1995-0718_OLD MC, INC_Assignment MemoG
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TO: Memo to File
FROM: Dawn M. Schanderl, Deputy City Clerk
DATE: July 26, 1995
SUBJECT: Old MC Assignment
On July 18, 1995, Price Enterprises, Inc. assigned to Old MC, Inc. the existing Promissory Note and
the right to "Auto Tax Revenues".
For original Disposition and Development Agreement, please see 600.40, Price Company.
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San Juan Capistrano
Community
Redevelopment
Agency
July 20,1995
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Mr. Joseph R. Satz
Vice President - Counsel
Price Enterprises, Inc.
4649 Morena Boulevard
San Diego, California 92117
Re: Assignment of Promissory Note to Old MC. Inc.
Dear Mr. Satz:
At their meeting of July 18,1995, the San Juan Capistrano Community Redevelopment
Agency Board of Directors and the City Council held a joint public hearing to consider the
assignment of an existing Promissory Note and the right to "Auto Tax Revenues" from
Price Enterprises, Inc., to Old MC, Inc. Following that hearing both bodies approved the
assignment and copies of Resolution No. CRA 95-7-18-1 and City Council Resolution No.
95-7-18-6 are enclosed for your files. Also enclosed is your letter dated May 2, 1995,
signed by the Chairman of the Community Redevelopment Agency as consenting to the
assignment.
Please contact Cassandra Walker at 443-6320 if you have any questions or need any
further information.
Very truly yours,
Cheryl Johns n
OU"�`.
Agency Secretary
Enclosure
cc: Cassandra Walker
Finance Officer
32400 Paseo Adelanto
San Juan Capistrano
California 92675
714 - 493-1171
CR •
JULY 18, 1445
REGULAR MEETING OF THE SAN JUAN CAPISTRANO
COMMUNITY REDEVELOPMENT AGENCY
BOARD OF DIRECTORS
The Regular Meeting of the Board of Directors of the City of San Juan Capistrano Redevelopment
Agency was called to order by Chairman Swerdlin at 7:50 p.m. in the City Council Chamber.
ROLL CALL: PRESENT: David Swerdlin, Chairman
Carolyn Nash, Vice Chairman
Collene Campbell, Director
Wyatt Hart, Director
Gil Jones, Director
ABSENT: None
STAFF PRESENT: George Scarborough, Executive Director; Thomas Tomlinson, Deputy Director;
Richard K. Denhalter, Agency Counsel/City Attorney; Cynthia L. Pendleton, Finance Officer; Cheryl
Johnson, Agency Secretary; William Huber, Director of Engineering and Building Services; Lt. Paul
Sullivan, Chief of Police Services; Nancy Bernardi, Recording Secretary.
PUBLIC HEARINGS
1. JOINT PUBLIC HEARING WITH THE CITY COUNCIL - RESOLUTION
APPROVING ASSIGNMENT OF AN EXISTING PROMISSORY NOTE (PRICE
ENTERPRISES/OLD M IN(600,40)
proposall
Consideration of a request by Price Enterprises, Inc. for the Community Redevelopment
Agency to assign the existing Promissory Note and right to "auto tax revenues" with Price
Enterprises to Old MC, Inc., which is a holding corporation for accounting and tax purposes.
Applicant:
Price Enterprises, Inc.
Written Communication:
Report dated July 18, 1995, from Cassandra Walker, Community Development
Administrator, recommending that the Promissory Note and "auto tax revenues" be assigned
from Price Enterprises, Inc. to Old MC, Inc.
C. J. Amstrup, Associate Planner/Project Manager, made an oral presentation, noting that the
proposed reassignment would not modify any terms of the original Promissory Note.
CRA Minutes -1- 7/18/95
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Public Hearing:
Notice having been given as required by law, Mayor Nash opened the Public Hearing, and
there being no response, closed the hearing with the right to reopen at any time.
Adoption of Resolution Assigning the Promisso[y Note and "Auto Tax Revenues" to
Old MC, Inc.:
It was moved by Director Campbell, seconded by Chairman Swerdlin, that the following
Resolution be adopted:
RESOLUTION NO CRA 95-7-18-1 APPROVING ASSIGNMENT OF
THE PRICE ENTERPRISES INC.PROMISSORY NOTE TO OLD M
INC- - A RESOLUTION OF THE SAN JUAN CAPISTRANO
COMMUNITY REDEVELOPMENT AGENCY, APPROVING
ASSIGNMENT OF PRICE ENTERPRISES, INC. PROMISSORY NOTE
TO OLD MC, INC.
The motion carried by the following vote:
AYES: Directors Campbell, Hart, Jones, Nash, and Chairman Swerdlin
NOES: None
ABSENT: None
CONSENT CALENDAR
It was moved by Director Jones, seconded by Director Hart, that the staff recommendations be
accepted for the following items listed on the Consent Calendar. The motion carried by the following
vote:
AYES: Directors Campbell, Hart, Jones, Nash, and Chairman Swerdlin
NOES: None
ABSENT: None
PaU&SITAIRI WelwkeluvatlimL 60 I_ l
The Minutes of the Regular Meeting of June 20, 1995, were approved as submitted.
CRA Minutes
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7/18/95
AGENDA ITEM July 18, 1995
TO: George Scarborough, Executive Director
FROM: Cassandra Walker, Community Development Administrator
SUBJECT: Joint Public Hearing to Consider Assignment of an Existing Promissory Note from
Price Enterprises, Inc. to Old MC, Inc.
By Motion, adopt the attached Resolution approving the assignment of the Promissory Note and
"auto tax revenues" from Price Enterprises, Inc. to Old MC, Inc.
A. ,Summ= and Recommendation - Price Enterprises, Inc. is requesting the Redevelopment
Agency to assign the existing Promissory Note and right to "auto tax revenues" with Price
Enterprises, Inc. to Old MC, Inc. Price Enterprises is currently in the process of transferring
Redevelopment Agency Promissory Notes and other assets to Old MC, Inc., a holding corporation
for accounting and tax purposes.
In 1986, the Redevelopment Agency entered into a Disposition and Development Agreement (DDA)
with The Price Company to facilitate the development of the Price Club Plaza. The Price Company
loaned the Agency $5,107,517 to be utilized in part toward the purchase of the site by the Agency,
an Environmental Impact Report, on-site and off-site improvements, and certain development fees.
The repayment of the obligation (Promissory Note) was based on sales tax revenues received by the
City from the Price Club and surrounding stores in the Price Club Plaza. Currently, the repayment
is structured so that the first $450,000 of sales tax flows directly to the Agency. The next $600,000
goes to The Price Company to pay-off the Promissory Note. Any sales tax over $1,050,000 is split
with 50% to the City and 50% to repayment of the Note.
Staff recommends that the Agency adopt the attached Resolution approving the assignment of the
Promissory Note and "auto tax revenues" from Price Enterprises, Inc. to Old MC, Inc.
B. Bac ound - In March 1995, The Price Company transferred the Promissory Note to Price
Enterprises, Inc. Price Enterprises, Inc. has now created Old MC, Inc. a holding corporation to
administer its City and Agency notes, and other assets for tax and accounting purposes. Price
Enterprises, Inc. owns all the issued and outstanding stock of Old MC, Inc. The assignment of the
Promissory note would not alter any of the terms and conditions of the original note.
Price Enterprises, Inc. will own and operate the Price Club Plaza (existing in-line stores and proposed
Office Depot and Petsmart), and The Price Company will continue to own and operate the Price Club
and underlying property. The auto parcel is separately owned and operated by Capistrano Ford.
FOR CirY COUNCIL AGEN v
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Agenda Item -2- July 18, 1995
Under this assignment, Old MC, Inc. will receive payments under the Agency's Promissory Note
based on the sales tax generated by the whole plaza (in-line stores, new buildings, and Price Club).
Should the Price Club close, Price Costco would be obligated to pay Old MC, Inc. an amount equal
to 72% of the outstanding book balance of the Promissory Note (reduced by payments to that date).
Not Applicable.
There is no cost to the Redevelopment Agency associated with assignment of the Promissory Note.
Copies of this Agenda Item were forwarded to Price Enterprises, Inc.
Adopt the attached Resolution approving the assignment of the promissory note and "auto
tax revenues" from Price Enterprises, Inc. to Old MC, Inc. and execute the attached
assignment.
2. Do not approve the assignment of execution of the Certificate of Completion.
Request further information from Staff.
By Motion, adopt the attached Resolution approving the assignment of the Promissory Note and
"auto tax revenues" from Price Enterprises, Inc. to Old MC, Inc.
R ectf illy submitted
Cassandra L. Walker
Community Development Administrator
Exhibits #1 - Resolution
#2 - Promissory Note Assignment Form
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RESOLUTION NO. CRA 95-7-18-1
A RESOLUTION OF THE SAN JUAN CAPISTRANO COMMUNITY
REDEVELOPMENT AGENCY, APPROVING ASSIGNMENT OF PRICE
ENTERPRISES, INC., PROMISSORY NOTE TO OLD MC, INC.
WHEREAS, the Community Redevelopment Agency of the City of San Juan
Capistrano ("the Agency") previously issued a Promissory Note to the Price Company dated June 4,
1987, which was amended on October 1, 1991, and on June 20, 1994; and,
WHEREAS, the Promissory Note was issued by the Agency pursuant to a
Disposition and Development Agreement (DDA) which was executed on June 9, 1986, and the "auto
tax revenue" sharing was approved as the second amendment to the Disposition and Development
Agreement on June 20, 1994; and,
WHEREAS, the Promissory Note and the "auto tax revenue" were assigned from the
Price Company to Price Enterprises, Inc., on March 7, 1995, as a result of the Price Costco merger;
and,
WHEREAS, the Price Enterprises, Inc., wishes to now assign the Promissory Note
and the right to "auto tax revenues" to Old MC, Inc., a corporation created for accounting and tax
purposes; and,
WHEMEAS, the Agency has duly considered the foregoing and believes that it is in
the best interests of the Agency and the health, safety and welfare of the residents of the City of San
Juan Capistrano, and in accordance with the public purposes and provisions of applicable state and
local law requirements.
NOW, THEREFORE, BE iT RESOLVED, by the San Juan Capistrano Community
Redevelopment Agency Board of Directors, City of San Juan Capistrano, California, as follows:
The Agency hereby approves the assignment of the Promissory Note and authorizes
and directs the Chairman and the Agency Secretary to execute the assignment.
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SECTION 2.
This Resolution shall become effective after its adoption.
PASSED, APPROVED, AND ADOPTED this 18th day of
1995.
DAVID SWERDLIN, CHAIRMAN
ATTEST:
AGENCY i.
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) ss
CITY OF SAN JUAN CAPISTRANO )
I, CHERYL JOHNSON, Agency 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 95-7-18-1 adopted by the San Juan Capistrano Community
Redevelopment Agency Board of Directors at a regular meeting thereof held on the 18th day
of July , 1995, by the following vote:
AYES: Directors Jones, Hart, Nash, Campbell and
Chairman Swerdlin
NOES: None
ABSTAIN: None
ABSENT: None
(SEAL) jQ"
CBERYL JOEWSW,AGENCY S CRtTARY
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August 1, 1995
Mr. George Scarborough
SAN JUAN CAPISTRANO COMMUNITY
REDEVELOPMENT AGENCY
32400 Paseo Adelanto
San Juan Capistrano, CA 92675
RE: AUTO TAX REVENUES
FIVE STAR ENTERPRISES
Gentlemen:
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Pursuant to a Disposition and Development Agreement between The Price
Company and the San Juan Capistrano Community Redevelopment Agency (the
Agency') dated December 16, 1986 as amended by an Amendment dated
October 1, 1992, and as further amended by an amendment dated June 20,
1994, the Agency is to pay seventy (70%) percent of the "Auto Tax Revenues"
to the "Developer".
The Price Company assigned its rights to the Auto Tax Revenues to Price
Enterprises, Inc., pursuant to an Assignment of Promissory Note and Right to
Auto Tax Revenues dated August 29, 1994.
Price Enterprises, Inc., assigned its rights to the Auto Tax Revenues to Old MC,
Inc., (a subsidiary of Price Enterprises, Inc.), pursuant to an Assignment of
Promissory Note and Right to Auto Tax Revenues dated June 2, 1995.
Pursuant to an Auto Sales Tax Agreement dated September 9, 1994, between
Price Enterprises, Inc. and Five Star Enterprises, Old MC, Inc., (assignee of
Price Enterprises, Inc. with respect to said Auto Sales Tax Agreement), is
required to pay Five Star sixty-seven and 85/100 (67.85%) percent of all Auto
Tax Revenues" collected by Old MC, Inc., from the Agency.
Furthermore, such agreement requires (at the request of Five Star) that Old MC,
Inc. and Five Star execute an authorization letter to the Agency directing the
GM=
At►G 3 1995
Agency to send any amounts due Five Star with respect to the Auto Tax
Revenues directly to Five Star.
Based upon the aforementioned, Old MC, Inc., irrevocable assigns to Five Star
Enterprises, Inc., sixty-seven and 851100 (67.85%) percent of the Auto Tax
Revenues required to be paid to the Developer pursuant to the DDA. Therefore,
all future payments by the Agency attributable to Auto Tax Revenues" should be
disbursed as follows:
Five Star Enterprises, Inc. - sixty-seven and 851100 (67.85%) percent.
Old MC, Inc. - thirty-two and 151100 (32.15%) percent.
Thank you for your cooperation.
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Agreed to:
FIVE S S=/SES, INC.
by:
080195:sjcge