HomeMy WebLinkAboutOversight Board Reso 15-0023a : • _ : "T• i7 Mexel- _XF��I�Y c3
LOAN AGREEMENT BETWEEN THE CITY OF DOWNEY D THE
DOWNEY SUCCESSOR AGENCY
WHEREAS, the Oversight Board for the Downey Successor Agency (the "Oversight
Board ") has been appointed pursuant to the provisions of Health and Safety Code Section
34179, and,
WHEREAS, the Downey Successor Agency ( "Successor Agency ") is a public agency
pursuant to Health and Safety Code Section 34173; and,
WHEREAS, the City of Downey ( "City ") is a California municipal corporation operating
under the laws of the State of California; and,
WHEREAS, the Downey Community Development Commission ( "CDC') is a public
body, corporate and politic, exercising governmental functions and previously exercised powers
under the Community Redevelopment Law, Health and Safety Code Section 33000 et seq.
("CRL"); and,
WHEREAS, under the CRL, the City had the expressed authority to provide the CDC
with financial assistance for purposes of implementing redevelopment activities (see, e.g.,
Health and Safety Code Sections 33132, 33133, 33220, 33445, 33445.1, 33600, 33601, 33610,
33614; see also Government Code section 53600 et seq.); and,
WHEREAS, pursuant to the authority granted under the CRL, the City and CDC entered
into that certain Cooperation Agreement, dated June 22, 2010 ( "Loan Agreement"). A copy of
the Loan Agreement is set forth in Attachment No. 1 to Exhibit "A" hereto, which Exhibit "A" is
incorporated herein by this reference. The Loan Agreement provides for the City to loan to the
CDC up to Five Hundred Thousand Dollars ($500,000) to assist the CDC with annual payments
required to be made by the CDC to Champion Dodge, LLC, a limited liability company
( "Champion Dodge ") pursuant to that certain Owner Participation Agreement between
Champion Dodge and the CDC dated June 8, 2010 (the "OPA "). The annual payments required
to be made by the CDC under the OPA are to be paid from property tax increment. The amount
of such payments are measured by the amount of sales tax generated by the operation of a
Chrysler /Jeep new car franchise and Dodge new car dealership; and
WHEREAS, in January 2011, the Governor of California first proposed as part of the
2011 -12 budget the possible dissolution of redevelopment agencies to cover an estimated $25
billion shortfall. In June 2011, Assembly Bill 26 from the 2011 -12 First Extraordinary Session of
the California Legislature ( "ABA 26 ") was enacted as a bill related to the 2011 Budget Act. In
June 2012, Assembly Bill 1484 from the 2011 -2012 Regular Session of the California
Legislature ( "AB 1484 ") was enacted as a bill related to the 2012 Budget Act. ABx1 26, as
modified by the California Supreme Court Decision in California Redevelopment Association v.
Matosantos (2011) 53 CalAth 231, dissolved all redevelopment agencies and redevelopment
functions of community development commissions in California on February ,1, 2012; and
WHEREAS, pursuant to Health and Safety Code Section 34173, added by ABx1 26 and
amended by AB 1484, the Successor Agency assumed on February 1, -2012, all authority,
rights, powers, duties, and obligations previously vested with the CDC, except for those
provisions of the CRL that were repealed, restricted, or revised pursuant to Part 1.85 of
Division 24 of the Health and Safety Code; and,
OVERSIGHT" BOARD RESOLUTION NO. OB 15 -0023
PAGE 2
WHEREAS, pursuant to Health and Safety Code Section 34171(d)(2), added by ABx1
26, commencing on February 1, 2012, loan agreements between the city, county, or city and
county that created the redevelopment agency and the redevelopment agency, not entered into
within the first two years of the creation of the redevelopment agency, were not "enforceable
obligations;" and,
WHEREAS, pursuant to Health and Safety Code section 34191.4(b), added by AB 1484,_
loan agreements between the city, county, or city and county that created the redevelopment
agency and the redevelopment agency shall be deemed "enforceable obligations" so long as a
successor agency receives a "finding of completion" pursuant to Health and Safety Code
Section 34179.7 and the successor agency's oversight board makes a finding that the loans
were for legitimate redevelopment purposes; and,
WHEREAS, pursuant to Health and Safety Code Section 34180(a), added by ABx1 26
and amended by AB 1484, an oversight board is authorized to approve a request by a
successor agency to reestablish loan agreements between the successor agency and the city,
county, or city and county that formed the redevelopment agency in accordance with the
provisions in Health and Safety Code Section 34191.4; and,
WHEREAS, pursuant to Health and Safety Code Section 34191.4(b)(2) if an oversight
board finds that the loan is an enforceable obligation, any accumulated interest on the
remaining principal amount of the loan shall be recalculated from origination at the interest rate
earned by funds deposited into the Local Agency Investment Fund, and the loan must be repaid
to the city, county, or city and county in accordance with a defined schedule over a reasonable
term of years at an interest rate not to exceed the interest rate earned by funds deposited into
the Local Agency Investment Fund. The annual loan repayments provided for in the recognized
obligations payment schedules are subject to the additional following provisions:
(A) Repayments shall not be made prior to the 2013 -14 fiscal year. Beginning in the
2013 -14 fiscal year, the maximum repayment amount authorized each fiscal year for
repayments made for a reestablished city /redevelopment agency loan and
repayments for any amounts owed to the former redevelopment agency's Low and
Moderate Income Housing Fund as repayment for the funding of the Supplemental
Education Revenue Augmentation Fund (SERAF) shall be equal to one -half of the
increase between the amount distributed to the taxing entities pursuant to Health and
Safety Code Section 34183(a)(4) in that fiscal year and the amount distributed to
taxing entities pursuant to that paragraph in the 2012 -13 base year. Loan or deferral
repayments made to city /redevelopment agency loans are to be second in priority to
amounts to be repaid as part of any SERAF loan.
(B) Payments received by a city, county, or city and county that formed the
redevelopment agency shall first be used to retire any outstanding amounts
borrowed and owed to the Low and Moderate Income Housing Fund of the former
redevelopment agency for purposes of the SERAF and shall be distributed to the
Low and Moderate Income Housing Asset Fund established pursuant to Health and
Safety Code Section 34176(4).
(C) Twenty percent of any loan repayment for a city /redevelopment agency loan shall
be deducted from the loan repayment amount and shall be transferred to the Low
and Moderate Income Housing Asset Fund established pursuant to Health and
Safety Code section 34176(4), after all outstanding loans from the Low and
Moderate Income Housing Fund for purposes of the SERAF have been repaid; and
U11? lrl��
PAGE 3
WHEREAS, the CDC did not pay for the SERAF requirement with any funds from the
former Low and Moderate Income Housing Fund; and,
WHEREAS, the Successor Agency received its "Finding of Completion" on or about May
15 -2013.
WHEREAS, the Loan Agreement is a proper and legally- authorized loan agreement
under the CRL made by the City to the CDC for legitimate redevelopment purposes, including
but not limited to the elimination of blight in the redevelopment project areas, administrative
functions, and construction of public infrastructure; and,
WHEREAS, the outstanding amount owed by the Successor Agency to Champion
Dodge under the OPA is One Hundred Ninety -Two Thousand Four Hundred Seventy -Four
Dollars and Ninety Cents ($192,474.90) (the "Remaining OPA Amount"); and,
WHEREAS, the Successor Agency now desires to borrow funds from City, in the
amount of the Remaining OPA Amount and pursuant to the Loan Agreement, to enable the
Successor Agency to make the remaining payments to Champion Dodge under the OPA; and,
WHEREAS, upon the City's loan of funds to the Successor Agency pursuant to the Loan
Agreement, if the amounts loaned were not paid back to the City, then other public services
provided by the City, such as public safety, fire protection, wet and dry utilities, and waste and
water management, would be impacted, thereby negatively impacting the other taxing entities
and their provision of services that use and benefit from these City services; and,
WHEREAS, the Loan Agreement, upon approval by the Oversight Board, will have a
Restated and Amended Cooperation Agreement (attaching the original Loan Agreement) with
the Restated and Amended Cooperation Agreement restating the terms and conditions of the
original Loan Agreement and amending it to conform to the loan repayment terms required by
Health and Safety Code Section 34191.4(b), added by AB 1484. The Restated and Amended
Cooperation Agreement is attached hereto as 'Exhibit "B" and incorporated herein by this
reference (the "Restated Agreement ").
SUCCESSOR NOW, THEREFORE, THE OVERSIGHT BOARD OF THE DOWNEY
AGENCY HEREBY • _ • •
SECTION 1 The above recitals are true and correct and incorporated herein,.
SECTION 2. The Oversight Board hereby finds and declares as follows:
A The Loan Agreement is a "loan agreement" as described in Health and Safety
Code Section 34191.4(b).
B. The Loan Agreement was for legitimate redevelopment purposes, including the
following:
0) The CDC was implementing the redevelopment of the project area(s)
under the duly adopted redevelopment plan(s) and the CRL as referenced and
identified in the Loan Agreement;
(ii) The redevelopment plan(s) for the project area(s) specifically authorized
the City to assist the CDC, and for the CDC to accept funding from any public or
OVERSIGHT BOARD RESOLUTION NO. OB 15 -0023
PAGE 4
private agency, including the City, in furtherance of redevelopment activities
authorized under the CRL;
(iii) The CRL (Health and Safety Code Sections 33132, 33133, and 33600)
specifically authorized the CDC to accept financial assistance from public sources,
including the City, and to expend those moneys for any redevelopment project
within the CDC's area of operation or for the CDC's activities, powers, and duties;
(iv) The CRL (health and Safety Code Section 33220) specifically authorized
the CDC to enter into agreements with any other public body, including the City, for
the purpose of aiding and cooperating in the planning, undertaking, construction, or
operation of redevelopment projects upon the terms and with or without
consideration as determined necessary by the CDC;
(v) The CRL (Health and Safety Code Sections 33445 and 33445.1)
specifically authorized the CDC, with the consent of the City, to pay all or a part of
the value of the land for and the cost of the installation and construction of any
publicly owned building, facility, structure, or other improvement;
(vi) The CRL (Health and Safety Code Section 33601) specifically authorized
the CDC to borrow money from any public agency, including the City, for any
redevelopment project within its area of operation, and comply with any conditions
of such loan or grant;
s -•
(viii) California law (Government Code sections 53600 et seq. and 53601(e)
specifically) authorized the City to invest moneys not required for the immediate
needs in evidences of indebtedness of any local agency, including the CDC, within
the State of California.
C. Based on the facts applicable to the Loan Agreement, the amended repayment
terms in the Restated Agreement complies with the limitations on the terms of
repayment for the Loan Agreement,
D. The Loan Agreement, as restated and modified by the Restated Agreement, is an
"enforceable obligation."
SECTION 3. The Oversight Board hereby approves the Restated Agreement and
authorizes the City and Successor Agency to enter into and execute the same.
SECTION 4. The Secretary shall certify to the adoption of this Resolution.
PASSED AND ADOPTED by the Oversight Board at a meeting held on the 17th day of
September, 2015.
A EST;
ADRIAN[ JIll
Oversight Board S cretary
m, wf�
DONALD PLANTE
Oversight :•_ • Chair
R AND AMENDED
ESTATED
F_WVV!iW#AiFt
AMENDED This RESTATED AND COOPERATION •
Agreement") is entered into this day of September, 2015, by and between the City of
Downey ("City"), a California municipal corporation, and the Downey Successor Agency
("Successor Agency") ' a public agency pursuant to Health and Safety Code section 34173, and is
approved by the Oversight Board of the Successor Agency ("Oversight Board").
Ai The City is a California municipal corporation and charter city operating under
the laws of of •
882/028785-0M
VS1627 1 08 /31M ATTACHMENT 1
defined schedule over a reasonable of not • exceed the intere
earned rate by a deposited • the Local _ f Annual repayments
the Remaining OPA Amount, or any portion thereof that is loaned bv Citv to Successitt a o,-,,
JAThc Winaximuln rei)a,-�ment amount T.AtI*rized earA fLgr,?L-VP.'qr-f%Y-Y-ea,? - -
AffPA
i • ::i •i •. `�:.
ar
jear Nina Me amount aistrini taxing entities pursuant to that paragraph
in the 2012-13 base year.
(B) Twenty percent of any loan repayment shall be deducted from the loan
repayment amount and shall be ` i to the Low and Moderate
Housing Asset Fund established pursuant to Health and Safety Code section
34176(d).
3. Both the City and the Successor Agency hereby reserve
any and all rights, and do not waive any rights which they may now or in the future have, for
repayment under the Loan Agreement, including but not limited to the right to receive repayment
under the existing Loan Agreement as may be • "i pursuant to any current or
administrative or f decision, or otherwise.
4. Elbective fate. This Restated Agreement shall be effective only upon the
approval of the Oversight Board.
• • TI M
87836a7 AsOM5 -4
IN WITNESS WHEREOF, the City and the Successor Agency enter into this Restated
Agreement as of the date first set forth above.
EUM
City Clerk
Successor Agency Secretary
11
City Attorney/Successor Agency General Counsel
H821028795-0001
8,783627 1 AW31/15 -5.
CITY OF DOWNEY, a California municipal
corporation
City Manager
DOWNEY SUCCESSOR AGENCY, a public
agency pursuant to Health and Safety Code
section 34173
By:
Executive Director
•i ` i i
88210287 8 5-000
878 ,1627 1 a0g /ID'+ S
This Cooperation Agreement ( "Agreement ") is made and entered into by
and between the DOWNEY COMMUNITY DEVELOPMENT COMMISSION
(the "Commission "), a public body, corporate and politic, and the CITY
OF DOWNEY (the "City "), a municipal corporation.
WHEREAS, The City has approved and adopted a Redevelopment
Plan, as amended ( "Amended Redevelopment Plan "), for a redevelopment
project known as the Downey Redevelopment Project ("Project Area") by
its adoption of Ordinance No. 553 on August 18, 1987, as amended; and
WHEREAS, _ the Redevelopment Plan, in accordance with Section
33220 of the California Redevelopment Law (Health and Safety Code
Section 33000 et seq.) provides for the cooperation of the Commission
and City to carry out the Redevelopment Plan; and
WHEREAS, the Commission _ has entered into that certain Owner
Participation Agreement by and between the Commission and Downey
Dodge, dated June 8, 2010 (the "Participation Agreement "); and
WHEREAS, for purposes of effectuating the Redevelopment Plan;
and for providing for the creation of new jobs in the City and increasing
the tax revenue base of the City, the City wishes to assist the
Commission by funding the Commission's obligations under that
Participation Agreement.
NOW, THEREFORE, in consideration of the foregoing, and in
cooperation for the implementation of the Redevelopment Plan, the
Commission and City hereby agree as follows:
1. The City shall withhold and retain from sales tax revenues received
by the City which are attributable to the Property (as defined in the
Participation Agreement) in accordance with the provisions of Section
4.5.2 of the Participation Agreement.
2. As required under the Participation Agreement, the City shall loan
at an interest rate of twelve percent (12 %) per annum to the Commission
said sales tax revenues and shall release said revenues as provided in
Section 1 above, to fund the Commission's obligation to make its
payments thereunder.
3. No member, official or employee of the Commission or City shall
have any personal interest, direct or indirect, in this Agreement nor shall
any such member, official or employee participate in any decision
relating to the Agreement which affects his or her personal interests or
EXHIBIT A
the interests of any corporation, partnership or association in which he
or she is directly or indirectly, interested,
4. The Executive Director of the Commission and the Mayor of the
City, or their respective designee, are hereby authorized to execute all
reasonably necessary documents to carry out and implement the terms
of this Agreement.
IN WITNESS WHEREOF, the parties have executed this
Cooperation Agreement effective the 22 day of June of 2010.
"Commission"
DOWNEY COMMUNITY DEVELOPMENT COMMISSION
oe
By:
Z4�Z'ZhL
Executive Director
Gerald M. Caton
Attest:
Secretary
2