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HomeMy WebLinkAboutRA001-2011 Historic City Hall Finance Agrmtti f FINANCING CONTRACT HISTORIC CITY HALL PROJECT THIS FINANCING CONTRACT ("Contract") is made and entered into this 14th day of January, 2011 by and between the CITY OF ATASCADERO, a general law city and municipal corporation ("City") and the COMMUNITY REDEVELOPMENT AGENCY OF ATASCADERO, a public body, corporate and politic ("Agency") Hereinafter, City and Agency shall be referred to collectively as the "Parties" and singularly as the "Party " RECITALS WHEREAS, the City Council previously adopted a Redevelopment Plan (the "Redevelopment Plan") for a redevelopment project area (the "Project Area"), and, WHEREAS, the Agency is vested with responsibility pursuant to the Community Redevelopment Law (Part 1 of Division 24 of Health and Safety Code of the State of California) (the "Law") to implement the Redevelopment Plan both within and without the Project Area, and, WHEREAS, on December 22, 2003, the San Simeon earthquake, declared a natural disaster by the President of the United States, severely damaged the historic City Hall building, located in the Project Area within the City; and, WHEREAS, the City has commenced a construction project to rehabilitate the Historic City Hall (the "Project"), which public facilities upon their completion will be owned and operated by the City; and, WHEREAS, the Project includes design, de -construction, construction, project/construction management, inspection, testing, permitting, construction support, grant administration, general conditions and other costs associated with the repair, hazard mitigation and rehabilitation of the Historic City Hall, its grounds, adjacent parking lot and adjacent public infrastructure, and, WHEREAS, the Project is estimated to cost $42,926,000, of which the majority of the funding will come from Federal and State grant funds due to the historic nature of the City Hall and the fact that it was damaged in a natural disaster, but there remains a gap between the total estimated cost of the Project and the amount of grant funds and other public funds available for the Project, and, WHEREAS, the City lacks sufficient capital or general funds available which could be used to fully fund the Project and bring it to completion and it is not practical to arrange for assessment district or similar financing for the Project, and, WHEREAS, the Project will address the goals and objectives of the Redevelopment Plan for the Project Area and will be of benefit to the Project Area in that the Project will attract additional tourists, assist with improving physical aesthetics, and alleviate blighting conditions in the area serving as the gateway to the Project Area, and, WHEREAS, the Project is consistent with and will promote the Agency's Implementation Plan, and, WHEREAS on July 27, 2010, the Board approved a reimbursement agreement by and between the City and the Agency to provide for the Agency to reimburse the City for the City s repayment of bonds issued by the City to assist with the financing of the Project, and, WHEREAS, the Agency is authorized by the California Redevelopment Law to enter into a binding contract with the City pursuant to which the Agency will irrevocably commit the Agency Funds and the Agency Loan to the Project and due to the Agency's reimbursement obligation the Agency intends to provide funding in the amount of $13,000,000 00 ("the Agency Funds") to assist the City with the cost of the Project because the Project will directly benefit the Project Area, and, WHEREAS, pursuant to Health and Safety Code Section 33445, and specifically subsection (e)(2)(B) of that Section, the Agency may, with the consent of the City Council, pay part or all of the cost of the construction of the Project if the Board and the City make certain specified findings, and, WHEREAS, a duly noticed public meeting of the Agency was held on January 14, 2011 wherein the Agency adopted Resolution No RA 2011-002 making all required findings for the use of Agency monies for the Project pursuant to Section 33445 NOW, THEREFORE, the Parties hereto state and agree as follows 1 The purpose of this Contract is to set forth the understanding and agreement of the Parties with respect to the Agency's commitment to fund the Project through reimbursement of the City's share of Project costs, up to a defined amount. The contents of this Contract are intended to be as comprehensive as possible with respect to the Agency's commitment of Agency Funds (as defined in paragraph 3 of this contract) to the Project yet not exhaustive with respect to additional issues and expenses that may arise relative to the development of the Project. In the event that issues and expenses occur that are not identified in this Contract, the Parties agree to work together in good faith to resolve each matter 2 The Parties understand that the City will be required to complete final planning and public bidding required on the Project. Those final plans and the public bidding are prerequisites for the City's construction of the Project, including the improvements that will be of benefit to the Project Area. 3 The estimated total cost of the Project is $42,926,000 ("Total Cost") The Agency anticipates that the Project will address the goals and objectives of the Redevelopment Plan for the Project Area and will be of benefit to the Project Area by alleviating blighting conditions, attracting additional tourists, and assisting with improving physical aesthetics The Agency has agreed to commit a total sum of thirteen million dollars and no cents ($13,000,000 00) ("Agency Funds") to the Project to pay for the Project's direct benefit to the Project Area. 4 The Parties agree that the Agency shall use the Agency Funds to the extent that such funds have not been previously committed to pay for and/or reimburse City for costs and 2 expenses associated in any way with the Project including, but not limited to, services and costs for design, de -construction, construction, project/construction management, inspection, testing, permitting, construction support, grant administration, general conditions and other costs associated with the repair, hazard mitigation and rehabilitation of the Historic City Hall, its grounds, adjacent parking lot and adjacent public infrastructure Any previous commitment by the Agency of Agency Funds to the Project shall be deducted from the $13,000,000 00 total amount of Agency Funds available for the Project. 5 Within thirty (30) business days of the Parties executing this Contract, Agency shall segregate the sum of thirteen million dollars and no cents ($13,000,000 00), less any of Agency Funds already spent to date on the Project, within the Agency's accounts to be held in a separate account ("Historic City Hall Project Account") to pay the Agency's share of the Project costs The Agency Funds shall be held in the Historic City Hall Project Account until 2 months from the latest of the date the project is completed, the date of the final invoice, or the date of resolution of the final audit by regulatory/granting agencies The City shall request reimbursement from the Agency for Project costs actually incurred and the Agency shall reimburse the City from the Agency Funds from the Historic City Hall Project Account. 6 The City understands and agrees that a portion of the source of the Agency Funds may be the proceeds of tax exempt bonds secured by the tax increment revenue the Agency receives pursuant to California Health and Safety Code Section 33670 (the "Bonds") The City covenants and agrees with respect to the Project to comply with all applicable requirements of the federal Internal Revenue Code necessary to preserve the tax-exempt status of the interest on the Bonds and specifically covenants, without limiting the generality of the foregoing, as follows (a) Private Activity The City will take no action or refrain from taking any action or make any use of the proceeds of the Bonds or of any other monies or property which would cause the Bonds to be "private activity bonds" within the meaning of Section 141 of the Internal Revenue Code of 1986, as amended, and (b) Arbitrage The City will make no use of the proceeds of the Bonds or of any other amounts or property, regardless of the source, or take any action or refrain from taking any action which will cause the Bonds to be "arbitrage bonds" within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended, and (c) Federal Guaranty The City will make no use of the proceeds of the Bonds or take or omit to take any action that would cause the Bonds to be "federally guaranteed" within the meaning of Section 149(b) of the Internal Revenue Code of 1986, as amended, and (d) Information Reporting. The City will cooperate with the Agency in providing information that the Agency needs to comply with the informational reporting requirement of Section 149(e) of the Internal Revenue Code of 1986, as amended, and (e) Hedge Bonds The City will make no use of the proceeds of the Bonds or any other amounts or property, regardless of the source, or take any action or refrain from taking any action that would cause the Bonds to be considered "hedge bonds" within the meaning of $1 Section 149(g) of the of the Internal Revenue Code of 1986, as amended, unless the City takes all necessary action to assure compliance with the requirements of Section 149(g) of the of the Internal Revenue Code of 1986, as amended, to maintain the tax exempt status of interest on the Bonds for federal income tax purposes and such action has been approved by the Agency 7 In contemplation of the provisions of Section 895.2 of the California Government Code imposing certain tort liability jointly upon public entities solely by reason of such entities being Parties to an agreement as defined in Section 895 of said code, the Parties hereto, as between themselves pursuant to the authorization contained in Sections 895.2 and 895 6 of said code, will each assume the full liability imposed upon it or any of its officers, agents or employees by law for personal injury, property damage or loss to third Parties caused by a negligent or wrongful act or omission of that party occurring in the performance of the Contract. To achieve the above stated purpose, each party indemnifies and holds harmless the other party for any damage, loss, cost or expense arising out of its own negligent or wrongful acts or omissions 8 This obligations, as set forth herein, are binding on the successors, assigns or heirs, including any private or public entities, of both parties. 9 This Contract shall be governed by the laws of California and represents the entire agreement of the Parties as to the subject matter of this Contract. IN WITNESS WHEREOF, the City and Agency have approved the foregoing FINANCING CONTRACT effective January 14, 2011, and caused the same to be executed by their duly authorized officers as set forth below AGENCY By V Wade cKmney Executive Director ATTEST Marcia McClure Torgerson, C.M C Board Secretary Date APPROVED AS TO FORM Community Redevelopment Agency of Atascadero By �--Q Brian A. Pierik, Agency General Counsel 11 CITY �n By — Wade G cKi ey City Manager ATTEST By - Marcia McClure Torgerson, C.M.0 City Clerk Date )-15--1 APPROVED AS TO FORM City of Atascadero By-_ Brian A. Pierik, City Attorney