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HomeMy WebLinkAboutAgenda Statement 1979/09/18 Item 01a, b Resolution CITY OF CHULA VISTA Ite~ No, 1 a, b REDEVELOPMENT AGENCY AGENDA STATEMENT For meeting of 9/18/79 (a) Authorizing Issuance of $7,150,000 Principal Amount of Redevelopment Agency Bayfront/Town Centre Redevelopment Projects 1979 Tax Allocation Bonds (b) Authorizing and Directing Sale of $7,150,000 Principal Amount of Agency Bayfront/Town Centre Redevelopment Projects 1979 Tax Allocation Bonds, Adopting Official Notice of Sale, Adopting Official Statement and Authorizing Official Action ~~ . ') Community Development Director C'--J ITEM TITLE SUBMITTED BY ITEM EXPLANATION (4/5TH'S VOTE REQUIRED YES ___ NO~) The Agency is asked to consider the above resolutions relative to the issuance of tax allocation bonds for the Bayfront/Town Centre projects. In addition, due to State statutes the City Council (by resolution) is asked to reaffirm the Agency's action. Basically, the resolutions will: 'Authorize the issuance of $7,150,000 principal amount of Town Centre/Bayfront bonds. .Authorizes sale of the bonds, adopts official statement, notice of sale and other implementation measures. The sale of bonds for redevelopment project use has been the subject of much Agency discussion since the enactment of the Disposition & Development Agreement with Centre City Associates last September. In order to obtain the required funding for the Town Centre, several actions were necessary the most important of which was the enactment of AB405. Said legislation permitted the merger of the Bayfront and Town Centre pro- jects for fiscal purposes. The legislation, thanks to Assemblyman Deddeh was signed by the Governor on July 10, 1979 and concurred in by Agency action dated July 17, 1979. Since that date with the Agency's concurrence, Stone & Youngberg has been preparing documents relative to a sale of tax allocation bonds based on the strength of the merged projects. The amount of the bond issue has been set at $7,150,000. Of this, derending upon the discount and interest rate including required reserves, the Agency will net approxi- mately $6,200,000. As related at the September 6 meeting, approximately 20%, or (continued on page 2) PGD:as Agreement Resolution EXHIBITS Ordinance Plat Notification List Other ENVIRONMENTAL DOCUMENT: Attached Submitted on FINANCIAL IMPACT The bonds are not a liability of the City; bond service is projected to be over 1.3 times the tax increment. The bond amortization is within the constraints of the Gann initiative should that measure pass in the November election. STAFF RECOMMENDATION Adopt resolutions. BOARD/COMMITTEE RECOMMENDATION Iv ~ REDEVELOPMENT AGENCY ACTION RA-4 (REV. 10/77) . . Item No'. 1, a. b For meeting of 9/18/79 Page 2 $1~ million must be utilized for low and moderate-income housing with the remainder of $5 million for project expenses. The bonds are not a debt of the City. Their repayment is derived from the tax incre- ment from both projects which now totals over $1 million annually or over 1.3 times the amount needed to service the debt. As noted in the Official Statement, the estimated full market value of both projects since their inception has increased $108,230,448; it is further expected that this will increase by another $35 million from projects now eit~er under construction or in the planning stages. The signif- icance of this is that additional bonds may be sold in future years if we have the need for such funds. Should we be able to implement our Bayfront project then suf- ficient tax increment will be available to service the required bonds in stagffias required. t1r. Terry McCarty of Stone & Youngberg (our finance consultant) and t1r. Andy Hall of Jones, Hall, Hill & White (bond counsel) will both be present to briefly describe the subject resolutions. On Thursday of this week they have arranged meetings in New York with the credit rating agencies, f1oody's Investors Service and with Standard & Poor's Corporation. The Community Development Director has been asked to also attend so as to provide responses to local conditions and redevelopment project activities. The cost of travel and rating service will be allocated from the bond sale issuance cost. As described at the September 6th meeting it is necessary that City Council ratify the Agency's action due to the fact that in some other entities within the state the Council and Agency members are not the same. \\ V\I\. ..