1999 AGN SEP 07 I14 - Laserfiche WebLink

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CITY OF COLTON AGENDA REPORT For the City Council Meeting of September 7, 1999 TO: Honorable Mayor and City Counc' APPROVAL: Henry Garcia, City Manage FROM: Robb Steel, Redevelopment Direct SUBJECT: Consideration and Approval of a Resolution and a Redevelopment Cooperation Loan Agreement by and between the City of Colton and Redevelopment Agency for the City of Colton. DATE: August 23, 1999 Backaround On May 4, 1999, the City Council adopted Resolution No. R-37-99, which approved entering into a Redevelopment Cooperation Loan Agreement (the "Loan Agreement") between the City of Colton (the "City") and the Redevelopment Agency for the City of Colton (the "Agency"). This Loan Agreement was entered into in connection with the Agency's Owner Participation Agreement with Vanir Development, Inc. (the "Vanir OPA") for the rehabilitation and renovation of the vacant Travelodge Motel and surrounding buildings located at 201 - 225 Valley Boulevard in the Downtown # 1 Redevelopment Project Area. Since the Agency has little, if any, tax increment revenues available to assist the Developer in the Downtown # 1 Project Area, the Loan Agreement was entered into by the City and Agency to provide a mechanism by which the Agency could offer an incentive to the Developer and encourage the project to take place. As provided for in the Loan Agreement, the City would loan a certain percentage of the Transient Occupancy Taxes (TOT) generated by the project to the Agency so it could fulfill its obligations to reimburse the Participant under provisions in the OPA for the cost of installing off-site improvements and annual costs for billboard advertising. Under the Loan Agreement, the Agency would execute a note made payable to the City each year for the amount borrowed from the City and equal to a certain percentage of the TOT generated by the project. The Note carried interest at 7% per annum. At the time the OPA was approved by the Agency Board, the agreement had not been executed by the Participant, but was presented to the Agency for approval in its substantive form. Following the Agency's approval, the OPA was sent to the Participant for execution; however, prior to executing the Agreement, the Participant and his attorney reviewed the Agreement and made several technical modifications, as well as some substantive changes to the Agreement. Item #14