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HomeMy WebLinkAboutResolution No. 11-R6RESOLUTION NO. 11-R6 A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF AZUSA REQUESTING A LOAN FROM THE CITY OF AZUSA FOR PURPOSES OF THE MERGED AND RANCH CENTER REDEVELOPMENT PROJECT AREAS WHEREAS, pursuant to California Community Redevelopment Law (Health and Safety Code Section 33000, et seg.) ("CRL"), the Redevelopment Agency of the City of Azusa ("Agency") is engaged in activities necessary to implement the redevelopment plans ("Redevelopment Plans") for the Merged and Ranch Center Project Areas ("Project Areas"); and WHEREAS, the State legislature passed AB 26 4x, as amended by Senate Bill 68, as a budget balancing measure, which requires redevelopment agencies statewide to make payments totaling $350,000,000 to county Supplemental Educational Revenue Augmentation Funds ("SERAF") during Fiscal Year 2010-11; and WHEREAS, by March 1, 2010, the legislative body, City Council, has to report to the County Auditor how the Agency intends to fund the required SERAF payment for Fiscal Year 2010-11; and WHEREAS, because the Agency has insufficient funds to make the SERAF payment out of Agency funds, the Agency requests that the City Council determine that the City loan the funds to the Agency to make the 2010-11 SERAF payment; and WHEREAS, the City of Azusa is authorized, pursuant to Section 33620, et. seq., of the Health and Safety Code of the State of California (California Redevelopment Law) to make loans to the Agency for the purposes of defraying said expenses; and WHEREAS, the Parties now desire to enter into this Loan Agreement to memorialize the terms and conditions of the City loan to the Agency for the SERAF payment; NOW, THEREFORE, BE IT RESOLVED by the Agency Members of the Redevelopment Agency of the City of Azusa that: Section 1. Pursuant to the provisions of said Section 33620, et. seq., of the California State Health and Safety Code, the Agency Members hereby authorize the Redevelopment Agency of the City of Azusa to request a Loan from the City of Azusa for purposes of the Merged and Ranch Center Redevelopment Projects. Section 2. The Agency pledges to accept and administer any funds loaned to it pursuant to this request in accordance with the provisions of Section 33620, et. seq., of the Health and Safety Code. Section 3. The Agency requests that authorization for repayment of the loan shall be evidenced by a Loan Agreement (in the form attached as Exhibit A) of the Agency containing the following terms, in addition to all usual and customary terms: LOAN INT. BORROW PLEDGED FROM AMOUNT PROJECT RATE TERM REVENUE SOURCES $512,545 FY 2010/11 SERAF 6.0% 1 Year, unless City of Tax Increment, Payment: extended by Azusa Other Available Merged Project Area Portion: $504,059 mutual consent of both parties' Revenues Ranch Center Project designees Area portion: $8,486 The loan listed herein is payable according to the terms of the Note. The Note is payable from accumulated tax increment funds in excess of those pledged for payment of Agency bonded indebtedness or superior debt, and/or from any other funds available to the Agency from which such payment may legally be made. The Note may be prepaid at any time without penalty. Section 4. The Chairperson of the Agency or his/her designee is hereby authorized and directed to execute, on behalf of the Agency, the Note to the City of Azusa in accordance with the provisions of Section 3 hereof. Section 5. The Agency Secretary shall certify the adoption of this Resolution. PASSED AND ADOPTED this 22 day of February, 2011. Joseph R. Rocha, Chairperson I HEREBY CERTIFY that the foregoing resolution was duly adopted by the Redevelopment Agency of the City of Azusa at a regular meeting held on the 22 day of February, 2011. AYES: AGENCY MEMBERS: GONZALES, CARRILLO, HANKS, MACIAS, ROCHA NOES: AGENCY MEMBERS: ABSTAIN:�GENCY MEMBERS: ABSENT: AGENCY MEMBERS: Vera Mendoza, EXHIBIT A LOAN AGREEMENT (SERAF Loan) between REDEVELOPMENT AGENCY OF THE CITY OF AZUSA a public body, corporate and politic and CITY OF AZUSA a California municipal corporation [Dated as of February 22, 2011 for reference purposes only.] THIS LOAN AGREEMENT ("Agreement") is dated as of February 22, 2011, by and between the REDEVELOPMENT AGENCY OF THE CITY OF AZUSA, a public body corporate and politic ("Agency"), and the CITY OF AZUSA, a California municipal corporation ("City"). Agency and City are sometimes referred to in this Agreement individually as "Party" and collectively as "Parties." RECITALS This Agreement is entered into with reference to the following recitals of fact ("Recitals") that Agency and City believe to be true, as of the date each Party executes this Agreement: A. Pursuant to California Community Redevelopment Law (Health and Safety Code Section 33000, et seq.) ("CRL"), the Agency is engaged in activities necessary to implement the redevelopment plans ("Redevelopment Plans") for the Merged and Ranch Center Project Areas ("Project Areas"). B. The State legislature passed AB 26 4x, as amended by Senate Bill 68, as a budget balancing measure, which requires redevelopment agencies statewide to make payments totaling $350,000,000 to county Supplemental Educational Revenue Augmentation Funds ("SERAF") during Fiscal Year 2010-11. C. By March 1, 2011, the legislative body, City Council, had to report to the County Auditor how the Agency intended to fund the required SERAF payment for Fiscal Year 2010-11. D. Because the Agency has insufficient funds to make the SERAF payment out of Agency funds, the City Council has determined the City will loan the funds to the Agency to make the 2010-11 SERAF payment. E. The Parties now desire to enter into this Loan Agreement to memorialize the terms and conditions of the City loan to the Agency for the SERAF payment. NOW, THEREFORE, in consideration of the mutual promises set forth in this Agreement and other good and valuable consideration, the receipt and sufficiency of which is acknowledged by Agency and City, the Parties agree as follows: ARTICLE 1. EFFECTIVE DATE. 1.1 Effective Date of Agreement. This Agreement is dated February 22, 2011 for reference purposes only. This Agreement shall not become legally effective or binding until the date on which all of the following are true ("Effective Date"): 1.1.1 Following all legally required notices and hearings, this Agreement is ratified by the Governing Board of Agency and the City Council of City; 1.1.2 This Agreement is executed by the authorized representative of Agency and delivered to City; and 1.1.3 This Agreement is executed by the authorized representative of City and delivered to Agency. ARTICLE 2. TERMS REGARDING CITY LOAN TO AGENCY. 2.1 City Loan to Agency; Loan Amount. No later than May 5, 2011, City shall loan to Agency the sum of FIVE HUNDRED TWELVE THOUSAND FIVE HUNDRED FORTY-FIVE DOLLARS AND NO/100 ($512,545.00) ("Loan Amount") in immediately available funds. 2.2 Use of Loan Amount. The Loan Amount shall be used by Agency for the sole purpose of making the Agency's required SERAF Payment pursuant to AB 26, as amended by SB 68. Of the total Loan Amount, $504,059 is loaned to the Merged Project and $8,486 is loaned to the Ranch Center Project, each amount representing shares owed by the individual Project Areas. 2.3 Agency Repayment of Loan Amount. Agency agrees to repay the Loan Amount, with interest, pursuant to the terms and conditions of this Agreement and the Promissory Note attached to this Agreement as Exhibit A and incorporated into this Agreement by this reference. ARTICLE 3. GENERAL TERMS. 3.1 Notices and Demands. All notices or other communications required or permitted between Agency and City under this Agreement shall be in writing, and may be (i) personally delivered, (ii) sent by United States registered or certified mail, postage prepaid, return receipt requested, (iii) sent by telecopier, or (iv) sent by nationally recognized overnight courier service (e.g., Federal Express), addressed to the Parties at the addresses provided in this Section 3. 1, subject to the right of either Party to designate a different address for itself by notice similarly given. Any notice so given by registered or certified United States mail shall be deemed to have been given on the second (2"d) business day after the same is deposited in the United States mail. Any notice not so given by registered or certified mail, such as notices delivered by telecopier or courier service (e.g., Federal Express), shall be deemed given upon receipt of the same by the Party to whom the notice is given. If to the Agency: Redevelopment Agency of the City of Azusa 213 East Foothill Boulevard Azusa, California 91702 Attention: Executive Director If to the City: City of Azusa 213 East Foothill Boulevard Azusa, California 91702 Attention: City Manager 3.2 Time Is Of The Essence. Time is of the essence in the performance of the Parties obligations under this Agreement. 3.3 No Third Party Beneficiaries. This Agreement is expressly declared to be for the sole benefit of the Parties hereto. No other person or entity not a signatory to this Agreement shall have any rights or causes of actions against any Party to this Agreement because of that Party's entry into this Agreement. 3.4 Assignment. City may not assign any of its rights or obligations under this Agreement without the prior express written consent of Agency, which may be given or withheld in Agency's sole and absolute discretion. 3.5 Failure to Strictly Enforce Not a Waiver. Failure by any Party to this Agreement to insist upon the strict performance of any provision of the Agreement or at any one or more times shall not be deemed to constitute a waiver of that Party's right to insist upon strict performance of that or any other provision of this Agreement on future occasions. No alleged waiver of any right afforded to any Party under this Agreement shall be effective unless in writing. 3.6 Attorneys' Fees. In the event that any action or proceeding is commenced by either Agency or City against the other to interpret or enforce any provision of this Agreement, the prevailing Party in such action or proceeding shall be entitled to recover from the non -prevailing Party, in addition to all other relief to which the prevailing Party may be entitled, the prevailing Party's reasonable attorneys' fees and litigation costs, as established by a court of law. Recoverable costs and fees shall include those incurred on appeal and in the enforcement of anyjudgment. 3.7 Amendments and Modifications, This Agreement may be amended only by a written document, duly subscribed by the Parties hereto. 3.8 Counterparts. This Agreement may be executed in two (2) counterpart originals, each of which shall be deemed to be an original, but, when taken together, shall constitute one and the same instrument. [Signatures on Following Pages] ATTEST: MM SIGNATURE PAGE TO LOAN AGREEMENT AGENCY: REDEVELOPMENT AGENCY OF THE CITY OF AZUSA a public body, corporate and politic F.M. Delach Executive Director Date: Agency Secretary Redevelopment Agency of the City of Azusa APPROVED AS TO LEGAL FORM: BEST BEST & KRIEGER LLP 0 Agency Counsel Redevelopment Agency of the City of Azusa SIGNATURE PAGE TO LOAN AGREEMENT CITY: CITY OF AZUSA a California municipal corporation M Dated: ATTEST: By: City Clerk City of Azusa APPROVED AS TO LEGAL FORM: By: City Attorney City of Azusa F.M. Detach City Manager EXHIBIT A TO LOAN AGREEMENT Promissory Note [Attached Behind This Page] REDEVELOPMENT AGENCY OF THE CITY OF AZUSA MERGED AND RANCH CENTER PROJECT AREAS UNSECURED PROMISSORY NOTE 2011 FOR VALUE RECEIVED, this Unsecured Promissory Note is dated as of 2011 ("Promissory Note") and evidences an indebtedness of the Redevelopment Agency of the City of Azusa, a public body, corporate and politic ("Maker"), to the City of Azusa, a California municipal corporation ("Holder"). For value received, Maker hereby promises to pay to the order of Holder, at such address as Holder shall designate, the Loan Amount (as defined in the Agreement), with interest, in accordance with the terms of this Promissory Note. 1. Loan Agreement. The rights and obligations of Maker and Holder under this Promissory Note are made with respect to that certain agreement entitled "Loan Agreement" dated February 22, 2011 by and between Maker and Holder ("Agreement"), as approved by Resolution Number of Maker, dated , 2011 and Resolution Number of Halder, dated , 2011. The terms and provisions of the Agreement are incorporated into this Promissory Note by this reference. All initially capitalized terms used but not otherwise defined in this Promissory Note shall have the meaning ascribed to them in the Loan Agreement. 2. Unsecured Obligation. The Maker's obligations under this Promissory Note are not secured by any instrument encumbering any property or asset of Maker. 3. Repayment of Promissory Note. Maker shall pay to the order of Holder the Loan Amount, with interest accruing at a rate of SIX percent (6_0%) per annum beginning on the date of distribution of funds from the City to the Agency, as follows: 3.1 Maker promises to pay to the order of Holder the Loan Amount, with interest, one year after the date of distribution of funds from the City to the Agency ("Maturity Date"). The entire unpaid balance of the Loan Amount shall be immediately due and payable upon the Maturity Date, and Maker shall tender to Holder such amount on or before the Maturity Date, unless extended by mutual consent of both parties' designees. 3.2 All payments due hereunder are payable in lawful money of the United States in same day funds. The Loan Amount may be prepaid, in whole or in part, at any time and from time to time without penalty or premium. 3.3 The entire unpaid balance of the Loan Amount shall be due and payable, prior to the Maturity Date upon Maker's material breach any of the obligations of this Promissory Note or the Agreement ("Event of Default"). 3.4 Maker's obligation to pay the unpaid principal balance of the Loan Amount shall be limited to the available funds of Maker which are not otherwise encumbered as of the date of this Promissory Note. 3.5 This Note is a subordinate lien and is payable from tax increment revenues in excess of those pledged for Agency bonded indebtedness and any other superior debt, and/or payable from any other resources available to the Agency from which such payment may legally be made, allocated to and received by the Agency for the Merged and Ranch Center Redevelopment Project Areas. 4. Assignment. Holder shall have no power to transfer or assign its right .to receive any payment under this Promissory Note, unless Maker has first granted written approval to Holder for such a proposed assignment, in the Maker's sole and absolute discretion. 5. Severability. The unenforceability or invalidity of any provision or provisions of this Promissory Note as to any persons or circumstances shall not render that provision or those provisions unenforceable or invalid as to any other person or circumstances, and all provisions hereof, in all other respects, shall remain valid and enforceable. 6. Governing Law. The validity, interpretation and performance of this Promissory Note shall be governed by and construed in accordance with the laws of the State of California, without regard to conflicts of laws principles. 7. Jurisdiction and Venue. The Holder and the Maker acknowledge and stipulate that the obligation hereunder was entered into in the County of Los Angeles, California. Any legal action or proceeding to interpret, enforce, or which in any way arises out of this Promissory Note shall be instituted and prosecuted in the appropriate court in the County of Los Angeles, California. Holder and Maker expressly waive, to the maximum legal extent, any legal right either Party may have to have such action or proceeding transferred to or prosecuted in any other court or jurisdiction. 8. Amendments and Modifications. This Promissory Note may be amended or modified only in writing signed by the Holder and the Maker. Time of the Essence. Time is of the essence of this Promissory Note. [Signatures on Following Page] ATTEST: 0 SIGNATURE PAGE TO REDEVELOPMENT AGENCY OF THE CITY OF AZUSA UNSECURED PROMISSORY NOTE MAKER: REDEVELOPMENT AGENCY OF THE CITY OF AZUSA, a public body, corporate and politic M F.M. Delach Executive Director Date: Agency Secretary Redevelopment Agency of the City of Azusa APPROVED AS TO LEGAL FORM: BEST BEST & KRIEGER LLP By: Agency Counsel Redevelopment Agency of the City of Azusa