HomeMy WebLinkAboutResolution No. SA 15-0005i i • P11
A RESOLUTION OF THE BOARD OF DIRECTORS FOR THE DOWNEY
SUCCESSOR AGENCY APPROVING -A RESTATED AND AMENDED
LOAN AGREEMENT BETWEEN THE CITY OF DOWNEY AND 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 and AB
1484, and related amendments thereto, are collectively referred to as the "Dissolution Law."
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
RESOLUTION • 000
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,
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 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 fora 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(x)(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).
O 15-0005
PAGE 3
(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
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 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, 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 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 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 ").
i i • - • - • i r e
i" Biel 0 • 0
SECTION 1 The above recitals are true and correct and incorporated herein. ,
SECTION 2. The Downey Successor Agency hereby approves the Restated
Agreement and authorizes the Executive Director to enter into and execute the same on behalf
of the Downey Successor Agency.
RESOLUTION NO. 15-0005
PAGE 4
SECTION 3. The Board of Directors hereby authorizes the Executive Director or his or
her designee to enter into and execute any implementing documents to further the repayment of
the City of Downey pursuant to the Restated Agreement.
SECTION, 4. The Secretary shall certify to the adoption of this Resolution;
APPROVED AND ADOPTED this 8th day of September, 2015.
LUIS H. MARQUEZ, fair a
State of California )
County of Los Angeles )ss.
City of Downey )
I, Adria M. Jimenez, CMC, Secretary of the Downey Successor Agency, do hereby
certify the foregoing Resolution was duly adopted by the Board of Directors for the Downey
Successor Agency at a Regular Meeting held on the 8th day of September, 2015, by the
following vote, to wit:
AYES: Board Members: Ashton, Brossmer, Vasquez, Saab, Chair Marquez
NOES: Board Members: None.
ABSENT: Board Members: None.
ABSTAINED: Board Members: None.
ADRIA M. JIMENEZ CMC
Secretary
M-1191 w ol MIN 11#1 W-11M I I ol DILVI 101610 1
G. 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.
H. Pursuant to Health and Safety Code section 34179, added by ABxI 26 and
amended by AB 1484, members of the Oversight Board have been duly appointed.
1. Pursuant to Health and Safety Code section 34171(d)(2). added by ABXI 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 were not "enforceable
obligations."
K. The Oversight Board, pursuant to resolution found that the Loan Agreement is a
"loan agreement" as described in Health and Safety Code section 34191.4(b), and that the Loan
Agreement was for legitimate redevelopment purposes based upon the following:
(i) The CDC was implementing the redevelopment of the project area(s)
under the duly adopted redevelopment plan(s) and the CL as referenced and identified in the
Loan Agreement;
(ii) The redevelopment plan(s) for the project area(s) specifically authorized
the City
• assist the CDC, and for the CDC to accept funding from any public • 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 •
operation or for the CDC's activities, powers, and duties;
(iv) The CRL (Health and Safety Code section 33220) speci ica y orize
the CDC to enter into agreements with any other public body, including the City, for the purpos
of aiding and cooperating in the planning, undertaking, construction, or operation o
redevelopment projects upon the terms and with or without consideration as determine
necessary
• the CDC; I
(v) The CRL (Health and Safety Code sections 33445 and 33445.1)
specifically authorized the CDC, with the consent • the City, to pay all • a part • the value •
882/028785-0001
878362731 a08/31/15 -2-
the land for and the cost of the installation an construction of any publicly owned building,
facility, structure, • other improvement;
(vi) The CRL (Health and Safety Code section 33•01) 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 • grant;
(vii) The C•L (Health and Safety Code section 336 10) specifically authorize
the City to appropriate to the CDC such amounts as the City deemed necessary for the
administrative expenses and overhead of the CDC, with such moneys appropriated by the City to
be repaid by the CDC as a loan • such terms and conditions as the City may have provided.
(viii) California law (Government Code sections 53600 et seq, and 53601(efl
specifically) authorized the City to invest moneys not required for the immediate needs 11
evidences of indebtedness of any local agency, including the CDC, within the State of Califormes
L. The CDC did not loan any money from its former Low and Moderate Income
Housing Fund to pay the Supplemental Education Revenue Augmentation Fund (SERAF), so
there is
• requirement to repay the housing successor entity any amount pursuant to Health and
Safety Code sections 34176(e)(6) and 34191.4(b)(2) prior to making any payments under this
Restated Agreement.
0. Pursuant • Health and Safety Code section 34191.4(b), the Successor Agency,
having received its "Finding • Completion" from the California Department of Finance, seeks
Oversight Board approval of this Restated Agreement, as set forth herein. I
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. Annual repayments on
the Remaining OPA Amount, • any portion thereof that is loaned • City to Successor Agency,
shall be subject to the following:
3. Reservad6n of Rialits. 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 authorized pursuant to any current or future law,
administrative or judicial decision, • otherwise.
4. Effective Date. This Restated Agreement shall be effective only upon the
approval of the Oversight Board.
882/029785-0001
8783627: [ a08/3 1 /15
M
IN WITNESS WHEREOF, the City and the Successor Agency enter into this Restated
Agreement as of the date first set forth above.
City Clerk
Successor Agency Acretary
CITY OF DOWNEY, a California municipal
corporation
VOTIMI'E • `T—,a—p—ubT1—c
agency pursuant to Health and Safety Code
section 34173
"I
By:
Executive Director
882/028785-000 1
8783627 1 a08131115 -5-
i
8821028785 -0001
8783627 1 a08 /31 /15
mnm
••'" •
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 Flan; and
WHEREAS, the Commission has entered into that certain Owner
4` 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
the interests • any corporation, partnership • association in which he
*r she is directly or indirectly, interested.
4. The Executive Director • the Commission and the Mayor of the
City,
• their respective designee, are hereby authorized to execute all
reasonably necessary documents to carry out and implement the terms
• this Agreement.
IN WITNESS WHEREOF, the parties have executed thi
Cooperation Agreement effective the 22 day of June of 2010.
"Commission"
DOWNEY COMMUNITY DEVELOPMENT COMMISSION
By:
Ae D
Gerald M. Caton
By: LVOVA � X) W zwT
Kathleen L. Midstokkea,6-RF-/P
Approved as to
— Effw-ard W. Lee
0