2003 AGN DEC 22 I01 - Laserfiche WebLink

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REDEVELOPMENT AGENCY FOR THE CITY OF COLTON For the Redevelopment Agency Board Meeting of December 22, 2003 TO: Honorable Agency Chairperson and Board Me ers FROM: Candace Cassel, Redevelopment Manager SUBJECT: Consideration and Approval of Terms to Negotia;ewith the Mike Thompson's RV and Altman's Winnebago and Villelli Enterprises for Financial Assistance. DATE: December 18, 2003 BACKGROUND Agreement, Agency Notes and Developer Notes On October 6, 1988, the Agency entered into a Disposition and Development Agreement (DDA) with American RV Expo ("AMRV") to facilitate the development of a recreational vehicle mail on a 21.3 acre property in the Cooley Ranch Project Area. The assistance required from the Agency to facilitate the AMRV's acquisition and development of the property resulted in Agency indebtedness of $4,765,000 and $665,000, evidenced by two promissory notes ("Agency Notes"), respectively. Villelli is currently the beneficiary of the notes. Pursuant to the DDA, the Agency adopted an Ordinance enacting a sales and use tax for the RV Mall in order to provide a revenue stream to repay the Agency Notes. As a result, the State Board of Equalization distributes 62.5% of the sales tax generated from the Mall directly to the Agency. The City receives 37.5%. Of the 62.5% share of the sales tax the Agency receives directly, 20% is allocated to the low/mod housing fund. The 50% balance is used to make payments on the Agency Notes. The Agency's payments are to be applied first to the $4,765,000 note. Thereafter, payments are applied to the $665,000 note. The payments continue for 15 years from the date on which the improvements were completed and the project was opened for business (AMRV indicates that the project began operations in the summer of 1989; payments will cease in June of 2004). Any unpaid principal and interest on the Agency Notes at the end of the term is to be forgiven. As of June 30, 2003, the Agency has paid $4,113,987.66 towards the Agency Notes, which doesn't even cover the interest. Total principal and interest due from the Agency to Villelli, as of June 30, 2003, is $10,005,769.34. The 1 st Amendment to the DDA, dated October 14, 1988, allows changes to the DDA to benefit the AMRV lender. The 2nd Amendment to the DDA, dated June 1, 1989 authorized the Agency to loan the AMRV $350,000 for preliminary development costs and fees ("Developer Note"). The loan was for $350,000 at 10% and was secured by a Letter of Credit ("LOC"). Payments were to be made over the course of 17 months, with an automatic 6 month extension. RASbareRDA\Meetings\2003 Meetings\December 22, 2003\RV Dealers Request for Financial Assistance.doc