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Home My WebLink Aboutcc min 1997/07/22 RDA MINUTES OF A SPECIAL JOINT MEETING OF THE REDEVELOPMENT AGENCY/ CITY COUNCIL/HOUSING AUTHORITY/INDUSTRIAL DEVELOPMENT/PUBIAC FINANCING AUTHORITY OF THE CITY OF CHULA VISTA Tuesday, July 22, 1997 Council Chambers 7:35 p.m. Public Services Building CALL TO ORDER 1. ROlL CALL: PRESENT: Members: Moot, Rindone~ Salas, and Chair/Mayor ttorton ABSENT: Member: Padilla ALSO PRESENT: Assistant Executive Director/City Manager, Sid W. Morris: Legal Counsel/City Attorney, John M. Kaheny: City Clerk, Beverly A. Authelet CONSENT CALENDAR (Item pulled: 4) BALANCE OF THE CONSENT CALENDAR OFFERED BY MEMBER RINDONE, headings read, texts waived, passed and approved ~0-1 (Padilla absent). 2. APPROVAL OF MINUTES: 5/23/95(joint Public Financing Authority/Council):09/17/96(Housing Authority); 7/9/96 and 01/28/97 (Industrial Development Authority); 06/03/97, 06/10/97. and 06/17/97 (joint Agency/Council); 06/24/97 (special Agency) (Member Salas abstained from voting on 5/23/95, 7/9/96, and 9/17/96 minutes since she was not on the City Council at that time). 3. AGENCY RESOLUTION 1546 APPROVING COST SHARING AGREEMENT BY AND BETWEEN WAIVING THE CONSULTANT SELECTION PROCESS; APPROVING A COST SHARING AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY, ROHR, INC. AND THE SAN DIEGO UNIFIED PORT DISTRICT, AND BFGW GROUP, LLC FOR SERVICES RELATED TO GROUNDWATER BASIN REDESIGNATION: AND AUTHORIZING THE EXECUTIVE DIRECTOR TO EXECUTE SAME - On 2/11/97. the Agency conceptuall~ approved participation in a petition to the Regional Water Quality Control Board to remove the beneficial use designation from the groundwater basin in the area of the Chula Vista Bayfront, contingent upon a cost sharing agreement among the participating parties and an appropriation of funds for the intended purpose. Staff recommends approval of the resolution. (Community Development Director) 4. AGENCY RESOLUTION 1547 APPROVING THE FORBEARANCE AGREEMENT BETWEEN ONE PARK LIMITED AND THE CHULA VISTA REDEVELOPMENT AGENCY RESTRUCTURING THE 1985 ORIGINAL AGENCY LOAN IN THE AMOUNT OF $850,000 FOR THE ONE PARK APARTMENTS AT 350 THIRD AVENUE On 10/17/85, the Agency approved an $850,000 ten year deferred loan for the development of a 94-unit residential rental project and parking structure located at 350 Third Avenue to benefit moderate income households. The borrower requested Agency financial assistance to off'set the costs of a grade level parking structure. As the 5/96 due date approached, the borrower requested the Agency to renegotiate the loan. On 9/24/96, the Agency instructed staff to implement the recommended ag~eemeut term.~ as t, utlint. d in the Forbearance Agreement. Staff recommends approval of the resolution. (Community Development Director) Member Moot stated that it was some time ago that staff walked the Agency through this complex financial transaction. He asked if we were able to stay within the guidelines that the Agency had given. He did not remember discussing the formula and asked for it to be explained. Was the formula for the kicker? RDA Minutes July 22, 1997 Page 2 Mr Salomone stated that this was negotiated with our consultant, Steve Delaney, and was an acknowledgement that a deal made in the mid-80s anticipated a market that was not there in the mid-9Os. The kicker was the main forgiveness that we negotiated in an acknowledgement that the market has gone away. The developer has honored every commitment of this agreement including the lump sum payments, tbe payments for legal costs. This proiect is in escrow, and we fully expect the escrow to be successful and this forbearance agreement will become unnecessary. We anticipate the sale will go through. We will get a lump sum payoff, and we will be in a lot better shape than this forbearance agreement would have tlltimately led us to. Glen G{~ogins. Deputy City Attorney, stated that basically what the transaction did was take the approximately $2.2 million that was due and payable in May 1996 under the original loan agreement and break it into components. First component was the $850,000 original principal balance of the loan and the restructured deal basically said that the developer was obligated to pay $250,000 immediately towards that principal balance and the remaining $600.000 would be repaid over the following three years at 6% interest with quarterly payments payable of $15,000 a piece. The remaining amounts of the loan, approximately $1.35 million in accrued interest and a potential kicker were broken down still further. $500,000 of that amount was also structured as a quarterly payment amortized over the same three-year period as the $600,000 amount described above. And $670,000 of the non-kicker interest was to be repaid based upon the formula which essentially pays the City a portion of that interest depending upon what the appraised value of the property is or what the sale price of the property is by no later than October 1999. In other wards. there is a potential payment under this component of $670,000. Basically, it has the City sharing in the upside of the increased value of the property up to a maximum amount of $670,000. Assuming that the developer honors all these various obligations, the $250,000 payment upfront, the structured payments iin the $600,000 remaining principal balance, the structured payment on the $500,000 component of the remaining interest. and maybe the formulaic payment up to $670,000, the kicker amount under the original agreement which was estimated at approximately $290,000 would be forgiven. This is consistent with the parameters given which was approved in concept in October. Member Moot asked that if the current escrow goes through, when will the Agency receive the $1.1 million less what has been paid? Juan Arroyo. Housing Coordinator. replied that there would be $1.1 million less any amount paid todate plus interest {~wed. Mr. Salomone stated that this amount was not included in the budget, but staff told the Agency that we thought that this would happen because at that point it was just going into escrow. These were housing set-aside monies that were loaned. and they are restrictive funds. RESOLUTION 15-47 OFFERED BY MEMBER MOOT, heading read, text waived, passed and approved 4-0-1 (Padilla absent). S. JOINT COUNCIL RESOLUTION 18734, AGENCY RESOLUTION 1548, HOUSING AUTHORITY RESOLUTION HA-5, INDUSTRIAL DEVELOPMENT AUTHORITY RESOLUTION IDA-34 AND PUBLIC FINANCING AUTHORITY RESOLUTION PFA-2 APPROVING AN AGREEMENT WITH THE LAW FIRM OF STRADLING, YOCCA, CARLSON & RAUTH TO PROVIDE BOND COUNSEL SERVICES AND AUTHORIZING THE MAYOR TO EXECUTE SAID AGREEMENT - Since 1985, the City and Agency have contracted with the law firm of Jones, Hall, Hill & White to provide bond counsel services on all debt issues with the exception of certain assessment district issues. In order to make a determination if a change was desirable, staff conducted a formal selection process for these services. A Request for Proposals was sent to 15 municipal law firms. Eleven proposals were received and evaluated by a selection committee appointed by the City MonageL Fhe committee interviewed three rums deemed the best and unanimously selected the firm of Stradling, Yocca. Carlson & Rauth. Staff recommends approval of the resolution. (Director of Finance) RDA Minutes July 22, 1997 Page 3 6. HOUSING AUTHORITY RESOLUTION HA-6 APPROVING FISCAL YEAR 1997-98 BUDGET AND APPROPRIATING ANTICIPATED REVENUES OF $1,500 - The City Council adopted bylaws for the Chula Vista Housing Authority on June 27, 1995. Being a separate entity from the City of Chula Vista, the Chula Vista Housing Authority must approve and adopt a budget in order to appropriate funds. Staff recommends approval of the resolution. (Director of Community Development) * * * FJqD OF CONSEl%r]' CALENDAR * * * ORAL COMI~IUNICATIONS (There were none) ITEMS pUI LF, D FROM THE CONSENT CALENDAR (Item No. 4 was pulled from the Consent Calendar, but the minutes will reflect the published agenda order). OTHER BUSINESS 7. DIRECTOR'S REPORT(S) - none. 8. CHAIR'SREPORT(S)- none. 9. AGENCY MEMBER COMMENTS - none. ADJOURNMENT The meeting adjourned at 7:44 p.m. Respectfully st?tted~_~ ~uthel~t, CMC/AAE City Clerk