The URL can be used to link to this page

Home My WebLink AboutRA Resolution 2000-34SAN RAFAEL REDEVELOPMENT AGENCY RESOLUTION NO. 2000-34 MOVED BY: MEMBER MILLER SECONDED BY: MEMBER PHILLIPS RESOLUTION OF THE SAN RAFAEL REDEVELOPMENT AGENCY APPROVING AND AUTHORIZING EXECUTION OF A SUBORDINATION AGREEMENT, APPROVING SUBORDINATION OF THE AGENCY'S BOND DEED OF TRUST TO THE AGENCY'S BOND REGULATORY AGREEMENT, AND MAKING SUBORDINATION FINDINGS PURSUANT TO THE CALIFORNIA REDEVELOPMENT LAW IN CONNECTION WITH LOANS BY THE AGENCY TO CANAL HOUSING ASSOCIATES FOR THE ACQUISITION AND REHABILITATION OF 162-172 BELVEDERE STREET ("CAHIP99) WHEREAS, the City Council of the City of San Rafael (the "City Council") adopted the Redevelopment Plan for the Central San Rafael Redevelopment Project Area on November 20, 1972, by Ordinance No. 1079, and adopted the Second Amended and Restated Redevelopment Plan for the Central San Rafael Redevelopment Project Area (the "Redevelopment Plan") on October 5, 1998, by Ordinance No. 1732; and WHEREAS, pursuant to the Community Redevelopment Law (Health and Safety Code Section 33000 et seq., (the "Law")), the San Rafael Redevelopment Agency (the "Agency") is vested with responsibility to implement the Redevelopment Plan; and WHEREAS, Canal Housing Associates, a California Limited Partnership (the "Developer") desires to acquire and renovate certain improved real property located within the Project Area at 162-172 Belvedere Place (the "Development"); and WHEREAS, the Agency has entered into a Loan Agreement ("the Agency Loan Agreement ") with the Developer whereby the Agency has agreed to provide a loan to the Developer in the principal amount of Seven Hundred Fifty Thousand Dollars ($750,000) for the acquisition and development of the Development (the Agency Loan"), to be evidenced by a promissory note (the "Agency Note"), secured by a deed of trust (the "Agency Deed of Trust") (collectively the "Agency Documents); and WHEREAS, the Development will also be financed by a loan of the proceeds of Multifamily Housing Revenue Bonds (Belvedere Place Project) Series 2000A issued by the Agency in the initial principal amount of up to Three Million Five Hundred Ninety Thousand Five Hundred Twenty Nine Dollars ($3,590,529) (the "Bond Loan") which will be evidenced by a loan agreement (the "Bond Loan Agreement), a regulatory agreement (the "Bond Regulatory Agreement") and a promissory note (the "Bond Note") secured by a deed of trust (the "Bond Deed of Trust") (collectively the "Bond Documents"), the Agency's beneficial interest in which shall be assigned to WestAmerica Bank, a California state chartered bank; and {r43k WHEREAS, the Development will additionally be financed by a loan from the Marin Community Foundation (the "Foundation") in the initial principal amount of One Million Five Hundred Thousand Dollars ($1,500,000) (the "Foundation Loan") which will be evidenced by a loan agreement (the "Foundation Loan Agreement) and a promissory note (the "Foundation Note") secured by a deed of trust (the "Foundation Deed of Trust") (collectively the "Foundation Documents"); and WHEREAS, the Bond Loan Agreement and the Foundation Loan Agreement require subordination of the Agency Documents to the Bond Documents and the Foundation Documents, and a proposed subordination agreement has been prepared to be entered into by and among the Developer, the Agency, the Foundation, and WestAmerica Bank (the "Subordination Agreement"), which is on file with the Agency Secretary; and WHEREAS, the Bond Documents require subordination of the Bond Regulatory Agreement to the Bond Deed of Trust; and WHEREAS, Health and Safety Code Section 33334.14(a) requires certain findings to be made by the Agency prior to subordination of the Bond Regulatory Agreement; and WHEREAS, by staff report accompanying this Resolution and incorporated into this Resolution by this reference (the "Staff Report"), the Agency has been provided with additional information upon which the findings and actions set forth in this Resolution are based. NOW, THEREFORE, IT IS HEREBY RESOLVED Section 1. The Agency finds that all of the above recitals are true and correct, and the Agency has based the findings and actions set forth in this Resolution, in part on such recitals. Section 2. The Agency hereby approves the Subordination Agreement and authorizes the Agency Economic Development Director to execute on behalf of the Agency the Subordination Agreement in substantially the form on file with the Agency Secretary, with such minor changes as are approved by the Agency Economic Development Director, such approval to be evidenced by the execution of the Subordination Agreement. Section 3. Based on the information and analysis included in the Staff Report and otherwise in the record before the Agency, the Agency hereby approves the subordination of the Bond Regulatory Agreement to the Bond Deed of Trust and finds that an economically feasible alternative method of financing the Development on substantially comparable terms and conditions to the Bond Loan, but without subordination, is not reasonably available. The Agency further finds that, pursuant to the Subordination Agreement, the Agency has obtained written commitments reasonably designed to protect the Agency's interests under the Bond Regulatory Agreement in the event of a default under the Bond Deed of Trust, including one or more of the protections described in Health and Safety Code Section 33334.14 (a)(4)(A)-(D). Section 4. The Agency authorizes the Agency Economic Development Director to take such other actions and execute such other documents as are appropriate to effectuate the intent of the subordinations approved by this Resolution. BE IT FURTHER RESOLVED that this Resolution shall take immediate effect upon adoption. I, JEANNE M. LEONCIM, Agency Secretary of the San Rafael Redevelopment Agency, hereby certify that the foregoing resolution was duly and regularly introduced and adopted at a regular meeting of the members of said Agency held on the 16th day of October, 2000, by the following vote, to wit: AYES: NOES: ABSENT: ABSTAIN: MEMBERS: Cohen, Miller, MEMBERS: None MEMBERS: Chairman Boro MEMBERS: None JEANA M. LEONCINI, Xgency Secretary Phillips and Vice -Chair Heller CITY OF SAN RAFAEL AGENDA ITEM NO.: 5 MEETING DATE: October 16, 2000 San Rafael Redevelopment Agency Agenda Report Department: Redevelopment Prepared by: Initials: / ?— 65 — Nancy Mackle, Econ iic Development Director Rod Gould, Executive Director 6UJt5J :U 1: 1t1'-:JULU I'1UN OF THE SAN RAFAEL REDEVELOPMENT AGENCY APPROVING AND AUTHORIZING EXECUTION OF A SUBORDINATION AGREEMENT, APPROVING SUBORDINATION OF THE AGENCY'S BOND DEED OF TRUST TO THE AGENCY'S BOND REGULATORY AGREEMENT, AND MAKING SUBORDINATION FINDINGS PURSUANT TO THE CALIFORNIA REDEVELOPMENT LAW IN CONNECTION WITH LOANS BY THE AGENCY TO CANAL HOUSING ASSOCIATES RECOMMENDATION: Staff recommends the Agency adopt the resolution. BACKGROUND: 162-172 Belvedere Place is being acquired and rehabilitated using funds from the Agency, the County (CDBG and HOME), the Marin Community Foundation ("MCF") and proceeds from a bond issued by the Agency. Westamerica Bank will be buying the bonds from the Agency and loaning the money to Canal Housing Associates (BRIDGE). Canal Housing Associates will use the bond funds for acquisition and rehabilitation and will be responsible for the bond payments. One condition of Westamerica's loan to Canal Housing Associates is that all other funders be subordinate to the Bank's $3,590,529 loan. The Marin Community Foundation requires their $1,500,000 loan be in second place behind Westamerica. The Agency would be in third place and the County is last. FOR AGENCY SECRETARY ONLY File No.: Agency Meeting: Disposition: ANALYSIS: The Agency is recording a Deed of Trust on the property securing the $750,000 loan. This security interest will be subordinate to Westamerica and MCF. The Agency's interest could be negatively impacted in the following situations: a) Default of Canal Housing Associates b) Failure to complete the renovations c) Condemnation, damage or destruction of the building. In each case, the proceeds of the property sale would be allocated based on the position of each of the lenders. Westamerica would be paid first, MCF would be paid second and the Agency would be paid third. The subordination agreement allows, but does not require, the Agency to cure any monetary or non -monetary default to protect the Agency's interest. This provision meets the requirements of Health and Safety Code Section 33334.14 (a) (4). Subordination is a standard lender requirement for these types of transactions. Westamerica would not make a loan commitment for the project without the subordination. The Agency provided a similar subordination for Lone Palm. FISCAL IMPACT: No direct impact to the Agency unless Canal Housing Associates defaults. In a default situation, the Agency would be at risk if proceeds from the sale or condemnation were less than the total lien amount. OPTIONS: • Adopt the attached resolution. • Direct staff regarding an alternative. • Reject the attached resolution. ACTION REQUIRED: Adopt the attached Resolution. ATTACHMENT A: Subordination Agreement