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Home My WebLink AboutSA RES 14-01SUCCESSOR AGENCY TO THE TUSTIN COMMUNITY REDEVELOPMENT AGENCY RESOLUTION NO. 14 -01 A RESOLUTION OF THE CITY OF TUSTIN, ACTING AS THE SUCCESSOR AGENCY TO THE TUSTIN COMMUNITY REDEVELOPMENT AGENCY, AMENDING THE DECEMBER 31, 2008 PROMISSORY NOTE BETWEEN THE CITY OF TUSTIN AND THE SUCCESSOR AGENCY TO THE TUSTIN COMMUNITY REDEVELOPMENT AGENCY The City of Tustin, acting as the Successor Agency to the Tustin Community Redevelopment Agency, finds, determines and. declares as follows: A. The Tustin Community Redevelopment Agency ( "Agency ") was a community redevelopment agency organized and existing under the California Community Redevelopment Law, Health and Safety Code Sections 33000, et seq. ( "CRL ") and had been authorized to transact business and exercise the powers of a redevelopment agency pursuant to action of the City Council ( "City Council ") of the City of Tustin ( "City "); and B. Assembly Bill X1 26 added Parts 1.8 and 1.85 to Division 24 of the California Health and Safety Code, which laws cause the dissolution and wind down of all redevelopment agencies ( "Dissolution Act "); and C. On December 29, 2011, in the petition California Redevelopment Association, et al v. Ana Matosantos, et al ( "Matosantos Decision "), the California Supreme Court upheld the Dissolution Act and, thereby, all redevelopment agencies in California were dissolved as of and on February 1, 2012 under the dates in the Dissolution Act that were reformed and extended thereby ( "Supreme Court Decision "); and D. The Agency is now a dissolved community redevelopment agency pursuant to the Dissolution Act; and E. The City of Tustin previously took action on September 20, 2011 with adoption of Resolution No. 11 -71 electing to become and to act as the Successor Agency to the Tustin Community Redevelopment Agency ( "Successor Agency "); and F. On December 2, 2008, the Agency Board adopted RDA Resolution No. 08 -06, authorizing the purchase of a Promissory Note issued by the City of Tustin in the principal amount of $18,881,750; and G. Under the terms of the Note and in anticipation repayment would be made from the proceeds of selling the portion of the 34 acres not required for right -of -way, the City Resolution No. 14 -01 Page 1 of 3 was to repay the Agency principal and interest on December 1, 2013 unless amended by both parties; and H. During the term of the Note, the City has only sold 7.53 acres of 26.59 acres available for development due to an economy which has suffered through what most economists refer to as the "Great Recession "; and The City, acting as Successor Agency, has determined that it is necessary and appropriate to amend and restate the Original Promissory Note entered into by and between the City of Tustin and the former Tustin Community Redevelopment Agency on December 31, 2008; and J. In accordance with the Dissolution Act, the amended Promissory Note will also require the Oversight Board of the Successor Agency approval and State of California Department of Finance approval. NOW, THEREFORE, BE IT RESOLVED BY THE TUSTIN CITY COUNCIL SERVING AS THE SUCCESSOR AGENCY TO THE TUSTIN COMMUNITY REDEVELOPMENT AGENCY: Section 1. The foregoing recitals are incorporated into this Resolution by this reference, and constitute a material part of this Resolution. Section 2. The City acting as Successor Agency to the Tustin Community Redevelopment Agency approves amending the December 31, 2008 Promissory Note between the City of Tustin and the former Tustin Community Redevelopment Agency. Section 3. The Executive Director is hereby authorized to execute the First Amendment to the Promissory Note, in substantially the form attached to this Resolution. Section 4. This Resolution shall take effect immediately upon its adoption by the City Council, and the City Clerk on behalf of the Successor Agency shall attest to and certify the vote adopting this Resolution. PASSED AND ADOPTED this 21 st day of January, 2014. ELWY J A. MURRAY, Mayor on behalf of Successor A ency 1 Resolution No. 14 -01 Page 2 of 3 1 1 ATTEST: — '�J' 4K C �Z4 JEFF Y ARKER, City C erk on l6ehalf of the Successor Agency STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss. CITY OF TUSTIN ) I, JEFFREY C. PARKER, City Clerk of the City of Tustin, acting as the Successor Agency to the Tustin Community Redevelopment Agency, hereby certify that the foregoing resolution was duly adopted by the City of Tustin, acting as the Successor Agency to the Tustin Community Redevelopment Agency, at its regular meeting held on the 21St day of January 21, 2014, and that it was so adopted by the following vote: COUNCILPERSONS AYES: Murray, Puckett, Nielsen, Gomez, Bernstein (5) COUNCILPERSONS NOES: None (0) COUNCILPERSONS ABSTAINED: None (0) COUNCILPERSONS ABSENT: None (0) 4j'-A� C'Z' - / Y JEFF C PARKER, City le oh behalf of the Successor Agency Attachment No. 1 Resolution No. 14 -01 Page 3 of 3 First Amendment to the Promissory Note FIRST AMENDMENT TO PROMISSORY NOTE Initial Principal Amount: $18,881,750.00 Tustin, California , 2014 FOR VALUE RECEIVED, the undersigned City of Tustin, a municipal corporation and public body corporate and politic of the State of California ( "City") and the Successor Agency to the Tustin Community Redevelopment Agency, a public body corporate and politic ( "Successor Agency ") by this FIRST AMENDMENT TO PROMISSORY NOTE hereby amend that certain Promissory Note dated as of December 31, 2008 between the City and the former Tustin Community Redevelopment Agency in the amount of Eighteen Million Eight Hundred Eighty -One Thousand Seven Hundred Fifty Dollars and No /100 Dollars ($18,881,750.00) ( "Original Note "). A. Modification to the Original Note. The following sections of the Original Note shall be amended as follows: a. The introductory paragraph is hereby deleted and replaced as follows: The City of Tustin (together with any and all of its successors, the "City") hereby promises to pay to the Successor Agency to the Tustin Community Redevelopment Agency (together with any and all of its successors and assigns, the "Successor Agency ") in accordance with the payment schedule outlined below ( "Maturity Date "), in lawful money of the United States of America, at 300 Centennial Way, Tustin, California, or at such other address as may be specified by the Agency, the principal amount of $18,881,750.00, together with interest accrued thereon from December 30, 2008 to the Maturity Date at the rate corresponding with the interest rate earned by funds deposited into the Local Agency Investment Fund ( "LAIF "). The Original Note, as amended by this First Amendment to Promissory Note, and any subsequent renewals or extensions hereof and as the same may be amended, restated or•supplemented from time to time, is referred to herein as this "Note." In recognition the parties entered into the Original Note with the payoff being tied to the sale of the purchased parcels, the payment schedule is dependent upon whichever occurs first: 1) the reinstatement of the Affordable Housing Reimbursement Agreement, Public Works Agreement, and South Central Project Area Working Capital Loan Agreement (together, "Agreements "), or 2) the sale of the remaining parcels for which the Original Note was issued. 1) Should the reinstatement of the Agreements occur first, the payment schedule will comply with HSC Section 34191.4(b)(2)(A) as follows: i. In recognition that the City has sold 7.53 acres for $8,710,000, the City will make a payment of $2,438,800 against the Note, reflecting the Note's contribution as a percentage (28 %) towards the original purchase. Payment will be made upon State of California Department of Finance issuing a Finding of Completion ( "Finding ") and will leave a balance of $16,442,950 plus interest accrued from the Original Note date of December 31, 2008. ii. A five -year payment schedule will be established with the first payment commencing six months from receiving a Finding. The annual payments will be $3,288,590 per year plus accrued interest. In the event Redevelopment Property Tax Trust Funds ( "Trust Funds ") pursuant to the ROPS process and received as a result of the Reimbursement Agreements do not equal $3,288,590 plus accrued interest, the City will only pay the actual amount received in Trust Funds. iii. Corresponding to the payment schedule once it is initiated, the Successor Agency will provide Semi - Annual Reports to the Oversight Board detailing the payments made against the Note. iv. If parcels are also sold during this time, the CityAkill make a payment'against the Note that reflects the Note's contribution � d&'a percentage (28 %) towards the original purchase. t V. The City will pay off the balance of the Note in the fifth (5`h) year, regardless of whether or not Trust Funds have amounted to $3,288,590 plus accrued interest in each of the previous four years. 2) If the Agreements are not reinstated, the payment schedule and due date will correspond with the sale of the remaining parcels as follows: i. In recognition that the City has sold 7.53 acres for $8,710,000, the City will make a payment of $2,438,800 against the Note that reflects the Note's contribution as a percentage (28 %) towards the original purchase. Payment will be made on December 1, 2014. ii. As each parcel is sold, the City will make a payment against the Note that reflects the Note's contribution as a percentage (28 %) towards the original purchase. iii. Upon the sale of the final parcel, the City will pay off the balance owed on the Note, notwithstanding whether the payment is less than or greater than 28% of the sale. iv. As parcels are sold, the Successor Agency will provide Reports to the Oversight Board of the Successor Agency to the Tustin Community Redevelopment Agency detailing the payments made against the Note. b. Section 3. Is hereby deleted and replaced as follows: Section 3. Events of Default and Remedies. The failure of the City to pay the Accreted Value hereof, as and when due, shall constitute an event of default under this Note (an "Event of Default "). If an Event of Default shall occur and be continuing, the Agency may, at its option, without prior notice or demand, and is hereby authorized and empowered by the City to, at any time and from time to time, exercise all or any one or more of the rights, powers or other remedies available to the Agency against the City under applicable law. Upon the occurrence and during the continuance of an Event of 2 Default, interest shall accrue on the Accreted Value hereof at the rate corresponding with the interest rate earned by funds deposited into the Local Agency Investment Fund. C. Section 7. Is hereby deleted and replaced as follows: Section 7. Notices. All written notices, statements, demands, consents, approvals, authorizations, offers, designations, requests or other communications hereunder shall be given to the party entitled thereto at its address set forth below, or at such other address as such party may provide to the other parties in writing from time to time, namely: If to the City: City of Tustin 300 Centennial Way Tustin, California 92680 Attention: City Manager If to the Agency: Successor Agency to the Tustin Community Redevelopment Agency 300 Centennial Way Tustin, California 92680 Attention: Executive Director Each such notice, statement, demand, consent, approval, authorization, offer, designation, request or other communication hereunder shall be deemed delivered to the party to whom it is addressed (a) if given by courier or delivery service or if personally served or delivered, upon delivery, (b) if given by telecopier, upon the sender's receipt of an appropriate` answerback or other written acknowledgment, (c) if given by registered or certified mail, return receipt requested, deposited with the United States mail postage prepaid, 72 hours after such notice is deposited with the United States mail, or (d) if given by any other means, upon delivery at the address specified in this Section. Except as amended hereby, all other terms and conditions of the Original Note shall remain in full force and effect. IN WITNESS WHEREOF, the parties have duly executed this Note as of the date first above written. Date: SUCCESSOR AGENCY: SUCCESSOR AGENCY TO THE TUSTIN COMMUNITY REDEVELOPMENT AGENCY, a public body corporate and politic 3 Jeffrey C. Parker Executive Director 3 APPROVED AS TO FORM: By: Celeste Brady Special Counsel to the Successor Agency APPROVED AS TO FORM: LO- David E. Kendig City Attorney CITY: CITY OF TUSTIN : 0 Jeffrey C. Parker City Manager �J 1