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SA - Resolution 28140-SARESOLUTION NO. 28140 -SA RESOLUTION OF THE COUNCIL OF THE CITY OF SANTA ROSA, ACTING IN ITS CAPACITY AS SUCCESSOR AGENCY TO THE FORMER REDEVELOPMENT AGENCY, AUTHORIZING THE SUCCESSOR AGENCY TO RE -ENTER INTO THE FUNDING AGREEMENT FOR GATEWAYS ECONOMIC DEVELOPMENT PROGRAM WHEREAS, pursuant to Resolution No. 28029, adopted by the City Council of the City of Santa Rosa on January 10, 2012, the City of Santa Rosa agreed to serve as the Successor Agency to the Redevelopment Agency of the City of Santa Rosa ( "Agency ") commencing upon dissolution of the Redevelopment Agency on February 1, 2012 pursuant to AB xl 26 ( "AB 26 "); and WHEREAS, Health and Safety Code Section 33220 authorized any public body to enter into an agreement with a redevelopment agency for the purpose of aiding and cooperating in the planning, undertaking, construction, or operation of redevelopment projects located within the jurisdiction in which such public body is authorized to act, upon the terms and with or without consideration as such public body determines; and WHEREAS, by Resolution No. 27902, adopted June 14, 2011, the City approved the Second Amended and Restated Funding Agreement with the Redevelopment Agency under which the Agency would provide additional funding, in the amount of $570,000, to pay the costs for the City to provide Economic Development Program Services to benefit the Gateways Project Area; and WHEREAS, in accordance with AB 26, the City, acting in its capacity as Successor Agency, prepared a Recognized Obligation Payment Schedule ( "ROPS ") setting forth the schedule of existing Redevelopment Agency obligations, including among others, repayment of the Funding Agreements; and WHEREAS, the Oversight Board for the Successor Agency was established pursuant to AB 26 (the "Oversight Board "); and WHEREAS, the Oversight Board approved the ROPS covering the period of January through June 2012 on March 29, 2012, and approved the ROPS covering the period of July through December 2012 on May 3, 2012; and WHEREAS, the State Department of Finance reviewed the ROPS, but by letter dated May 17, 2012, indicated that it objected to that portion of the Funding Agreement for the Gateway Economic Development Program ($406,471) that would be funded through the Redevelopment Property Tax Trust Fund; and WHEREAS, Health and Safety Code Section 34178(a) provides that, with specified exceptions, commencing February 1, 2012, agreements, contracts and arrangements between a redevelopment agency and the city that formed the redevelopment agency are invalid; provided, however, a successor agency that wishes to enter or re -enter into agreements with the city that formed the agency may do so upon obtaining approval of the Oversight Board; and WHEREAS, the City and Successor Agency desire to ratify the Successor Agency's obligation to repay the Funding Agreement. NOW, THEREFORE, BE IT RESOLVED that the Successor Agency, pursuant to Health and Safety Code Section 34178(a), approves and authorizes the re- entering of a Funding Agreement for the Gateways Economic Development Program as attached, and authorizes the Successor Agency to execute and deliver the agreement substantially in such form. BE IT FURTHER RESOLVED that the Successor Agency authorizes the Director of Economic Development and Housing or the City Manager to execute the agreement and to take any other action necessary to carry out the purpose of this resolution, subject to approval by the City Attorney. BE IT FURTHER RESOLVED that the Successor Agency authorizes the agreement to be listed on updated or future ROPS for the Successor Agency. M COUNCIL DULY PASSED this 19` day of June, 2012. AYES: (7) Mayor Olivares, Vice Mayor Sawyer, Council Members Bartley, Gorin, Ours, Vas Dupre, and Wysocky NOES: (0) ABSENT: (0) ABSTAIN: (0) ATTEST: APPROVED: Deputy City Clerk Mayor APPROVED AS TO FORM: /e� Successor Agency Attorney SECOND AMENDED AND RESTATED FUNDING AGREEMENT GATEWAYS REDEVELOPMENT PROJECT AREA (Economic Development) THIS SECOND AMENDED AND RESTATED FUNDING AGREEMENT (Second Amended Agreement) is entered into as of , 2012, by and between the City of Santa Rosa, acting in its capacity as the Successor Agency to the Former Redevelopment Agency of the City of Santa Rosa, a public body, corporate and politic (Successor Agency), and the CITY OF SANTA ROSA, a municipal corporation (City). Recitals A. Pursuant to the Community Redevelopment Law of the State of California (Health and Safety Code Section 33000 et seq.), the Redevelopment Agency of the City of Santa Rosawas a duly constituted redevelopment agency under the laws of the State of California and pursuant to said laws was carrying out the Redevelopment Plan for the Gateways Redevelopment Project Area (Gateways Project Area). B. The major goals and objectives of the Redevelopment Plan include, among others, the elimination of blighting influences and the correction of environmental deficiencies in the Gateways Project Area including buildings in which it is unsafe or unhealthy for persons to live or work, properties containing hazardous wastes, depreciated or stagnant property values and a high crime rate; the restoration and preservation of portions of the Gateways Project Area which are stagnant or improperly utilized; the provision of opportunities for participation by owners and tenants in the revitalization of their properties; the provision of an environment for social and economic growth; and the improvement and preservation of the Gateways Project Area and the Gateways Project Area's supply of housing available to low- and moderate - income persons and families. The Redevelopment Plan provided the Agency with powers, duties and obligations for the redevelopment, rehabilitation and revitalization of the area within the Gateways Project Area. The Five -Year Implementation Plan for the Gateways Redevelopment Project Area (2006- 2011) specifically identified the strengthening of retail and other commercial functions, through public improvements and development assistance, as one of the redevelopment activities proposed to be funded by the Agency. C. The City of Santa Rosa's Economic Development Program is a coordinated effort intended to assist in the elimination of economic and physical blight through focused and intense efforts of encouraging new business investment and job creation in high vacancy commercial areas to enhance the community above and beyond the normal City provided service levels, including the Downtown Enhancement Program, the Downtown Promotion Program, the Commercial Rehabilitation and Fagade Loan Programs, and other such activities necessary to strengthen the economic base of the Gateways Project Area. In furtherance of the Economic Development Program, the City Council, on May 4, 2010, by Resolution No. 27626, adopted Aggressive Augments to the City of Santa Rosa Economic Sustainability Strategy, D. The Redevelopment Agency and City previously entered into a Funding Agreement, dated June 22, 2010 (Original Funding Agreement) and an Amended and Restated Funding Agreement, dated February 7, 2011 (Amended Funding Agreement), which Amended Funding Agreement replaced in its entirety the Original Funding Agreement, pursuant to which the Redevelopment Agency contributed to the City a portion of the costs necessary for the Economic Development Program to extend its work to serve and be of primary benefit to the Gateways Project Area. The Redevelopment Agency desired to continue its cooperation with the City by providing additional funding to assist with the costs necessary for the Economic Development program to extend its work to serve and be of primary benefit to the Gateways Project Area. E. The City Council by Resolution No. 27902 adopted on _June 14„ 2011, and Redevelopment Agency by Resolution No. 1661 adopted on June 13 , 2011, have determined, and the Successor Agency and the City hereby reaffirm and declare, that the Economic Development Program Services, including the Downtown Enhancement Program, the Downtown Promotion Program, the Commercial Rehabilitation and Fagade Loan Programs, the Aggressive Augments to the City of Santa Rosa Economic Sustainability Strategy, and other such activities necessary to strengthen the economic base of the Gateways Project Area provided for in this Second Amended Agreement benefit the Gateways Project Area by building a strong economy and attracting private investment through improvement of the building stock, improvement of impaired investments, removal of barriers to property reuse, and creation of a vital Downtown business, commercial, and entertainment district. The Successor Agency and City hereby reaffirm and declare that no other reasonable means of financing such services are available to the community, and that the payment of funds for the cost of such services will assist in the elimination of one or more blighting conditions inside the Gateways Project Area and is consistent with the Agency's Five -Year Implementation Plan for the Gateways Project Area. G. Section 33678 of the Community Redevelopment Law provides that the portion of taxes allocated to the Agency pursuant to Section 33670(b) of the Community Redevelopment Law (Tax Increments) will not be deemed the receipt or appropriation of proceeds of taxes for the purposes of Article XIII.B. of the California Constitution so long as such Tax Increments are used for redevelopment activity which primarily benefits the Project Area. H. In order to enable the City to continue its efforts to provide the Economic Development Program for the benefit of the Gateways Project Area, and as an inducement to the City to do so, the parties desire to enter into this Second Amended Agreement providing for the Agency to contribute to the City a portion of the costs relating to providing the Economic Development Program Services for the primary benefit of the Gateways Project Area. Pursuant to Health and Safety Code Section 34178(a), agreements between the city that created the redevelopment agency and the redevelopment agency are invalid and are not binding on the successor agency. However, this section allows a successor agency to enter or reenter into agreements with the city that formed the redevelopment agency upon obtaining approval of its oversight board. Agreement THE SUCCESSOR AGENCY AND THE CITY HEREBY AGREE AS FOLLOWS: 1. The foregoing recitals are hue and correct and incorporated herein by reference. Upon execution of this Second Amended Agreement by the Successor Agency and City, the Amended Funding Agreement shall be deemed terminated and shall no longer be in force and effect, and all future rights and obligations of the parties shall be as set forth in this Second Amended Agreement. 2. The City shall continue to maintain and operate the Economic Development Program and provide the Economic Development Program Services that will be of primary benefit to the Gateways Project Area, which shall include the Downtown Enhancement Program, the Downtown Promotion Program, and the Commercial Rehabilitation and Fagade Loan Programs, the Aggressive Augments to the City of Santa Rosa Economic Sustainability Strategy, and other such activities necessary to strengthen the economic base of the Gateways Project Area. Specific programs shall include the Downtown Fagade Improvement Program and the Tenant Improvement Loan Program, among others. The City shall also serve as lead agency and prepare and obtain approvals of any environmental review documentation and comply with any noticing required for any activity that is a project subject to the California Environmental Quality Act (CEQA) and, if necessary, subject to the National Environmental Policy Act (NEPA). 3. In consideration of the undertakings of the City under Section 2 of this Second Amended Agreement, the Successor Agency shall pay to the City the actual costs incurred by the City for providing the Economic Development Program Services specifically within the Gateways Project Area, as follows: Under the Original Funding Agreement, the Redevelopment Agency provided to the City the amount of TWO HUNDRED AND SEVENTY -FIVE THOUSAND DOLLARS ($275,000.00), (Initial Funding), and under the Amended Funding Agreement, the Redevelopment Agency provided to the City an additional THREE HUNDRED THIRTY THOUSAND DOLLARS ($330,000.00) (Additional Funding), to pay a portion of the costs incurred by the City to provide the Economic Development Program Services. As an incentive to the City to continue to provide the Economic Development Program Services to benefit the Gateways Project Area, the Successor Agency agrees to provide an additional FIVE HUNDRED SEVENTY THOUSAND DOLLARS ($570,000.00) (Supplemental Funding) for fiscal year 2011/2012, of which FOUR HUNDRED SIX THOUSAND FOUR HUNDRED SEVENTY ONE DOLLARS ($406,471.00) is available, which when combined will be a total contribution of ONE MILLION ONE HUNDRED SEVENTY FIVE THOUSAND DOLLARS ($1,175,000.00) (Agency Contribution). The Successor Agency shall make such Agency Contribution on a reimbursement basis to the City from any funds available to the Successor Agency for such purpose, including the proceeds of any bonds issued by the Agency, loans and Tax Increments and/or distributions from the Redevelopment Property Tax Trust Fund from the Gateways Project Area. 4. Within thirty (30) days following the end of each fiscal year during the term of this Second Amended Agreement, and upon termination of this Second Amended Agreement, the City shall prepare and deliver to the Successor Agency a report of activities and accomplishments in the Gateways Project Area during the prior fiscal year or since the City's previous report, as the case may be, together with 1) evidence of the City's compliance with any environmental documentation or notice required as a result of any activity undertaken during such prior fiscal year in compliance with this Second Amended Agreement that was a project under CEQA and/or NEPA, and 2) evidence of the costs incurred by the City to provide the Economic Development Program Services provided for under this Second Amended Agreement (City's Report). 5. Any of the following shall be considered an event of default under this Second Amended Agreement: any portion of the Agency Contribution is expended by the City for any activities or costs not authorized by this Second Amended Agreement; or if for any reason the City ceases or fails to provide the Economic Development Program Services required by this Second Amended Agreement. In the event of any default by the City hereunder, the Successor Agency shall provide written notice to the City specifying the alleged default. The City shall have thirty (30) days following receipt of such notice to cure such default. If the City has not cured such default within said thirty (30) day period, the Successor Agency may terminate this Second Amended Agreement by providing written notice of such termination to the City. Within thirty (30) days following any such termination, the City shall deliver to the Successor Agency a final City's Report, and shall refund to the Successor Agency any Agency Contribution amounts not properly expended by the City as of the termination date for Economic Development Program Services in accordance with this Second Amended Agreement. 6. Failure by either party to perform its obligations hereunder shall constitute a default under this Second Amended Agreement, and the other party may institute legal action to cure, correct or remedy such default, to recover damages for such default or to obtain any other remedy, including injunctive or declaratory relief, consistent with the purpose of this Second Amended Agreement. 7. Pursuant to Section 895.4 of the Government Code, the Successor Agency and City agree that each will assume the full liability imposed upon it or any of its officers, agents or employees for injury caused by a negligent or wrongful act or omission occurring in the performance of this Second Amended Agreement and each party agrees to indemnify and hold harmless the other party for any loss, costs or expense that may be imposed upon such other party by virtue of Sections 895.2 and 895.6 of the Government Code. 8. The City shall endeavor to provide the Successor Agency, in a timely manner, the information necessary for the Agency to fulfill any reporting requirements regarding the Economic Development Program Services that may be required under the California Health and Safety Code. 9. This Second Amended Agreement and the obligations of the City and Successor Agency hereunder shall terminate upon the earlier to occur of: (i) use of the entire Agency Contribution to pay the City's actual costs to provide certain Economic Development Program Services to benefit the Gateways Project Area in accordance with this Second Amended Agreement; or (ii) termination in accordance with Section 5 of this Second Amended Agreement, and delivery of the final City's Report and refund of any unexpended amounts of the Agency Contribution that may be due to the Successor Agency, or a successor designated by the Successor Agency, as provided for under Section 5. Upon any such termination and delivery of the final City's Report, and return of any unexpended Agency Contribution, if applicable, neither party shall have any further rights or obligations under this Second Amended Agreement. IN WITNESS WHEREOF, the Successor Agency and the City have executed this Second Amended Agreement as of the date first above written. CITY OF SANTA ROSA ACTING IN ITS CAPACITY AS THE SUCCESSOR AGENCY TO THE FORMER REDEVELOPMENT AGENCY OF THE CITY OF SANTA ROSA Director /City Manager Approved as to Form C Successor Agency Counsel CITY OF SANTA ROSA Lo City Manager Approved as to Form: City Attorney