18-0821_SOUTH COAST FARMS_F1a_Staff PowerPoint PresentationCity Council MeetingITEM F1ATHE ECOLOGY CENTERLICENSE AGREEMENTAugust 21, 20181
Authorize City Manager to execute the following:1.License Agreement with Ecology Center for continued farming operations. 2.Letter Agreement with Ecology Center regarding water repayment.3.Amendment No. 1 to Payment Schedule Agreement with South Coast Farms.4.Extension to Exclusive Negotiation Agreement with Ecology Center.RECOMMENDED ACTIONS2
3LOCATION MAP
January 2018 ENA with Ecology Center:Long-term vision.Transformative Community Farm.Long-term License Agreement.Next Step: Interim License Agreement.BACKGROUND4
PROPOSED TRANSFORMATIVE COMMUNITY FARM5
Continued use.Initial term corresponds with tax-exempt financing obligation.AGREEMENT #1: INTERIM LICENSE AGREEMENT6
Term:Initial three-year term.Two, optional one-year extensions.At Ecology Center’s discretion.INTERIM LICENSE AGREEMENT DEAL POINTS7
License Fee:INTERIM LICENSE AGREEMENT DEAL POINTS8Years Annual License Fee1) FY 2018-2019 $25,0002) FY 2019-2020 $25,0003) FY 2021-2022 $25,0004) FY 2022-2023 $35,0005) FY 2023-2024 $35,000Totals $145,000
Corresponds with interim license agreement term.Memorializes Ecology Center’s commitment to address outstanding water bill. AGREEMENT #2: WATER REPAYMENT AGREEMENT9
Water Repayment Fee:WATER REPAYMENT AGREEMENT DEAL POINTS10Years Water Repayment Fee1) FY 2018-2019 $8,0002) FY 2019-2020 $8,0003) FY 2021-2022 $8,0004) FY 2022-2023 $10,0005) FY 2023-2024 $10,000Totals $44,000
Years Annual License FeeAnnual Water RepaymentTotal1 – FY 2018-2019 $25,000 $8,000 $33,0002 – FY 2019-2020 $25,000 $8,000 $33,0003 – FY 2020-2021 $25,000 $8,000 $33,0004 – FY 2021-2022 $35,000 $10,000 $45,0005 – FY 2022-2023 $35,000 $10,000 $45,000Subtotals $145,000 $44,000 $189,000AGREEMENT PAYMENT TOTALS11
Amends February 2017 Agreement.Establishes that City will hold off on pursuing South Coast Farms operator.Allows transition plan (TEC/SCF) to preserve farm.Maintains all legal options for City.AGREEMENT #3 PAYMENT SCHEDULE AMENDMENT12
Ensure adequate time to process entitlements and conduct the environmental review for the long-term project.13AGREEMENT #4: EXTEND ENA WITH ECOLOGY CENTER
Direction at Successor Agency Meeting on June 11, 2018. Necessary for TEC Plan and Investment.Must Refinance by 2021 (Balloon Payment).Now or 2021.Risk is Increased Interest Rates.General Fund – No Effect on Budgeted Revenue.REFINANCING OF KINOSHITA NOTES14
Original Financing PlanDOF Financing PlanAmount Borrowed $9,180,000 7,995,000Average Annual Debt Service on 2018Bonds 918,000 815,000Total Debt Service Paid to Maturity on2018 Bonds 13,047,000 11,415,000Additional Amounts to be Paid onKinoshita Notes at 6% interest-1,201,000Total Debt Service 13,047,000 12,616,000FINAL TERMS OF REFINANCING15
Fall 2018:Council to consider initiation of Specific Plan Amendment for Kinoshita Farm for Transformative Community Farm Concept.16NEXT STEPS
Authorize City Manager to execute the following:1.License Agreement with Ecology Center for continued farming operations. 2.Letter Agreement with Ecology Center regarding water repayment.3.Amendment No. 1 to Payment Schedule Agreement with South Coast Farms.4.Extension to Exclusive Negotiation Agreement with Ecology Center.RECOMMENDED ACTIONS17