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HomeMy WebLinkAbout22895 RESOLUTION NO. 22895 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS CALIFORNIA, AUTHORIZING EXECUTION OF A CONSOLIDATED AMENDED AND RESTATED PROMISSORY NOTE WITH THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS. WHEREAS, the Agency has prepared Redevelopment Plans for the Merged Project No. 1 and Merged Project No. 2 Redevelopment Projects (the "Project Areas"), which results in the allocation of taxes from the Project Areas to the Agency for purposes of redevelopment; and WHEREAS, the Agency has prepared Redevelopment Plans for the Merged Project No. 1 and Merged Project No. 2 Redevelopment Projects (the "Project Areas"), which results in the allocation of taxes from the Project Areas to the Agency for purposes of redevelopment; and WHEREAS, the Agency has previously entered into three separate promissory notes with the City for the acquisition of property; and WHEREAS, the City and the Agency desire to enter into a consolidated amended and restated promissory note to acknowledge the foregoing recitals and to provide for a payment schedule for such obligations by the Agency to the City. NOW, THEREFORE, BE IT HEREBY RESOLVED by the City of Palm Springs, as follows: 1. The City Manager and City Clerk are hereby authorized and directed to execute and attest to the Consolidated Amended and Restated Promissory Note for and in the name and on behalf of the City. The City hereby authorizes the delivery and performance of the Consolidated Amended and Restated Promissory Note pursuant to the terms thereof. PASSED AND ADOPTED THIS 16TH DAY OF MARCH, 2011. David H. Ready, Cit er-- ATTEST: r ames Thompson, City Clerk Resolution No. 22895 Page 2 CERTIFICATION STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss. CITY OF PALM SPRINGS ) I, JAMES THOMPSON, City Clerk of the City of Palm Springs, hereby certify that Resolution No. 22895 is a full, true and correct copy, and was duly adopted at a regular meeting of the City Council of the City of Palm Springs on the 16t" day of March, 2011, by the following vote: AYES: Councilmember Foat, Councilmember Hutcheson, Mayor Pro Tern Weigel, and Mayor Pougnet. NOES: None. ABSENT: Councilmember Mills. ABSTAIN: None. James Thompson, City Clerk City of Palm Springs, California CONSOLIDATED AMENDED AND RESTATED PROMISSORY NOTE THIS CONSOLIDATED AMENDED AND RESTATED PROMISSORY NOTE (the "Note") is entered into this 16th day of March, 2011, by and between the CITY OF PALM SPRINGS (the "City") and the REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS(the "Agency"), with reference to the following facts: A. The Agency has prepared Redevelopment Plans for the Merged Project No. 1 and Merged Project No. 2 Redevelopment Projects (the "Project Areas"), which results in the allocation of taxes from the Project Areas to the Agency for purposes of redevelopment. B. The intent of the Redevelopment Plans is, in part, to provide for the construction and installation of necessary public infrastructure and facilities and to facilitate the repair, restoration and/or replacement of existing public facilities and to perform specific actions necessary to promote the redevelopment and the economic revitalization of the Project Areas; and to increase, improve and preserve the community's supply of low and moderate income housing, some of which may be located or implemented outside the Redevelopment Project Areas; and to take all other necessary actions to implement the redevelopment plans for the respective redevelopment projects and to expend tax increment to accomplish the goals and objectives of the respective redevelopment projects. C. Pursuant to California Redevelopment law, section 33220, certain public bodies, including the City may aid and cooperate in the planning, undertaking, construction, or operation of redevelopment projects. The Agency has previously entered into certain Promissory Notes as follows: • Promissory Note dated December 12, 2007 in the initial amount of$4,823,000, of which $797,000 currently remains outstanding and will accrue interest at 6% to June 30, 2011 for an estimated outstanding balance of $844,820 at June 30, 2011; • Promissory Note dated December 12, 2007 in the initial amount of $4,675,000, all of which currently remains outstanding and will accrue interest at 6% to June 30, 2011 for an estimated outstanding balance of 4,955,500 at June 30, 2011; and • Promissory Note dated February 7, 2008 in the initial amount of $51,297,000, all of which currently remains outstanding, and has accrued but unpaid interest of $3,704,357 as of June 30, 2010 and will accrue additional interest at 10% to June 30, 2011 for an estimated balance of $60,675,921 at June 30, 2011; The three outstanding promissory notes above described are incorporated herein by this reference and referred to herein as the "Outstanding Notes". Page 1 DUPLICATE N i E. The Agency wishes to enter into this Note with the City for the pledge of net available tax increment to repay amounts borrowed or otherwise to be reimbursed for the Outstanding Notes. F. Net available tax increment is defined as any tax increment, net of existing debt service payments, and existing contractual obligations received by the Agency or any lawful successor of the Agency and/or to any of the powers and rights of the Agency pursuant to any applicable constitutional provision, statute or other provision of law now existing or adopted in the future. The pledge of net available tax increment will constitute obligations to make payments authorized and incurred pursuant to Section 33445 and other applicable statutes. The obligations set forth in this Note will be contractual obligations that, if breached, will subject the Agency to damages and other liabilities or remedies. G. The City Council (the "Council") and the Agency by resolution have each found that the use of Agency redevelopment funding for the Outstanding Notes was, if applicable, in accordance with Section 33445 of the California Community Redevelopment Law (Health & Safety Code Section 33000 et seq.) ("CRL") and Section 33445(a) of the CRL and other applicable law at time the financial obligation was originally incurred. The said Council and Agency resolutions are each based on the authority of the Agency, with the consent of the Council, to pay all or part of the cost of the installation and construction of any building, facility, structure, or other improvements which is publicly owned either within or outside a project area, if the Council makes certain determinations. H. By approving and entering into this Note, the Agency has approved the pledge of net available tax increment from the Project Areas to pay for the Note. I. The obligations of the Agency under this Note shall constitute an indebtedness of the Agency for the purpose of carrying out the Redevelopment Plans for the Project Areas. NOW, THEREFORE, the parties hereto do mutually agree as follows: I. INTRODUCTORY PROVISIONS The recitals above are an integral part of this Note and set forth the intentions of the parties and the premises on which the parties have decided to enter into this Note. Page 2 II. AGENCY'S OBLIGATIONS 1. The Agency's obligations under this Note, including without limitation the Agency's obligation to make the payments to the City required by this Note, shall constitute an indebtedness of the Agency for the purpose of carrying out the redevelopment of the Project Areas and are obligations to make payments authorized and incurred pursuant to Section 33445 and other applicable statutes. The obligations of the Agency set forth in this Note are contractual obligations that, if breached, will subject the Agency to damages and other liabilities or remedies. 2. The Note shall bear interest at the 6% starting July 1, 2011. 3. The obligations of Agency under this Note shall be payable out of net available tax increments, as defined in the above recitals and/or as defined or provided for in any applicable constitutional provision, statute or other provision of law now existing or adopted in the future, levied by or for the benefit of taxing agencies in the Redevelopment Project Areas, and allocated to the Agency and/or any lawful successor entity of the Agency and/or any entity established by law to carry out any of the redevelopment plans for the Project Areas and/or expend tax increment or pay indebtedness of the Agency to be repaid with tax increment, pursuant to Section 33670, et seq., of the California Community Redevelopment Law or any applicable constitutional provision, statute or other provision of law now existing or adopted in the future, in the minimum amounts set forth in the Payment Schedule attached hereto as Exhibit 1 and incorporated herein by this reference. 4. The Payment Schedule reflects the payments from the respective Redevelopment Project Areas in the same proportionate share as the Outstanding Notes. 5. The indebtedness of Agency under this Note shall be subordinate to the rights of the holder or holders of any existing bonds, notes or other instruments of indebtedness (all referred to herein as "indebtedness") of the Agency incurred or issued to finance the Project Areas, including without limitation any pledge of tax increment revenues from the Project Areas to pay any portion of the principal (and otherwise comply with the obligations and covenants) of any bond or bonds issued or sold by Agency with respect to the Redevelopment Project Areas. 6. All payments due to be made by the Agency to the City under this Note shall be made by the Agency in accordance with the schedule set forth in Exhibit 1 and as otherwise necessary to reimburse the City for the cost to the City of performing its obligations hereunder. Page 3 IV. LIABILITY AND INDEMNIFICATION In contemplation of the provisions of California Government Code Section 895.2 imposing certain tort liability jointly upon public entities solely by reason of such entities being parties to an agreement as defined by Government Code Section 895, the parties hereto, as between themselves, pursuant to the authorization contained in. Government Code Sections 895.4 and 895.6, shall each assume the full liability imposed upon it, or any of its officers, agents or employees, by law for injury caused by negligent or wrongful acts or omissions occurring in the performance of this Note to the same extent that such liability would be imposed in the absence of Government Code Section 895.2. To achieve the above-stated purpose, each party indemnifies, defends and holds harmless the other party for any liability, losses, cost or expenses that may be incurred by such other party solely by reason of Government Code Section 895.2. V. ENTIRE NOTE; WAIVERS; AND AMENDMENTS 1. This Note integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the parties with respect to the subject matter of this Note. 2. This Note is intended solely for the benefit of the City and the Agency. Notwithstanding any reference in this Note to persons or entities other than the City and the Agency, there shall be no third party beneficiaries under this Note. 3. All waivers of the provisions of this Note and all amendments to this Note must be in writing and signed by the authorized representatives of the parties. VI. SEVERABILITY If any term, provisions, covenant or condition of this Note is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the provisions shall continue in full force and effect unless the rights and obligations of the parties have been materially altered or abridged by such invalidation, voiding or unenforceability. VII. DEFAULT If either party fails to perform or adequately perform an obligation required by this Note within thirty (30) calendar days of receiving written notice from the non-defaulting party, the party failing to perform shall be in default hereunder. In the event of default, the non-defaulting party will have all the rights and remedies available to it at law or in Page 4 equity to enforce the provisions of this contract, including without limitation the right to sue for damages for breach of contract. The rights and remedies of the non-defaulting party enumerated in this paragraph are cumulative and shall not limit the non-defaulting party's rights under any other provision of this Note, or otherwise waive or deny any right or remedy, at law or in equity, existing as of the date of the Note or hereinafter enacted or established, that may be available to the non-defaulting party against the defaulting party. All notices of defaults shall clearly indicate a notice of default under this Note. BINDING ON SUCCESSORS This Note shall be binding on and shall inure to the benefit of all successors and assigns of the parties, whether by agreement or operation of law. IN WITNESS WHEREOF, the parties have executed this Note as of the date first set forth above. CITY OF PALM SPRINGS David H. Read , nager ATTEST: CliN COUIKIL :�-jmes Thompson, City Clerk COMMUNITY REDEVELOPMENT AGENCY David H. Ready, Ex ❑irector ATTEST: APPROVO Sy 'rig UNTY aL AG"Itcy BY an. fto� wk mes Thompson, Assistant Secretary �-- - APPR E TO FORM: Douglas C. Holland, Agency Counsel Page 5 EXHIBIT 1 PAYMENT SCHEDULE Payment Date Merged Project No. 1 Merged Project No. 2 June 30 Payments (1) Payments (1) 2012 $895,500 $ 1,000,000 2013 - 1,100,000 2014 - 1,210,000 2015 - 1,331,000 2016 - 1,464,100 2017 - 1,610,510 2018 - 1,771,561 2019 - 1,948,717 2020 - 2,143,589 2021 - 2,357,948 2022 - 2,593,742 2023 - 2,853,117 2024 - 3,138,428 2025 - 3,452,271 2026 - 3,797,498 2027 - 4,177,248 2028 - 4,594,973 2029 - 5,054,470 2030 - 5,559,917 2031 - 6,115,909 2032 - 6,727,500 2033 - 7,400,250 2034 - 8,140,275 2035 - 8,954,302 2036 - 50,000,000 2037 - 60,093,584 (1) Includes interest at 6% Page 6