Loading...
HomeMy WebLinkAbout7/30/2003 - STAFF REPORTS (15) DATE: JULY 30, 2003 TO: CITY COUNCIL FROM: DIRECTOR OF COMMUNITY & ECONOMIC DEVELOPMENT AUTHORIZING A RELEASE OF A PORTION OF THE REAL PROPERTY ACQUIRED FOR THE DOWNTOWN PARKING STRUCTURE AND SALE OF SAME TO THOMAS A. AND EILEEN C. ADAMO 1; " i� v RECOMMENDATION: It is recommended that the City Council approve the release of five hundred and fifty (550) square feet of land acquired for the downtown parking structure and approve the sale of the same to Thomas A. And Eileen C. Adamo, the previous owners of the property and the owners of the adjacent property. SUMMARY: The Adamos were the previous owners of 550 square feet of property that was acquired as part of the property acquisition for the downtown parking structure. The City acquired The Saloon, some adjacent apartments, and a portion of the parcel behind Aloe People. Now that the structure has been completed and there is no public use for the parcel, it has created a problem by being a small, isolated "no man's land" tucked away from the street. Last year Mr. Adamo requested that he be able to purchase the property back from the City. The City hired Dozier Appraisal Services to appraise the property: they determined a value of$13,600. In order to release the property for sale, a number of financing agreements related to the parking structure needed to be amended, since it is a portion of the security for the bonds, including the City's lease with the Financing Authority, as well as the Assignment Agreement with BNY Western Trust Company. A0 / J hn S. aym d D rect,9f of Community & Economic Development Approved by:— — �z—�� City Manager` 66 Attachments: 1. Resolution 2. Amendment No. 1 to Assignment Agreement 3. Certification by City Representative 4. Consent and Waiver by Bond Holders 5. Amendment No. 1 to Lease Agreement 1 C�� RECORDING REQUESTED BY ) AND WHEN RECORDED, MAIL TO: ) URBAN J. SCHREINER ) Aleshire & Wynder, LLP ) 18881 Von Karman Ave., Ste. 400 ) Irvine, CA 92612 ) (Space Above This Line for Recorder's Office Use Only) (This transaction is exempt from California documentary transfer tax pursuant to§11929 of the California Revenue and Taxation Code. This document is exempt from recording fees pursuant to§27383 of the California Government Code) AMENDMENT NO. 1 TO ASSIGNMENT AGREEMENT by and between CITY OF PALM SPRINGS FINANCING AUTHORITY and BNY WESTERN TRUST COMPANY, as Trustee $8,000,000 CITY OF PALM SPRINGS TAXABLE VARIABLE RATE DEMAND CERTIFICATES OF PARTICIPATION 2002 SERIES A (DOWNTOWN PARKING PROJECT) Dated as of June 1, 2003 1003/001/24390 v I AMENDMENT NO. 1 TO ASSIGNMENT AGREEMENT THIS AMENDMENT NO. 1 TO ASSIGNMENT AGREEMENT ("Amendment to Assignment Agreement" or "Agreement"), made and entered into as of June 1, 2003, by and between the CITY OF PALM SPRINGS FINANCING AUTHORITY, (herein called "Authority"), a joint powers authority duly organized and existing under the laws of the State of California and BNY WESTERN TRUST COMPANY, a state banking corporation duly organized and existing under and by virtue of the laws of the State of California (herein called "Trustee") amends the Assignment Agreement, dated as of August 1, 2002, by and between the Authority and the Trustee (the "Assignment Agreement") relating to the City's Taxable Variable Rate Demand Certificates of Participation, 2002 Series A (Downtown Parking Project) (the "Certificates"); WITNESSETH: In consideration of the mutual covenants hereinafter contained and for other valuable consideration, the parties hereto do hereby agree as follows: ARTICLE 1 RECITALS 1.1 Purpose of Amendment No. 1 to Assignment Agreement. In furtherance of its public purposes of providing for public facilities and in furtherance of its governmental and proprietary purposes, Authority desires to amend the Assignment Agreement to release a portion of the property which secures the Certificates. 1.2 Related Agreements. The parties hereto acknowledge the following agreements and hereby approve of, and consent to, the terms of: (a) the Trust Agreement, dated as of August 1, 2002, by and between the City and BNY Western Trust Company, as Trustee (the "Trust Agreement"); (b) the Assignment Agreement, dated as of August 1, 2002, by and between the Authority and the Trustee; (c) this Amendment No. 1 To Assignment Agreement pursuant to which the Assignment Agreement is amended; (d) the Lease Agreement, dated as of August 1, 2002, by and between the City and the Authority pursuant to which City leases the Property from the Authority (the "Lease Agreement"); and (c) the Amendment No. 1 to the Lease Agreement, dated as of June 1, 2003, by and between the Authority and the City. 1.3 Construction of This Agreement. For all purposes of this Agreement, reference to the "assignee" of Authority means the Trustee acting on behalf of the Owners of the Certificates delivered pursuant to the Trust -I- 1&43 Agreement. So long as the Assignment Agreement shall be in effect, references herein to Authority or its assignee shall be deemed to refer to the Trustee as assignee of Authority. 1.4 Amendment No. 1 to Assignment Agreement. This Amendment No. 1 to Assignment Agreement is entered into pursuant to Section 21(b)(iv) of the Lease Agreement. ARTICLE 2 DEFINITIONS AND GENERAL PROVISIONS 2.1 Definitions in General. The terms contained herein have the meanings ascribed to them in the Trust Agreement and the Lease Agreement. 2.2 Effect of Amendment No. 1 to Assignment Agreement. Upon joint execution of this Amendment No. 1 to Assignment Agreement, its terms shall merge into, and be incorporated within the Assignment Agreement. ARTICLE 3 THE PROPERTY 3.1 The Property. The amended legal description of the property shall be as described in Exhibit A. 1003/001/24390 v1 IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 To Assignment Agreement to be executed in their respective names by their duly Authorized Representatives as of the date first above written. ATTEST: CITY OF PALM SPRINGS FINANCING AUTHORITY Secretary By: Its: Treasurer BNY WESTERN TRUST COMPANY, as Trustee By: Its: Authorized Officer 1003/001/24390 vl EXHIBIT "A" PARCEL A: That portion of lot 19 of Block 28 of Palm Springs Townsite as recorded in Map Book 9 at Page 432, Records of San Diego County, California,described as follows: Commencing at the northwest corner of said lot 19; Thence South 8905248"East along the north line of said lot 19 a distance of 62.62 feet said point also being the TRUE POINT OF BEGINNING; Thence South 00005'27" East a distance of 25.01 feet; Thence North 8905248"West a distance of 22.00 feet; Thence North 00°05'27"West a distance of 25,01 feet; Thence South 89°52'48" East a distance of 22.00 feet to the true point of beginning. eROFESSI0/yq4 * No. C-28931 Exp.03-31-2001 `ti'T,9r C 1 V 1 F OF �uF DATE: FILE V/ 513-154-4-025 SHEET NO.: 1 OF 2 ' � s • fit Ot . if `ice:+:��,i r R • � t 7 i s a ._.. _..-..-._.-... Ifs` )1`ai�•��a.,+a++�++�+i•+��i:; .{" .� `1/� �. ♦.�:9j f4�I''«mil�es � 1 � i III a EXHIBIT "B" 1 w w NW COR., Q LOT J LOT19 LOT 20 Q P.O.C. 589"52'48"E T.P.O.B. z W 62.62' W z O o � o O 0° D >- ca o 6 , zlo I i_C) o C? I Q ;OT 19 0IQ Q � = o ; z U J LOT 7 L-01- 18 Q Q C) n z Q(tOFESSIL}yq� "D J. BgRq� FZ LINE DATA DELTA LENGTH * No. C-28931 Ezp.03-31-2007 iQ S00'05'27"E 25.01' STgT C I V I1- Q2 S89'52'48"E 22.00' f OF �yF DATE: APPROVED: D3 f CITY OF PALM SPRINGS DATE PUBLIC WORKS & ENGINEERING 28931 DEPARTMENT DIREC R F PUBLIC WORKS/ R.C.E. CITY ENGINEER LEGAL DESCRIPTION: DESIGN BY: SCALE: FILE NO.: JRM 1" = 60' 513-154-025 CHECKED BY: W.O. X SHEET NO.: MLF 2 OF 2 CITY OF PALM SPRINGS TAXABLE VARIABLE RATE DEMAND CERTIFICATES OF PARTICIPATION 2002 SERIES A (DOWNTOWN PARKING PROJECT) (the "Certificates") The undersigned hereby states and certifies: (a) That he is the Finance Director and Treasurer of the City of Palm Springs (the "City"), and as such is an Authorized City Representative authorized to execute this certificate in connection with the Certificates; (b) That Section 16 of the Lease Agreement dated August 1, 2002 by and between the City and the City of Palm Springs Financing Authority (the "Lease Agreement') provides for the release of any portion of the Property, as defined in the Lease Agreement, upon the satisfaction of certain conditions; (c) That this certificate fulfills the requirements of Section 16 paragraphs (iii), (vi), (viii) and (ix) of the Lease Agreement; (d) That the amount of property to be released from the Lease Agreement (the `Released Site") is approximately 550 square feet and the removal of the Released Site has almost no impact on the value of the Property that will remain subject to the Lease Agreement as shown in Exhibit A; (e) That the annual fair rental value of the Property after such release will be at least equal to 100% of the maximum amount of Base Rental payments becoming due in the current Lease Year or in any subsequent Lease Year; (f) That the removal of the Released Site does not materially adversely affect the interest of the Owners of the Certificates and the remaining Property subject to the Lease Agreement is essential to the operations of the City; (g) That the useful life of the Property has not changed and exceeds the remaining term of the Certificates; (h) That the Property is not encumbered by any prior liens (other than Permitted Encumbrances). Dated: June 1, 2003 CITY OF PALM SPRINGS By: Its: Finance Director and Treasurer 1003/001/24392 vl EXHIBIT A VALUE OF THE PROPERTY Original Land Value: 87,120 square feet at $11.75 s.f. $1,023,660 Facility: Construction Costs financed with Certificates 7,280 000 Total Original Value $8,303,660 Less Release Site: 550 square feet at $12 s.f. (6,463) Remaining Value of Property $8,297,197 Outstanding Certificates $8,000,000 6410 1003/001/24392 v1 2 $8,000,000 CITY OF PALM SPRINGS TAXABLE VARIABLE RATE DEMAND CERTIFICATES OF PARTICIPATION, 2002 SERIES A (DOWNTOWN PARKING PROJECT) CONSENT AND WAIVER OF UNION BANK OF CALIFORNIA N.A. AND CALIFORNIA STATE TEACHERS' RETIREMENT SYSTEM The undersigned hereby certifies that he/she is authorized to execute and deliver this Consent and Waiver on behalf of Union Bank of California N.A. ("UBOC") or the California State Teachers' Retirement System ("STIRS"), the issuers of the letter of credit and the confirming letter of credit, respectively, with respect to the Taxable Variable Rate Demand Certificates of Participation, 2002 Series A (the "Certificates") of the City of Palm Springs (the "City"). The City has informed the undersigned that it desires at this time to release approximately 550 square feet of property (the "Released Site') that currently constitutes a portion of the Property, as defined in the Lease Agreement (the "Lease Agreement") dated August 1, 2002 by and between the City and the City of Palm Springs Financing Authority (the "Authority') with respect to the Certificates. The City has represented to the undersigned that there are no structures located on the Released Site. Section 16 of the Lease Agreement states the conditions which must be satisfied with respect to the release of any portion of the Property. The City represents to the undersigned that it has complied with all of the provisions of Section 16 with respect to the release of the Released Site, except for Section 16(iv), which requires an MAI fair market appraisal setting forth the fair replacement value of the property which will constitute the Property after such release evidencing that such fair replacement value is equal to or greater than such replacement value of the released Property or any portion thereof. The City informs the undersigned that the acquisition of the Property which is the subject of the Lease Agreement was not financed with proceeds of the Certificates and the Released Site represents a minor amount of the total value of the Property. The City is requesting that UBOC and STRS consent to the amendment of the Lease Agreement for the purpose of amending the description of the Property to exclude the Released Site and waive the requirement to obtain an MAI appraisal in accordance with Section 16(iv) of the Lease Agreement due to the very minor change in the value of the Property after such release. Execution of this Consent and Waiver by the signatories hereto shall constitute such consent and waiver as requested by the City. Dated: 2003 UNION BANK OF CALIFORNIA, N.A. BY: TITLE: Dated: 12003 CALIFORNIA STATE TEACHERS' RETIREMENT SYSTEM BY: TITLE: 1003/001/24391 vl /014 )1 RECORDING REQUESTED BY ) AND WHEN RECORDED, MAIL TO: ) URBAN J. SCHREINER ) Aleshire & Wynder, LLP ) 18881 Von Karman Ave., Ste. 400 ) Irvine, CA 92612 ) (Space Above This Line for Recorder's Office Use Only) (This transaction is exempt from California documentary transfer tax pursuant to § 11929 of the California Revenue and Taxation Code. This document is exempt from recording fees pursuant to § 27383 of the California Government Code ) AMENDMENT NO. 1 TO LEASE AGREEMENT by and between CITY OF PALM SPRINGS FINANCING AUTHORITY, as Lessor and CITY OF PALM SPRINGS, as Lessee $8,000,000 CITY OF PALM SPRINGS TAXABLE VARIABLE RATE DEMAND CERTIFICATES OF PARTICIPATION 2002 SERIES A (DOWNTOWN PARKING PROJECT) Dated as of June 1, 2003 � 1 Cat+ Imo. 1003/001/24389 vl AMENDMENT NO. 1 TO LEASE AGREEMENT THIS AMENDMENT NO. 1 TO LEASE AGREEMENT ("Amendment No. 1"), made and entered into as of June 1, 2003, by and between the CITY OF PALM SPRINGS FINANCING AUTHORITY, (herein called "Authority"), a joint powers authority duly organized and existing under the laws of the State of California and the CITY OF PALM SPRINGS, a municipal corporation, duly organized and existing under and by virtue of the Constitution and laws of the State of California and the City Charter (herein called "City") supplements and amends the Lease Agreement, dated as of August 1, 2002, by and between the Authority and the City (the "Lease Agreement") relating to the City's Taxable Variable Rate Demand Certificates of Participation, 2002 Series A (Downtown Parking Project) (the "Certificates"); WITNESSETH: In consideration of the mutual covenants hereinafter contained and for other valuable consideration, the parties hereto do hereby agree as follows: ARTICLE 1 RECITALS 1.1 Status and Powers of Authority. Authority is a joint powers authority organized under the Joint Powers Act sections 6500 et sec. of the California Government Code for public purposes, including the following: to render assistance to the City by acquiring and constructing public facilities, including, the acquisition of land and related facilities for the use, benefit and enjoyment of the public. 1.2 Status and Powers of City. City is a political subdivision organized and operating pursuant to the Constitution and laws of the State of California and the City Charter and is authorized by Government Code Section 37350 to acquire, lease and dispose of property for the common benefit and in furtherance of its public purposes. 1.3 Purpose of Amendment No. 1 to Lease Agreement. In furtherance of its public purposes of providing for public facilities and in furtherance of its governmental and proprietary purposes, City desires to amend the Lease Agreement to release a portion of the property which secures the Certificates. Authority is able and willing to amend the Lease Agreement. 1.4 Related Agreements. The parties hereto acknowledge the following agreements and hereby approve of, and consent to, the terms of: (a) the Trust Agreement, dated as of August 1, 2002, by and between the City and BNY Western Trust Company, as Trustee (the "Trust Agreement"); (b) this Amendment No. 1 To Lease Agreement pursuant to which the Lease Agreement is amended; -I_ /& )t 13 (c) the Lease Agreement, dated as of August 1, 2002, by and between the City and the Authority, pursuant to which City leases the Property from the Authority; (d) the Assignment Agreement, dated as of August 1, 2002, by and between the Authority and the Trustee; and. (e) Amendment No. 1 to the Assignment Agreement, dated as of June 1, 2003, by and between the Authority and the Trustee. 1.5 Construction of this Agreement. For all purposes of this Agreement, reference to the "assignee" of Authority means the Trustee acting on behalf of the Owners of the Certificates delivered pursuant to the Trust Agreement. So long as the Lease Agreement shall be in effect, references herein to Authority or its assignee shall be deemed to refer to the Trustee as assignee of Authority. 1.6 Amendment No. 1 to Lease Agreement. This Amendment No. 1 to Lease Agreement is entered into pursuant to Section 21(b)(iv) of the Lease Agreement. ARTICLE 2 DEFINITIONS AND GENERAL PROVISIONS 2.1 Definitions in General. The terms contained herein have the meanings ascribed to them in the Trust Agreement and the Lease Agreement. 2.2 Certificates. The City has complied with all the provisions of Section 16 of the Lease Agreement, with the exception of Section 16(iv), which provision has been waived by the Credit Bank and the Confirming Credit Entity. 2.3 Effect of Amendment No. 1 to Lease Agreement. Upon joint execution of this Amendment No. 1 to Lease Agreement, its terms shall merge into, and be incorporated within the Lease Agreement. 2.4 Consents. The City has obtained the consent by the Credit Bank and the Confirming Credit Entity to enter into this Amendment No. 1. 1 1003/001/24389 vl ARTICLE 3 THE PROPERTY 3.1 The Property. Pursuant to Section 16 of the Lease Agreement, the amended legal description of the Property shall be as described in Exhibit A hereto. IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 To Lease Agreement to be executed in their respective names by their duly Authorized Representatives as of the date first above written. ATTEST: CITY OF PALM SPRINGS FINANCING AUTHORITY, as Lessor Secretary By: Its: Treasurer ATTEST: CITY OF PALM SPRINGS, as Lessee By: City Clerk Its: Finance Director-Treasurer l � 1003/001/24389 vl LEGAL OPINION OF SPECIAL COUNSEL RE: AMENDMENT NO. 1 TO LEASE AGREEMENT BY AND BETWEEN CITY OF PALM SPRINGS FINANCING AUTHORITY, AS LESSOR, AND CITY OF PALM SPRINGS, AS LESSEE, DATED AS OF JUNE 1, 2003 We act as City Attorney and special counsel to the City of Palm Springs (the "City") and are familiar with that certain Lease Agreement, dated as of August 1, 2002 (the "Lease Agreement'), by and between the City of Palm Springs Financing Authority (the "Authority"), as Lessor, and the City, as Lessee. We are also familiar with Amendment No. 1 ("Amendment No. 1") to such Lease. Pursuant to Section 16 of the Lease, property covered by the Lease may be released from such coverage upon certain steps being taken to the satisfaction of the Letter of Credit Bank and the issuance of a Confirming Letter of Credit. One of the required steps under Section 16(vii) of the Lease is as follows: "An opinion of special counsel stating that such amendment or modification (1) is authorized or permitted by the Constitution and laws of the State and by this Lease; (2) complies with the terms of the Constitution and laws of the State and of this Lease; (3) will, upon the execution and delivery thereof, be valid and binding upon the Authority and the City in accordance with its terms; and (4) will not cause the interest component of the Base Rental payments to be included in gross income for federal income tax purposes." In issuing the following opinion specified in said Section 16(vii), the undersigned points out that it is unable to opine as to (4) of said Section 16(vii) inasmuch as the interest component of the Base Rental payments is included in gross income for federal income tax purposes, and has been so included when the Lease took effect and the Base Rental payments described therein became payable. In issuing such opinion the undersigned has examined and relies on the validity of the following documents: 1)- Amendment No. 1 to Lease, executed and recorded in the Office of the Riverside County Recorder. 2) Lease. 3) Amendment No. 1 to Assignment Agreement by and between City of Palm Springs Financing Authority and BNY Western Trust Company, as Trustee, executed and recorded in the Office of the Riverside County Recorder. 4) The Assignment. 5) The executed Certificate of the City Representative complying with Section 16(iii), (vi), (viii) and (ix) of the Lease. 6) The executed Consent and Waiver executed by the Letter of Credit Bank, and the Confirming Letter of Credit Bank. 1003/008/24669 vl 1 /(04/4 Based upon the foregoing, we are of the opinion, under existing law as follows: 1. The Amendment No. 1 is authorized and protected by the Constitution and laws of the State of California and the Lease. 2. The Amendment complies with the Constitution and laws of the State of California and the Lease. 3. The Amendment will, upon the execution thereof, be valid and binding upon the Authority and the City in accordance with its terms. Respectfully submitted, 1003/009/24669 vl 2 CITY OF PALM SPRINGS TAXABLE VARIABLE RATE DEMAND CERTIFICATES OF PARTICIPATION 2002 SERIES A (DOWNTOWN PARKING PROJECT) (the "Certificates") The undersigned hereby states and certifies: (a) That he is the Finance Director and Treasurer of the City of Palm Springs (the "City'), and as such is an Authorized City Representative authorized to execute this certificate in connection with the Certificates; (b) That Section 16 of the Lease Agreement dated August 1, 2002 by and between the City and the City of Palm Springs Financing Authority (the "Lease Agreement') provides for the release of any portion of the Property, as defined in the Lease Agreement, upon the satisfaction of certain conditions; (c) That this certificate fulfills the requirements of Section 16 paragraphs (iii), (vi), (viii) and (ix) of the Lease Agreement; (d) That the amount of property to be released from the Lease Agreement (the 'Released Site") is approximately 550 square feet and the removal of the Released Site has almost no impact on the value of the Property that will remain subject to the Lease Agreement as shown in Exhibit A; (e) That the annual fair rental value of the Property after such release will be at least equal to 100% of the maximum amount of Base Rental payments becoming due in the current Lease Year or in any subsequent Lease Year; (f) That the removal of the Released Site does not materially adversely affect the interest of the Owners of the Certificates and the remaining Property subject to the Lease Agreement is essential to the operations of the City; (g) That the useful life of the Property has not changed and exceeds the remaining term of the Certificates; (h) That the Property is not encumbered by any prior liens (other than Permitted Encumbrances). Dated: June 1, 2003 CITY OF PALM SPRINGS By: Its: Finance Director and Treasurer 1003/001124392 vl EXHIBIT A VALUE OF THE PROPERTY Original Land Value: 87,120 square feet at $11.75 s.f. $1,023,660 Facility: Construction Costs financed with Certificates 7,280,000 Total Original Value $8,303,660 Less Release Site: 550 square feet at $12 s.f. (6,463) Remaining Value of Property $8,297,197 Outstanding Certificates $8,000,000 1003/001/24392 vl 2 $8,000,000 CITY OF PALM SPRINGS TAXABLE VARIABLE RATE DEMAND CERTIFICATES OF PARTICIPATION, 2002 SERIES A (DOWNTOWN PARKING PROJECT) CONSENT AND WAIVER OF UNION BANK OF CALIFORNIA N.A. AND CALIFORNIA STATE TEACHERS' RETIREMENT SYSTEM The undersigned hereby certifies that he/she is authorized to execute and deliver this Consent and Waiver on behalf of Union Bank of California N.A. ("UBOC") or the California State Teachers' Retirement System ("STRS"), the issuers of the letter of credit and the confirming letter of credit, respectively, with respect to the Taxable Variable Rate Demand Certificates of Participation, 2002 Series A (the "Certificates") of the City of Palm Springs (the "City"). The City has informed the undersigned that it desires at this time to release approximately 550 square feet of property (the "Released Site") that currently constitutes a portion of the Property, as defined in the Lease Agreement (the "Lease Agreement") dated August 1, 2002 by and between the City and the City of Palm Springs Financing Authority (the "Authority") with respect to the Certificates. The City has represented to the undersigned that there are no structures located on the Released Site. Section 16 of the Lease Agreement states the conditions which must be satisfied with respect to the release of any portion of the Property. The City represents to the undersigned that it has complied with all of the provisions of Section 16 with respect to the release of the Released Site, except for Section 16(iv), which requires an MAI fair market appraisal setting forth the fair replacement value of the property which will constitute the Property after such release evidencing that such fair replacement value is equal to or greater than such replacement value of the released Property or any portion thereof. The City informs the undersigned that the acquisition of the Property which is the subject of the Lease Agreement was not financed with proceeds of the Certificates and the Released Site represents a minor amount of the total value of the Property. The City is requesting that UBOC and STIRS consent to the amendment of the Lease Agreement for the purpose of amending the description of the Property to exclude the Released Site and waive the requirement to obtain an MAI appraisal in accordance with Section 16(iv) of the Lease Agreement due to the very minor change in the value of the Property after such release. Execution of this Consent and Waiver by the signatories hereto shall constitute such consent and waiver as requested by the City. Dated: 2003 UNION BANK OF CALIFORNIA, N.A. BY: TITLE: Dated: 2003 CALIFORNIA STATE TEACHERS' RETIREMENT SYSTEM BY: TITLE: 1003/001/20.391 v1 LEGAL OPINION OF SPECIAL COUNSEL RE: AMENDMENT NO. 1 TO LEASE AGREEMENT BY AND BETWEEN CITY OF PALM SPRINGS FINANCING AUTHORITY, AS LESSOR, AND CITY OF PALM SPRINGS, AS LESSEE, DATED AS OF JUNE 1, 2003 We act as City Attorney and special counsel to the City of Palm Springs (the "City") and are familiar with that certain Lease Agreement, dated as of August 1, 2002 (the "Lease Agreement'), by and between the City of Palm Springs Financing Authority (the "Authority'), as Lessor, and the City, as Lessee. We are also familiar with Amendment No. 1 ("Amendment No. 1") to such Lease. Pursuant to Section 16 of the Lease, property covered by the Lease may be released from such coverage upon certain steps being taken to the satisfaction of the Letter of Credit Bank and the issuance of a Confirming Letter of Credit. One of the required steps under Section 16(vii) of the Lease is as follows: "An opinion of special counsel stating that such amendment or modification (1) is authorized or permitted by the Constitution and laws of the State and by this Lease; (2) complies with the terms of the Constitution and laws of the State and of this Lease; (3) will, upon the execution and delivery thereof, be valid and binding upon the Authority and the City in accordance with its terms; and (4) will not cause the interest component of the Base Rental payments to be included in gross income for federal income tax purposes." In issuing the following opinion specified in said Section 16(vii), the undersigned points out that it is unable to opine as to (4) of said Section 16(vii) inasmuch as the interest component of the Base Rental payments is included in gross income for federal income tax purposes, and has been so included when the Lease took effect and the Base Rental payments described therein became payable. In issuing such opinion the undersigned has examined and relies on the validity of the following documents: 1)- Amendment No. 1 to Lease, executed and recorded in the Office of the Riverside County Recorder. 2) Lease, 3) Amendment No. 1 to Assignment Agreement by and between City of Palm Springs Financing Authority and BNY Western Trust Company, as Trustee, executed and recorded in the Office of the Riverside County Recorder. 4) The Assignment. 5) The executed Certificate of the City Representative complying with Section 16(iii), (vi), (viii) and (ix) of the Lease. 6) The executed Consent and Waiver executed by the Letter of Credit Bank, and the Confirming Letter of Credit Bank. 1003/008/24669 v 1 - 1 Based upon the foregoing, we are of the opinion, under existing law as follows: 1. The Amendment No. 1 is authorized and protected by the Constitution and laws of the State of California and the Lease. 2. The Amendment complies with the Constitution and laws of the State of California and the Lease. 3. The Amendment will, upon the execution thereof, be valid and binding upon the Authority and the City in accordance with its terms. Respectfully submitted, lCOP 1003/008/24669 vl 2 RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, AUTHORIZING THE RELEASE OF A PORTION OF THE REAL PROPERTY ACQUIRED FOR THE DOWNTOWN PARKING STRUCTURE WHEREAS, the City of Palm Springs Financing Authority ("Authority") and the City of Palm Springs ("City") entered into a Lease Agreement, dated as of August 1, 2002 ("Lease Agreement") relating to that real property ("Property") which is currently used for the Downtown Parking Structure and which secures debt incurred by the City to pay acquisition and construction costs thereof; and WHEREAS, the City does not require all of the Property for the operation of the Downtown Parking Structure; and WHEREAS, Eileen C. and Thomas W. Adamo, who own real property adjacent to the Property, previously sold a portion of the Property to the Agency; and WHEREAS, pursuant to the Adamos' request, the City has agreed to sell and release a five hundred fifty (550) square foot portion of the Property ("Release Parcel") to the Adamos' for thirteen thousand six hundred dollars ($13,600), a true and correct legal description and map of the Release Parcel being attached hereto as Exhibit "A" and incorporated herein by this reference; and WHEREAS, the disposal price for the Release Parcel was calculated pursuant to the per square fair market value determined by an appraisal performed by Dozier Appraisal Services; and WHEREAS, the Release Parcel is "exempt surplus land" pursuant to Government Code Section 54221(e)(2) because the Release Parcel is less than 5,000 square feet in area and because the Release Parcel is being sold to the owner of contiguous land; and WHEREAS, pursuant to Section 16 of the Lease, property covered by the Lease may be released from such coverage upon certain actions being taken to the satisfaction of the Letter of Credit Bank and the Confirming Letter of Credit; and WHEREAS, pursuant to' said Section 16, the parties must amend the Lease before property may be released; accordingly, a true and correct copy of Amendment No. 1 to the Lease ("Lease Amendment No. V) is attached hereto as Exhibit "B" and is incorporated herein by this reference; and WHEREAS, pursuant to said Section 16, the City must amend the Assignment Agreement by and between the Authority and BNY Western Trust Company before property may be released; accordingly, a true and correct copy of Amendment No. 1 to the Assignment Agreement by and between the Authority and BNY Western Trust A07 Company ("Assignment Amendment No. 1") is attached hereto as Exhibit "C" and is incorporated herein by this reference; and WHEREAS, pursuant to said Section 16, the City must provide an executed Certificate of the City Representative ("Certificate") before property may be released; accordingly, a true and correct copy of the Certificate is attached hereto as Exhibit "D" and is incorporated herein by this reference; and WHEREAS, pursuant to said Section 16, the City must obtain an executed Consent and Waiver executed by the Letter of Credit Bank, and the Confirming Letter of Credit Bank ("Consent and Waiver") before property may be released; accordingly, a true and correct copy of the Consent and Waiver is attached hereto as Exhibit "E" and is incorporated herein by this reference; and WHEREAS, the release will not become effective until the executed Consent and Waiver has been obtained; and WHEREAS, pursuant to said Section 16, the City must provide an opinion of special counsel stating that such amendment or modification (1) is authorized or permitted by the Constitution and laws of the State and by the Lease; (2) complies with the terms of the Constitution and laws of the State and of the Lease; (3) will, upon the execution and delivery thereof, be valid and binding upon the Authority and the City in accordance with its terms; and (4) will not cause the interest component of the Base Rental payments to be included in gross income for federal income tax purposes ("Legal Opinion") before property may be released; accordingly, a true and correct copy of the Legal Opinion is attached hereto as Exhibit "F" and is incorporated herein by this reference; and WHEREAS, a minor alteration in land use which does not result in any changes in land use or density is categorically exempt from the California Environmental Quality Act ("CEQA"), such that the release is not a "project" under CEQA; and a Notice of Exemption has been prepared and will be posted for public review and comment in accordance with CEQA; NOW THEREFORE, it is hereby found, resolved, determined and ordered by the City Council of the City of Palm Springs as follows: Section 1. All of the facts set forth in the above recitals are true and correct and are incorporated herein by this reference. Section 2. It is hereby determined that (a) in disposing of the Release Parcel to the Adams' for the consideration stated above, the City will be obtaining fair market value for the property and (b) the Adams', as the adjacent property owner, are the only entity who could acquire the Release Parcel and not create a substandard parcel not meeting the requirements of the zoning ordinance. Section 3. Lease Amendment No. 1 is hereby approved and the City Manager is hereby authorized and instructed to execute same on behalf of the City. Section 4. Assignment Amendment No. 1 is hereby approved and the City Manager is hereby authorized and instructed to execute same on behalf of the City. r I � aZ Section 5. The City Manager and his designee are authorized to execute any and all additional documents necessary and to grant any and all other approvals necessary to the release and reconveyance of the Release Parcel to the Adamos'. Section 6. The Adamos' shall take appropriate action to merge the Release Parcel with Adamos' other property so that the Release Parcel cannot be conveyed separately from such property. Section 7. Adoption of this ordinance is not subject to CEQA by virtue of Public Resources Codes § 21083, 21084 and 21087 and CEQA Guideline 15305, as a minor alteration in land use which does not result in any change in land use or density and which is therefore categorically exempt from CEQA. ADOPTED this day of , 2003. AYES: NOES: ABSENT: ATTEST: CITY OF PALM SPRINGS, CALIFORNIA By: City Clerk City Manager REVIEWED &APPROVED: / (0, 33