Resolution Number CRA 11-03-15-01CRA RESOLUTION NO. 11-03-15-01
A RESOLUTION OF THE SAN JUAN CAPISTRANO COMMUNITY
REDEVELOPMENT AGENCY APPROVING THE FIRST AMENDMENT
TO OWNER PARTICIPATION AGREEMENT BETWEEN THE AGENCY
AND 26755 VERDUGO, LLC AND MAKING CERTAIN OTHER
FINDINGS IN CONNECTION THEREWITH
WHEREAS, the San Juan Capistrano Community Redevelopment Agency
("Agency") is a community redevelopment agency duly organized and existing under the
California Community Redevelopment Law, Health and Safety Code Section 33000,
et seq. ("CRL"), and has been authorized to transact business and exercise the power
of a redevelopment agency pursuant to action of the City Council ("City Council") of the
City of San Juan Capistrano ("City„); and
WHEREAS, the existing Redevelopment Plan (the "Redevelopment Plan") and
the boundaries of the Redevelopment Plan (the "Project Area") were duly established by
ordinances of the City Council; and
WHEREAS, Agency is vested with the power to implement the Redevelopment
Plan and to carry out its goals and objectives of the Agency, including without limitation
the goals and objectives adopted by the Agency's implementation plan
(the "Implementation Plan") pursuant to the CRL; and
WHEREAS, the Agency is authorized and empowered by the CRL to enter into
agreements for the acquisition of real or personal property, to receive consideration for
the provision by the Agency of redevelopment assistance and to make and execute
contracts and other instruments necessary or convenient to the exercise of its powers,
and
WHEREAS, 26755 Verdugo, LLC ("Developer") is a California limited liability
company duly organized under the laws of the State of California and experienced in
the construction and rehabilitation of commercial buildings; and
WHEREAS, the Agency and Developer have entered into an Owner Participation
Agreement dated as of February 17, 2009 ("Agreement"), pursuant to which the Agency
has agreed to provide the Developer funds in the form of a loan ("Covenants Loan") to
assist in the construction of additions to and remodeling of an existing building located
at 26755 Verdugo Drive, San Juan Capistrano, California ("Paseo de Verdugo Project");
and
WHEREAS, Section 301 of the Agreement provided that the Covenants Loan to
be provided to the Owner by the Agency was to be in the amount of Nine Hundred Fifty
Thousand Dollars ($950,000), and pursuant to Section 302 of the Agreement, the
Covenants Loan was to be disbursed in portions as Owner reached certain project
milestones; and
WHEREAS, pursuant to the Agreement, and in consideration of Agency's
agreement to make the Covenants Loan to Owner, Owner executed the Promissory
Note and Deed of Trust, both dated February 20, 2009, which Deed of Trust was
recorded in the official records of Orange County, California on March 5, 2009 as
Instrument No. 2009000103451; and
WHEREAS, the amount of the Covenants Loan was originally intended and
calculated by the parties to make the Paseo de Verdugo Project more feasible by
partially off -setting the gap between the cost of development and the expected returns
generated by leasing space at the completed Paseo de Verdugo Project (the "Feasibility
Gap"); and
WHEREAS, subsequent to the execution of the Agreement, Promissory Note,
and Deed of Trust, the parties have recalculated the Feasibility Gap and found that it is
up to Seven Hundred Forty Eight Thousand Dollars $748,000 greater than previously
expected, due to increased construction costs and a decrease of forecasted lease
revenues arising from a reduction in the total leaseable space; and
WHEREAS, the Agency entered into the Agreement in order to further the
Agency's objectives of eliminating blight in the Project Area, increasing employment
opportunities within the Project Area, and generating additional taxes with which the
community can increase and assist in providing an environment for the social and
economic growth and well-being of the citizens of the City; and
WHEREAS, in furtherance of these objectives, the parties desire, by execution
of a First Amendment to Owner Participation Agreement ("Amendment") to increase the
amount of the Covenants Loan to an amount sufficient to ensure that construction of the
Paseo de Verdugo Project may be successfully completed; and
WHEREAS, the Amendment and the implementation thereof are in the vital and
best interest of the City and the health, safety and welfare of its residents, and in accord
with the public purposes and provisions of applicable state and local laws and
requirements under which the redevelopment of the Project Area has been undertaken;
and
WHEREAS, the Agency has adopted the Implementation Plan pursuant to
CRL Section 33490, which sets forth the objective of eliminating blighting conditions
including impaired investments; and
WHEREAS, by providing for the operation of the Paseo de Verdugo Project, the
Amendment will assist the Agency in meeting the development policies and objectives
set forth in the Redevelopment Plan and Implementation Plan, specifically the goal of
reducing blighting economic conditions by encouraging new investment in the
community through facilitating the use of underutilized and vacant buildings; and
WHEREAS, pursuant to the CRL, the Agency is authorized to acquire the
"Covenants" as defined in the Agreement; and
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WHEREAS, on March 15, 2011, the Agency held a duly noticed public meeting
on the proposed Amendment, at which time the Agency reviewed and evaluated all of
the information, testimony, and evidence presented during the public meeting; and
WHEREAS, all actions required by all applicable law with respect to the
proposed Amendment have been taken in an appropriate and timely manner; and
WHEREAS, the City Council has previously determined, in its adoption of the
ordinance approving the Redevelopment Plan, that the Site was blighted; and
WHEREAS, the Agreement will assist in the elimination of blight by providing for
the operation of the Paseo de Verdugo Project; and
WHEREAS, the Amendment will not result in physical impacts to the
environment as it simply amends financial aspects of the Agreement; and
WHEREAS, the Agency has duly considered all terms and conditions of the
proposed Amendment and believes that ensuring the completion and operation of the
Paseo de Verdugo Project is in the best interests of the City of San Juan Capistrano
and the health, safety, and welfare of its residents, and in accord with the public
purposes and provisions of applicable state and local laws and requirements.
NOW, THEREFORE, BE IT RESOLVED by the San Juan Capistrano
Community Redevelopment Agency as follows:
1. Each of the foregoing recitals is true and correct.
2. The Agency hereby finds and determines that the operation of the Paseo
de Verdugo Project, pursuant to the Agreement as amended by the Amendment will
assist in the elimination of blight within the Project Area by providing for the proper
reuse of a portion of the Project Area, which was previously declared blighted and
encourage the redevelopment of nearby blighted properties.
3. The Agency hereby finds and determines that the Amendment is
consistent with the provisions and goals of the Redevelopment Plan and
Implementation Plan.
4. The Agency hereby finds that the Amendment will not result in physical
impacts to the environment as it simply amends financial aspects of the Agreement.
5. The Agency hereby approves the Amendment between the Agency and
Developer, in the form of the Amendment, which has been submitted herewith
(Exhibit A).
6. The Agency Executive Director and the Agency Secretary are hereby
authorized to execute and attest the Amendment, including any related attachments; on
behalf of the Agency. Copies of the final form of the Amendment, when duly executed
and attested, shall be placed on file in the office of the City Clerk.
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7. The Agency Executive Director (or his duly authorized representative) is
further authorized to implement the Amendment and take all further actions and execute
all documents referenced therein and/or necessary and appropriate to carry out the
Amendment. The Agency Executive Director (or his duly authorized representative) is
hereby authorized to the extent necessary during the implementation of the Amendment
to make technical or minor changes thereto after execution, as necessary to properly
implement and carry out the Amendment, provided the changes shall not in any manner
materially affect the rights and obligations of the Agency.
The Agency Secretary shall certify to the adoption of this Resolution.
PASSED AND ADOPTED this 15th day of March, 2011.
SAN JUAN CAPISTRANO COMMUNITY
REDEVELOPMENT AGENCY
Laura Freese, Chairman
ATTEST:
Maria Morri , Aden Secreta
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) ss.
CITY OF SAN JUAN CAPISTRANO )
I, MARIA MORRIS, appointed Agency Secretary of the Community Redevelopment
Agency of the City of San Juan Capistrano, do hereby certify that the foregoing
Resolution No. CRA 11-03-15-01 was duly adopted by the Board of Directors of the
Community Redevelopment Agency at a regular meeting thereof, held the 15th day of
March, 2011 by the following vote:
AYES: DIRECTORS: Allevato, Kramer, Reeve, Taylor and Chair Freese
NOES DIRECTORS: None
ABSENT: DIRECTf"10S', None
MAMA MORRIS,. Abe py Secretary
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