AR 051507 Cooperation Loan Agreement

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REDEVELOPMENT AGENCY FOR THE ITEM #25 CITY OF COLTON For the City Council and Redevelopment Agency Meeting of May 15, 2007 TO: Honorable Chairperson and Agency Boardmembers Honorable Mayor and Councilmembers FROM: Candace Cassel, Economic Development Director Mark Nuaimi, Assistant City Manager SUBJECT: Consideration and Approval of Agency Resolution No. 863 and City Resolution Approving a Redevelopment Cooperation Loan Agreement by and between the City of Colton and the Redevelopment Agency for the Purchase of Property Adjacent to and Within the West Valley Redevelopment Project Area. DATE: May 10, 2007 BACKGROUND The City Council and Redevelopment Agency have directed staff to purchase certain properties proposed for Delhi Sands Flower Loving fly habitat conservation north of the 1-10. The subject properties are within and immediately adjacent to the Agency's West Valley Redevelopment Project Area. While the City of Colton principally sponsors the project, the Agency has been asked to complete the land acquisitions on behalf of the project. Because the West Valley Project Area does not have the financial resources to acquire the subject properties, a loan from the City of Colton is needed to complete the purchase. By entering into the loan agreement, the Agency is able to conduct due diligence investigations, make initial purchase deposits, and eventually acquire the properties. The Agency will agree to repay the City at a later date as tax increment revenues from the West Valley Redevelopment Project permit. In addition, the West Valley Original Project Area's time limit to incur debt repayable with tax increment expired on July 15, 2006; the West Valley Amendment Project Area's date to incur debt repayable with tax increment revenues expires on June 30, 2007. To provide for repayment of the loan to the City General Fund using future tax increment, the loan is conditioned on the City adoption of an ordinance eliminating the time limits in each of these project areas. It is expected that adequate tax increment will be generated in the West Valley Redevelopment Project Area as a result of the Colton Super Block development to repay the loan to the General Fund.