorizing the Mayor to Execute
the Community Development Block Grant(CDBG)Loan Agreement by and between the City of San
Bernardino and Inland Valley Development Agency(IVDA)in the amount of$120,000.
Contact Person(s): Gary Van Osdel/Maggie Pacheco Phone: 5081
Project Area(s) IVDA Ward(s): 1,2,3,4,6&7
® Staff Report® Resolution(s)®Agreement(s)/Contract(s)O Map(s)
IKI Letter/Memo
Supporting Data Attached:
FUNDING REQUIREMENTS Amount: $ 120,000 Source: CDBG Funds
/, dget Authority:
SIGNATURE:
4Ecromic Osdel,Executive irector Maggie P teco, Drector
Development ency Housing&Community
Development
Commission%Council Notes: ---- — -
---------------------—----------—----------------__----------------------------GVO:XXX:lag:agenda item-maggie COMMISSION MEETING AGENDA
Meeting Date: 1110/2000
Agenda Item Number: Rolle
ECONOMIC DEVELOPMENT AGENCY
STAFF REPORT
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Title
Approval of A City community Develo meat Block Grant CDBG Economic
Development Loan to Inland Valley Development Agency (IVDA)
BACKGROUND:
On December 6, 1999, the Mayor and Common Council conceptually authorized a loan to the
Inland Valley Development Agency (IVDA) in order to renovate a commercial building at the
former Norton Air Force Base and allow for a new commercial tenant to move into the site. At
this time, staff informed the Mayor and Common Council that staff would return with the
appropriate loan documentation for review and consideration.
CURRENT ISSUE:
The attached Loan Agreement by and between the City and IVDA provides for the following
terms:
• The City will provide a 3%per annum $120,000 loan to IVDA. The loan will have a five
(5)year maturity date, with fifty-four(54) monthly installment payments of principal and
interest in the amount of$2,299.03. Payments will be deferred for the initial six(6)
months of the term of the loan. The City Loan will be secured by a promissory note (the
"Note"). In addition,the City will receive as collateral the property located at 195 North
Del Rosa Drive, San Bernardino, Ca. (APN136-341-016), commonly referred to as the
former Norton Air Force Base Parcel "F-2"( the"Property"). The value of the collateral
is approximately$2 million. The City's collateral will also be secured by a recorded
deed of trust against the Property.
• IVDA will use the loan funds for the preparation, construction, rehabilitation and
installation of certain improvements presently estimated to cost$155,000 of commercial
Building No. 932 so that the building (the "Site") will be ready for occupancy and reuse
by a commercial-industrial tenant(presently contemplated to be Astro-Fab Inc. from
Pico Rivera, Ca.). The rehabilitation of the project Site is expected to be completed no
later than six (6) months following the date IVDA executes the City Note.
• IVDA is required to make up the difference between the City's $120,000 loan and the
actual costs of construction of the above referenced improvements, currently estimated
to be $35,000, from their own funds, for a total rehabilitation cost of$155,000.
The City's loan is conditioned upon IVDA providing to the City a fully approved and executed
Lease/Sub-Lease Agreement between Astro-Fab, Inc. and IVDA. Astro-Fab, Inc. is a Pico
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GVO:XXX:lag:agenda item-maggie COMMISSION MEETING AGENDA
Meeting Date: 1/102000
Agenda Item Number: '�
Rivera based company who plans to relocate into the Site and bring to the Norton Air Force
building 932 in excess of 117 jobs. They are also planning on adding additional jobs to their
company(see attached letter dated October 13, 1999). IVDA expects Astro-Fab, Inc. to lease
Building No. 932 for a minimum period of five (5)years, at an approximate lease payment of
$13,000 per month. This lease payment is more than sufficient to cover the City's monthly
repayment.
In conclusion, the City's loan to IVDA will assist the City in achieving one of its principle goals
of attracting new businesses and creating jobs for the San Bernardino community.
ENVIRONMENTAL IMPACT
Pursuant to federal regulations, staff has prepared the appropriate environmental analysis and has
found that the loan to IVDA will have no significant impact on the environment.
FISCAL IMPACT
This item will not negatively impact the City's General Fund nor the Redevelopment Agency's
Fund. Funds in the amount of$120,000 for this Loan Agreement will be derived from the City's
federal Community Development Block Grant(CDBG)Program.
RECOMMENDATION
That the Mayor and Common Council adopt the attached Resolution.
Maggie Pacheco, Director
Housing & Community Development
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:XXX:lag:agenda item-maggie COMMISSION MEETING AGENDA
Meeting Date: 1/10/2000
Agenda Item Number: U4