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would be advanced to the City who, in turn, will loan the proceeds to BLD. This way, the City and the lender are the only <br />parties in control of the deed of trust obligations. <br />As a result of staffs efforts with much help from the National Development Council, the CRF was determined to be the <br />most viable option for procuring the loan. While BLD's obligation is $2.5 million, CRF requires a $250,000 reserve fund. <br />Therefore, the loan to BLD needs to be $2,750,000. A commitment for $3 million has been obtained, leaving an additional <br />$250,000 available if the City needs it for any cost overruns. City Manager signature on the CRF commitment letter does <br />not constitute a debt instrument. Actual indebtedness will not occur until loan documents are signed which will, again, <br />require City Council approval. <br />FINANCIAL IMPACT <br />There is no financial impact as a result of signing the commitment letter from CRF. Once the actual loan documents are <br />signed, and the loan is funded, the City could incur annual debt service costs (approximately $200,000) if BLD ever <br />defaulted on the loan. However, this contemplated transaction and associated risk is part of the agreement with BLD <br />which is now nearly three years old. <br />ENVIRONMENTAL IMPACT <br />There is a previous environmental impact report (EIR) adopted/approved by the Planning Commission. <br />RECOMMENDATION <br />Direct staff to sign the $3,000,000 loan commitment letter from the Community Reinvestment Fund, Inc. <br />REVIEW TEAM ONL <br />City Attorney: V c ��' Finance Director: <br />V7 - <br />City Manager: OTHER: <br />