HomeMy WebLinkAboutRDA Reso 2004-1870
REDEVELOPMENT AGENCY RESOLUTION NO. 1870
RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF
CHULA VISTA APPROVING SUBORDINATION AGREEEMNT IN
FAVOR OF KEYBANK NATIONAL ASSOCIATION. THE BROADWAY
VILLAGE PROJECT CONSTRUCTION LENDER
WHEREAS, on June 10, 2003. the City Council and Redevelopment Agency held all required
hearing and approved a Disposition and' Development Agreement ("DDA") that provided for the saie of
Agency owned property at 760 Broadway ("Property"), and the development of mixed used project
comprised of 40 "lane homes", 9 apartments, and approximately 10,000 square feet of retail space
("Projecr'); and
WHEREAS, Agency staff and the Developer have been working to complete the entitlement
process and to satisfy the various conditions to close of escrow; and
WHEREAS, the Subordination Agreement is necessary to accommodate the interests of the
Project's construction iender Keybank National Association; and
WHEREAS, Staff recommends approval of the subordination agreement for the following
reasons:
1. Staff modifications to the DDA, to go into effect concurrent with the Subordination Agreement,
will allow the Agency, if it so elects, to exercise its reentry rights prior to the lender's
foreclosure.
2. Various provisions in the proposed Subordination Agreement would give the Agency notice
and opportunity to purchase the loan, or the Property, prior to a foreclosure transfer to a third
party.
3. Even if a foreclosure transfer were to occur, the key development obligations for the Project
would not be extinguished and would remain in effect (although up to a 12 month delay would
be allowed).
4. Where a sophisticated lender is involved, some form of subordination is typical and
reasonable for th is type of transaction.
5. Keybank is a quality, experienced lender that is ioaning the Developer over $12 million to
construct the Project; Keybank's involvement makes it more likely the Project will be
constructed and that no right of reentry remedy will be necessary in the first place.
NOW, THEREFORE, BE IT RESOLVED the Redeveiopment Agency of the City of Chula Vista
does hereby approve the Subordination Agreement in favor of Keybank National Association, the
Broadway Village Project Construction Lender.
PRESENTED BY
APPROVED AS TO FORM BY
~#j2r Ikæ!
Agency Attorney
Redevelopment Agency Resolution No. 1870
Page 2
PASSED, APPROVED and ADOPTED BY THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA
VISTA, CALIFORNIA this 20th day of April, 2004 by the following vote:
AYES:
Members Davis, McCann, Rindone, Salas, and Chair/Mayor Padilla
NOES:
None
ABSENT:
None
ABSTENTIONS:
None
Stephen C. Padilla
Chairman
ATTEST:
STATE OF CALIFORNIA)
COUNTY OF SAN DIEGO) sse
CITY OF CHULA VISTA)
I, Laurie A. Madigan, Executive Secretary to the Redevelopment Agency of the City of Chula Vista,
California DO HEREBY CERTIFY that the foregoing is a full, true and correct copy of Resolution No. 1870
and that the same has not been amended or repealed.
Dated: April 20, 2004