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1985-0827_KAISER DEVELOPMENT CO_Participation Agreementq-ty 41 PARTICIPATION AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF SAN JUAN CAPISTRANO D KAISER DEVELOPMENT COMPANY A u 2S 41 TABLE OF CONTENTS Page I. SUBJECT OF AGREEMENT .......................... 1 A. Purpose of the Agreement ................. 1 B. Description of the Site .................. 2 C. Parties to the Agreement ................. 2 1. The Agency .......................... 2 2. The Participant ..................... 2 3. Prohibition Against Change in Ownership, Management, and Control of Participant .............. 3 II. ACQUISITION OF THE SITE ....................... 7 III. DEVELOPMENT OF THE SITE ....................... 7 A. Development According to Terms of Approval 7 B. Agency Assistance ........................ 8 IV. TIMING OF LAND USE PERMIT APPROVALS; TERMINATION ................................... 14 V. OTHER PROVISIONS .............................. 15 A. Obligation to Refrain from Discrimination 15 B. Form of Nondiscrimination and Nonsegrega- tion Clauses ............................. 15 C. Taxes, Assessments, Encumbrances and Liens 17 D. Notices, Demands and Communications Between the Parties ...................... 17 E. Conflict of Interest; Agency's or City's Representatives Not Individually Liable .. 18 F. Enforced Delay, Extensions of Times of Performance .............................. 18 G. Titles of Sections ........................ 19 VI. DEFAULT, REMEDIES AND TERMINATION ............. 19 A. Defaults ................................. 19 B. Legal Actions ............................ 20 C. Specific Performance ..................... 21 D. Applicable Law ........................... 21 E. Acceptance of Service of Process ......... 21 F. Rights and Remedies are Cumulative ....... 22 G. Inaction Not a Waiver of Default ......... 22 H. Counterparts ............................. 23 I. Entire Agreement, Waivers and Amendments; Execution ................................ 23 J. Vested Rights ............................ 23 (i) PARTICIPATION AGREEMENT THIS AGREEMENT is entered into on August 27, , 1985, by and between the REDEVELOPMENT AGENCY OF THE CITY OF SAN JUAN CAPISTRANO, a public body corporate and politic (the "Agency"), and KAISER DEVELOPMENT COMPANY, a California corporation, (the "Participant"). The Agency and the Partic- ipant agree as follows: I. SUBJECT OF AGREEMENT A. Purpose of the Agreement The purpose of this Agreement is to facilitate the development of the Site (as defined herein) in accordance with this Agreement. Specifically, the Participant shall develop on the Site a business park consisting of a mix of industrial, research and development and office and related support uses, which shall hereafter be referred to as the "Project," subject to Participant's receipt of general plan, zoning and tentative tract map approvals from the City of San Juan Capistrano (the "City") (collectively referred to as the "Land Use Permits"). Such development of the Site will further the purposes of the Community Redevelopment Law (Health and Safety Code Section 33000 et seq.) and shall help to effectuate the Redevelopment Plan for the Central Redevelopment Project (the "Redevelopment Project"). Moreover, the construction of necessary flood control improvements will be of benefit to the Project Area (the "Project Area") of the Redevelopment Project. The provision of business park development and infrastructure improvements pursuant to this Agreement shall be consistent with the General Plan of the City and will promote the public health, safety, welfare and morals. B. Description of the Site The "Site" is all of the real property shown on the Map of the Site, which is incorporated herein and attached hereto as Attachment No. 1. C. Parties to the Agreement 1. The Agency The Agency is a public body, corporate and politic, exercising governmental functions and powers, organized and existing under the Community Redevelopment Law of the State of California. The principal office of the Agency is located at 32400 Paseo Adelanto, San Juan Capistrano, California 92675. "Agency", as used in this Agreement, includes the Redevelopment Agency of the City of San Juan Capistrano, California, and any successor to its rights, powers and responsibilities. 2. The Participant Participant is a California corporation. The address of the Participant for the purpose of this Agreement is Kaiser Development Company, 2121 Palomar -2- 0 • Airport Rd., Suite 201 P.O. Box 308, Carlsbad, California, 92008. 3. Prohibition Against Change in Ownership, Management,_ and Control of Participant. Participant recog- nizes that, in view of; (a) the importance of the redevelopment of the Site to the general welfare of the community; (b) the substantial financing and other pub- lic aids that have been made available by law and by the government for the purpose of making such redevelopment possible; and (c) the fact that a change in ownership or control of Participant or of a substantial part thereof, or any other act or transaction involving or resulting in a significant change in ownership or control of Participant or the degree thereof, is for practical purposes a transfer or disposition of the property then owned by the Participant; the qualifications and identities of Participant, and its principals, are of particular concern to City and Agency. It is because of those qualifications and identities that Agency has entered into this Agreement with Participant. No volun- tary or involuntary successor in interest of Participant shall acquire any rights or powers under this Agreement except set forth herein. -3- n s Prior to the completion of (i) the mass grading of the Site; (ii) the grading and construction of the access road and bridge required for the development of the Site; (iii) the installation and construction of utilities stubbed to the perimeter of the Site; and (iv) the construction of the Oso Creek flood control improvements ("Related Improvements"), Participant shall not, except as expressly permitted by this Section I.C.3., assign this Agreement or sell, transfer, convey or assign (hereinafter "Transfer") the whole or any part of the Site or the improvements on the Site without the prior written approval of the Agency. This prohibition shall not apply to any of the following: (i) Any mortgage, deed of trust, sale and lease- back or other form of conveyance required for any rea- sonable method of financing the direct and indirect costs, including financing costs, interest and commis- sions, of acquiring, developing, leasing and operating the improvements to be constructed on the Site and any other expenditures necessary and appropriate to acquire, develop, lease and operate the Site pursuant to this Agreement. (ii) The dedication of portions of the Site to the City or other appropriate governmental agency, or the granting of easements or permits, to facilitate the development of the Site; SM 0 (iii) The leasing of any buildings to be con- structed on the Site pending completion of the improvements; (iv) A transfer of stock in a publicly held corpo- ration or of the beneficial interest in any publicly held partnership or real estate investment trust; (v) A transfer or assignment from one partner or joint venturer in Participant to another or from one shareholder to another; (vi) A transfer to an "affiliated entity," i.e., one in which a minimum of Fifty Percent (50%) of the beneficial interest is owned and controlled by the same person(s) who have the beneficial interest in the trans- feror, or a transfer of Fifty Percent (50%) of Participant's stock to a third party. Notwithstanding any other provisions hereof, Participant reserves the right, at its discretion without prior approval of the Agency, to join and associate in a joint venture, partnership or similar arrangement, for the purpose of financing the acquisition and development of the Site and, in that connection, Participant shall be entitled to convey or contribute the Site to such entity and assign to such entity some or all of its rights under this Agreement; provided, however, that (i) any such assignee entity shall execute an assumption agreement in form and content satisfactory to Agency assuming the obligations of Participant under this -5- 0 Agreement consistent with its interest, (ii) Participant shall remain jointly and severally responsible to Agency as provided in this Agreement with respect to all obligations pertaining to the Site, and (iii) Participant shall retain at least a Fifty Percent (50%) interest in and operational and managerial control of the joint venture, partnership or similar arrangement. The restrictions of this Section I.C.3 shall terminate as to the Site upon the date of Participant's completion of the Related Improvements as described herein. Upon the completion of the Related Improvements, Agency, upon the request of Participant, shall attest to such completion in a form satisfactory to Participant. In considering whether it will grant approval to any assignment by Participant of its interest in the Site, which assignment requires Agency approval, Agency shall consider factors such as (i) the financial strength and capability of the proposed assignee to perform Participant's obligations to be assumed and (ii) the proposed assignee's experience and expertise in the planning, financing, development, ownership and operation of similar projects. The Agency shall not unreasonably refuse to approve an assignment. All of the terms covenants and conditions of this Agree- ment shall be binding upon and shall inure to the benefit of the Participant and the permitted successors and assigns of the Participant. Whenever the term "Participant" is used ME a Ll herein, such term shall include any other permitted succes- sors and assigns as herein provided. II. ACQUISITION OF THE SITE The Participant represents and warrants to each of the Agency and the City that the Participant has an equitable interest in the Site by virtue of a real property acquisition contract for the assignment of an existing lease option on the Site and that Participant is not in default under the terms of that contract as of the execution by the Participant of this Agreement. III. DEVELOPMENT OF THE SITE A. Development According to Terms of Approval The Participant shall develop the Site in accord- ance with the terms of the City's Land Use Permits. All dis- cretionary land use approvals necessary for the development of the Project shall be applied for by the Participant prior to commencement of construction. The Participant shall be required to pay all fees of the Agency and the City appli- cable to the development of the Project (including without limitation, fees for processing of maps and plan check). Neither Participant nor the Agency shall be obligated in any manner under the terms of this Agreement until Participant has obtained all necessary governmental approvals for the development of the Site. 0 B. Agency Assistance 1. Among the infrastructure improvements required for the Project are flood control improvements (Oso Creek) the general location of which are described in Attachment 1 attached hereto (the "Channel"), the design and construction of which are subject to the City's Land Use Permits and other required governmental approvals. Only a portion of the cost of the Channel is allocable to the Project. The balance of the cost of the Channel is allocable to other projects within the Project Area and to the Agency. The Agency, however, does not currently have funds with which to pay for the portion of the costs of the Channel attributable to other projects. Participant is willing to contribute Five Hundred Thousand Dollars ($500,000.00) towards the cost of the construction of the Channel, which sum Agency agrees represents the portion of the cost of the Channel which is allocable to the Project as presently contemplated. In addition, Participant is willing to advance up to Two Million Dollars ($2,000,000.00) for the purpose of constructing the Channel provided the Agency is willing to reimburse Participant all such funds so advanced. To the extent the City wishes to incur additional costs for the construction of the Channel beyond the sums contributed or advanced by Participant (not to exceed Two Million Five Hundred Thousand Dollars ($2,500,000)), such costs shall be borne and/or financed entirely by the Agency. For the purposes of this Agreement, the cost of the construction of the Channel shall include all costs associated with the construction and design of the Channel, including those costs incurred for the preparation of plans and specifications. The Agency makes no representations that Partici- pant shall receive City approval for any amount of net useable acres, however, the foregoing financial commitments are based upon obtaining the approval of the City and all other necessary governmental agencies and departments such that the Project consists of a minimum of 40 net useable acres. For purposes of this Agreement, the term "net useable acres" shall mean that amount of land within the Project which is used for building footprints, required parking and landscaping, with landscaping constituting not more than 20% of the total area used for building footprints and parking. In the event governmental approvals are obtained for more than 40 net useable acres for the Project, Participant is willing to contribute toward the cost of the Channel as its allocable share of the costs of the Channel an additional sum of One Hundred Thousand Dollars ($100,000.00) for each net useable acre approved for the Project above 40 net useable acres. Such payment shall CM not be subject to reimbursement to Participant by the Agency. 2. Participant shall design and construct the Channel, unless Agency elects to do so. Prior to the award of the construction contract or contracts, Participant shall submit to Agency the amount of the lowest responsible bid (as determined by Participant's best judgment) for Agency approval. Agency shall not unreasonably withhold its approval, and in the event Agency fails to approve or disapprove said amount within fifteen (15) working days of receipt, said amount shall be deemed approved. In the event that the amount of the lowest responsible bid for the construction of the Channel, when added to those costs incurred by Participant for the design and planning of the Channel, exceeds Two Million Five Hundred Thousand Dollars ($2,500.000.00), Participant may elect to advance the amount in excess thereof, in which event such amount shall be repaid to Participant in accordance with subparagraph B.3 below, request Agency to seek alternative financing for the Channel Project or portion thereof, in which event Agency agrees to use its best efforts to obtain such alternative financing or terminate this Agreement. I£ Participant elects to request Agency to seek alternative financing and alter- -10- r native financing satisfactory to Agency and Participant is not available this Agreement shall terminate. 3. In consideration of the Participant's performance of its obligations under this Agreement, the amount incurred by Participant for the purpose of constructing the Channel in excess of Five Hundred Thousand Dollars ($500,000.00) (not to exceed Two Million Dollars ($2,000,000.00) unless adjusted pursuant to paragraph B.1 or B.2, above) shall be deemed to be a loan by the Participant to the Agency. The unpaid principal shall bear interest at the rate as set forth in the "11 -Bond Index," published weekly by the Daily Bond Buyer, in no event to exceed the statutory maximum rate, for that date upon which Participant awards the contract for the construction of the Channel, simple interest, commencing on the date Participant awards said contract, and continuing thereafter until principal and interest are paid in full, repayable on the following terms and conditions: (a) Commencing in the first fiscal year (beginning July 1) following the date of the completion of the Channel (as evidenced by acceptance of the Channel by Agency, City or other governmental agency, which acceptance shall not be unreasonably delayed), Agency shall pay to Participant an amount equal to the "Net Property -11- Tax Increment" from the Site as that term is defined below for that fiscal year. Payments shall be credited first to interest due and any remainder to reduce the unpaid principal, until principal and interest are paid in full. (b) The obligation of Agency to Participant shall be a special, not a general, obligation, and payable only from property tax increment revenues allocated to and received by Agency pursuant to California Health and Safety Code Section 33670(b) from the Site. Property tax increment revenues from the Site shall not be pledged or encumbered by Agency so as to impair Participant's rights under this Agreement; provided, however, that Participant agrees that its rights to repayment under this Agreement shall be subordinate to the bonded indebtedness of Agency provided Agency pledges to set aside all Net Property Tax Increment from the Site in order to fulfill its obligations hereunder, so that Participant will be placed on the same basis as governmental agencies which subordinate their interests to the bonded indebtedness on a pass through basis. The obligation referenced herein is not an obligation of the City. (c) Payments required to be made by Agency to Participant hereunder for any fiscal year shall be -12- made on July 30, 1985 of said fiscal year, based upon the amounts of "Net Property Tax Increment" received by Agency through that date. Agency may prepay all or part of its obligation without penalty. (d) As used herein, the term "Net Property Tax Increment" for the Site shall be defined as follows: (i) A "Frozen Property Tax Base" shall first be determined, which sum shall be equal to the property tax revenue derived from the Site and allocated and paid to Agency for the fiscal year immediately preceeding the fiscal year in which Participant completes the Related Improvements. (ii) The "Net Property Tax Increment" in any fiscal year shall mean the total property tax increment derived from the Site and allocated to the Agency pursuant to existing agreements with other public agencies and which is paid to the Agency for such fiscal year less the Frozen Property Tax Base determined in accordance wih subparagraph (i). 4. In the event that financing alternatives superior to that contained herein become available, the -13- parties hereto, by mutual agreement, may modify the terms and conditions contained herein. IV. TIMING OF LAND USE PERMIT APPROVALS; TERMINATION This Agreement is entered into with the understanding that all Land Use Permits will be obtained by Participant and that City and Agency will have approved a preliminary design concept for the Channel improvements on or before March 31, 1986 and that the escrow for Participant's acquisition of the lease option on the Site will close on or before April 30, 1986. In the event the Land Use Permits have not been obtained prior to March 31, 1986, or the escrow for Participant's acquisition of the lease option has not closed on or before April 30, 1986, Participant may elect to terminate this Agreement by delivering a written notice of termination to the Agency. Agency may elect to terminate this Agreement by delivering a written notice of termination to Participant if Participant shall fail to commence the preparation of plans and specifications for the Channel upon obtaining the Land Use Permits and thereafter fails to award a contract for the construction of the Channel within six (6) months after obtaining all required governmental permits for the Channel Project. -14- V. OTHER PROVISIONS A. Obligation to Refrain from Discrimination There shall be no discrimination against or segre- gation of any person, or group of persons, on account of sex, race, color, religion, national origin, marital status or ancestry in the sale, lease, sublease, transfer, use occu- pancy, tenure or enjoyment of the Project, nor shall the Par- ticipant itself or any person claiming under or through it establish or permit any practice or practices of discrimina- tion or segregation with reference to the selection, loca- tion, number, use or occupancy of tenants, lessees, sub- tenants, sublessees or vendees. The covenants set forth in this Article VI shall remain in effect in perpetuity. B. Form of Nondiscrimination and Nonsegregation The Participant shall refrain from restricting the use, occupancy, rental, sale or lease of the Site or the improvements thereon or any portion thereof on the basis of sex, race, color, religion, ancestry, marital status or national origin of any person., Any deed, lease or contract entered into between Participant and Agency in furtherance of this Agreement, shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: 1. In deeds: "The Grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or -15- through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee himself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the land herein conveyed. The foregoing covenants shall run with the land." 2. In leases: "The Lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns and all persons claiming under or through him or her and this lease is made and accepted upon and subject to the following conditions: That there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin, or ancestry, in the leasing, subleasing, transferring, use, or enjoyment of the land herein leased, nor shall the lessee himself, or any per- son claiming under or through him or her, establish or permit any such practice or practices of discrimination or segrega- tion with reference to the selection, location, number, use -16- of occupancy of tenants, lessees, sublessee subtenants or vendees in the land herein leased." 3. In contracts: "There shall be no discrimina- tion against or segregation of, any person or group of per- sons on account of race, color, creed, religion, sex, marital status, national origin, or ancestry, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land, nor shall the transferee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number use or occupancy of permits, tenants, lessees, subtenants, sublessees or vendees of the land." C. Taxes, Assessments, Encumbrances and Liens Without prejudice to the right of the Participant to protest or appeal the determination or imposition of taxes, the Participant shall pay when due all real estate taxes and assessments assessed and levied upon the Site or arising from this Agreement for the duration of the Redevel- opment Plan. D. Notices, Demands and Communications Between the Parties Written notices, demands and communication between the Agency and the Participant shall be sufficiently given if delivered personally to the other party or dispatched by registered or certified mail, postage prepaid, return receipt -17- requested, to the principal office of the Agency and to the local office of the Participant as specified in Section I.C. of this Agreement. Such written notices, demands and com- munications may be sent in the same manner to such other addresses as either party may from time to time designate by mail as provided in this Section. Mailed notices shall be effective three (3) business days after deposit in the mail. E. Conflict of Interest; Agency's or City's Represen- tatives Not Individually Liable No member, official or employee of the Agency or the City shall have any personal interest, direct or indirect, in this Agreement; nor shall any such member, official or employee participate in any decision relating to this Agreement that affects his personal interest or the interest of any corporation, partnership or association in which he is, directly or indirectly, interested. No member, official or employee of the Agency or the City shall be personally liable to participate or any successor in interest in the event of any default or breach by the Agency or the City, or for any amount that may become due to Participant or successor for any obligation under the terms of this Agree- ment. F. Enforced Delay, Extensions of Times of Performance Performance by either party hereunder shall not be deemed to be in default where delays or defaults are due to war, insurrection, strikes, lockouts, riots, floods, earth- quakes, fires, casualties, acts of God, acts of public enemy, epidemics, quarantine restrictions, freight embargoes, lack of transportation, governmental restriction or priority or acts by a governmental agency or entity excepting the City's growth management allocation system (other than the act or failure to act of the Participant, Agency or City shall not excuse performance by the Participant or Agency), litigation, unusually severe weather, inability to secure necessary labor, materials or tools, delays of any contractor, subcontractor or supplier, or any other cause beyond the control of the party seeking to be excused. An extension of time for any such cause shall only be for the period of the enforced delay. Times of performance under this Agreement may also be extended in writing by the Agency and the Participant. G. Titles of Sections Any titles of the several Sections of this Agree- ment are inserted for convenience of reference only and shall be disregarded in construing or interpreting any of its pro- visions. VI. DEFAULT, REMEDIES AND TERMINATION A. Defaults Subject to the extensions of time set forth in Section V.F., failure or delay by either party to perform any term or provision of this Agreement constitutes a default -19- under this Agreement; however, if the party who so fails or delays commences to cure, correct or remedy such failure or delay within thirty (30) days after receipt of a notice spe- cifying such failure or delay, and shall diligently prosecute such cure, correction or remedy to completion, then such party shall not be in default. The injured party shall give written notice of default to the party in default, specifying the default com- plained of by the injured party. Except as required to pro- tect against further damages, the injured party may not institute proceedings against the party in default until thirty (30) days after giving such notice. Failure or delay in giving such notice shall not constitute a waiver of any default, nor shall it change the time of default. Except as otherwise expressly provided in this agreement, any failure or delay by either party in asserting any of its remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies or deprive either such party of its rights to institute and maintain any actions or proceedings which it may deem neces- sary to protect, assert or enforce any such rights or reme- dies. B. Legal Actions In addition to any other rights or remedies, either party may institute legal action to cure, correct or remedy any default, or recover damages for any default, or to obtain -20- any other remedy consistent with the purpose of this Agree- ment. Such action shall not be brought unless the party seeking to institute proceedings has delivered or served written notice of default on the other party not less than thirty (30) days prior to filing suit. Such legal actions must be instituted in the Superior Court of the County of Orange, State of California, in an appropriate Municipal Court in the County, or in the Federal District Court in the Central District of California. C. Specific Performance If the Participant or the Agency defaults under any of the provisions of this Agreement, the nondefaulting party shall serve written notice of such default upon the default- ing party. If the default is not cured by the defaulting party within thirty (30) days of the service of this default, the nondefaulting party, at its option, may institute an action for specific performance of the terms of this Agree- ment. D. Applicable Law The laws of the State of California shall govern the interpretation and enforcement of this Agreement, except as to matters governed by federal laws and regulations. E. Acceptance of Service of Process In the event that any legal action is commenced by the Participant against the Agency, service of process on the Agency shall be made by personal service upon the Chief -21- Executive Officer or Chairman of the Agency, or in such other manner as may be provided by law. In the event that any legal action is commenced by the Agency against the Participant, service of process on the Participant shall be made by personal service upon any authorized agent or person authorized by law to receive ser- vice of process for the Participant (or a successor) and shall be valid whether made within or without the State of California, or in such other manner as may be provided by law. F. Rights and Remedies are Cumulative Except as otherwise expressly stated in this Agree- ment, the rights and remedies of the parties are cumulative; and the exercise by either party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other party. G. Inaction Not a Waiver of Default Any failures or delays by either party in asserting any of its rights and remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies or deprive either such party of its right to insti- tute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such riaghts or reme;dies. -22- H. Counterparts This Agreement is executed in three (3) counter- parts, each of which is deemed to be an original. I. Entire Agreement, Waivers and Amendments; Execution The Agreement integrates all of the terms and con- ditions mentioned herein or incidental thereto, and super- sedes all negotiations or previous agreements between the parties with respect to all or any part of the subject matter thereof. All waivers of the provisions of this Agreement must be executed in writing by the appropriate authorities of the Agency or the Participant and all amendments hereto must be executed in writing by the appropriate authorities of the Agency and the Participant. This Agreement, when executed by the Participant and delivered to the Agency, must be authorized, executed and delivered by the Agency within thirty (30) days after the date of execution by the Participant or this Agreement shall be void, except to the extent that the Participant shall con- sent in writing to a further extension of time for the authorization, execution and delivery of this Agreement. The date of this Agreement shall be the date when the Agreement shall have been signed by the Agency. J. Vested Rights Nothing contained in this Agreement shall imply that City has agreed to approve the Land Use Permits or any -23- • other development approvals for the Site and Participant shall not have a vested right to develop the Site for any purpose by virtue of this Agreement. IN WITNESS WHEREOF, the Agency and the Participant have duly executed this Agreement as of the date first above writ- ten. THE REDEVELOPMENT AGENCY OF THE CITY OF AN JUAN CAPISTRANO GARY USDORF , AIRMAN Date // GCSfi 1985 By (o Vice irman LaWtence F. Buchheim ATTEST: gency Se retary Mary Ann Hanover KAISER DEVELOPMENT COMPANYA Approved as to Form: ornia orporatio By: --� I s: Agency Cou sel Tom Clark pRQdP By: Its: -24- ATTACHMENT N0.1 Hi r. i i \ r .mow 77 W, San Juan Capistrano Community Redevelopment Agency November 15, 19 Charles X. Delg Kaiser Developm P. O. Box 308 Carlsbad, California Re: Participation Agreement - Kaiser Development Company Dear Mr. Delgado: Enclosed is a fully executed copy of the Participation Agreement between the San Juan Capistrano Community Redevelopment Agency and the Kaiser Development Company. Thank you for your cooperation. please do not hesitate to call. Very truly yours, MARY ANN ANO VER, CMC Agency Secretary MAH/mac Enclosure cc: Executive Director 32400 Paseo Adelanto San Juan Capistrano Califomia 92675 714-493-1171 If you have any questions, 0 KAISER DEVELOPMENT COMPANY INDUSTRIAL/COMMERCIAL SOUTHWEST October 31, 1985 Steve Julian City Manager CITY OF SAN JUAN CAPISTRANO 32400 Paseo Adelanto San Juan Capistrano, CA 92675 U Re: Participation Agreement by and between the Redevelopment Agency of the City of San Juan Capistrano and Kaiser Development Company Dear Mr. Julian: Enclosed are two (2) copies of the above -referenced agreement, which have been executed by Kaiser. Please return one (1) fully executed copy to this office after the Agency Secretary has signed where indicated on the signature page. Thank you. Very truly yours, i Charles X. Delgado Legal Counsel /tlf Encl. nil 7 Irl' A Wholly Owned Subsidiary of Kaiser Aluminum 8 Chemical Corporation 2121 PALOMAR AIRPORT ROAD, SUITE 201, P.O. BOX 308, CARLSBAD, CALIFORNIA 92008-0060 TELEPHONE: (619) 438-2636 RANCHO CALIFORNIA. CA/HAWAII KAI, HI/KAISER CENTER. OAKLAND, CAANDUSTRIAL AND COMMERCIAL PROPERTIES WESTERN STATES/KAISER ALUMINUM REAL ESTATE FACILITIES -WORLDWIDE IIfIMM11 • lfMllf111 1 Il161 1776 September 5, 1985 Kaiser Development Company 2121 Palomar Airport Road, Suite 201 P. O. Box 308 Carlsbad, California 92008 Re: MEMSERS OF THE CITY COUNCIL ANTHONY L. ELAND LAWRENCE F. SUCHHEIM KENNETH E. FRIESS GARY L. HAUSOORPZR PHILLIP R. SCHWARTZZ CITY MANAGER STEPHEN E. JULIAN Gentlemen: The City Council of the City of San Juan Capistrano at its regular meeting held September 3, 1985, adopted Resolution No. 85-9-3-5 consenting to the Redevelopment Agency's agreement with your firm for construction of channel improvements at the Bathgate property adjacent to Oso Creek. A copy of Resolution No. 85-9-3-5 is enclosed for your information. Thank you for your cooperation. If you have any questions, please do not hesitate to call. Very truly yours, MARY ANN OVER, CMC City Clerk MAH/mac Enclosure cc: City Manager Director of Community Planning and Development Tom Clark 32400 PASEO ADELANTO, SAN JUAN CAPISTRANO, CALIFORNIA 92675 • (714) 493-1171 •• AGENDA ITEM TO: City Council FROM: Stephen B. Julian, City Manager SUBJECT: Kaiser Development Agreement SITUATION• •• September 3, 1985 The Redevelopment Agency has entered.into an agreement with the Kaiser Development Company providing for Kaiser's contribution toward and advance of funds for construction of certain channel improvements adjacent to the Bathgate property. Under redevelopment law (Health and Safety Code §33445), a redevelopment agency may expend funds for the construction of public facilities in a project area, providing consent is also obtained from the legislative body, that is, the City Council. Based upon the Agency's earlier approval of this agreement, it is recommended that the City Council consent to the expenditure of funds as set forth in the proposed agreement. COMMISSION/BOARD REVIEW, RECOMMENDATIONS: Not applicable. FINANCIAL CONSIDERATIONS: No financial cost involved for the City. ALTERNATE ACTIONS: Move to adopt resolution consenting to the Redevelopment Agency's agreement with Kaiser Development Company for construction of channel improvements at the Bathgate property adjacent to Oso Creek. 2. Continue the matter. RECOMMENDATION: Move to adopt resolution consenting to the Redevelopment Agency's agreement with Kaiser Development Company for construction of channel improvements at the Bathgate property adjacent to Oso Creek. ------------------------------------------------------------------------ ------------------------------------------------------------------------ Resp ful4JAN tted, EN B. City Manager H3 raw C'iT •,f`!� � �I ^'n,I_ �,(-�E�!I?A ...w� i� I • • • • RESOLUTION NO. 85-9-3-5 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN JUAN CAPISTRANO, CALIFORNIA, DETERMINING THAT THE CONSTRUCTION OF CERTAIN ONSITE AND OFFSITE PUBLIC IMPROVEMENTS IN CONNECTION WITH THE DEVELOPMENT OF A BUSINESS PARR PROJECT PURSUANT TO A PARTICIPATION AGREEMENT BY AND BETWEEN THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SAN JUAN CAPISTRANO AND RAISER DEVELOPMENT COMPANY IS OF BENEFIT TO THE CENTRAL REDEVELOPMENT PROJECT AND THE IMMEDIATE NEIGHBORHOOD IN WHICH THE PROJECT IS LOCATED AND DETERMINING THAT THERE ARE NO OTHER REASONABLE MEANS OF FINANCING SAID PUBLIC IMPROVEMENTS WHEREAS, the Community Redevelopment Agency of the City of San Juan Capistrano ("Agency") is authorized to carry out the redevelopment of the Central Redevelopment Project Area ("Project Area"); and, WHEREAS, the Redevelopment Plan for the Project Area authorizes and directs the Agency to pay all or part of the value of the construction and installation of certain public improvements; and, WHEREAS, the Agency has entered into that certain Participation Agreement ("Agreement") with Raiser Development Company ("Developer") which calls for the Agency to construct certain flood control improvements to be known as the Oso Creek Flood Control Channel ("Agency Improvements") in conjunction with the construction by Developer of a business park consisting of a mix of industrial, research and development and office and related support uses ("Project"); and, WHEREAS, California Health & Safety Code Section 33445 provides that a redevelopment agency may, with consent of the legislative body, pay all or part of value of public buildings facilities, structures or other improvements upon a finding that such public improvements are of benefit to the Project Area or the immediate neighborhood in which the Project is.located and that there are no other reasonable means of financing said public improvements available to the community. NOW, THEREFORE, the City Council of the City of San Juan Capistrano does hereby resolve as follows: -1- r . Sectic l • 00 This City Council hereby determines that the acquisition, construction and installation of the Agency Improvements will be of benefit to the Project Area and the surrounding neighborhood in which the Project is located. Section 2. This City Council further determines that no other reasonable means of financing the acquisition, construction and installation of the Agency.Improvements is available. Section 3. This Resolution shall take effect immediately upon its adoption. PASSED, APPROVED AND ADOPTED this 3rd day of —.qdap l-&Mhor , 1 QRS ATTEST: STATE OF CALIFORNIA COUNTY OF ORANGE CITY OF SAN JUAN CAPISTRANO ss. i / • I, MARY ANN HANOVER, City Clerk of the City of San Juan Capistrano, California, DO HEREBY CERTIFY that the foregoing is a true and correct copy of Resolution No. RS,3-1-s , adopted by the City Council of the City of San Juan Capistrano, California, at a regular meeting thereof held on the ';rr4 day of �9pn Dinh r , 1985 , by the following vote: AYES: Councilmen Friess, Bland, Buchheim, Hausdorfer, and Mayor Schwartze NOES: None ABSENT: None (SEAL) MARY ANr 10 ER, CITY CLERK -2- t San Juan Capistrano Communitv Redevelopment .agency August 30, 1985 Tom Clark Stradling, Yocca, Carlson 6 Rauth Attorneys at Law P. 0. Box 7680 Newport Beach, California 92660-6401 Re: Dear Mr. Clark: Two copies of each of the following Agreements are enclosed which require your signature: c; _ �1. Participation Agreement by and between the Nob Redevelopment Agency of the City of San Juan Capistrano and Raiser Development Company, scheduled for City ,- approval on September 17, 1985. 2. Agreement between the County of Orange; the Orange County Flood Control District; the Orange County Harbors, Beaches, and Parks District; the San Juan gt11 Capistrano Redevelopment Agency; and the City of San Juan Capistrano for Redevelopment Plan Amendment 84-1, scheduled for Agency and City approval on September 17, F` " 1985. Please sign these Agreements and return them to this office at Your earliest convenience. It will also be necessary for us to obtain signatures from Raiser Development Company prior to the September meeting. 32400 Paseo Adelanto San Juan Capistrano California 92675 714-499.1171 Cl j • Tom Clark Thank you for your cooperation. please do not hesitate to call. Very truly yours, 17ze�llle MARY ANN PNOVER, CMC City Clerk MAH/mac Enclosures • -2- August 30, 1985 If you have any questions, 1k •0 00 1. - OSO CREEK FLOOD CONTROL Written Communications.- Report.dated August 27, 1985, from the Deputy Director forwarding a Participation Agreement between the Agency and Kaiser Development company, as approved in concept at the meeting of August 20, 1985, in connection with development of a business park project. The site is on the Bathgate property off Camino Capistrano at the northern City limits. The agreement provides that: 1. Kaiser will pay $500,000 of improvements. In addition, for every net usable acre i nthe Oso Creek channel they will pay $100,000 more excess of 40. 2. The Community Redevelopment Agency will pay for the remaining costs of flood control improvements, but in no event will the Agency contribution exceed $2 million. 3. Kaiser will loan the Community Redevelopment Agency up to $2 million for the Community Redevelopment Agency's share of the flood control improvements. The Community Redevelopment Agency will reimburse Raiser using the annual net tax increment coming from the Bathgate -1- 8/27/85 •• 00 property. The Agency will pay an interest rate equivalent to the prevailing rate for tax exempt bonds at the time the obligation is created. The Executive Director made an oral report and advised that there is no commitment on the part of the City or Agency for concept or land use approvals; the channel design will be subject to the review process; that Kaiser and the Agency are entering into the Agreement in good faith. Resolution A rovinectoA reement: It was move by Dirr Sc wartze, seconded by Director Friess, that the following Resolution, which makes findings pursuant to Health and Safety Code Section 33445, be adopted: DEVELOPMENT COMPANY) - A XZbVLUT1UN UY THE SAN JUAN CAPISTRANO COMMUNITY REDEVELOPMENT AGENCY, APPROVING A PARTICIPATION AGREEMENT BY AND BETWEEN THE AGENCY AND KAISER DEVELOPMENT COMPANY; DETERMINING THAT THE CONSTRUCTION OF CERTAIN ONSITE AND OFFSITE PUBLIC IMPROVEMENTS IN CONNECTION WITH THE DEVELOPMENT OF A BUSINESS PARK PROJECT BY KAISER DEVELOPMENT COMPANY PURSUANT TO SAID PARTICIPATION AGREEMENT IS OF BENEFIT TO THE CENTRAL REDEVELOPMENT PROJECT AND THE IMMEDIATE NEIGHBORHOOD IN WHICH THE PROJECT=IS LOCATED; DETERMINING THAT THERE ARE NO OTHER REASONABLE MEANS OF FINANCING -SAID IMPROVEMENTS; AND AUTHORIZING THE EXECUTION AND DELIVERY OF SAID PARTICIPATION AGREEMENT The motion carried by the following vote: AYES: Directors Friess, Bland, Schwartze, and Buchheim. NOES: None ABSENT: Chairman Hausdorfer Approval of Participation Ae rement: It was moved y Director Sc wartze, seconded by Director Friess, and unanimously carried to approve the Participation Agreement by and between the Redevelopment Agency of the City of San Juan Capistrano and Kaiser Development Company and to authorize the Vice Chairman and Agency Secretary to sign the Agreement on behalf of the Agency. -2- 8/27/85 AGENDA ITEM August 27, 1985 TO: Stephen B. Julian, Executive Director Community Redevelopment Agency FROM: Thomas G. Merrell, Deputy Director Community Redevelopment Agency SUBJECT: Participation Agreement Between Community Redevelop- ment Agency and Kaiser Development Company SITUATION At the Community Redevelopment Agency meeting of August 20, staff presented a request by Kaiser Development Company for financial assistance with their project on the Bathgate property. In their request they indicated that their project would not be profitable unless they could limit their contribution to Oso Creek flood control improvements to $500,000. They indicated a need for an immediate decision inasmuch as a substantial option payment will be due at the end of August. At the August 20 meeting the Agency approved, in concept, Community Redevelopment Agency assistance with Oso Creek improvements and directed staff to prepare the necessary agreement for subsequent Agency action. Following that meeting, staff received and analyzed the Kaiser Company's pro -forma and has confirmed that the margin of profitability is tight and that without assistance the risks inherent to the project leave little incentive to a developer. A participation agreement has been prepared and is offered for Agency approval. The key points to the agreement are as follows: 1. Kaiser will pay $500,000 of the creek channel improvements. In addition, they will pay $100,000 more for every net usable acre in excess of 40. 2. The Community Redevelopment Agency will pay for the remaining costs of flood control improvements but, in no event, will the Agency contribution exceed $2 million. 3. Kaiser will loan the Community Redevelopment Agency up to $2 million for the Community Redevelopment Agency's share of the flood control improvements. The Community Redevelopment Agency will reimburse Kaiser using the annual net tax increment coming from the Bathgate property. The Agency will pay an interest rate equivalent to the prevailing rate for tax exempt bonds. 0 0 Agenda Item -2- August 27, 1985 4. Kaiser will not transfer title or otherwise release control of the project without approval of the Agency. 5. Unless otherwise agreed, Kaiser will prepare plans and contract for the improvements. 6. In the event that zoning and land use approvals are not obtained on or before March 31, 1986, Kaiser may terminate the agreement. It should be pointed out that the basis for Kaiser's proposal is that the flood control improvements will be an aesthetically pleasing, open channel design consistent with the General Plan. They estimate improvement costs for such a design at $2 million. In the event that these costs are actual, Kaiser would then build the improvements and pay the $2 million at the beginning of their project. The Community Redevelopment Agency would reimburse Kaiser on an annual basis using the tax increment from the project for $1,500,000, plus interest. However, if a more expensive project is proposed, up to $2 million will be advanced and similarly reimbursed. Should the total cost of the flood control improvements exceed $2,500,000, Kaiser and the Community Redevelopment Agency will have to seek alternative methods of financing the additional funds needed. When entering into such a participation agreement calling for the Community Redevelopment Agency to pay a portion of the cost of public improvements in a project area, Health and Safety Code Section 33445 requires that findings be made that the improvements are a benefit to the redevelopment project area and that no other reasonable means of financing the improvements are available. Such a resolution has been prepared for Agency adoption prior to approval of the agreement. COMMISSION. BOARD REVIEW, RECOMMENDATION Not applicable. FINANCIAL CONSIDERATIONS This agreement would obligate the Agency to reimburse Kaiser for up to $2 million for flood control improvements in Oso Creek. Net tax increment revenues from the project are pledged toward this reimbursement. The amount of tax increment revenues derived from the project will rise as development proceeds. Thus, it is not possible to project accurately how long it will take for these revenues to cover the reimbursement obligation. Current estimates project a period of six -to -ten years. 0 Agenda Item -3- August 27, 1985 ALTERNATE ACTIONS 1. Adopt the resolution making findings under Health and Safety Code Section 33445, approve the participation agreement, and authorize its execution by the Chairman of the Community Redevelopment Agency. 2. Do not approve the participation agreement at this time. RECO14MENDATION Adopt the resolution making findings under Health and Safety Code Section 33445, approve the participation agreement, and authorize its execution by the Chairman of the Community Redevelopment Agency. Respectfully submitted, Thomas G. Merrell, Deputy Director Community Redevelopment Agency TGM:lcl Attachments 01-1 L RESOLUTION NO. CRA 85-8-27-1 M A RESOLUTION OF THE SAN JUAN CAPISTRANO COMMUNITY REDEVELOPMENT AGENCY, APPROVING A PARTICIPATION AGREEMENT BY AND BETWEEN THE AGENCY AND RAISER DEVELOPMENT COMPANY; DETERMINING THAT THE CONSTRUCTION OF CERTAIN ONSITE AND OFFSITE PUBLIC IMPROVEMENTS IN CONNECTION WITH THE DEVELOPMENT OF A BUSINESS PARR PROJECT BY RAISER DEVELOPMENT COMPANY PURSUANT TO SAID PARTICIPATION AGREEMENT IS OF BENEFIT TO THE CENTRAL REDEVELOPMENT PROJECT AND THE IMMEDIATE NEIGHBORHOOD IN WHICH THE PROJECT IS LOCATED; DETERMINING THAT THERE ARE NO OTHER REASONABLE MEANS OF FINANCING SAID IMPROVEMENTS; AND AUTHORIZING THE EXECUTION AND DELIVERY OF SAID PARTICIPATION AGREEMENT WHEREAS, the Community Redevelopment Agency of the City of San Juan Capistrano ("Agency") is authorized to carry out the redevelopment of the Central Redevelopment Project Area ("Project Area"); and, WHEREAS, the Redevelopment Plan for the Project Area authorizes and directs the Agency to pay all or part of the value of the construction of certain public improvements; and, WHEREAS, the Agency desires to enter into a Participation Agreement ("Agreement") with Raiser Development Company ("Developer"), substantially in the form presented to the Agency at the meeting at which this Resolution was adopted, which requires the Developer to construct a businessparkconsisting of a mix of industrial, research and development and office and related support uses ("Project"); and, WHEREAS, pursuant to the Agreement, the Agency is required to construct certain flood control improvements necessary to serve the Project ("Agency Improvements") in conjunction with the construction of the Project by the Developer; and, WHEREAS, California Health 8 Safety Code Section 33445 provides that a redevelopment agency may, with consent of the legislative body, pay all or part of the value of public buildings, facilities, structures or other improvements upon a finding that such public improvements are of benefit to the Project Area or the immediate neighborhood in which the Project is located and that there are no other reasonable means of financing such public improvements available to the community. NOW, THEREFORE, the Community Redevelopment Agency of the City of San Juan Capistrano does hereby resolve as follows: -1- 0 0 Section 1. The Agency hereby approves the form of the Agreement presented to the Agency at the meeting at which this Resolution was adopted and hereby authorizes the Chairman and Secretary of the Agency to execute said Agreement on behalf of the Agency, and hereby authorizes the Chairman, Secretary, Executive Director and Deputy Executive Director of the Agency to execute any and all documents and instruments required in order to consummate the a; transactions contemplated by the Agreement.` Section 2.-; The.Agency hereby determines that the acquisition, construction and installation of the Agency Improvements is of benefit to the Project Area and the surrounding neighborhood in which the Project is located. Section 3. The Agency hereby determines that it is appropriate to construct and install or cause the construction and installation of the Agency Improvements and that there are no other reasonable means of financing the Agency Improvements. Section 4. This Resolution shall become effective upon the adoption of a resolution by the City Council of the City of San Juan Capistrano finding that the construction of the Agency Improvements by the Agency is of benefit to the Project Area and the immediate neighborhood in which the Project is located and that there are no.other reasonable means of financing the construction of the Agency Improvements. PASSED, APPROVED AND ADOPTED this 27th day of August , 1985 . ATTEST: GENAR GARY L. USDORFER CHAIRMAN B CE F. BCCHHEIM, VICE CHAIRMAN -2- STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss. CITY OF SAN JUAN CAPISTRANO ) I, MARY ANN HANOVER, Secretary of the San Juan Capistrano Community Redevelopment Agency, DO HEREBY CERTIFY that the foregoing is a true and correct copy of Resolution No. CRA 85-8-27-1, adopted by the Board of Directors of the San Juan Capistrano Community Redevelopment Agency at an adjourned regular meeting thereof held on the 27th day of August , 1985, by the following vote: AYES: Directors Friess, Bland, Schwartze, and Vice Chairman Buchheim NOES: None ABSENT: Chairman Hausdorfer (SEAL) MARY ANN ANOVER, AGENCY'SECRETARY -3- 0 San Juan Capistrano Community Redevelopment Agency August 21, 1985 Frank W. Rice, Jr. Regional Vice President Kaiser Development Company P. O. Box 308 Carlsbad, California 92008-0060 Re: s Dear Mr. Rice: 0 t The Community Redevelopment Agency of the City of San Juan Capistrano at its regular meeting held August 20, 1985, approved in concept the Agency's assistance with the Oso Creek flood control improvements at approximately $1.5 million and directed staff to prepare the necessary Development Agreement. The Agency is tentatively scheduled to take action on the Development Agreement at their Regular Adjourned Meeting scheduled for Tuesday, August 27, 1985, at 7:00 p.m. A copy of the agenda will be forwarded to you prior to that meeting. Thank you for your cooperation. please do not hesitate to call. Very truly yours, , a2ay �l7 MARY ANN(/ HANOVER, CMC Agency Secretary MAH/mac cc: Deputy Director 32400 Paseo Adelanto San Juan Capistrano California 92675 714-493-1171 If you have any questions, Written Communications: Additional Report dated August 20, 1985, from the Deputy Director, advising that Raiser Development Company had been working on development concepts for the northerly 50 acres of the 78 -acre Bathgate property located off Camino Capistrano at the northern City limits. The report advised that Raiser Development. Company had.requested assistance with the --necessary Oso Creek channel improvements, including a commitment from the Agency prior to August 28, in order for the project to proceed. The report forwarded a letter dated April 13, 1985, from Frank W. Rice, Jr., Regional Vice President, Raiser development Company, 2121 Palomar Airport Road, Suite 201, P. 0. Box 308, Carlsbad, 92008-0060, setting forth a proposal for financial assistance. The proposal provided for Raiser Development Company to pay the full -cost of all improvements, with reimbursement from the Agency of $1.5 million for an Oso Creek open channel design. Repayment would be made over a 10 -year period at 118 interest. The letter advised that should a covered box design be required, increased costs would require a greater financial commitment from the Agency. The Executive Director made an oral report, advising that staff recommended the request be handled through a Development Agreement concept; final negotiations could be completed and an Agreement presented for approval at an adjourned meeting on August 27. He advised that discussions were continuing regarding the extension of the covered box channel; an open channel would be designed with earth -covered rock riprap for a natural appearance. Council discussed the two channel designs, noting that improvements would be subject to future City approvals; approval of this request would not commit the Agency to either channel design. Director Friess suggested consideration be given to more beneficial terms for repayment. -2- 8/20/85 • 21, Frank Rice, Raiser Development, discussed the financial aspects of the project, stating a project had been developed that would be of benefit to both the City and the developer. However, if the covered box channel were required, the project would be unable to absorb the increased costs. Raiser development Company would be willing to provide the extra funds, but would expect reimbursement from the Agency. Concept Approval: It was moved by Director Schwartze, seconded by Director Friess, and unanimously carried to approve in concept Agency assistance with Oso Creek improvements, noting that a commitment was not made to either channel design; and, to direct staff to prepare the necessary Development Agreement for future consideration. AGENDA ITEM August 20, 1985 TO: Stephen B. Julian, Executive Director Community Redevelopment Agency FROM: Thomas G. Merrell, Deputy Director Community Redevelopment Agency SUBJECT: Request For CRA Assistance By Kaiser Development Company "Bathgate Properties". SITUTATION Over the past several months, Kaiser has been working on development concepts for the northerly 50 acres + of the 78 - acre Bathgate property. Recently, Kaiser has retained Tierra Planning to address the concerns identified by the Planning Commission at its earlier worksession on the project. We believe that the resulting concept alternatives prepared by Tierra are encouraging and believe we can work out a mutually -supportable site design. The access road, requiring an eight -to -ten foot raising of Camino Capistrano is still a source of concern, however. Planning Commission review of revised site designs will be scheduled for September or Otober, depending on Kaiser's actual submission of plans. As noted in their letter, they need to have all discretionary approvals (EIR, Rezone, General Plan Amendment, site plan, tentative map) and final map recordation by April, 1986. This is "do -able" if they make their plan submittals early. During the past several weeks Kaiser has requested CRA assistance with the necessary improvements to Oso Creek. The following is a summary of the issues involved. 1. Per the attached letter, Kaiser is requesting CRA commitment to help with the Oso Creek improvements prior to August 28, when their next option payment is due to Mr. Simonian. Per their letter, Kaiser is proposing to front the full cost of all improvements (including Oso Creek) with the CRA reimbursing them for $1.5 million of an Oso Creek open channel design (e.g. earth -covered rock riprap) over ten years at 11 percent interest. They estimate the cost of continuing the covered box design as resulting in a $3.8 million CRA commitment (instead of the $1.5 million). 3. Per our request, Kaiser will supply us with their draft pro -forma on the project this week. Agenda Item -2- August 20, 1985 4. Upon completing an analysis of the pro -forma and clarifying the defination of costs, staff will be preparing a Development Ageement for Agency consideration, and the agreement will provide for the Agency to reimburse Kaiser for approximately $1.5 million dollars, attributable to costs of improving Oso Creek. 5. At the end of this month Kaiser will incur substantial costs in order to carry the property. They will need firm indication of the Agency's willingness to cooperate. Staff is recommending an informal action by the Agency to indicate willingness to consider participation in the project, as is outlined above. FINANCIAL CONSIDERATIONS There are no financial obligations associated with this action. Ultimate approval of a Development Agreement resulting from this action could obligate the Agency for reimbursement costs for Oso Creek Channel improvements, over a period of ten years or more. Tax increments from the project is expected to be sufficient to cover these costs. ALTERNATE ACTIONS 1. Indicate preliminary approval of a Development Agreement providing for reimbursement for Oso Creek Improvements. 2. Indicate the Agency is not willing to approve financial assistance for this project. 3. Indicate other areas of assistance desirable to the Agency. RECOMMENDATION By motion, approve in concept Agency assistance with Oso Creek improvements as outlined in staff report, and direct staff to prepare the necessary Development Agreement for subsequent Agency action. Respectfully submitted,,_ ,n Thomas G. Merrell, Deputy Director Community Redevelopment Agency TGM:kjs KA/SER DEVELOPMENT COMPANY FRANK W. RICE JR, REGIONAL VICE PRESIDENT INOUSTRIALICOMMERCIAL SOUTHWEST HAND DELIVERED August 13, 1985 Mr. Steve Julian City Manager CITY OF SAN JUAN CAPISTRANO 32400 Paseo Adelanto San Juan Capistrano, CA 92675 Re: Bathgate Property, San Juan Capistrano Dear Steve: Based upon our earlier conversations, we have formulated a proposal whereby the City of San Juan Capistrano through its redevelopment agency can assist us with the Bathgate project improvement costs. This will enable us to reduce the intensity of development to a level desired by the City while retaining the financial feasibility of the project. As we have indicated to you, the project desired by the City will support an infrastructure cost of approximately $5.2 million, but the approximate development costs will be either $6.7 million, if the Oso Creek drainage facility can be constructed as an open channel, or in excess of $9.0 million if box culvert construction is required. You have asked us to prepare a proposal whereby the City acting through its redevelopment agency could reduce Kaiser's share of the project's infrastructure costs to $5.2 million. After investigating several alternatives, we believe that the following proposal best meets the needs of the City, the redevelopment agency and Kaiser Development.Company. Our proposal is as follows: 1. Kaiser will undertake at its cost the development of all infrastructure facilities required for the project with the exception of the Oso Creek storm drain channel. It is currently estimated that these costs will be approximately $4.7 million. 2. Kaiser will advance to the redevelopment agency those funds required for construction of an open drainage channel. ($2.0 million is our estimate for these costs). The redevelopment agency will repay Kaiser the actual amount advanced less $500,000 with interest at a rate of 11% per annum. Repayment A Wholly Owned Subsidiary of Kaiser Aluminum & Chemical Corporation 2121 PALOMAR AIRPORT ROAD. SUITE 201. P.0 BOX 308 CARLSBAD. CALIFORNIA 920080060 TELEPHONE 1619, 4382 6.36 I RANCHO CALIFORNIA CAJHAWAII KAL HUKAISER CENTER. OAKLANO. CA INDUSTRIAL AND COMMERCIAL PROPERTIES -WESTERN STATESIKAISER ALUMINUM REAL ESTATE FACILITIES WORLDWIDE - 2 - will be made in forty (40) equal quarterly installments of principal and interest commencing ninety (90) days after completion of improvements, and will be evidenced by a promissary note structured such that the interest thereon is tax free (for federal income tax purposes) to Kaiser. Reimbursement will be made from a fund to be established, the source of which will be the tax increment generated by the project. We understand that the 116 rate has been utilized recently in a similar project in the City of San Juan Capistrano. 3. To the extent the City wishes to incur additional costs for the construction of the drainage improvements, such costs would be borne and/or financed entirely by the City or the redevelopment agency. The foregoing cost estimates are predicated on the necessary processing being completed through the City of San Juan Capistrano so that a final map can be recorded and escrow can close no later than April, 1986, and any delays will result in a need to revise these cost figures. We anticipate that construction will start shortly thereafter. We therefore request that the City initiate the General Plan Amendment whicfi will be required in order to permit the proposed development and that the City commit to the expeditious processing of this project so as to permit us to be in a position to have a final map recorded by April, 1986. We are prepared to furnish the City with a pro forma demonstrating the need for the City or the agency's participation with us in this project, and we would be happy to answer any additional questions that the City may have with respect to our proposal. We believe that the foregoing proposal is the fairest to Kaiser and the City and will be the easiest to implement. As we have indicated to you, it is necessary that we arrive at a final and formal agreement with regard to this matter before August 28, 1985 as we have a substantial financial commitment which must be made at that time if the project is to proceed. Cordially, tank W. Rice JrJ. Regional Vice President c.c. - Thomas.G. Merrell FWR/dhm.