2005 AGN JUL 19 I01 & I02 - Laserfiche WebLink

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item 1 & 2 CITY OF COLTON AGENDA REPORT FOR CITY COUNCIL MEETING OF JULY 199 2005 TO: Honorable Mayor and Council Members FROM: Dilu de Alwis, Finance Director SUBJECT: Loan from the Community Reinvestment Fund for the Big League Dreams Sports Park DATE: July 18, 2005 BACKGROUND On May 3, 2005, the City Council tentatively approved entering into a loan arrangement with Community Reinvestment Fund (CRF). Proceeds from the loan would be used to complete the construction of the Big League Dreams (BLD) project. Likewise staff was directed to establish the terms and conditions of the BLD's use of the project, including the amount of money BLD would pay to the City for such use, and other matters of "housekeeping nature". The City has been in discussions with Big League Dreams (BLD) since 1999 for the development and construction of a community sports complex. There have been numerous challenges relative to land acquisition and endangered species. As a result, there is much history relative to this project. Bonded indebtedness to build the park on its original site was incurred in August, 2002 in the amount of $7.2 million, which netted approximately $6.5 million after paying costs of issuance and setting aside a debt service reserve. In addition to this sum, BLD was to put in $1.5 million of their own money, or the City was to help procure a loan for them in this amount. Due to Delhi Sands Flower Loving Fly (Fly) issues the original site for the sports park known as the former Frontier Town property became unusable. The City has since purchased a 11.2 acre sight adjoining Ashley Furniture. Due to the relocation of the site there was a need to redesign the project increasing the cost of the project which led to the need to significantly increase the loan from CRF. The original loan amount of $1.5 million has since been increased to $5 million with a 10 year payment term. DISCUSSION/ ANALYSIS The City has approval from CRF for an increase in the loan amount to $5 million, subject to City Council approval. The related loan documents are attached for you review. The $5 million loan will require a debt service payment of approximately $700,000 per year. Proceeds of the CRF loan will be used to complete the BLD project. BLD, under a separate use arrangement, will then make payments to the city for use of the project. The arrangement would require BLD to make semi-annual payments to the City which would be placed in the City's General Fund and then used by the City to make its semi-annual debt service payments for the CRF loan. If a lease or maintenance and operations agreement between the City of Colton and BLD is not approved by the City Council within 90 days, this loan will not be funded and will be cancelled without cost to the City of Colton.