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HomeMy WebLinkAboutR7- Economic Development ECONOMIC DEVELOPMENT AGENCY OFFICE OF BUSINESS DEVELOPMENT COPY OF THE CITY OF SAN BERNARDINO REQUEST FOR COMMISSION/COUNCIL ACTION FROM: ROBERT E. BOTTS,Manager SUBJECT: CROWN PRINTERS Office of Business Development DATE: September 10, 1996 --------------------------------------------------------------------------------------------------------------------------------- Synopsis of Previous Commission/Council/Committee Action(s): On August 22, 1996,the Redevelopment Committee recommended that the Community Development Commission approve an assistance package with Crown Printers. ---------------------------------------------------------------------------------------------------------------------------------- Recommended Motion(s): OPEN PUBLIC HEARING(SCHEDULED AT 11:00 A.M.) CLOSE PUBLIC HEARING (Community Development Commission) MOTION A: That the Community Development Commission make certain determinations in accordance with Health and Safety Code Section 33444.6. MOTION B: RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO,CALIFORNIA,APPROVING AN AGREEMENT TO PROVIDE ASSISTANCE TO CROWN PRINTERS IN CONNECTION WITH THE REHABILITATION DEVELOPMENT OF A BUILDING TO ENPAND THEIR OPERATIONS. (Motions continued on next e...) Administrator WEOBERT E.BOTTS,Manager Office of Business Development ---------------------------------------------------------------------------------------------------------------------------------- Contact Person(s): Robert E Botts Phone: 5081 Project Area(s): Central City Ward(s): First Supporting Data Attached: Staff Report Owner Participation Agreement Resolution Mutual Benefit Resolution(2) FUNDING REQUIREMENTS: Amount: $75.000 Source: Tax Increment Budget Authority: ----------------------------------------------------------------------------------------------------------------------------------------- Commission/Council Notes: ------------------------------------------------------------------------------------------------------------------ REB:dle:crownptr:.cdc COMMISSION MEETING AGENDA MEETING DATE: 09/16/1996 Agenda Item Number:�7� i v rl/ r Res 96— ! —` <� REQUEST FOR COMMISSION/COUNCIL ACTION RE: CROWN PRINTERS September 10,1996 page 2 Recommended Motion(s)continued from previous page: (Mayor and Common Council) MOTION C: RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO,CALIFORNIA,MAKING FINDINGS AND DETERMINATIONS AS TO THE BENEFIT TO THE STATE COLLEGE PROJECT AREA OF PROVIDING CERTAIN ASSISTANCE(CROWN PRINTERS PROJECT). (Community Development Commission) MOTION D: RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO,CALIFORNIA,MAKING FINDINGS AND DETERMINATIONS AS TO THE BENEFIT TO THE STATE COLLEGE PROJECT AREA OF PROVIDING CERTAIN ASSISTANCE(CROWN PRINTERS PROJECT). Administrator ROBERT E.BOTTS,Manager Office of Business Development ------------------------------------------------------------------------------------------------------------------ REB:dte:crownptr:.cdc COMMISSION MEETING AGENDA MEETING DATE: 09/16/1996 Agenda Item Number: ECONOMIC DEVELOPMENT AGENCY OFFICE OF BUSINESS DEVELOPMENT OF THE CITY OF SAN BERNARDINO STAFF REPORT --------------------------------------------------------------------------------------------------------------------------------- CROWN PRINTERS,INC. The City of San Bernardino has an outstanding opportunity to retain and assist in the expansion of a local, long-term company within the City. Crown Printers is a full service printing business. In order to survive the challenges of the severe recession and closure of Norton Air Force Base in San Bernardino, the company has pursued new strategies and reached out to the Southern California market. As a result approximately 50%of their sales come from outside San Bernardino, while hiring local citizens to fill the jobs here thus clearly fitting the Economic Strategic Plan's No. 1 priority, the"basic"job tier. The company has been operating in San Bernardino for over 27 years. Its primary operation has been full service, color printing,but is expanding into a new line of printing, storing and then"full-filling"orders and distribution of the materials for various companies. To accomplish this expansion,the company contemplates purchasing the old,long vacant, Smart&Final building immediately adjacent to their existing operation. Crown's five-year plan projects the company will add$1.5 million in additional sales and produce an additional eleven(11)positions in that time frame. The following reasons that staff considers this an excellent opportunity for the City of San Bernardino are: 1. Economic Factors: First and foremost,Crown Printers falls within the first priority--job retention and creation tier of the Economic Strategic Plan. Additionally, with this assistance, it will help insure the retention and expansion of this company within San Bernardino. 2. Coital Investment: The purchase and use of this vacant building by a viable and expanding company will add to the stability and beautification of this downtown area. Crown will be purchasing this 12,000 s.f. building at Rialto and N. Arrowhead Avenue, San Bernardino, California. The company will be expending$200,000 for the purchase of the building and,in addition,will need to invest$105,000 in City required retrofit items to meet the existing development code. (See attached letter and listing of required improvements.) 3. Utility Tax Increment: Current utility tax payments are$118,400 annually. This will increase with the company's acquisition and growth. This results in net payment to the City,annually,of$10,064. 4. Qbs: Fifty(50)existing jobs will be retained and eleven(11)new jobs created over the next five years. 5. Sees Tax: Net sales tax to the City of San Bernardino will be$8,474. 6. Real and Personal Property Taxes total$25,640. ------------------------------------------------------------------------------------------------------------------ REB:dle:crownptr:.cdc COMMISSION MEETING AGENDA MEETING DATE: 09116/1996 Agenda Item Number: 2 COMMUNITY DEVELOPMENT COMMISSION STAFF REPORT RE: CROWN PRINTERS August 23, 1996 Page 2 Agency staff is working with the company to resolve planning and fire/building code issues. In order to assist in making this transaction occur and retaining this business, Crown has asked for assistance in paying for City retrofit requirements and items which will enhance the viability and esthetics of the building. This represents a cost of approximately$75,000. The deal points are as follows: 1. Crown will purchase the Rialto Street and N. Arrowhead Avenue building and invest approximately $105,000 in tenant improvements that are basically required by the Uniform Building and Development Code. 2. The Agency will provide$75,000 to assist in off-setting a portion of the necessary capital improvements to the building. 3. If, at any time before completing five continuous years of operation,following execution of the Owner Participation Agreement to implement this action, Crown Printers, Inc. should cease operations within the City,all Economic Development Agency funds must be repaid to the Agency. In conclusion,this is an excellent retention opportunity of a clean, expanding company that fits the Economic Strategic Plan. The retention,jobs and financial income to the City are significant. The cost to the City, relative to the economic and physical enhancement to be derived, is minimal. Based upon the foregoing, staff recommends adoption of the form motion. j' ROBERT E.BOTTS, Director Office of Business Development ------------------------------------------------------------------------------------------------------------------ REB:dle:crownptr:.cdc COMMISSION MEETING AGENDA MEETING DATE: 09/16/1996 Agenda Item Number: V j "J August 9, 1996 Bob Botts, Manager Office of Business Development Economic Development Agency 201 North "E" Street - Suite 301 San Bernardino, CA 92401-1507 Re: $125,000. Business Retention Grant Dear Bob, Per our conversation, I atn providing you with some history on Crown Printers and an outline of our plans for growth within San Bernardino. Crown Printers was founded in San Bernardino in 1970 by myself and 2 other partners whom I bought out approximately 24 years ago. Crown Printers was incorporated in 1975 and currently my brother Tom Shorett and I own all of the stock in the corporation. Tom, a Vice President in sales owns 25.25% and 1, as President and CEO, own 73.75%. Our company grew steadily to a peak of$6,000,000 in annual sales in 1990 and has declined since then to $5,100,000 as of fiscal year end, June 30,1996. Our industry has experienced an economic down turn much the same as other industries in California. There are presently, approximately 6770 printing companies in California sharing about 10 billion in annual revenues. That, compared to Illinois, is nearly twice as many printing facilities for an equal amount of sales C(t), 10 billion. In addition to the fierce competition in Southern California, it is even more difficult to attract customers to do business in San Bernardino. cont. a Division of Shored Printing,Incorporated 250 WEST RIALTO AVENUE•SAN BERNARDINO,CALIFORNIA 92408-1081 •PHONE(909)888-7531/824-0785•FAX(909)889-1639 Page 2 - Our market area encompasses Los Angeles to Newport, to Palm Springs and all of the Inland Empire. When Disney can buy printing within 3 or 4 miles from their headquarters, it's a little tough to convince them to drive to San Bernardino. In the 80s, when print demand was high and production capacity was low, there was plenty of business to go around. Today is different! First, a company must be competitive, give good service and offer impeccable quality. But, that's a given! The key is; customers must want to do business with your company. Image and location become a major factor. I can't begin to emphasize enough, that we have missed out on a lot of business due to our location and the perceived image of San Bernardino. Recruitment of top notch personnel is also difficult at times, for the same reason. You must keep in mind, that running a small printing operation, that caters to small accounts, is not the issue here. Getting to the next level, so that we can attract major accounts and grow our company is our goal and challenge. Due to the obstacles and challenges we face at our present location, we have considered the alternatives of selling our company or merging and moving to a more lucrative area. In the last year and a half we have been contacted by at least a half dozen companies that would like to buy Crown Printers and move it to another market area. Although tempting, I am more interested in remaining in San Bernardino where I was born and raised and currently live. Many of our employees live in the area as well and the majority of my family resides in San Bernardino. Still, I must consider all options, which include changing our location or our marketing strategy, to entice new business. We believe that offering warehousing and distribution as a value added service will be a major attraction to a high volume print buyer. With this in mind,we have successfully tested this theory with a national corporation based in Los Angeles. We have contracted with that client to produce large combined, bulk printing orders, which will reduce their unit costs. We will then maintain their inventory at our San Bernardino location for later distribution. On an"as needed"basis,we will distribute that material to their branch locations throughout the United States and some foreign countries. Although our new strategy is initially successful, we have created another problem - warehouse and distribution space. If we are not able to economically and conveniently appropriate more space for warehousing,we face the risk of losing this and other potential major accounts. The client in question is projected to bring us a minimum of $500,000 in new annual revenue, with an upside potential of approximately $1.5 million. This new business is particularly important to Crown Printers now, due to the recent loss of business from Riverside's Directors Mortgage which was purchased by Norwest Mortgage.Norwest moved$500,000 in business that was being printed at Crown, to their central purchasing offices, headquartered in Des Moines, Iowa. Cont. Page 3 - Although we are continuing to pursue our alternatives, including moving our business out of San Bernardino, we have an opportunity to purchase a building and property, adjacent to ours which should solve our warehousing needs. The property at Rialto and Arrowhead, that we wish to purchase, has been vacant and deteriorating for approximately 5 years. It is zoned as office space but does not have sufficient parking to meet zoning requirements. The property has been an "eye sore" to the community, since Smart and Final moved to it's new Baseline location several years ago. Not only is Crown Printers probably the most natural buyer to have a use for the property, but we would greatly enhance the exterior of this building and property in our effort to help improve the image of Crown Printers and San Bernardino. We have proven our commitment to image enhancement in the community through improvements and land scape maintenance performed at our current location, next door to the old Smart and Final building. We believe that "we are what people perceive us to be". I have made an offer on the property owned by Smart and Final located on the northeast corner of Rialto Avenue and Arrowhead Avenue, contingent on financial help from the city of San Bernardino. The proposed location and square footage meet our utility needs, but also present some financial obstacles. In order to pencil out, the space needed for warehousing must be available at a reasonable cost per square foot. I have come to terms with Smart & Final regarding the purchase price, but would still face expenditures to comply with city occupancy and code regulations. My estimate for the remodeling and retrofitting of the property could well exceed $150,000. The closing costs and immediate upgrades, necessary to comply with city regulations, will be a minimurn of $105,000. In order to fund rehabilitation, so that the property will be in code compliance and aesthetically compatible with the downtown community, I am requesting a grant from the San Bernardino Economic Development Agency in the amount of $125,000. Crown Printers and I, personally, have been strongly supportive of and even involved with the economic preservation and development of our community. It is obvious that Crown Printers meets the exact profile of a small company that will have a positive impact on the city. It is a much lower risk to enhance an already successful, community oriented, local company than it is to spend Economic Development Agency money searching for and trying to lure an unproven company to the community. Crown Printers supports its community and contributes to many community non-profit organizations including, but not limited to, Arrowhead United Way, Cal State University and the San Bernardino Area Chamber of Commerce. Cont. Page 4 - In closing, let me say that financial support from the Economic Development Agency will truly create a win-win situation. The city will retain approximately 50 jobs, continue to share in revenue from sales tax, utility tax, and property tax, and greatly benefit from the image enhancement to the community. I therefore hope you will see this as a valuable investment that will generate a high yield return to San Bernardino for years to come. Since my offer for the property is contingent on help from the city, I hope you'll understand that time is of the essence. Please find the attached worksheet and budget estimate for proposed retrofit and improvements. Sincerely, &�y�D e �horett POLLOCK AS SOC I A T E S GENERAL CONTRACTORS August 9, 1996 Mr. Denny Shorett, President Crown Printers P. O. Box 6560 San Bernardino, CA 92412 Re: 105 South Arrowhead Avenue San Bernardino, CA 92408 Demolition and Prep Time $ 1,000 Floor plans and Plot plans $ 500 Plumbing - install new handicap toilet, new handicap lavatory with lever action faucet. Install new bar sink and mix valves and miscellaneous. $ 1,200 Electrical - Wire new bath, office. Remove fixtures as necessary. Install new wall receptacle, security light on south side building. Wire and install new lighted exit signs (two) and miscellaneous repair, check system. $ 1,500 Drill hole face of curb, saw cut and install cast iron drain from downspout corner of building complete. $ 250 Remove and replace cap sheet roofing complete 14,000 square feet including parapet @ $1.50 per square foot. $21,000 Install framing at southwest corner of building to enclose downspout and water line. Plaster. $ 400 Install twelve (12) 24" x 72" metal sky-lites @ $325 ea. $ 3,900 Post Office Box 1308 • San Bernardino, CA 92402 • (714) 888-9915 POLLOCK ASSOCIATES GENERAL CONTRACTORS Page 2 - Install cover over door on west side of buklding. Approxi- mately 7' x 10' x 2'. Lumber, labor, stucco and roofing $ 1,400 Install approximately 270 Lin 6' wrought iron fence, 1 - 34' gated opening and 1 - 37' gated opening. 270 @ $15.00 $ 4,050 37' gate $ 900 34' gate 850 Total L5..-800 Install 62' x 30" concrete footing x 18" deep for retaining wall. Install 48" x 0" average 24" x 62' Lin. = 124 sq. ft. 8" block retaining wall @ $12.00 $ 1,488 Pour slab at top of retaining wall $ 240 Install approximately 1900 square foot landscaping @ $5.00 per sq. ft. $ 9,500 Landscape to include sprinkler system (automatic),24" box trees, 18" box trees, 5 gal. plants, 1 gal. plants and ground cover. Install fire sprinkler system in buidling complete. Approxi- mately 100 heads interior - 4" supply line - 110 volt bell. All per bid Brad Pagel Plumbing $18,600 Install new 5 x 7 - 20 gage steel sectional door south side of building $ 600 Service roof mounted water coolers $ 250 Post Office Box 1308 • San Bernardino, CA 92402 • (714) 888-9915 l POLLOCK ASSOCIATES GENERAL CONTRACTORS Page 3 - Paint exterior building complete. 440' x 14 ' = 6,160 sq. feet = 685 yards. 685 yards @ $4.00 = $ 2,720 Paint cover over door westside and 3 doors = 200 Total LZ.,920 Parking Lot - Approximately 12,000 square feet 1 - Remove and replace 12,000 sq. ft. 3" thick over existing base @ $0.95 sq. ft. _ $11,400 2 - Saw cut approximately 282 lin. ft. @ $1.00 ft. _ $ 282 3 - Saw cut approximately 62 lin. ft. of concrete ramp area @ $1.00 lin. ft. = $ 62 4 - Install approximately 284 lin. 12" "A" curb and planters = $ 2,840 5 - Remove approximately 1900 sq. ft. asphalt for planters @ $0.50 $ 950 6 - Wall saw 3 x 7 southside = $ 188 7 - Block in 2 partial door openings @ $250 ea. $ 500 Total construction costs = $ 86,770 20% Overhead and Profit = 17,354 Construction Total 1194.124 Post Office Box 1308 • San Bernardino, CA 92402 • (714) 888-9915 City of San Bernardino ECONOMIC STRATEGIC PLAN POLICY STATEMENT ALLOCATION OF RESOURCES .�711 L (Attach to all staff reports on projects requesting assistance.) As adopted and approved by the San Bernardino City Council and Community Development Commission THE TOP PRIORITY AND FIRST CALL ON CITY OR ECONOMIC DEVELOPMENT AGENCY FUNDS SHALL BE THE DEVELOPMENT, EXPANSION AND RECRUITMENT OF BUSINESS AND INDUSTRY WHICH BRING JOBS AND DOLLARS FROM OUTSIDE SAN BERNARDINO'S ECONOMY OR PROJECTS THAT SUPPORT THE FOREGOING! PRIORITY ONE(1) is made up of the BASIC economic activities which are "Net Importer's of Dollars (NID's), as defined in the adopted Economic Strategy Plan. PRIORITY ONE businesses produce a product or service that is sold outside San Bernardino and will brings new jobs and dollars into the City. Some examples of industrial and manufacturing companies that sell products outside of San Bernardino,are Cobra or Accent Furniture which manufacture products in our City and sells them throughout the U.S. Another organization is the US Postal Service's Remote Encoding Center which provides a service,but derives its revenue from outside of San Bernardino. These examples fits Priority One. *** THIS BUSINESS/PROJECT FITS PRIORITY ONE YES [ ] NO [ ] *** ANY COMPANY OR PROJECT THAT DOES NOT FIT THE FOREGOING CRITERIA SHALL BE CONSIDERED A SECONDARY CATEGORY. (Please complete the attached. Detail why this project should be considered for funding.) To support consideration for funding this project the following information is required: 1. Does the business entity produce a product or service that is sold outside the City of San Bernardino? YES NJ NO ] If not a business, does this project support the adopted strategy as a PRIORITY ONE project? YES [ ] NO [ ] 2. If YES to No. 1 (above),do all sales/revenue come from outside San Bernardino? YES [ ] NO'[J If NO,what is the percentage of sales/revenue that comes from outside San Bernardino? S0 % EDA-ESP2 EJ,� 3. Total sales/revenue for the company? . . . . . . . . . . . . . . . . . . . . . . . z Total sales/revenue from inside the City? . . . . . . . . . . . . . . . . . . . . $ Total sales/revenue from outside the City . . . . . . . . . . . . . . . . . . . $ a� Z 3 0 Secondary business or project category. This company/project does not fit Priority One;however,it should be considered for approval and/or funding. YES [ ] NO [ ] If yes,please explain in detail how this business/project fits or supports Priority One or other Priorities, as approved in the adopted Economic Strategy Plan? Approved for consideration: Agency Administrator,EDA EDA-ESP2 7 ECONOMIC STRATEGIC PLAN POLICY STATEMENT COST BENEFIT ANALYSIS (Use this form if the project fits the Economic Strategic Plan-Priority One) *** THIS BUSINESS/PROJECT FITS PRIORITY ONE AS ADOPTED AND APPROVED IN THE ECONOMIC STRATEGIC PLAN? YES [ ] NO[ ] *** Name of Business: Q ClIU►J �K 1 r - P-S Type of Business: v 1J� T `� Nl Gross Sales: *** BENEFITS *** Number of Jobs Number of relocating employees? Number of projected new hires in yea£-ene? t Total number of new jobs to San Bernardino? Number of entry level positions? '3 Wage Scale$ Number of supervisory level positions? r Wage Scale$ Number of management level positions? Wage Scale$ Capital Investment OG Total purchase price of building? Total cost of Tenant Improvements by the company? Revenue to City Total Taxable sales? `"I /�rX 1%=$ , 14-71-1`- net to the City Annually Total tax incrcniew? �`` (/Q�� Annually "total unlit%, bills'' 1T X 8.50% = $ >� net to the City Annually EDA-ESP3 *** COSTS *** Proposed assistance Loan$ Rate Term Loan Guarantee$ Term (Contingent Liability) Grant $ �JT 0 Q� / for jell i 1-4 IV4 0 n� SC �,✓ A u�- S Employee Linkage Program Number of new employees during year one of operation @ $1,000 per employee Off-site improvements? _ Industrial Revenue Bonds (pass through) $ EDA-ESP3 SBEO/0001/OPA/CROWN PRINTERS, INC. 09/04/96 1:00 MMC RECORDING REQUESTED BY: REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO AND RECORDED RETURN TO: SABO & GREEN, a Professional Corporation 23801 Calabasas Road, r Suite 1015 Calabasas, California 91302 (Space Above for Recorder' s Use) REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO OWNER PARTICIPATION AGREEMENT CROWN PRINTERS, INC. By and Between REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO and CROWN PRINTERS, INC. , PARTICIPANTS TABLE OF CONTENTS Pae RECITALS 1 Section 1 . Incorporation of Basic Documents . . . . . . . 5 Section 2 . Public Purpose . . . . . . . . . . . . . . . . 5 Section 3 . Agency Assistance . . . . . . . . . . . . . . 6 Section 4 . Completion of the Project . . . . . . . . . . 6 Section 5 . Participant ' s Responsibilities . . . . . . . . 7 Section 6 . Certain Sales or Transfers of the Project . . 10 Section 7 . Notice of Sales and Transfers . . . . . . . . 10 Section 8 . Prevailing Wage . . . . . . . . . . . . . . . 11 Section 9 . Plans and Specifications . . . . . . . . . . . 11 Section 10 . Remedies . . . . . . . . . . . . . . . . . . . 12 Section 11 . Obligation to Obtain Financing . . . . . . . . 14 Section 12 . Notices . . . . . . . . . . . . . . . . . . . 14 Section 13 . Applicability of Laws and Litigation Costs . . 16 Section 14 . Nondiscrimination and Related Covenants . . . 16 Section 15 . Certificate of Completion . . . . . . . . . . 19 Section 16 . Successors and Assigns; Assignment . . . . . . 19 Section 17 . Events of Default . . . . . . . . . . . . . . 20 Section 18 . Entire Agreement; Amendment . . . . . . . . . 22 Section 19 . Severability . . . . . . . . . . . . . . . . . 23 Section 20 . Section Headings . . . . . . . . . . . . . . . 23 Section 21 . Meaning of Terms . . . . . . . . . . . . . . . 23 Section 22 . Indemnification . . . . . . . . . . . . . . . 24 Section 23 . Effective Date of This Agreement; Execution; Term of Agreement . . . . . . . . . . . . . 24 EXHIBIT "A" - Legal Description EXHIBIT "B" - Scope of Development EXHIBIT "C" - Certificate of Completion - i - REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO OWNER PARTICIPATION AGREEMENT (CROWN PRINTERS. INC. PROJECT) This Owner Participation Agreement (the "Agreement") is entered into this day of September, 1996 by and between the Redevelopment Agency of the City of San Bernardino, a public body, corporate and politic duly organized and existing pursuant to the Community Redevelopment Law of the State of California (hereinafter referred to as the "Agency" ) , and Crown Printers, Inc . , a California corporation (hereinafter referred to as the "Participant" ) and is entered into by the parties hereto with reference to the following facts : RECITALS WHEREAS, the Agency is authorized and empowered by the Community Redevelopment Law, Chapter 1 of Division 24 of the California Health and Safety Code, as amended (the "Law" ) , to permit owner participation in the redevelopment of real property; to enter into agreements for the acquisition, disposition and development of property or to otherwise assist in the redevelopment of real property within a redevelopment project area conforming - 1 - with a redevelopment plan adopted for such area; to acquire real and personal property in redevelopment project areas; to receive consideration for the provision of redevelopment assistance; to make and execute contracts and other instruments necessary or convenient to the exercise of its powers; and to incur indebtedness to finance or refinance redevelopment projects; and WHEREAS, the Redevelopment Plan for the Central City Redevelopment Project, has previously been approved and adopted by the City of San Bernardino, California (the "City") , pursuant to a duly adopted Ordinance (the "Redevelopment Plan" ) ; and WHEREAS, the Participant seeks to acquire certain real property generally located at 105 North Arrowhead Avenue, within the project area subject to the Redevelopment Plan (the "Project Area" ) , as legally described in Exhibit "A" attached hereto and incorporated herein by reference (the "Property") ; and WHEREAS, pursuant to Health and Safety Code Section 33444 .6 the Agency may, within a redevelopment project area, assist in the financing of facilities and capital equipment in connection with - 2 - the development and/or rehabilitation of property used for industrial or manufacturing purposes; and WHEREAS, the Participant intends to develop the Property by undertaking the construction and , rehabilitation of an approximately twelve thousand (12 , 000) square foot manufacturing, warehouse and office building on the Property (the "Project") , all as more fully described in the Scope of Development attached hereto as Exhibit "B" and incorporated herein by this reference; and WHEREAS, the Participant is currently engaged in activities related to printing and graphics production and seeks to cause the acquisition and installation of certain capital equipment and facilities in connection with undertaking the Project; and WHEREAS, the Participant has requested the Agency to exercise certain redevelopment powers, pursuant to the Community Redevelopment Law, and to assist the Participant with respect to undertaking the Project; and WHEREAS, it is proposed that the Agency will provide assistance with respect to the development of the Project by - 3 - reimbursing to the Participant the costs of the acquisition, construction and installation of certain capital facilities and equipment (the "Facilities" ) ; and WHEREAS, it is currently anticipated that the Project, upon completion, shall generate tax increment revenues for the City and will create new employment opportunities for approximately eleven (11) persons and retain employment opportunities for approximately fifty (50) persons; and WHEREAS, the development of the Project will benefit the Project Area by eliminating a blighted condition within the Project Area and will facilitate development of the Property in a manner consistent with the Redevelopment Plan and help encourage economic growth and revitalization within the Project Area; and WHEREAS, the Participant has demonstrated to the satisfaction of the Agency its financial ability to undertake the completion of the Project . - 4 - NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS : Section 1 . Incorporation of Basic Documents . The Redevelopment Plan is by reference incorporated herein and made a part of this Agreement with the same force and effect as though set forth in full herein; provided, however, that any amendments to the Redevelopment Plan after the date of this Agreement shall not affect any rights granted hereby to the Participant, except as may otherwise be required by law. All terms not otherwise defined herein shall have the same meaning as used in the Community Redevelopment Law, Health and Safety Code Section 33000, et sea. (the "Law" ) . The recitals are by reference incorporated herein and made a part of this Agreement . Section 2 . Public Purpose. The Agency and the Participant agree that the completion of the Project shall be undertaken for the common benefit of the parties hereto and the residents of the City in order to eliminate blight within the Project Area. The Agency and the Participant further agree that the development of the Project shall not only eliminate blight on the Property, but will also assist in creating an environment which will encourage and facilitate the elimination of blight within the Project Area. Therefore, the completion of the Project will be of - 5 - benefit to the Project Area, and will help improve, upgrade and revitalize, both economically and physically, a portion of the City located within the Project Area that manifests itself as a blighted area. Section 3 . Agency Assistance . The Agency hereby agrees that in order to assist the Participant in the development of the Project, the Agency shall, upon the fulfillment of the conditions and obligations of the Participant hereunder, provide the Agency assistance through the reimbursement to the Participant of its costs of causing the acquisition and installation of the Facilities . The Agency shall provide the Agency assistance, in an amount not to exceed Seventy Five Thousand Dollars ($75, 000) , (the "Agency Assistance" ) , upon receipt of appropriate invoices and within thirty (30) days of completion of the Facilities, as evidenced by the issuance of a Certificate of Completion as described in Section 15 hereof . Section 4 . Completion of the Project . Except as otherwise provided herein, the Participant, solely at its own cost, shall undertake or cause to be undertaken the acquisition, - 6 - construction and installation of all Facilities and improvements comprising the Project . The Participant shall pay any and all fees and assessments that may be levied against the Project or the Property or which may be required in connection with undertaking the Project . The Participant shall commence the Project prior to October 10, 1996 and shall complete the Project prior to January 311 1997 subject to any extensions by mutual written consent of the parties hereto. Section S . Participant ' s Responsibilities . A substantial portion of the consideration which supports the agreement as herein contained of the Agency to assist in the redevelopment of the Property is the agreement of the Participant to complete the Project as set forth in the Scope of Development attached hereto as Exhibit "B" , including the construction and installation of the Facilities, and cause the commencement of manufacturing operations prior to February 1, 1997, all as evidenced by the issuance of a Certificate of Completion in the form attached hereto as Exhibit "C" , subject to any extensions as mutually agreed upon by the Parties hereto. 7 - However, the foregoing responsibility of the Participant shall be subject to the following limitations : By reason of acts of God; strikes, lockouts or other industrial disturbances; delays in obtaining materials or labor which are through no fault of Participant, shortages of materials or labor or acts of public enemies; orders of any kind of the Government of the United States or of the state of California or any department, agency, political subdivision, court or official of any of them, or any civil or military authority; insurrections; riots; epidemics; landslides; lightning; earthquakes; volcanoes; fires; hurricanes; tornados; storms; floods; washouts; droughts; arrests; restraint of government and people; civil disturbances; explosions; breakage or accident to machinery; partial or entire failure of utilities; or any cause or event not reasonably within the control of the Participant, the Participant is unable in whole or in part to carry out any one or more of its agreements or obligations contained in this Agreement, the Participant shall, for the time of said delay or such longer period as shall be agreed in writing by the Agency, not be deemed in default pursuant to Section 17 hereof by reason of not carrying out said agreement or agreements or performing said obligation or obligations during the continuance of such inability. The Participant shall make reasonable effort to remedy with all 8 - "l reasonable dispatch the cause or causes preventing it from carrying out its agreements; provided, that the settlement of strikes, lockouts and other industrial disturbances shall be entirely within the discretion of the Participant, and the Participant shall not be required to make settlement of strikes, lockouts and other industrial disturbances by acceding to the demands of the opposing party or parties when such course is in the judgment of the Participant unfavorable to the Participant . The completion and operation of the Project by the Participant shall substantially assist the Agency to implement the Redevelopment Plan. Therefore, the Participant will take all reasonable steps to enable the Project, including the Facilities, to be completed prior to January 31, 1997 . For the purposes hereof, completion of the Project shall mean the date on which the Agency approves the issuance of a Certificate of Completion provided that such approval shall not be unreasonably withheld and which Certificate of Completion shall be substantially in the form attached hereto as Exhibit "C" , certifying that the completion of the Project, including the installation of any operating machinery and equipment has been - 9 - completed and that the manufacturing operations as contemplated by the construction of the Project by the Participant have commenced. Section 6 . Certain Sales or Transfers of the Proleect . The Participant hereby covenants and agrees not to sell, transfer or otherwise dispose of the Property or the Project located thereon prior to the completion of the Project and for a period of five (5) years therefrom without obtaining the prior express written consent of the Agency which consent shall be at the Agency' s sole discretion. Section 7 . Notice of Sales and Transfers . Notwithstanding the foregoing, and for the term of this Agreement, the Participant agrees to notify the Agency in writing of any sales or transfers of any portion of the Property or the Project prior to the consummation of such sale and/or transfer, which notice shall contain the name, address and formal description of the entity so acquiring interests in the Project or the Property. - 10 - Section 8 . Prevailina Wacre. The Participant shall comply with any prevailing wage requirements, as applicable, in connection with the acquisition and installation of the Facilities and the construction of the Project . Section 9 . Plans and Specifications . The Participant agrees that the plans and specifications to be prepared for the acquisition, construction and installation of all Facilities comprising the Project shall be submitted to the appropriate department of the City for approval prior to commencement of construction; provided, however, that said plans and specifications shall be in all respects in accordance and in conformity with this Agreement, the Redevelopment Plan and all appropriate plans or building standards of the City. In the event said plans and specifications are not reasonably acceptable to such department of the City and in compliance with this Agreement, then, in such event, the Participant agrees to amend or modify said plans and specifications or to submit such further or additional plans and specifications as may reasonably be required by the appropriate department of the City. The plans and specifications approved by the appropriate department of the City shall not be amended or modified in any material respect subsequent to such date of - 11 - approval without the prior written approval of either or both the City or the Agency, as applicable . The Agency shall use best efforts to assure that the approvals set forth in this Section are not unreasonably withheld or delayed. Section 10 . Remedies . In the event the Participant breaches any of its covenants or obligations under this Agreement, including the obligation to remain in business on the Property for a period of five (5) years from the date of completion of the Project, all subject to the acts of force majeure as provided in Section 5 hereof, the Participant shall, at the option of the Agency and upon demand by the Agency to the Participant, immediately reimburse to the Agency the amount of the Agency Assistance . As a further and cumulative remedy, the Participant, for itself, legal representatives, successors and assigns, agrees that the Agency, its successors and assigns, shall have the right and power to institute and prosecute any proceeding at law or in equity to enforce any covenants and agreements herein contained and to enjoin the threatened or attempted violation thereof by the Participant, legal representatives, successors, tenants and assigns and/or to collect damages from the aforesaid, whomsoever of which may violate said covenants and agreements; and in addition, the - 12 - Participant for itself, legal representatives, successors and assigns does hereby grant the Agency such right and power to institute and prosecute such proceedings . The remedies for the benefit of the Agency set forth in this Section 10 shall be in addition to any and all other remedies available to the Agency under this Agreement or as a matter of law. The parties acknowledge and agree that the Agency may exercise any and all legal and equitable remedies available to the Agency under the laws of the State of California to enable the Agency to exercise the rights of the Agency hereunder and to enforce the provisions of this Agreement including, but not limited to, those which are contained in this Section 10 . The Participant further agrees to pay upon written demand of the Agency all costs, fees and expenses of the Agency including, but not limited to, reasonable attorneys ' fees, court costs and costs attributable to Agency Staff time, incurred in connection with any enforcement by the Agency of the provisions of this Section 10 or the seeking of any remedies legally available to the Agency related to this Agreement . - 13 - Jl In the event the Agency breaches any of its covenants or obligations under this Agreement, the Participant may exercise all legal and equitable remedies available to the Participant under the laws of the State of California and the Participant shall be entitled to reimbursement of reasonable attorney fees, court costs and related costs . Section 11 . Obligation to Obtain Financing. The Agency shall have no obligation or commitment to provide any form of financial assistance to the Participant in connection with the Property or the completion of the Project, except as is specifically provided in this Agreement . Section 12 . Notices . All notices and demands of any kind which any party hereto may be required to serve upon any other party under the terms of this Agreement shall be served in writing on such other party by personal service or by leaving a copy of such notice or demand at the address hereinafter set forth, whereupon service shall be deemed complete and notices and demands shall be deemed to have been received on the date of such personal service; or by mailing a copy thereof by certified or registered mail, postage prepaid, airmail if the address is outside the State - 14 - in which the same is mailed, with return receipt requested, addressed as follows : If to the Agency: Redevelopment Agency of the City of San Bernardino 201 North "E" Street, Third Floor San Bernardino, California 92401-1507 Attention: Director with copy to: Sabo & Green 23801 Calabasas Rd. , Ste . 1015 Calabasas, CA 91302 Attention: Andre de Bortnowsky If to the Participant : Crown Printers, Inc . 250 W. Rialto Avenue San Bernardino, CA 92408 Attention: C. Denton Shorett In case of service by mail, service shall be deemed complete and notices and demands shall be deemed to have been received at the expiration of the third calendar day after the date of mailing, notwithstanding any other date for receipt set forth on any return receipt or the failure of any party to receive a return receipt . The addresses to which notices and demands may be delivered or sent may be changed from time to time by service of notice as hereinabove provided by any party upon the other party. - 15 - Section 13 . Applicability of Laws and Litigation Costs. This Agreement shall be construed and enforced in accordance with the laws of the State of California. Should any action be brought in any court of competent jurisdiction, the prevailing party in such action shall be entitled to reimbursement by the other party for all reasonable attorney' s fees, court costs and other costs related to such litigation. Section 14 . Nondiscrimination and Related Covenants. The Participant agrees that, in addition to the other provisions set forth in this Agreement, every conveyance of the Property, in whole or in part to the extent as permitted pursuant to this Agreement, shall, in addition to any other covenants, contain covenants on the part of the Participant, for itself, its successors and assigns of the Property and which covenants shall be covenants running with the land and shall bind the Participant, its successors and assigns and all persons claiming under or through it to effectuate the following: (a) That the work of the redevelopment of the Property or part or parts thereof as in this Agreement provided shall be implemented as intended by this Agreement . - 16 - l (b) That there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises to be conveyed, nor shall the Participant or any grantees or any persons claiming under or through the Participant establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the premises to be conveyed. (c) That, after the satisfactory completion of the Project made necessary by this Agreement, the Property shall be devoted to the uses specified in this Agreement and consistent with the Redevelopment Plan and shall not, in whole or in part, be devoted to any other use or used for any other purposes . (d) That such agreements and covenants shall run with the land, and shall inure to the benefit of and be enforceable by the Agency, its successors and assigns . Furthermore, it is intended and agreed that the covenants contained in subsection (b) of this Section 14 shall remain in effect without limitation as to time. - 17 - (e) Such agreements and covenants shall run in favor of the Agency for the entire period during which such agreements shall remain in force and effect without regard to whether the Agency has at any time been, remains, or is an owner of any land or interest therein to which these covenants relate . In the event of any breach, the Agency shall have the right to exercise all the rights and remedies available at law or in equity to enforce the curing of such breach. (f) That no portion of the Project or the Property shall be sold or used by any tax-exempt entity for the duration of the Redevelopment Plan without written consent of the Agency and that the Participant shall not appeal any assessed valuation established by the County for the purposes of the levy of real property taxes . It is the intent hereof that the provisions of subsections (a) through (f) , inclusive, hereof shall survive the termination of the other operative provisions of this Agreement and as may additionally be required by the Constitution and laws of the State of California and the Law. - 18 - r-1 Section 15 . Certificate of Completion. The Agency, its successors and assigns agree that upon the full compliance by the Participant with the terms of this Agreement which pertain to the construction of the Project upon the Property, and following completion as per City code of the Project, the receipt by the Agency of a written request from the Participant for a Certificate of Completion and notification that the Property is ready for occupancy, the Agency shall provide promptly and furnish to the Participant a Certificate of Completion, substantially in the form as attached hereto as Exhibit "C" , certifying that the construction and installation of the Project, as required pursuant to this Agreement, has been completed as per City code to the satisfaction of the Agency, its successors and assigns . The Director may execute such Certificate of Completion on behalf of the Agency. Upon issuance of the Certificate of Completion by the Agency, each of the covenants, restrictions, warranties and conditions contained in this Agreement relating to the construction of the Project shall be deemed satisfied and shall terminate. Section 16 . Successors and Assians ; Assignment . The provisions of this Agreement shall be binding upon and inure to the benefit of the heirs, executors, administrators, successors and - 19 - assigns of the parties hereto. The Participant shall not assign, transfer or in any manner hypothecate any or all of the rights and obligations of the Participant under this Agreement or with respect to the Property without the prior written approval and consent of the Agency. Section 17 . Events of Default . "Event of Default" wherever used in this Section, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary, or be effectual by operation of law pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body superior to the Agency) : (a) Default in the performance, or breach, of any provision of this Agreement by the Participant, and continuance of such Default or breach for a period of thirty (30) calendar days after the Agency has given notice as specified in Section 12, and requiring it to be remedied and stating that such notice is a "Notice of Default" hereunder; or - 20 - (b) The entry of a decree or order by a court having jurisdiction in the premises adjudging the Participant bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of the Participant under the Federal Bankruptcy Act or any other applicable federal or state law, or appointing a receiver, liquidator, assignee, trustee, sequestrator, or other similar official of the Participant or of any substantial part of its property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order unstayed and in effect for a period of thirty (30) calendar days; or (c) The institution by the Participant of proceedings to be adjudged bankrupt or insolvent, or the consent by it to the institution of bankruptcy or insolvency proceedings against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under the Federal Bankruptcy Act or any other applicable federal or state law, or the consent by it to the filing of any such petition or to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of the Participant or of any substantial part of its property, or the making by it of an assignment for the benefit of - 21 - creditors, or the admission by it in writing of its inability to pay its debts generally as they become due, or the taking of corporate action by the Participant in furtherance of any such action. Section 18 . Entire Agreement : Amendment . Except as otherwise expressly provided herein, this Agreement constitutes the entire agreement between the parties pertaining to the subject matter hereof and supersedes all prior and contemporary agreements and understandings . The parties intend this Agreement to be the final expression of their agreement with respect to the terms hereof and a complete and exclusive statement of such terms . No modification, amendment or waiver of any term hereof shall be binding unless executed in writing by any party or parties to be bound thereby. This Agreement may be amended from time-to-time as deemed necessary by the parties hereto upon written instruments duly approved and executed by the parties hereto. Any such amendments or modifications shall be valid, binding and legally enforceable only if in written form and executed by both the Participant and - 22 - the Agency after the same have been duly approved and authorized for execution. Section 19 . Severability. Each and every section of this Agreement is, and shall be construed to be, a separate and independent covenant and agreement . If any term or provision of this Agreement or the application thereof shall to any extent be invalid or unenforceable, the remainder of this Agreement, or the application of such term or provision to circumstances other than those to which it is invalid or unenforceable shall not be affected thereby, and each term and provision of this Agreement shall be valid and shall be enforced to the extent permitted by law. Section 20 . Section Headings. The headings of the several sections of this Agreement are inserted solely for convenience of reference, and are not a part of and are not intended to govern, limit or aid in the construction of any term or provision hereof . Section 21 . Meaning of Terms . Where the context so requires, the use of the masculine gender shall include the feminine and the neuter gender, and the singular shall include the plural and vice versa. - 23 - "l Section 22 . Indemnification. It is understood and agreed that no official, employee or agent of the Agency shall be personally liable to the Participant or to anyone else as to any obligation or obligations under the terms of this Agreement . The Participant shall save the Agency, and all parties in privity to it, harmless from all claims, demands, causes of action, expenses, and liability of whatsoever kind or nature which may arise out of, because of, concerning, or incident to the performance of the Participant under this Agreement, including all court actions, costs and expenses and attorney' s fees relative to the Agency being a party to this Agreement as may be initiated by the Participant or any third party for any reason whatsoever, except in the event that the Agency has caused the default either through willful misconduct or negligence, including any claims for damages or with respect to personal injuries on the Property. Section 23 . Effective Date of This Agreement ; Execution; Term of Agreement . This Agreement shall not be effective for any purpose whatsoever or binding and enforceable upon the Agency until such time as this Agreement has been approved pursuant to official action of the Agency in accordance with a duly adopted and approved Agency resolution authorizing the Chairman and Secretary of the - 24 - Agency to execute this Agreement on behalf of the Agency. This Agreement may be executed in original counterparts, each of which shall be deemed to be an original for all purposes, and such counterparts shall constitute one and the same instrument . This Agreement shall remain in full force and effect until all of the obligations hereunder have been satisfied in full . IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the year and day first hereinabove written. REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO By. (SEAL) Attest : By: Secretary Approved as to Form: By: Agency Attorney - 25 - "PARTICIPANT" CROWN PRINTERS, INC. a California corporation BY: SBEO/0001/OPA/CROWN PRINTERS, INC. 09/04/96 1:00 mmc - 26 - EXHIBIT"A" LEGAL DESCRIPTION Lots 9 to 12, inclusive, Block 3, Bedford Bros. Subdivision, as per plat recorded in book 8 of Maps, page 30, records of said County. Together with the south '/z of the alley abutting said land on the north as vacated by Resolution of the Mayor and Common Council of the City of San Bernardino, recorded November 14, 1961 in book 5586, page 234, Official Records. .e S EXHIBIT "B" SCOPE OF DEVELOPMENT (TO BE SUPPLIED UNDER SEPARATE COVER) EXHIBIT "C" CERTIFICATION OF COMPLETION When Recorded, Mail to: CERTIFICATE OF COMPLETION I, , Director of the Redevelopment Agency of the City of San Bernardino hereby certify as follows : Section 1 . The Facilities required to be constructed and installed as part of the Project in accordance with that certain Owner Participation Agreement (the "Agreement") dated , 199_, by and between the Redevelopment Agency of the City of San Bernardino and Crown Printers, Inc. , a California corporation (the "Participant" ) on that certain real property more fully described in Exhibit "A" attached hereto and incorporated herein by this reference have been completed in accordance with the provisions of said Agreement . C - 1 Section 2 . This Certificate of Completion shall constitute a conclusive determination, as of January 31, 1997, of satisfaction of the agreements and covenants contained in the Agreement with respect to the obligations of the Participant, and its successors and assigns, to construct the Facilities and the dates for the beginning and completion thereof; provided, however, that the Agency may enter the Property for purposes of enforcing any covenant of the Agreement and shall have the right to offset such expenditures against sums otherwise due to the Participant under the Agreement . Said Agreement is an official record of the Redevelopment Agency of the City of San Bernardino and a copy of said Agreement may be inspected in the office of the Secretary of the Redevelopment Agency of the City of San Bernardino located at 201 North "E" Street, Third Floor, San Bernardino, California 92401-1507 during regular business hours. Section 3 . The real property to which this Certificate of Completion pertains is more fully described in Exhibit "A" attached hereto. C - 2 DATED AND ISSUED this day of 199_. (SEAL) Director of the Redevelopment Agency of the City of San Bernardino ATTEST: