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ADOPT: Resolution of the City Council of the City of San Leandro Acting in Its Capacity as the Successor Agency to the Redevelopment Agency of the City of San Leandro Confirming the Obligation to Repay a Loan from the City of San Leandro, Agreeing to a Modification of Loan Terms, and Authorizing Execution of an Amended and Restated Promissory Note (reaffirms validity of a $2 million debt owed by the former Redevelopment Agency to the City)
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WHEREAS, pursuant to Resolution 2012-001, adopted by the City Council of the City of San Leandro on January 9, 2012, the City of San Leandro agreed to serve as the Successor Agency to the Redevelopment Agency of the City of San Leandro ("Redevelopment Agency") commencing upon dissolution of the Redevelopment Agency on February 1, 2012 pursuant to Assembly Bill x1 26 ("AB 26");
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. 2004-11 adopted June 21, 2004, the City of San Leandro ("City") confirmed its agreement to advance City general funds in the amount of $4,372,774 (the "Joint City/County Project Area Loan") to the Redevelopment Agency to support redevelopment activities undertaken by the Redevelopment Agency in the City of San Leandro/Alameda County Joint Redevelopment Project Area adopted pursuant to Ordinance Nos. 1295 N.S., 67-62, 75-39, 2000-009 and 2000-010 (the "Joint City/County Project Area");
WHEREAS, to evidence its obligation to repay the Joint City/County Project Area Loan, the Redevelopment Agency executed and delivered to City a promissory note dated as of April 8, 2004 in the amount of the Joint City/County Project Area Loan (the "Note");
WHEREAS, the Note bears interest at the rate of six percent per annum;
WHEREAS, the Note provides for interest-only payments, but permits prepayment of the principal balance at any time;
WHEREAS, the current principal balance payable pursuant to the Note is $2,040,797.30;
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 Note;
WHEREAS, an oversight board for the Successor Agency was established pursuant to AB 26 (the "Oversight Board");
WHEREAS, the Oversight Board approved the ROPS on April 6, 2012;
WHEREAS, the State Department of Finance reviewed the ROPS, but by letter dated April 11, 2012, indicated that it objected to the Note;
WHEREAS, Health and Safety Code Section 34178(a) provides that, with specified exceptions, commencing upon 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 reenter into agreements with the city that formed the agency may do so upon obtaining approval of the oversight board;
WHEREAS, the improvements undertaken by the Agency in the Joint City/County Project Area using the advance of City funds have resulted in significant revitalization of the Joint City/County Project Area, and have been of benefit to all taxing entities that share in the property tax revenue generated by property located within the Joint City/County Project Areas 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;
WHEREAS, the City and the Successor Agency desire to ratify the Successor Agency's obligation to repay the Note, and desire to enter into an Amended and Restated Promissory Note stating modified terms for repayment ("Restated Note");
WHEREAS, the execution of the Amended and Restated Promissory Note was also approved by the City Council by resolution adopted on May 7, 2012; and
WHEREAS, the Restated Note will be presented to the Oversight Board for consideration.
NOW THEREFORE, BE IT HEREBY RESOLVED by the City Council of the City of San Leandro, acting in its capacity as Successor Agency to the Redevelopment Agency of the City of San Leandro, that it hereby:
1. Subject to approval of the Oversight Board, authorizes the Executive Director to execute and deliver the Amended and Restated Promissory Note substantially in the form attached hereto.
2. Authorizes the Executive Director or designee to execute such other documents and to take such other actions as necessary to carry out the intent of this Resolution, including without limitation, listing the Restated Note on an updated ROPS for the Successor Agency.