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HomeMy WebLinkAboutrda min 1994/01/28 Minutes of a Special Meeting of the Redevelopment Agency of the City of Chula Vista Friday, January 28, 1994 Council Conference Room 5:05 p.m. City Hall Building CALL TO ORDER 1. ROLL CALL: PP. ESENT: Members Horton, Fox, Moore, Rindone (arrived at 5:06 p.m.), and Chairman Nader ALSO PRESENT: John D. Goss, Executive Director; Brace M. Boogaard, Agency General Counsel; Kenneth Iohnson, Agency Special Counsel; Chris Salomone, Community Development Director; and Berlin D. Bosworth, Secretary to the Re. development Agency 2. APPROVAL OF MINUTES: None submitted. BUSINESS 3. WRITTEN COMMUNICATIONS: None Submitted. 4. REPORT TERMS OF THE CONSENT AND SUBORDINATION AGREEMENTS WITH THE FORD MOTOR CREDIT COMPANY AND GENERAL MOTORS ACCEPTANCE CORPORATION-On I/4/94 the Redevelopment Agency approved a Consent and Subordination Agreement to be entered between fie Agency and Ford Motor Credit Company. The FMCC Subordination Agreement is substantially similar to the Consent and Subordination Agreement previously entered into by the Agency and General Motors Acceptance Corporation in connection with ~eir loan to Messrs. Ordway and Reneau. In negotiating the final terms of the FMCC Subordination Agreement, certain conditions affecting the Agency' s right of reverter and requirement to subordinate to the CC&Rs have been altered at the request of Ford Motor Credit Company. These Changes are presented to the Agency for concurrence for inclusion both in the GMAC and FMCC Subordination Agreements. Staff recommends that the Agency approve the changes and authorize execution of the FMCC Subordination Agreement as modified and preparation and execution of an amendment to the GMAC Subordination Agreement incoroorafing such changes therein. (Community Development Director) Agency General Counsel Boogaard stated staff desired additional authority than set forth in the Consent and Subordination Agn~ement, previously approved by the Agency, by which Agency would have the duty to subordinate the Agency's Right of Reverter on the Auto Park to a subsequent lender, Ford Motor Credit Company on the Ford dealership parcels and GMAC on the Chevrolet dealership parcels. The question arose as to whether the Agency's Reverter Rights would be below or subject to the Use Covenants of the CC&Rs. The lenders wanted the Agency to be bound by the Use Covenants so the Agency would not go into the Auto Park Center, purchase the property and put a shopping center or some other use in the Auto Park that would be a disadvantage to the neighboring Auto Park dealerships. The new Agreement authorized additional authority beyond what Agency had previously given. A formula was developed whereby each party, based upon the productivity of the Auto Park as a whole, would be given a reasonable period of time to get an Auto Park-reLated bnsinass back into the Park. Should the Auto Park generate less than a given year's projected tax revenue, the Agency would then agree for one year to suspend its Reverter Rights and try and get another Auto Park dealership into the Pa/ck. Should the Auto Park generate tax revenue greater than that projected, then the Agency would suspend its Revert Rights for a period of three years. However, should the sales tax revenues drop below that projected, then the Reverter Rights would fall back to the maximum period of time originally established. Staff was seeking additional approval of the Agency to subordinate the Agency's Reverter Rights conditionally to the land use restriction. Minutes January 28, 1994 Page 2 Member Horton asked how value was determined for a dealership property. Agency Special Counsel Johnson replied it would be based on the dealership's actual cost, taking all fact~;rs in the Disposition and Development Agreement into consideration, plus the cost of improvement to that point in time. Agency General Counsel Boogaard stated that formula was established in the previously approved Disposition and Development Agreement. Member Moore asked the Executive Director if he had any problem with the new Agreement. Executive Director Goss stated from a business standpoint he had no problem. Member Rindone said the time lines provided in the new Agreement were very reasonable. Agency General Counsel Boogaard concurred. MOTION [Mooreatorton] to approve staff recommendation. Chairman Nader stated it did not seem like an unreasonable condition, but asked why the Agency should agree. Agency General Counsel Boogaard responded the lender would not lend on the site should the Agency have the right to come in, buy the property and put a non-auto related commerciai facility within the Auto Park Center. That would disrupt the commercial purpose for which the Auto Park Center had been established. Chairman Nader asked if the restriction applied only as long as there was an auto dealership functioning as such, and would the Agency have to wait one year to do something with the site if there was no dealerships. Agency General Counsel Boogaard stated the Agency would be bound for the year period unless Ford Motor Credit Company or GMAC was convinced it was futile to place another auto dealership at the site. They wonld then, by consent, also seek to re-market the site and get their costs out the deal. VOTE ON MOTION: 5-0-0. PUBLIC HEARINGS None Submitted. ORAL COMMUNICATIONS None Submitted. ACTION ITEMS None Submitted. Minutes January 28, 1994 Page 3 OTHER BUSINESS 5. DIRECTOR'S REPORT - None. 6. CHAIRMAN'S REPORT - None. 7. MEMBERS' COMMENTS - None. ADJOURNMENT The meeting adjourned at 8:13 P.M. to a Joint Meeting of the Redevelopmerit Agency/City Council on Tuesday, February 1, 1994 at 4:00 p.m., immediately following the City Council meeting, Council Chambers, Public Services Bttilding. Respectfully submitted, Berlin D. Bosworth Secretary to the Redevelopment Agency