HomeMy WebLinkAboutAgenda Statement 1982/03/09 Item 8a, 8b (2)COUNCIL AGENDA STATEMENT
Item 8a, 8b
Re olutions Meeting Date 3/9/82
ITEM T TLE• /0790 a) Authorizing Issuance of Bonds or Other Obligations to Finance
• Construction of Exempt Marina and Recreational Facilities by
Income Property Group
~ 07q~b) Authorizing Issuance of Bonds or Other Obligations to Finance
Construction of Non-Exempt Marina and Recreational-Facilities
by Income Property Group
SUBMIT ED BY: Community Development Director
(4/5ths Vote: Yes No X )
Upo the direction of the City Council/Redevelopment Agency, I have been attempting to
ass st in the development of the financing plan for the construction of a 600-slip
mar na and 250-space R/V park at the "J" Street marina tidelands area of the City.
Last year after several months of consideration, the City Council rejected the financin
pro osal wherein the full faith and credit of the City would back the issuance of suchg
bon s. At this time, I am proposing that the City consider participating as a sponsor
for industrial development type bonds that would not require the full faith and credit
of he City. The two resolutions that are before you this evening do not commit the
Cit to the actual financing but are inducement resolutions that provide the means to
init'ate the process. The City still has time after reviewing all the documents to
with raw its sponsorship. Therefore, it is my
REC01MENDATION: That the Council
Adop the resolutions in order to start the process of preparing documents relative
to t e sale of industrial development type bonds or other similar financing instruments
for he construction and financing of the marina and RU park.
BOAR S/COMMISSIONS RECOMP~1ENDATION:
The an Diego Unified Port District is expected to review the application of the
Wils n Group to transfer its leasehold interest in the marina and RV park to Income
Property Group of San Diego for the development of the facilities at the "J" Street
marin This action is expected to be forthcoming today and will be reported to you
orall The general design of the facilities have already been reviewed b a
ate C't staff and the Council last ear. Buildin Y ppropri-
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issue for the grading of the RV park. 9 permits have, in fact, been
DISCU SION:
At th s time, our financing team, consisting of bond counsel from Jones Hall Hill &
White underwriters from P~errill Lynch and Miller and Schroeder, myself, and repre-
senta fives of Income Property Group have met in an attempt to develop a financing
plan hat would not require City backing.
It no appears that the Income Property Group partnership has sufficient capability
to pa ticipate with several lending institutions in a loan-to-lender industrial de-
velopm nt type bond offering. The underwriter and legal counsel assure me that the
City w'll not have to provide its financial backing, but only sponsorship of a tax
exempt security that will be made with a financial institution. The financial insti-
tution will then issue a time certificate of deposit to provide repayment of the bond,
and th n, in turn, will loan funds to the developer for the construction of the marina
and RV park. Recently, the City of Fullerton participated in such an issue for a
civic heater.
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Form A-11 (Rev. 11/79)
Continued
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Page 2, Item 8a, 8b
P~eeting Date 3/9/82
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resolutions are required because of the particular requirements of applicable
~. The major issue will be under the Docks & UJharfs legislation while the
Iler issue will be under the ancillary provisions of such laws. These both fall
~ the Charter City Industrial Commercial Bond ordinance recentl
Council. Attached is a letter from bond counsel regarding the npedsforbtwohresolutions
previously stated, I will provide you with the information as the program is more
y developed. These resolutions do not commit the City to the issuance of such
rities but only initiate the process. Representatives of the underwriter, or
lope r, or both will be present this evening to respond to your questions.
NCIAL IMPACT:
Und r this plan, the City will receive a sponsorship fee, but in no way will be
obligated for the securities issuedo Therefore, all expenses incurred by staff
will be reimbursed through this fee.
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