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SAN JUAN CAPISTRANO, CITY OF (5)P 0 CITY/AGENCY LOAN AGREEMENT SAN JUAN CAPISTRANO CENTRAL REDEVELOPMENT PROJECT THIS AGREEMENT is entered into this 6th day of October, 1998, by and between the SAN JUAN CAPISTRANO COMMUNITY REDEVELOPMENT AGENCY, a public body, corporate and politic (the "Agency"), and the CITY OF SAN JUAN CAPISTRANO, a municipal corporation (the "City") RECITALS: A. By Ordinance No. 488, adopted July 12, 1983, Ordinance No. 509 adopted May 15, 1984, Ordinance No. 547, adopted on July 16,1985, and Ordinance Nos. 582-583 adopted on August 19, 1986, the City Council of the City of San Juan Capistrano (the "City Council') approved and amended the Redevelopment Plan (the "Plan") for the San Juan Capistrano Redevelopment Project (The "Project Area") of the SanJuan Capistrano Community Redevelopment Agency (the "Agency"). B. Pursuant to the Community Redevelopment Law of the State of California (Health and Safety Code Section 3300 et. sea., the Agency is carrying out the Redevelopment Plan for the Project in the redevelopment project area (the "Project Area"). C. Agency needs funds to acquire certain property within the Central Redevelopment Project Area in order to facilitate the goals of the Redevelopment Plan. D. The Agency has determined by resolution inability to allocate the full amount required and the City and the Agency desire to enter into agreement under which the City will loan to the Agency an amount not to exceed $400,000.00. AGREEMENT The Agency and the City hereby agree as follows: 1. Loan. The City loan to the Agency the amount not to exceed Four Hundred Thousand Dollars ($400,000.00) (the "Loan Amount')., which the Agency shall use as 1— 0 0 down payment for the purchase of Trulis Property. Agency shall issue a Promissory Note provided as Attachment 1 and incorporated herein to this Agreement. 2. Repayment by the Agency The Agency shall repay to the City the Loan Amount, plus interest at the average rate earned by the City investments during the term of this loan all due and payable upon the sale for the Lower Rosan Ranch property. 3. Indebtedness ofAgency. This Agreement constitutes an indebtedness of the Agency incurred carrying out the Project, and a pledging of tax allocations from the Project to repay such indebtedness, under the provisions of Section 16 of Article XVI of the California Constitution and Section 33670-33674 of the Health and Safety Code; provide, however, that such pledge of tax allocations shall always be subordinate and subject to the right of the Agency pledge or commit tax allocations from the Project to repay bonds or other indebtedness incurred by the Agency in carrying out the Project. IN WITNESS WHEREOF, the Agency and the City have executed this Agreement as of the date first above written. ATTEST: Agency Sectz tar ATTEST: SAN JUAN CAPISTRANO COMMUNITY REDEVELOPMENT AGENCY Director CITY OF %kN JUAN CAPISTRANO By: City Cler1 APPROVED AS TO FORM John Shaw I C orney 2— pro tem 0 s San Juan Capistrano Community Redevelopment Agency October 12, 1998 Mr. Tom Trulis P. O. Box 1100 San Juan Capistrano, California 92693 Re: First Amendment to Exchange Agreement Dear Mr. Trulis: At their meeting of October 6, 1998, the San Juan Capistrano Community Redevelopment Agency Board of Directors adopted Resolution No. CRA 98-10-6-1, which approved the First Amendment to the Agreement for Exchange of Real Property to provide for the outright purchase of your property in the Los Rios District. A copy of Resolution No. CRA 98-10-6-1 and an originally -signed copy of the First Amendment are enclosed for your files. ----�j In conjunction with this action, the City Council and the Community Redevelopment Agency both approved a Loan Agreement and Promissory Note to fund the $400,000 down payment on your Los Rios property. A copy of Resolution No. 98-10-6-2 and Resolution No. CRA 98-10-6-2, setting forth that action, are also enclosed for your information. Please feel free to contact Douglas Dumhart at 443-6316 if you have any questions. Very truly yours, Cheryl Johns Agency Secretary Enclosures cc: Roger Grable Douglas Dumhart Finance Officer 32400 Paseo Adelanto San Juan Capistrano Cald0F11M 92675 714-49.3-1171 Ll C I :AYES: '�,, Directors Campbell. Greiner, S%�erdlin, and Chairman Hart NOES: ABSTAIN: Director Jones ABSENT: None 2. ADOPTION OF RESOLUTION APPROVING THE EXECUTION OF A LOAN AGREEMENT AND ACCOMPANYING PROMISSORY NOTE BY AND BETWEEN THE CITY AND REDEVELOPMENT AGENCY (TRULIS/PARCEL 5 OF PARCEL MAP 92-123)(6 00.40 Director Jones advised he would abstaihis item due to a conflict of interest relating to its proximity to his business/residence. Written Communication: Report dated October 6, 1998, from the Senior Management Analyst Il, forwarding a proposed loan agreement with the Community Redevelopment Agency to loan the Agency the $400,000 down payment for its purchase of Tom Trulis' Los Rios property, known as Parcel 5 of Parcel Map 92-123. The report ad, 9sed that in 1990 Mr. Trulis and the Agency entered into an agreement to exchange 6 acres owned by the Agency, known as a portion of the Lower Rosan Ranch, for 2 acres owned by Mr. TrnliS in the Los Rius District, in order to facilitate the move of Mr. Trulis' business, Solag Disposal, out of the Los Rios area. Since that time, Mr. Trulis has obtained a site on the Rancho Santa Margarita property in the County unincorporated area off Ortega Highway and has relocated the majority of his operations to that site. Mr. Trulis no longer needs the Lower Rosan site, but does need funds to develop the new site. Agcncy staff proposed outright purchase of the Los Rios property. The Loan will be repaid when the current suspension on certain building permits during the General Plan update has been lifted and the Lower Rosan Ranch site has been sold. The Senior Management Analyst II made an oral presentation. Adoption of Resolution It was moved by Director Greiner, and seconded by Director Swerdlin that the following Resolution be adopted: RESOLUTION NO. CRA 98-10-6-2, APPROVING THE EXECUTION AND DELIVERY OF A LOAN AGREEMENT AND APPROVING AND AUTHORIZING THE EXECUTION OF PROMISSORY NOTE (TRULIS/PARCEL 5, PARCEL MAP 92-123) - A RESOLUTION OF THE SAN JUAN CAPISTRANO COMMUNITY REDEVELOPMENT AGENCY. APPROVING A LOAN AGREEMENT BETWEEN THE CITY OF SAN JUAN CAPISTRANO AND THE SAN JUAN CAPISTRANO COMMUNITY REDEVELOPMENT AGENCY AND APPROVING AND AUTHORIZING THE EXECUTION OF A PROMISSORY NOTE FOR THE REPAYMENT THEREOF CRA Minutes -3- 10/6/98 0 0 The motion carried by the following v ote. AYES: Directors Camphell, Greiner. Swerdlin and Chairman Hart NOES: None ABSTAIN: Director Jones ABSENT: None CONTINUATION OF CONSIDERA""1O1; OF OWNER PARTICIPATION Report da d October 6, 1998, from the Senior Management nalyst II, advising that Ben Weseloh had oposed to develop a new Chevrolet dealer tp and relocate and expand his existing Honda st to the northwest cornerof Camino Pppistrano and Stonehill Drive. Due to the topography of t ensive off-site impr ements to be made, and widening of Camino Capistrano to iREDort -lane width, Mr. eseloh had requested funding assistance from the Agency. `Che warded a nron sed Owner Participation Agreement to fund the cost of the necessary public The Senior Management Analyst If continued. / Mr. Weseloh had requested this item be Applicant's Representative Stephen Julian, 31878 De bispo, requested a continuan in order to resolve issue rema;ning between the Agency this item to the next meeting Qr. Weseloh. It was moved by/Director Campbell, seconded by Director Jones, and" nimously carried to continue th item to the October 20, 1998, meeting. There beinypocfo further business before the Board, the meeting was adjourned at 7:26 p.m. to the next regular meeting date of Tuesday. October 20, 1998, at 5:30 p.m., in the City Council Chambers. Respectfully submitted, ATTEST: CHER- 1, JQqNSOX, AGENCY SECRETARY .j 4at WYATT HIT, CHAIRMAN CRA Minutes -a- 10/6/98 • 0 COMMUNITY REDEVELOPMENT AGENCY AGENDA ITEM TO: George Scarborough, Execuitve Director FROM: Douglas D. Dumhart, Senior Management Analyst II October 6, 1998 SUBJECT: Consideration of Resolution Approving the Execution of a Loan Agreement and Accompanying Promissory Note by and between the City and Redevelopment Agency (Trulis Property 5 of Parcel 92-123). RECOMMENDATION: By motion, adopt the Resolution approving the execution of a Loan Agreement and accompanying Promissory Note by and between the City and Redevelopment Agency. SUMMARY: On the Agency agenda this evening was the consideration of a First Amendment to the Exchange Agreement with Mr. Trulis for his Los Rios property. In 1990, the Redevelopment Agency negotiated an exchange of properties in an attempt to acquire his Los Rios property. The property swap has been unsuccessful in completing the property acquisition. Staff has negotiated an Amendment to the Exchange Agreement which abandons the land exchange in lieu of an outright purchase. The purchase price is $1.2 million. The amendment calls for a $400,000 down payment and a $800,000 promissory note for 5 years. The Redevelopment Agency does not have sufficient funds to deposit the $400,000 down payment into escrow. Staff is proposing the City loan the Agency the down payment until the Agency is able to dispose of the Lower Rosan Ranch property. Staff has prepared a resolution approving the Loan Agreement and an accompanying Promissory Note for City Council action. BACKGROUND: Tom and Jasmine Trulis and the Agency entered an Agreement for the Exchange of Real Property, effective March 6, 1990, for the exchange of approximately two (2) acres of property owned by Tom and Jasmine Trulis, as tenants-in-common, for approximately six (6) acres of real property owned by the Agency, commonly known as a portion of the Lower Rosan Ranch. The intent of the exchange was to provide Trulis' business, Solag Disposal, which occupied the Los Rios property, a site in which to relocate. Opposition to the Solag use on Lower Rosan Ranch led to Trulis securing a site on Rancho Santa Margarita property in the County unincorporated area off Ortega Highway. FOR CRCOUNC11. AGED Cz 0 • Agenda Item -2- October 6, 1998 Mr. Trulis completed the development of his corporate yard in 1996 and relocated the majority of his operations to the site. The storage of roll -off containers and the transfer of "rent -me" bins is still being conducted on the Los Rios site. Mr. Trulis no longer has the need for the six acres at Lower Rosan Ranch but, rather a monetary need given the development cost of the new yard. Furthermore, the City is anticipating the construction of the Paseo Adelanto extension north to Ramos Street. The lingering acquisition of the Trulis parcel and its continued use provides logistical complications to the Adelanto extension. To address current matters and to meet obligations of the City Council and of the Los Rios Precise Plan, staff has recommended the outright purchase of Mr. Trulis' parcel. To that end, the Agency has prepared a First Amendment to the existing March 1990 Exchange Agreement to purchase the property. To facilitate the First Amendment the Agency needs to borrow the $400,000 down payment. The attached Promissory Note will repay the City the Loan amount, plus interest at the average rate earned by the City investments, during the term of this loan all due and payable upon the sale of the Lower Rosan Ranch Property, COMMISSION/BOARD REVIEW AND RECOMMENDATIONS: Not applicable. FINANCIAL CONSIDERATIONS: A real estate appraisal of Mr. Trulis' parcel was prepared on May 7, 1998 by Harry B. Holzhauser and Associates. The property was appraised on its grandfathered use as the highest and best use which yields a market value of $1,265,000. The First Amendment sets a purchase price of $1,200,000 ($400,000 in cash deposit and an $800,000 five-year note). Staff is proposing that the Agency borrow the $400,000 cash deposit from the City and budget the monthly installments at midyear. The loan from the City would be repaid when the planning suspension is lifted and the Agency's property, Lower Rosan Ranch, can be sold. Agenda Item -3- October 6, 1998 NOTIFICATION: Tom Trulis P.O. Box 1100 San Juan Capistrano, CA 92693 ALTERNATE ACTIONS: Roger A. Grable 19100 Von Karman, 8th Floor Irvine, CA 92623-9613 By motion, adopt the Resolution approving the execution of a Loan Agreement and accompanying Promissory Note by and between the City and Redevelopment Agency. 2. By motion, adopt the Resolution approving subject to the execution of a Loan Agreement and accompanying Promissory Note by and between the City and Redevelopment Agency subject to modifications. 3. By motion, continue the item and refer to staff for additional information. RECOMMENDATION: By motion, adopt the Resolution approving the execution of a Loan Agreement and accompanying Promissory Note by and between the City and Redevelopment Agency. Res ctful/l�y submitted, seeafw,s /O�c�CR.t�� DOUGLAS D. DUMHART Senior Management Analyst II Attachment 1. Resolution Approving Loan Agreement, Loan Agreement and Promissory Note C: \AG E N DAM1998\10-6LOAN. CRA RESOLUTION NO. CRA 98-10-6-2 APPROVING THE EXECUTION AND DELIVERY OF A LOAN AGREEMENT AND APPROVING AND AUTHORIZING THE EXECUTION OF PROMISSORY NOTE (TRULIS/PARCEL 5. PARCEL MAP 92-1231 A RESOLUTION OF THE SAN JUAN CAPISTRANO COMMUNITY REDEVELOPMENT AGENCY, APPROVING A LOAN AGREEMENT BETWEEN THE CITY OF SAN JUAN CAPISTRANO AND THE SAN JUAN CAPISTRANO COMMUNITY REDEVELOPMENT AGENCY AND APPROVING AND AUTHORIZING THE EXECUTION OF A PROMISSORY NOTE FOR THE REPAYMENT THEREOF WHEREAS, by Ordinance No. 488, adopted July 12, 1983, Ordinance No. 509 adopted May 15, 1984, Ordinance No. 547, adopted on July 16,1985, and Ordinance Nos. 582-583 adopted on August 19, 1986, the City Council of the City of San Juan Capistrano (the "City Council") approved and amended the Redevelopment Plan (the "Plan") for the San Juan Capistrano Redevelopment Project (The "Project Area") of the San Juan Capistrano Community Redevelopment Agency (the "Agency"); and, WHEREAS, the Agency has the inability to meet its entire obligation for the purchase of the Trulis Property. NOW, THEREFORE, BE IT RESOLVED, by the San Juan Capistrano Community Redevelopment Agency Board of Directors as follows: SECTION 1. The above recitals are true and correct. SECTION 2. The execution and delivery of the Loan Agreement and Promissory Note is in the best interest of the Agency and will promote the public health, safety and welfare. SECTION 3. The Loan Agreement, attached here to as Exhibit "A", is hereby approved. The Chairman and Executive Director are hereby authorized to execute the Loan Agreement on behalf of the City, together with such changes thereto as are approved by the Executive Director, execution thereof being conclusive evidence of the Agency's approval of such changes. -1- 0 0 SECTION 4. The Promissory Note, attached hereto as Exhibit "B", is hereby approved. The Agency hereby authorizes and directs the Chairman and Executive Director to execute the Note, providing for the repayment by the Agency to the City of the Note amount plus interest thereon, in substantially the form attached hereto, on behalf of the City at such time as the funds are necessary to fulfill the Agency's obligation, together with such changes thereto as are approved by the Executive Director of the Agency, execution thereof being conclusive evidence of the Agency's approval of such changes. PASSED, APPROVED, AND ADOPTED this 6th day of nctuber ,1998• WYATT ART, CHAIRMAN ATTEST: AGENCY C ETARY -2- 0 0 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 98-10-6-2 adopted by the San Juan Capistrano Community Redevelopment Agency Board of Directors at a regular meeting thereof held on the 6th day of October , 1998, by the following vote: AYES: Directors Swerdlin, Greiner, Campbell and Chairman Hart NOES: None ABSTAIN: Director Jones ABSENT: None (SEAL) CHERYL JOUNS09,AGENCYSECRETARY -3-