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2. Assist the bondholder The current bondholder is actually going to suffer <br />financially because there will be fewer bonds outstanding after the financing is <br />completed. This is due to the decline in the value of the Plaza Las Glorias project <br />and the delinquent, taxes, penalties and interest on the Lebanoff-McKnight <br />property. The bondholder/property owner is going to relinquish any future right to <br />sales proceeds for the Lebanoff-McKnight property. Any future bondholder will <br />be looking solely to the Plaza Las Glorias project to repaid on the bonds. <br />3. Assist the City of Colton This bond issue has consumed a large amount of staff <br />time in dealing with foreclosure issues, legal issues and general administrative <br />matter since its inception. In addition, the investor community is aware that there <br />were problems with this issue at various times. By cooperating in the restructuring <br />of the debt, the City is going minimize the time it will spend in the future on <br />dealing with this bond issue. In the event that a foreclosure action is required in <br />the future, the process will be greatly simplified because there will only be one <br />property owner, and the value of the bonds outstanding has been reduced to a <br />more acceptable value to lien ratio. <br />ALTERNATIVES: <br />1. Continue our defense in the litigation with WHC III and hope for a favorable <br />judgement. In addition we would need to attempt to resolve the issue of the unpaid taxes <br />penalties and interest on the Lebanoff-McKnight property. <br />2. Cooperate in the restructurin�of the existin� bond issue. <br />Staff and the finance team have spent considerable time reviewing all the City's options <br />and feel that this proposal is in the best interest of the City, the current property owner <br />and any future bondholders. The City will be made whole with regard to its prior legal <br />expenses related to defending ourselves in the suit with WHC III. <br />FINANCIAL IMPACT: <br />Beneficial due to cessation of the lawsuit with WHC III. <br />RECOMMENDATION: <br />Approval of the Resolution, the public sale of securities or limited public offering, the <br />Preliminary Private Placement Memorandum, the Bond Purchase Agreement, Fiscal Agent <br />Agreement, form of Opinion, Continuing Disclosure Certificate, the employment of <br />financing professionals and authorize official actions to be taken by staff <br />