SA - Resolution 28138-SARESOLUTION NO. 28138 -SA
RESOLUTION OF THE COUNCIL OF THE CITY OF SANTA ROSA, ACTING IN ITS
CAPACITY AS SUCCESSOR AGENCY TO THE FORMER REDEVELOPMENT AGENCY
OF THE CITY OF SANTA ROSA AUTHORIZING EXECUTION OF ONE (1)
PROMISSORY NOTE FOR A MODIFIED LOAN AGREEMENT FOR THE MERGED
SANTA ROSA CENTER/GRACE BROTHERS REDEVELOPMENT PROJECT AREA
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. 25828, adopted December 3, 2003, the City confirmed its
agreement to advance City general funds to the Redevelopment Agency to support
redevelopment activities undertaken by the Redevelopment Agency in the Santa Rosa
Center /Grace Brothers Redevelopment Project Area ( "SRC /GB ") pursuant to Ordinance No.
1036, adopted on December 5, 1961; and
WHEREAS, this agreement is evidenced by a Cooperation Agreement which provided
that the Redevelopment Agency will reimburse the City for actions undertaken and costs and
expenses incurred by it, for and on behalf of the Agency for SRC /GB Redevelopment Project
Area; and
WHEREAS, the Cooperation Agreement bears interest at the rate of 5.9% per annum for
SRC /GB; and
WHEREAS, the Cooperation Agreement provides for interest -only payments, but permit
prepayment of the principal balance at any time; and
WHEREAS, the current principal balance payable pursuant to the SRC /GB Cooperation
Agreement is $2,856,280.39 for SRC /GB; 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 Cooperation Agreement; 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 the Cooperation Agreement for SRC /GB
Redevelopment Project Area; 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 reenter into agreements with the city that
formed the agency may do so upon obtaining approval of the oversight board; and
WHEREAS, the improvements undertaken by the Redevelopment Agency in the
SRC /GB Redevelopment Project Area using the advance of City funds have resulted in
significant revitalization of the SRC /GB Redevelopment Project Area, and have been of benefit
to all taxing entities that share in the property tax revenue generated by property located within
the SRC /GB Redevelopment Project Area because such improvements have removed
impediments to development, eliminate adverse conditions in the project area and catalyzed
private development, thus resulting in an increase in assessed valuation and property tax revenue
that accrues to the taxing entities; and
WHEREAS, the City and Successor Agency desire to ratify the Successor Agency's
obligation to repay the Cooperation Agreement, and desire to enter into a Promissory Note
stating modified terms for repayment of the Cooperation Agreement ( "Promissory Note ").
NOW, THEREFORE, BE IT RESOLVED that the Successor Agency, pursuant to Health
and Safety Code Section 34178(a), approves and authorizes the Promissory Note attached hereto
for the Merged Santa Rosa Center /Grace Brothers Redevelopment Project Area, and authorizes
the Successor Agency to execute and deliver the Promissory Note 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 Promissory Note and to
take any other action as is 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 Promissory
Note to be listed on updated or future ROPS for the Successor Agency.
IN 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 � M � ay or �—�
Deputy City Clerk
AP PROVED AS TO FORM:
Successor Agency Attorney
PROMISSORY NOTE
Merged Santa Rosa Center / Grace Brothers Redevelopment Project Area
$2,856,280.39
Santa Rosa, California
2012
FOR VALUE RECEIVED, the City of Santa Rosa, acting in its capacity as the
Successor Agency to the Former Redevelopment Agency of the City of Santa Rosa ( "Successor
Agency ") promises to pay to the City of Santa Rosa, a charter city ( "City "), in lawful money of
the United States of America, the principal sum of Two Million, Eight Hundred Fifty -Six
Thousand, Two Hundred Eighty and 39/100 Dollars ($2,856,280.39), together with interest on
the outstanding principal balance in accordance with the terms and conditions described herein.
This Promissory Note ( "Note ") states modified terms for repayment of and supersedes
that certain Cooperation Agreement dated as of December 15, 2003, and loan executed by the
Redevelopment Agency of the City of Santa Rosa by Resolution No. 1555 on November 28,
2005, pursuant to the Cooperation Agreement, for the benefit of the City of Santa Rosa in the
original principal amount of $4,500,000 (the "Original Note ").
Execution of this Note has been approved by resolutions duly adopted by the City
Council of the City of Santa Rosa, the governing board of the Successor Agency, and pursuant to
Health and Safety Code Section 34178(a), by the Oversight Board appointed to review the
actions of the Successor Agency pursuant to Assembly Bill xl 26.
1. INTEREST RATE; REPAYMENT Interest shall accrue on the outstanding principal
balance of this Note at the rate of three percent (3 %) per annum, commencing upon the
origination date of this Note. Interest shall be calculated on the basis of a year of 365 days, and
charged for the actual number of days elapsed.
2. PAYMENT DATES; MATURITY DATE Commencing upon January 31, 2013, (the
"First Payment Date "), and on the last day of January during each year thereafter, Successor
Agency shall make annual payments of combined principal and interest until the entire
indebtedness evidenced hereby is fully paid, except that all remaining indebtedness, if not sooner
paid, shall be due and payable upon the Maturity Date (defined below). The amount of the
annual payments to be paid beginning on the First Payment Date will be an amount equal to the
payment necessary to fully amortize the principal amount of this Note, together with interest at
the interest rate specified in Section 1 above over an eight -year period. The entire outstanding
principal balance of this Note, together with accrued interest and all other sums accrued
hereunder shall be payable in full on January 31, 2020 (the "Maturity Date "). Payments shall
be credited first to accrued interest, and then to principal. In no event shall any amount due
under this Note become subject to any rights, offset, deduction or counterclaim on the part of the
Successor Agency.
3. PREPAYMENT Successor Agency may, without premium or penalty, at any time and
from time to time, prepay all or any portion of the outstanding principal balance due under this
Note. Prepayments shall be applied first to any unpaid late charges and other costs and fees then
due, then to accrued but unpaid interest, and then to principal.
4. MANNER OF PAYMENT All payments on this Note shall be made to City at 90 Santa
Rosa Avenue, Santa Rosa, California 95404 or such other place as City shall designate to
Successor Agency in writing, or by wire transfer of immediately available funds to an account
designated by City in writing.
5. EVENTS OF DEFAULT An event of default ( "Event of Default ") shall arise hereunder
if Successor Agency fails to pay when due the principal and interest payable hereunder and such
failure continues for ten (10) days after City notifies Successor Agency thereof in writing.
6. REMEDIES Upon the occurrence of an Event of Default hereunder, City may, at its
option (i) by written notice to Successor Agency, declare the entire unpaid principal balance of
this Note, together with all accrued interest thereon and all sums due hereunder, immediately due
and payable regardless of any prior forbearance, and (ii) exercise any and all rights and remedies
available to it under this Note or under applicable law. Successor Agency shall pay all
reasonable costs and expenses incurred by or on behalf of City including, without limitation,
reasonable attorneys' fees, incurred in connection with City's enforcement of this Note and the
exercise of any or all of its rights and remedies hereunder.
7. DEFAULT RATE Upon the occurrence of an Event of Default, interest shall
automatically be increased without notice to the rate of ten percent (10 %) per annum (the
"Default Rate "); provided, however, if any payment due hereunder is not paid when due, the
Default Rate shall apply commencing upon the due date for such payment. When Successor
Agency is no longer in default, the Default Rate shall no longer apply, and the interest rate shall
once again be the rate specified in the first paragraph of this Note. Notwithstanding the
foregoing provisions, if the interest rate charged exceeds the maximum legal rate of interest, the
rate shall be the maximum rate permitted by law. The imposition or acceptance of the Default
Rate shall in no event constitute a waiver of a default under this Note or prevent City from
exercising any of its other rights or remedies.
8. MISCELLANEOUS
8.1 WAIVER The rights and remedies of City under this Note shall be cumulative
and not alternative. No waiver by City of any right or remedy under this Note shall be effective
unless in writing signed by City. Neither the failure nor any delay in exercising any right, power
or privilege under this Note will operate as a waiver of such right, power or privilege, and no
single or partial exercise of any such right, power or privilege by City will preclude any other or
further exercise of such right, power or privilege or the exercise of any other right, power or
privilege. To the maximum extent permitted by applicable law (a) no claim or right of City
arising out of this Note can be discharged by City, in whole or in part, by a waiver or
renunciation of the claim or right unless in a writing, signed by City; (b) no waiver that may be
given by City will be applicable except in the specific instance for which it is given; and (c) no
notice to or demand on Successor Agency will be deemed to be a waiver of any obligation of
Successor Agency or of the right of City to take further action without notice or demand as
provided in this Note. Successor Agency hereby waives presentment, demand, protest, notices
of dishonor and of protest and all defenses and pleas on the grounds of any extension or
extensions of the time of payment or of any due date under this Note, in whole or in part,
whether before or after maturity and with or without notice.
8.2 SEVERABILITY If any provision in this Note is held invalid or unenforceable
by any court of competent jurisdiction, the other provisions of this Note will remain in full force
and effect. Any provision of this Note held invalid or unenforceable only in part or degree will
remain in full force and effect to the extent not held invalid or unenforceable.
8.3 GOVERNING LAW This Note shall be governed by the laws of the State of
California.
8.4 PARTIES IN INTEREST This Note shall bind Successor Agency and its
successors and assigns and shall accrue to the benefit of City and its successors and assigns.
8.5 SECTION HEADINGS, CONSTRUCTION The headings of Sections in this
Note are provided for convenience only and will not affect its construction or interpretation.
8.6 TIME IS OF THE ESSENCE Time is of the essence with respect to every
provision of this Note.
SIGNATURES ONFOLLOWING PAGE
IN WITNESS WHEREOF, Successor Agency has executed and delivered this Note as of
the date first written above.
SUCCESSOR AGENCY
THE CITY OF SANTA ROSA, ACTING IN ITS CAPACITY AS THE SUCCESSOR
AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF SANTA ROSA
By:
Mayor/Executive Director
ATTEST:
By:
Successor Agency Secretary
APPROVED AS TO FORM:
By:
Successor Agency Counsel
The City of Santa Rosa, a charter city, hereby acknowledges and agrees to the terms set forth in
this Note, and agrees that this Note supersedes in its entirety the Original Note defined above.
CITY OF SANTA ROSA, A CHARTER CITY
By:
City Manager
ATTEST:
By:
City Clerk
APPROVED AS TO FORM:
By:
City Attorney