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HomeMy WebLinkAbout2011-006 Historic City Hall Loan Agrmt RDA c7,D/l GY>(P LOAN AGREEMENT FOR HISTORIC CITY HALL PROJECT 1 PARTIES AND EFFECTIVE DATE 1 1 Parties to this Agreement. The parties to this Loan Agreement ("Agreement") are (t) The Redevelopment Agency of the City of Atascadero ("Agency"), a public body, and (u) The City of Atascadero ("City"), a California municipal corporation. This Agreement is dated as of January 14, 2011, for reference purposes only This Agreement will not become effective until the Effective Date described in Section 1.2 below t 1.2 Effective Date. This Agreement will become legally effective and binding as of the date ("Effective Date") on which this Agreement has been approved by the City Council and the Agency's governing board and executed by the City's and Agency's duly authorized representatives 2. RECITALS. 2 1 The City Council previously adopted a Redevelopment Plan (the "Redevelopment Plan") for a redevelopment project area(the "Project Area") 22 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. 23 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 24 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 2 5 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 1 All Section references shall be to Sections of this Agreement,unless otherwise stated. Loan Agreement Atascadero Redevelopment Agency& City of Atascadero Page 2 26 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. 27 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. 28 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. 29 The Project is consistent with and will promote the Agency s Implementation Plan. 2 10 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 Project if the Board and the City make certain specified findings 2 11 Pursuant to Health and Safety Code 33125, the Agency has the general power to execute instruments necessary or convenient to the exercise of its powers and may therefore enter into an agreement to loan funds for the Project; and 2 12 The Agency Board approved, via adoption of Resolution No RA 2011-002 at a duly noticed public meeting of the Agency on January 14, 2011, this no-interest loan agreement with the City to meet the cash flow needs of the Project while the City is waiting for Federal and State grant funds and any other reimbursement grants funds made by third parties to be forwarded to meet incurred Project costs. 2 13 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 3 TERMS. 31 Loan Amount; Disbursement of Funds, Repayment of Funds. Loan Agreement Atascadero Redevelopment Agency& City of Atascadero Page 3 3 1 1 Loan Amount. Agency hereby commits to keep on reserve an amount not to exceed ten million dollars and zero cents ($10,000,000 00) ("Agency Loan") The entire Loan Amount shall be reserved for the duration of the Project to serve as a revolving loan or series of bridge loans to keep the Project's cash flow liquid during periods in which the City is awaiting reimbursement by the Federal or State government for amounts to which one or both of those governments have pledged to provide funding or is awaiting any other grants made by third parties that would create a situation in which the City would experience a delay between submitting a request for payment and receipt of payment such that the Agency Loan could be necessary to provide sufficient cash flow for the Project. 3 1.2 Disbursement of Funds The Agency agrees to disburse to the City all or any portion of the total Agency Loan amount upon request by the City 3 1 3 Projected Repayment of Funds. City agrees to repay to Agency outstanding loan proceeds within thirty (30) days of receipt of grant funds from the Federal or State government(s) or funds from other third party sources. City shall complete the repayment of outstanding loan proceeds within three (3) years of the final disbursement of Federal and State grant funds following completion of the Project audit by the Federal Emergency Management Agency 3.2 Interest. Any and all portions of the Agency Loan disbursed by the Agency to the City shall not bear interest. 3.3 Commitment to Complete Repayment. In the event the Federal or State government or other third party granting entity does not fulfill its obligation to disburse to City the grant funds that the parties anticipate will be available to repay the Agency Loan, City agrees to repay the Agency Loan, or any portion thereof demanded by the Agency, within ten (10) days following demand by the Agency, provided that such demand may not be made prior to the sixth (6th) anniversary of the completion of the Project. 34 Subordination. The City's obligations hereunder shall be paid primarily from the grant funds available to the City from the Federal and State governments for completion of the Project. Obligations not paid out of these funds shall be paid out of all legally available fiends of the City The City's obligations under this Agreement are subject and subordinate to Loan Agreement Atascadero Redevelopment Agency& City of Atascadero Page 4 any preexisting City indebtedness including, without implied limitation, bonded indebtedness, and to any other indebtedness including, without implied limitation, bonded indebtedness, which is incurred subsequent to the Effective Date of this Agreement. Without any further action or agreement required of the Agency, the Agency hereby expressly subordinates to any and all such City indebtedness, either heretofore or hereafter incurred, the Agency's right to receive repayment of all or any portion of the Loan. 3.5 No Third Party Beneficiaries. This Agreement is for the sole and exclusive benefit of the Agency and the City No person or entity not a party to this Agreement is intended to be benefited by any provision of this Agreement and no person or entity not a party to this Agreement shall have any rights, causes of action, or claims against either the Agency or the City due to the fact either the Agency's and/or the City's entry into and performance or non- performance pursuant to this Agreement. 3.5 Counterpart Originals. This Agreement may be executed in two (2) counterpart originals, each of which shall be deemed to be an original, but, when taken together, shall constitute one and the same instrument. CITY OF ATASCADERO COMMUNITY REDEVELOPMENT AGENCY A California Mumci Corporation OF ATASCADERO A California Public Agency By -� By . Tom O'Mall , ayor Wade McKinney, Exec tive Director ATTEST Marcia McClure Torgrson, City Marcia McClure Torgerson, Board SecretaW Date I — /� ` 1 / Date APPROVED AS O FORM --- Brian A. Pierik, City Attorney Brian A. Pierik, Agency General Counsel