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HomeMy WebLinkAbout2007/04/03 Item 7 CITY COUNCIL AGENDA STATEMENT ~\'f:.. CITYOf J~CHUlA VISTA APRIL 3, 2007, Item '7J ITEM TITLE: RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA CONSENTING TO THE TRANSFER OF THE TERESINA APARTMENTS PROJECT FROM EAGLE LOMAS VERDES, L.P. TO EQUITY RESIDENTIAL AND AU1HORIZING THE CITY MANAGER TO EXECUTE ALL RELATED DOCUMENTS NECESSARY IN THE TRANSFER ~ ACTING COMMUNITY DETPMENT DIRECTO~ \ INTERIM CITY MANAGER (// SUBMITTED BY: REVIEWED BY: . 4/5THS VOTE: YES D NO ~ BACKGROUND In 1998, the City issued Multifamily Housing Revenue Bonds in total aggregate principal amount of $43,000,000 to finance a 440-urut multifamily housing project known as Teresina Apartments located at the southwest corner of East Palomar Street and La Media Road The project is currently owned by Eagle Lomas Verdes L.P., a Delaware limited partnership (the "Owner"). The existing Owner wants to sell the project and transfer all obligations under the bonds to Equity Residential. At this time, the City Council is asked to approve a resolution consenting to the transfer of the project and authorizing the City Manager to execute all related documents necessary in the transfer. ENVIRONMENTAL REVIEW The Environmental Review Coordinator has reviewed the proposed activity for compliance with the California Environmental Quality Act (CEQA) and has determined that the activity is not a "Project" as defined under Section 15378 of the State CEQA Guidelines; therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines the activity is not subject to CEQA Thus, no further environmental review is necessary. RECOMMENDATION Adopt a resolution consenting to the transfer of the Teresina Apartment project and authorizing the City Manager to execute all related documents necessary in the transfer. 7-1 APRIL 3, 2007, Item~ Page 2 of2 BOARDS/COMMISSION RECOMMENDATION Not Applicable DISCUSSION On November 10, 1998 the City Council of the City of Chula Vista approved Resolution 19255 authorizing the issuance, sale and delivery of multifamily mortgage revenue bonds for the Teresina Apartments in a combined principal amount not to exceed $43,000,000. The project was completed in 2000 and sold to Eagle Real Estate Group, LLC in late 2002. As a condition of the tax exempt bonds, the Borrower has entered into a Regulatory Agreement restricting 20% of the units (88) at affordable rental rates for very low income households for a period of fifty-five (55) years. The project has a stabilized occupancy rate and is in compliance with the terms of the Regulatory Agreement. The existing Owner wants to sell the project and transfer all obligations under the bonds to Equity Residential. To implement the Owner's request, the City is being asked to consent to the transfer, and execute an Assignment and Assumption Agreement (Attachment 1) which transfers all of the obligations unde{ the bond agreements to the buyer. All terms and conditions remain the same. Equity Residential owns and operates over 165,000 apartments in a diverse portfolio nationwide, with 27,277 units in California. Of these units, they own and operate over 12,000 units nationally that are financed with tax-exempt bond debt, for a total bond liability of over $625 million. They have a compliance consultant to monitor their tax-exempt properties and assist in the compliance of the income and rent restrictions dictated in their Regulatory Agreements. Equity Residential is an S&P 500 company and carries an A-/Baal investment grade credit rating. DECISION MAKER CONFLICT Staff has reviewed the property holdings of the City Council and has found no property holdings within 500 feet of the boundaries of the property which is the subject of this action. FISCAL IMPACT Bond financing is a self-supporting program with the owner responsible for the payment of all costs of issuance and other costs and repayment of the bonds. The bonds are secured by the project and do not constitute a liability to or obligation of the City. Staff costs associated with monitoring compliance of the regulatory restrictions and administration of the outstanding bonds will be reimbursed from an annual administrative fee of $20,000 paid to the City by the Owner. ATTACHMENTS Assignment and Assumption Agreement Prepared by: Amanda Mills, Hausing Manager, Community Development Deparlment 7-2 THE ATTACHED AGREEMENT HAS BEEN REVIEWED AND APPROVED AS TO FORM BY THE CITY ATTORNEY'S OFFICE AND WILL BE FORMALLY SIGNED UPON APPROVAL BY THE CITY COUNCIL 4 ~-aJ~PA L/u-N Ann Mo City Attorney Dated: ,':::/,fl 0, /0'7 , , Assignment and Assumption Agreement Relating to Teresina at Lomas Verdes Apartment between Eagle Lomas Verdes L.P., EQR- Teresina Limited Partnership the City ofChula Vista and U.S. Bank National Association 7-3 157004v3 I WHEN RECORDED, MAIL TO: Stradling, Y occa, Carlson & Rauth 660 Newport Center Drive, Suite 1600 Newport Beach, CA 92660 Attn: Robert J. Whelan, Esq. ASSIGNMENT AND ASSUMPTION AGREEMENT RELATING TO TERESINA AT LOMAS VERDES APARTMENTS THIS ASSIGNMENT AND ASSUMPTION AGREEMENT RELATING TO TERESINA at LOMAS VERDES APARTMENTS (this "Assumption Agreement") is made and entered into as of April_, 2007, by and among EAGLE LOMAS VERDES L.P., a Delaware limited partnership (the "Transferor") EQR-TERESINA LIMITED PARTNERSHIP, a Delaware limited partnership (the "Transferee"), the CITY OF CHULA VISTA, CALIFORNIA (the "Issuer"), and U. S. BANK NATIONAL ASSOCIATION, as trustee (the "Trustee") under the Indenture (as such term is hereinafter defined). RECITALS I I I I WHEREAS, Transferor owns that certain real property situated in Chula Vista, San Diego County, California, as more particularly described in Exhibit A attached hereto, and the multifamily rental housing development, including all structures, buildings, fixtures and improvements, situated thereon (the "Project"); WHEREAS, the Project was financed with the proceeds of the Issuer's $37,940,000 Variable Rate Demand Multifamily Housing Refunding Revenue Bonds (Teresina Apartments), Series 2006A (the "Bonds") issued under the terms of that certain Trust Indenture, dated as of April 1 , 2006, between the Issuer and the Trustee (the "Indenture"); WHEREAS, the Issuer used the proceeds of the Bonds to make a loan (the "Loan") to the Transferor pursuant to and in accordance with the provisions of the documents listed on Exhibit A hereto (collectively, the "Assumed Documents"): WHEREAS, all capitalized terms used herein not otherwise defined herein shall have the meaning attributed to such terms in the Assumed Documents, as the context may require; WHEREAS, the Transferor desires to convey and transfer, and the Transferee desires to acquire the rights, title and interest of the Transferor in and to the Project, which transfer and conveyance under the Assumed Documents also requires the consent of the Issuer and the Trustee; 7-4 PH/316157104v3312212007 WHEREAS, the Project may be transferred upon the satisfaction of the conditions set forth in the Assumed Documents, including, in particular, in Section 10 of the Regulatory Agreement, which includes, among other conditions, that the Transferee assume in writing and in full all of the obligations of the Transferor arising on and after the Effective Date (as hereinafter defined) under the Regulatory Agreement and the Financing Agreement; WHEREAS, the Transferee is willing to undertake, agree to and assume such obligations and all of the Owner's obligations under the Assumed Documents on and after the Effective Date; WHEREAS, in order to evidence the undertaking of, agreement to and assumption by the Transferee of the Loan and the rights, duties and obligations of the Transferor under the Assumed Documents, the Issuer, the Trustee, the Transferor and the Transferee have agreed to enter into this Assumption Agreement. NOW, THEREFORE, for good and valuable consideration, the sufficiency of which is hereby acknowledged, the Transferee, the Trustee, the Issuer and the Transferor agree as follows; SECTION 1. ASSIGNMENT AND ASSUMPTION OF OBLIGATIONS. Effective as of the date of the recording of this Assumption Agreement (the "Effective Date"), the Transferor hereby fully and unconditionally assigns from and after the Effective Date to the Transferee all of its rights, title and interest in and under each of the Assumed Documents, including, without limitation, all rights of the Transferor in amounts held by the Trustee in the funds and accounts established pursuant to the Indenture and the Assumed Documents, and delegates to the Transferee all of its duties and obligations under each of the Assumed Documents. The Transferee hereby accepts such assignment and, from and following the Effective Date, hereby fully and unconditionally assumes in full all of the duties and obligations of the Transferor arising after the Effective Date in and under each of the Assumed Documents and undertakes and agrees to perform each and every duty and obligation of "Owner" "Borrower," or "Debtor" (as those terms are defmed in the applicable Assumed Documents), as applicable, under the Assumed Documents. As of the Effective Date, the Issuer and the Trustee hereby fully and unconditionally release Transferor from any and all obligations, duties or liabilities under the Assumed Documents or any other documents to which the Transferor is a party with respect to the Bonds, except for any liabilities or obligations relating to matters arising prior to or on the Effective Date, even if notice of such obligation is received after the Effective Date. The Transferee hereby represents and warrants that the performance of the Transferee's obligations under the Program Documents and compliance with the terms thereof will not result in a breach of any of the terms and provisions of, or constitute a default under, any contract, lease, indenture, deposit agreement, mortgage, deed of trust or other agreement to which the Transferee is a party of by which it is bound. The Transferee acknowledges that is has received and reviewed copies of all of the Program Documents, that it understands the provisions, contents and effect thereof, and agrees to perform all obligations of the Owner under the Program Documents arising from and after the Effective Date. PH/316157104v33/22/2007 7-5 I SECTION 2. REPRESENTATIONS OF TRANSFEROR. The Transferor represents to the Issuer, the Trustee and the Transferee that, as of the date hereof, after reasonable inquiry, (i) the Transferor and the Project are in compliance in all material respects with all requirements of the Assumed Documents, (ii) no transfer of federal tax ownership of the Project has occurred during the six months immediately preceding the Effective Date, (iii) the representations and warranties of the Transferor set forth in the Assumed Documents are true and correct in all material respects as of the date hereof; (iv) there are no defaults by the Transferor under the Assumed Documents and, to the Transferor's knowledge, no event has occurred and is continuing which, with the giving of notice or passage of time, or both, would constitute an event of default or default under the Program Documents with respect to any of the Transferor's obligations; (v) the Assumed Documents are in full force and effect; (vi) there are no liens of any kind encumbering the Property other than the Regulatory Agreement, the Mortgage and other Permitted Encumbrances (as hereinafter defined); (vii) there are no mechanics' liens or liens for unpaid taxes or assessments encumbering the Property. I I I . I I I SECTION 3. ADDITIONAL TAX COVENANTS OF TRANSFEREE. The Transferee hereby covenants that so long as any of the Bonds remains outstanding and remain convertible to tax-exempt, (a) neither it nor any party related to it will pennit any of the obligations of the Transferee relating to the Bonds (including the obligations of the Transferee under any. agreement relating to credit enhancement or liquidity support for the Bonds), to be secured directly or indirectly by any interest in property that constitutes investment property under and within the meaning of Section 148 of the Internal Revenue Code of 1986, the yield on which exceeds the yield on the Bonds as such yield is computed in accordance with applicable federal tax law, and (b) it will comply with the terms and requirements of the Tax Certificate. SECTION 4. ACKNOWLEDGMENT. CONSENT AND REPRESENTATIONS OF TRUSTEE. U.S. Bank, National Association, as Trustee under the Assumed Documents (the "Trustee"), hereby acknowledges the acquisition by the Transferee of Teresina Apartments from the Transferor and acknowledges, consents and represents as follows, assuming due authorization, execution and delivery of this Assumption Agreement by the parties hereto:: (i) acknowledges that the Transferee has assumed the rights and obligations of the Transferor pursuant to the Assumed Documents; (ii) that all notices which absent such assumption and acquisition would have been sent to the Transferor, shall from and after the date of this Assumption Agreement be delivered to Transferee at the address set forth in Section 5 of this Assumption Agreement; (iii) the Transferor is hereby released from obligations under the Assumed Documents arising after the date hereof; (iv) to the knowledge of the Trustee the Assumed Documents are in full force and effect and there has been no amendment, modification, supplement, modification or assignment of the Assumed Documents of any kind except as listed on Exhibit A; 7-6 PHI 316157104v3 3/2212007 (v) All amounts payable to the Trustee under the Assumed Documents have been paid in full through the date hereof; (vi) To the knowledge of the Trustee the Transferor is not in default under the Assumed Documents and has not breached the Assumed Documents in the performance of any covenant or obligation thereunder, the Trustee has not given any notice to the Transferor of any default under the Assumed Documents which has not been cured, and no circumstance presently exists which, with the giving of notice or the passage of time or both, would give rise to a default by the Transferor under the Assumed Documents. (vii) The person executing this Assumption Agreement on behalf of the Trustee is duly authorized and empowered in all respects to do so on behalf of the Trustee, and the foregoing may be relied upon by the Transferee and its successors and assigns. SECTION 5. ACKNOWLEDGMENT. CONSENT AND REPRESENTATIONS OF THE ISSUER. City of Chula Vista, as Issuer (the "Issuer") hereby consents to the acquisition by the Transferee of the Teresina Apartments from the Transferor and hereby acknowledges, consents and certifies as follows, assuming due authorization, execution and delivery of this Assumption Agreement by the parties hereto: (i) that all notices which absent such assumption and acquisition would have been sent to the Transferor, should hence forth be delivered to Transferee at the address set forth in Section 5 of the Agreement; (ii) the Transferor is hereby released from obligations under the Assumed Documents arising after the date hereof (iii) To their knowledge, there has been no amendment, modification, supplement, modification or assignment of the Assumed Documents of any kind except as listed on Exhibit A. (iv) All amounts payable to the Issuer under the Assumed Documents have been paid in full through the date hereof. (v) To their knowledge, the Transferor is not in default under the Assumed Documents and has not breached the Assumed Documents in the performance of any covenant or obligation thereunder, the Issuer has not given any notice to the Transferor of any default under the Assumed Documents which has not been cured, and no circumstance presently exists which, with the giving of notice or the passage of time or both, would give rise to a default by the Transferor under the Assumed Documents. (vi) The person executing this Assumption Agreement is duly authorized and empowered in all respects to do so on behalf of the Issuer. 7-7 PH/316157104v33/2212007 I . . SECTION 4. MISCELLANEOUS. I A. Lien Priority. It is expressly understood by and among all parties hereto that the Mortgage is now and shall continue to be a first lien upon the Project (subject to the Regulatory Agreement), and that nothing done or said in this Assumption Agreement shall be construed as waiving, discharging, or as limiting or affecting in any manner, the lien of the Mortgage on the Project, nor shall this Assumption Agreement be construed as subordinating said lien to any other lien(s) or encumbrance(s) that may now or hereafter exist. I I B. Effectiveness of Transfer. The transfer and conveyance of the Project from the Transferor to the Transferee shall be effective upon the recordation of this Assumption Agreement, fully executed and delivered by the parties hereto. Delivery to the Issuer and the Trustee of (i) an opinion of counsel to the Transferee to the effect that the Transferee has duly assumed the obligations of the Transferor under the Assumed Documents and that such obligations are valid and binding on the Transferee, and (ii) of an opinion of Bond Counsel to the effect that such transfer will not adversely affect the tax-exempt status of interest on the Bonds and all other conditions our consent to the transfer of the Project are hereby acknowledged as satisfied by the Issuer and the Trustee and the Issuer hereby authorizes the Trustee to enter into this Assumption Agreement. C. Payment of Costs: Deliverv of Documents. The Transferee agrees to pay the Issuer's and the Trustee's costs to effectuate the transfer of the Project to Transferee, including, but not limited to, recording fees, transfer taxes, escrow fees, Bond Counsel and other attorney's fees, expenses and disbursements incurred by the Issuer and the Trustee relating to this Assumption Agreement or incurred in connection with the assumption by the Transferee of the obligations under the Assumed Documents. The Transferee, at its expense, shall promptly provide the Transferor and the Trustee with a complete transcript of the documents relating to the transfer to, assignment to and assumption of the Loan by the Transferee. D. Notices to the Transferee. All notices to be given to the Transferee, as Owner under and pursuant to the Assumed Documents, shall be addressed as follows: EQR-Teresina Limited Partnership c/o Equity Residential Two North Riverside Plaza, Suite 400 Chicago, Illinois 60606 Attention: General Counsel E. Construction. This Assumption Agreement and all related documents shall be governed by and construed in accordance with the laws of the State of California. F. Execution in Counterparts. This Assumption Agreement may be simultaneously executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. G. No Further Modifications. All terms and conditions of the Program Documents not expressly modified by this Assumption Agreement are expressly reaffirmed as if set forth in 7-8 PH/316157104v33/22/2007 their entirety herein and shall remain unaffected, unchanged and unimpaired by reason of this Assumption Agreement. Signatures on following pages - PH/316157104v3312212007 7-9 I i I I TIDS ASSUMPTION AGREEMENT is executed by the parties hereto on the date first written above. I I I TRANSFEROR: EAGLE LOMAS VERDES, L.P., a Delaware limited partnership By: Casa Major, Inc., a California nonprofit public benefit corporation Its: Managing General Partner I I . I I I . i By: Robert E. Graham Its: President By: Eagle Real Estate Group, LLC, a California limited liability company Its: Co-General Partner By: Eagle Real Estate Management Group, LLC, a California limited liability company Its: Managing Member By: Its: Manager [ADD NOTARIES FOR ALL] 7-10 PH/316157104v33/2212007 TRANSFEREE: EQR-Teresina Limited Partnership, a Delaware limited partnership By: HEARTHSTONE HOUSING FOUNDATION, a California non-profit corporation By: Name: Title: By: ERP OPERATING LIMITED PARTNERSHIP, an Illinois limited partnership, a general partner By: EQUITY RESIDENTIAL, a Maryland real estate investment trust Its: Sole General Partner By: Mark J. Purrell Its: First Vice President, Capital Markets and Treasurer 7-11 PHI 316157104v3 3/2212007 . I I i I I I I I I ISSUER: CITY OF CHULA VISTA, CALIFORNIA, as Issuer By: Its: I I I I i I I . I I . I . I I I I i ii . i . . ii ! 7-12 PH/316157104v33/2212007 TRUSTEE: U. S. BANK NATIONAL ASSOCIATION, as Trustee By: Its: 7-13 PH/316157104v33/2212007 I I I . . . ACKNOWLEDGMENT AND CONSENT OF CREDIT ENHANCER Federal National Mortgage Association, as Credit Enhancer (the "Credit Enhancer") hereby consents to the acquisition by EQR- Teresina Limited Partnership ("Purchaser") of the Teresina Apartments from the Seller, pursuant to that certain Assignment and Assumption Agreement by and between the Seller and Purchaser dated April-, 2007. FEDERAL NATIONAL MORTGAGE ASSOCIATION, as Credit Enhancer By: Name: Title: I I I ;; ; !! 7-14 PHI 316157104v3 3/2212007 ACKNOWLEDGMENT AND CONSENT OF REMARKETING AGENT Citigroup Global Markets Inc., as Remarketing Agent hereby acknowledges and consents to the Assumption of the Remarketing Agreement pursuant to that certain Assignment and Assumption Agreement by and between the Seller and Purchaser dated April_, 2007. CITIGROUP GLOBAL MARKETS INC., as Remarketing Agent By: Name: Title: PHI 316157104v3 3/2212007 7-15 EXHffiIT A LIST OF ASSUMED DOCUMENTS 1) Amended and Restated Regulatory Agreement and Declaration of Restrictive Covenants, dated as of April 1, 2006 among the Issuer, the Trustee and the Transferor (the "Regulatory Agreement"), recorded in the Official Records of San Diego County, California (the "Official Records"), on April 27, 2006, as Document No. 53010448-413; 2) Financing Agreement, dated as of April 1, 2006, among the Issuer, the Trustee and the Transferor, relating to the Bonds (the "Financing Agreement"); 3) Owner's Tax Certificate, dated April 27, 2006, executed by the Issuer and the Borrower (as supplemented and amended, the "Tax Certificate"); 4) Multifamily Note (the "Note") dated as of April 7, 2006 from Transferor to the Issuer. 5) Multifamily Deed of Trust, Assignment of Rents and Security Agreement executed by the Transferor for the benefit of the Issuer 6) Remarketing Agreement dated as of April I, 2006 between Transferor and Citigroup Global Markets Inc. (f/kJa/ Newman and Associates). 7-16 PHI 316157104v3 3/22/2007 RESOLUTION NO. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA CONSENTING TO THE TRANSFER OF THE TERESINA APARTMENTS PROJECT FROM EAGLE LOMAS VERDES, L.P. TO EQUITY RESIDENTIAL AND AUTHORIZING THE CITY MANAGER TO EXECUTE ALL RELATED DOCUMENTS NECESSARY IN THE TRANSFER WHEREAS, the City of Chula Vista California (the "City") has previously issued its $37,940,000 aggregate principal amount Variable Rate Demand Multifamily Housing Refunding Revenue Bonds (Teresina Apartments), Series 2006A (the "Bonds") to refmance the acquisition and construction of a multifamily residential rental project known as "Teresina Apartments" (the "Project"); and WHEREAS, in connection with such financing, the City and U.S. Bank National Association, as trustee (the "Trustee"), entered into that certain Trust Indenture, dated as of April 1, 2006 (the "Indenture"); and WHEREAS, in connection with the issuance of the Bonds, the City, the Trustee and Eagle Lomas Verdes, L.P., a Delaware limited partnership (the "Owner") have executed and delivered that certain Amended and Restated Regulatory Agreement and Declaration of Restrictive Covenants dated as of April I ,2006 (the "Regulatory Agreement") with respect to the Project; and WHEREAS, the Owner desires to sell the Project to EQR-Teresina Limited Partnership, a Delaware limited partnership (the "New Owner"); and WHEREAS, the Owner desires to assign the obligations of the Owner under the Regulatory Agreement and other Bond Documents (as defmed in the Indenture) to which the Owner is a party for the period from and after the New Owner's acquisition of the Project, and the New Owner desires to assume the obligations of the Owner under the Regulatory Agreement and other Bond Documents (as defmed in the Indenture) to which the Owner is a party for the period from and after the New Owner's acquisition of the Project, pursuant to that certain Assignment and Assumption Agreement, by and among the Owner, New Owner, the Trustee and the City, dated as of April 1, 2007 (the "Assignment and Assumption Agreement"); and WHEREAS, the form of an Assignment and Assumption Agreement has been submitted to the City for approval; and WHEREAS, the City desires to consent to the transfer of the Project and the assumption of the Regulatory Agreement by the New Owner; and WHEREAS, capitalized terms not otherwise defined herein shall have the meaning set forth in the Indenture. 1 7-17 NOW, THEREFORE, BE IT RESOLVED by the City Council of the City as follows: Section I. The above recitals, and each of them, are true and correct. Section 2. The City hereby consents to the transfer of the Project to the New Owner. Section 3. The proposed form of Assignment and Assumption Agreement presented at this meeting is hereby approved as the form of Assignment and Assumption Agreement. Each of the Mayor, City Manager, Deputy City Manger, Finance Director and Clerk of the City, or the designee of any of them, is hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver the Assignment and Assumption Agreement in substantially the form presented, with such additions thereto or changes therein as are recommended or approved by the City Manager, City Attorney or Bond Counsel and approved by the officer or officers executing the same. The approval of such officer or officers shall be evidenced conclusively by the execution and delivery of the Assignment and Assumption Agreement. Section 4. All actions heretofore taken by the officers and agents of the City with respect to the Assignment and Assumption Agreement are hereby approved, confirmed and ratified. Upon approval of the City Attorney and Bond Counsel, the proper officers of the City are hereby authorized and directed, for and in the name and on behalf of the City, to do any and all things and take any and all actions and execute and deliver any and all certificates, agreements and other documents, including, but not limited to, those described in the Indenture and the Assignment and Assumption Agreement herein approved which they, or any of them, may deem necessary or advisable in order to consummate the lawful execution and delivery of the Assignment and Assumption Agreement in accordance with this Resolution. The Mayor, City Manager, Deputy City Manager, Finance Director and Clerk of the City are hereby authorized and directed to execute and deliver from time to time any certificates, statements, requests, notices or orders as are required with respect to certain discretionary actions that may be taken by the City under the Assignment and Assumption Agreement in order to carry out the execution and delivery of the Assignment and Assumption Agreement. Section 5. This Resolution shall take effect immediately upon its adoption. Presented by Approved as to form by Ann Hix, Acting Community Development Director ~.~ ... {dL /J1P..--1 fk.d-/ Moore, City Atto . J:\COMMDEV\RESOS\2007\04-03-07\TERESINA TRANSFER 2 7-18