HomeMy WebLinkAboutAgenda Statement 1984/12/11 Item 5 COUNCIL AGENDA STATEMENT
Item 5
Meeting Date 12/11/84
ITEM TITLE: Public Hearing Issuance of Variable Rate Demand Commer-
cial Development Revenue Bonds
Resolution // 4 Authorizing the sale of $2,730,000
Principal Amount of Commercial Development Revenue Bonds
(South Bay Ambulatory Surgery Associates Project), 1984 Series
A, approving related documents and authorizing official action
SUBMITTED BY: Community Development Director 5ths Vote: Yes No X )
BY: City �4
REVIEWED B y Mana er g
ij
In August, 1983, the Industrial Development Authority approved an application
for Commercial Revenue Bond Financing from South Bay Ambulatory Surgery Center
for the construction of a 15,000 square foot surgi-center at 251-255 Landis
Street. At this time the City Council is requested to hold a public hearing
on the question of whether the City should issue bonds in support of this
project. This hearing is required by Federal tax law governing the issuance
of tax exempt bonds.
The City Council is also requested to approve a resolution authorizing the
issuance of the bonds.
RECOMMENDATION: That the City
1 . Accept the report and hold the public hearing on the South Bay
Ambulatory Center.
2. Approve the resolution authorizing the sale of $2,730,000 Principal
Amount of Commercial Development Revenue Bonds (South Bay Ambulatory
Surgery Associates Project), 1984 Series A, approving related
documents and authorizing official action.
BOARDS/COMMISSIONS RECOMMENDATION: The Industrial Development Authority
approved the project at their meeting of August 8, 1983. The Redevelopment
Agency approved an inducement resolution at their meeting of March 20, 1984.
The Town Centre Project Area Committee approved the financing and land use at
their meeting of August 8, 1983.
DISCUSSION:
South Bay Ambulatory Surgery Associates is a consortium of local physicians
who are constructing an outpatient surgical center at the southeast corner of
Landis Avenue and Davidson Street. The project calls for the construction of
Page 2, Item 5
Meeting Date 12/11/84
a two-story building comprising approximately 15,000 square feet. The first
floor of this building will provide surgical facilities for patients with
minor surgical needs not requiring overnight hospitalization. The second
floor will provide medical offices. Health facilities including diagnostic
and treatment centers are specifically eligible under the adopted criteria for
IDB financing. In terms of being in the public interest, the project will
also provide the following:
1 . Creation of Jobs - The center will be staffed by approximately 13
employees ranging in training from receptionists to highly ski 11 ed
registered nurses and physicians.
2. Increased Accessibility of Health Care Facilities - This project will
provide additional surgical facilities in an area where a high proportion
of the residents are elderly and retired.
3. Lower Cost of Health Care Services - The surgi-center's facility charge is
estimated to be considerably less than equivalent charges for the use of
hospital facilities wheich patients must pay.
4. This project is located within the Town Centre Redevelopment District and
supports the goals and objectives of the redevelopment program.
5. Increased Tax Flow - Property taxes accruing from the surgi-center are
estimated to be 25 times greater than taxes currently accruing from the
property.
Construction of this facility began this summer with a constructin loan from
the Golden State Sanwa Bank of California. The bank also issued a letter of
credit as initial security for the project. The approval and issuance of
bonds was delayed to coincide with the conversion to permanent financing after
completion of construction which is anticipated early in 1985.
It is also important that the City approve the issuance of the bonds before
the end of this calendar year so that the $2,730,000 is not charged against
the City's 1985 IDB allocation CAP of approximately 3 4.6 million. This
project was "grandfathered in" under 1984 Tax Equity and Fiscal Responsibility
Act (TEFRA) guidelines and will not affect this year's allocation.
FISCAL IMPACT: The bonds will be secured by the proposed facility and
repaid by South Bay Ambulatory Surgery Associates and will not constitute
liability or obligation of the City.
A processing fee of 1/8 of 1 percent (.00.125) is charged for the processing
of applications for IDB financing. Fees from this project, totaling 33,412.50,
will be paid to the City at the time of closing.
WPC 1337H � .
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