HomeMy Public PortalAbout2022-10-04-LSAThis Agenda contains a brief general description of each item to be considered. Copies of the Staff reports or
other written documentation relating to each item of business referred to on the Agenda are on file in the Office of
the City Clerk and are available for public inspection. Any person who has a question concerning any of the
agenda items may call the City Manager at (310) 603-0220, ext. 200.
Procedures for Addressing the Council
IN ORDER TO EXPEDITE CITY COUNCIL BUSINESS, WE ASK THAT ALL PERSONS WISHING TO ADDRESS THE
COUNCIL SUBMIT YOUR COMMENTS IN ADVANCE TO CITYCLERK@LYNWOOD.CA.US OR FILL OUT A FORM
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MEETING. FAILURE TO FILL OUT SUCH A FORM WILL PROHIBIT YOU FROM ADDRESSING THE COUNCIL IN
THE ABSENCE OF THE UNANIMOUS CONSENT OF THE COUNCIL.
AGE N D A
City of Lynwood as Succe ssor Age ncy
to the Lynwood Re de v e lopme nt Agency
TO BE HE L D ON
Octobe r 4, 2022
CO U N C I L C H A MB ERS - 11350 BULLI S RD. LY NWOOD, CA 90262 or We b
confe rence via ZOO M - To participate v ia Zoom or by telephone : 1-669-900-9128
or 1-253-215-8782 Mee ting I D: 835 2029 8238
Duly Poste d on 9/30/2022 By MQ
6:00 PM
1.C ALL TO OR D ER
2.C E R T IF IC ATION OF AGE N D A P OS T IN G B Y S E C R E TARY
3.R OL L C AL L OF ME MB E R S
J orge C asanova, Mayor
J ose L uis S olache, Mayor P ro Tem
Oscar F lores, C ouncil Member
Mari sela S antana, C ouncil Member
Ri ta S oto, C ouncil Member
P U B L IC OR AL C OMMU N IC AT ION S
(Regarding Agenda Items Only)
N ON-AGE N D A P U B LIC OR AL C OMMU N IC AT ION S
THIS PORTION PROVIDES AN OPPORTUNITY FOR THE PUBLIC TO ADDRESS THE LYNWOOD SUCCESSOR
AGENCY ON ITEMS WITHIN THE JURISDICTION OF THE LYNWOOD SUCCESSOR AGENCY AND NOT LISTED
ON THE AGENDA. IF AN ITEM IS NOT ON THE AGENDA, THERE SHOULD BE NO SUBSTANTIAL DISCUSSION
OF THE ISSUE BY LYNWOOD SUCCESSOR AGENCY, BUT LYNWOOD SUCCESSOR AGENCY MAY REFER THE
Lynwood Successor Agency - Page 1 of 115
MATTER TO STAFF OR SCHEDULE SUBSTANTIVE DISCUSSION FOR A FUTURE MEETING. (The Ralph M.
Brown Act, Government Code Section 54954.2 (a).)
C ON SEN T C AL E N D AR
ALL MATTERS LISTED UNDER THE CONSENT CALENDAR WILL BE ACTED UPON BY ONE MOTION
AFFIRMING THE ACTION RECOMMENDED ON THE AGENDA. THERE WILL BE NO SEPARATE DISCUSSION ON
THESE ITEMS PRIOR TO VOTING UNLESS MEMBERS OF THE COUNCIL OR STAFF REQUEST SPECIFIC
ITEMS TO BE REMOVED FROM THE CONSENT CALENDAR FOR SEPARATE ACTION.
4.AP P R OV IN G R ESOLU T ION N O. 2022.X X X OF T H E S U C C E S S OR AGE N C Y TO T H E
LYN WOOD R E D EVEL OP ME N T AGE N C Y C ON F IR MIN G T H E IS S U AN C E OF
R E FU N D IN G B ON D S, AP P R OV IN G P R E L IMIN ARY AN D FIN AL OF F IC IAL
S TATE ME N TS, AP P R OV IN G B ON D P U R C H AS E AGR EEMEN T, AN D P R OV ID IN G
F OR OT H E R MATT E R S R E L AT IN G T H E R E TO
Comments:
The S uccessor A gency to the Lynwood Redevelopment A gency approved the issuance of these
refunding bonds on J uly 19, 2022. The purpose of this item is to submit the preliminary official
statement for review and approval.
The S uccessor A gency to the C ity of Lynwood Redevelopment A gency (“S uccessor A gency”)
previ ously authorized the refunding of its 2011 and 2013 Tax A llocation B onds (“TA B s”) that are
outstanding and can be refi nanced for savi ngs. Tonight, the S uccessor A gency considers
approval of certain other i tems necessary to complete the refinancing transacti on, specifically the
forms of the P reliminary and F inal Official S tatements and the form of the B ond P urchase
A greement. (F IN)
Recommendation:
It is recommended S uccessor A gency B oard approve the attached Resolution No. 2022.X X X
entitled, “A RE S O L UTION OF THE S U C C E S S OR A G E NC Y TO THE LYNW O OD
RE D E V E L OP ME NT A GE NC Y C O NF IRMING THE IS S UA NC E OF RE F UND ING
B O ND S , A P P ROV ING P R E L IM INA RY A ND F INA L O F F IC IA L S TATE M E NTS ,
A P P RO V ING B OND P URC HA S E A GRE E ME N T, A N D P R OV ID IN G F O R O THE R
MATTE RS RE L ATING THE RE TO”
AD J OU R N ME N T
C ITY O F LYN W OO D A S S UC C E S S O R A GE NC Y TO THE LYNW OO D R E D E V E L O P M E NT
A G E NC Y M E E TINGS W IL L B E P O S TE D A S NE E D E D . THE NE X T M E E TING W IL L B E HE L D
IN THE C OUNC IL C HA M B E RS O F C ITY H A L L A NNE X , 11350 B UL L IS RO A D , C ITY OF
LYNW O OD , C A L IF ORNIA .
Lynwood Successor Agency - Page 2 of 115
A genda I tem # 4.
AGENDA STAF F REPORT
D AT E: October 4, 2022
TO: Honorable Mayor and Members of the C i ty C ouncil
AP P R OV E D B Y: E rnie Hernandez, C ity Manager
P R E PAR E D B Y: Harry Wong, D irector of F inance & A dministration
S U B J E C T: A P P ROV ING RE S OL UTION NO. 2022.X X X OF THE S UC C E S S OR A GE NC Y TO
THE LYNW O OD RE D E V E L O P M E N T A GE NC Y C O NF IRMING TH E IS S UA NC E OF
RE F UND ING B O N D S , A P P ROV ING P RE L IM INA RY A ND F INA L OF F IC IA L
S TATE ME NTS , A P P ROV ING B OND P URC HA S E A GRE E ME NT, A ND P RO V ID ING
F OR O THE R M ATTE RS RE L ATING THE RE TO
Recommendation:
It is recommended S uccessor A gency B oard approve the attached Resoluti on No. 2022.X X X entitled, “A
R E S OL UTIO N O F THE S UC C E S S O R A GE NC Y TO THE LYNW OOD RE D E V E L OP M E NT A GE NC Y
C O NF IRMING THE IS S U A N C E OF RE F UND ING B OND S , A P P ROV ING P RE L IMINA RY A ND F INA L
OF F IC IA L S TATE M E N TS , A P P ROV ING B OND P URC HA S E A GRE E M E NT, A ND P ROV ID ING F O R
OTHE R MATTE RS RE L ATING THE RE TO”
Background:
The S uccessor A gency to the Lynwood Redevelopment A gency approved the issuance of these refunding bonds
on J uly 19, 2022. The purpose of this item is to submit the prelimi nary official statement for review and approval.
The S uc c essor Agency to the C ity of Lynwood R edevelopment Agency (“S uccessor Agency”) previously authorized the
refunding of its 2011 and 2013 Tax Allocation B onds (“TAB s”) that are outstanding and can be refinanc ed for savings.
Tonight, the S uccessor Agency considers approval of certain other items necessary to complete the refinanc ing
transaction, s pec ific ally the forms of the Preliminary and Final O fficial S tatements and the form of the Bond P urchase
Agreement.
The S uccessor A gency was establi shed to wind down the business affairs of the former Lynwood Redevelopment
A gency (“F ormer A gency”) after redevelopment A gencies were dissolved in the S tate. The C ity C ouncil acts as
the Governing B oard of the S uccessor A gency, and as such is required to approve activities of the S uccessor
A gency. The F ormer R D A issued i ts (i) $18,480,000 Tax A llocation B onds (P roject A rea A –S ubordinate L ien),
2011 S eries A and its (ii) $5,660,000 Taxable Tax A llocation B onds (Housing P rojects–S ubordinate L ien), 2011
S eries B on March 9, 2011, and the S uccessor A gency i ssued its (iii) $9,785,000 i n L ocal Obli gati ons to the
C ounty of L os A ngeles Redevelopment Refunding A uthority as part of the Refunding A uthori ty’s $78,405,000 Tax
Lynwood Successor Agency - Page 3 of 115
A llocation refunding B onds, S eries 2013D , on D ecember 24, 2013 and i ts (iv) $810,000 in L ocal Obligations to
the C ounty of L os A ngeles Redevelopment Refunding A uthority as part of the Refunding A uthority’s $810,000 Tax
A llocation refunding B onds, S eries 2013F, on D ecember 24, 2013. The 2011 S eries A TA B s are currently
outstanding in the amount of $12,980,000, the 2011 S eries B TA B s are currently outstandi ng in the amount of
$3,810,000, the 2013 S eries A L ocal Obligation TA B s are currently outstanding i n the amount of $4,710,000, and
the 2013 S eri es B L ocal Obligation TA B s are currently outstandi ng in the amount of $170,000.
P ursuant to A ssembly B i ll No. X 1 26 (“A B 26”) and A ssembly B ill No. 1484 (“A B 1484”) (collecti vely referred to
herein as the “D issoluti on A ct”), the S uccessor A gency may cause the consoli dated refinancing or refunding of the
2011 and 2013 TA B s for debt service savings by issuing, or causing the issuance of, P roperty Tax Revenue
Refunding B onds, (the “Refunding B onds”) i n accordance with the D issolution A ct i ncludi ng, without li mitati on,
Health and S afety C ode S ections 34177.5 and 34180(b).
The S uccessor A gency’s Oversight B oard has also previously approved this transaction and the matter has been
sent to the C alifornia D epartment of F inance (“D OF ”), which is presently reviewing the proposed refunding TA B s.
A pproval of D OF is expected any time now, after whi ch tine the S uccessor A gency will be able to enter the
markets and sell the refunding bonds.
Discussion and Analysis:
P art of the refunding transaction calls for the publicati on of a document known as an Official S tatement. This
document is the primary di sclosure document related to the B onds, the S uccessor A gency and the C ity, and will
assist potential investors with maki ng an informed investment decision as to whether or not to buy the S uccessor
A gency’s bonds.
In addition, the B ond P urchase A greement is the contract by whi ch the Refunding TA B s will be sold to the
Underwriter on the day of the bond pricing. Once the investors have been identified, the Underwri ter will make an
offer to buy the S uccessor A gency’s bonds vi a the B ond P urchase A greement. B oth the Official S tatement and
the B ond P urchase A greement are in “near final” form, wi th updates to be made after the bond sale reflecting the
results of the pri ci ng.
Fiscal Impact:
The S uccessor A gency’s Municipal A dvisor, K osmont F inancial S ervices is still anticipating strong savings to be
shared among the affected taxi ng enti ti es and the C ity, currently estimated to be $16.6 million in gross savi ngs,
$11.5 million P resent Value savings, which translate into a Net P resent Value S avings (NP V %) of 52.9%.
Coordinated With:
C ity A ttorney
K osmont F inanci al S ervices, as Municipal A dvisor
Jones Hall, as B ond C ounsel
Ramirez & C o., as Underwriter
AT TAC H ME N T S:
Description
Lynwood S A R esolution Approving P OS
Lynwood S A P OS - 2022 TAR B s
Lynwood Bond Purchase Agreement TAR Bs
Lynwood Successor Agency - Page 4 of 115
SUCCESSOR AGENCY TO THE LYNWOOD REDEVELOPMENT AGENCY
RESOLUTION NO. 2022-____
A RESOLUTION OF THE SUCCESSOR AGENCY TO THE LYNWOOD REDEVELOPMENT
AGENCY CONFIRMING THE ISSUANCE OF REFUNDING BONDS, APPROVING
PRELIMINARY AND FINAL OFFICIAL STATEMENTS, APPROVING BOND PURCHASE
AGREEMENT, AND PROVIDING FOR OTHER MATTERS RELATING THERETO
WHEREAS, pursuant to Section 34172(a) of the California Health and Safety Code
(unless otherwise noted, all Section references hereinafter being to such Code), the Lynwood
Redevelopment Agency (the “Former Agency”) has been dissolved and no longer exists as a
public body, corporate and politic, and pursuant to Section 34173, the Successor Agency to the
Lynwood Redevelopment Agency (the “Successor Agency”) has become the successor entity to
the Former Agency;
WHEREAS, prior to the dissolution of the Former Agency, the Former Agency issued the
following series of bonds to provide moneys to finance redevelopment activities for Project A of
the Former Agency:
(i) Tax Allocation Bonds (Project Area A - Subordinate Lien), 2011 Series A (the
“2011 Series A Bonds”); and
(ii) Taxable Tax Allocation Bonds (Housing Project - Subordinate Lien), 2011 Series
B (the “2011 Series B Bonds” and together with the 2011 Series A Bonds, the
“2011 Bonds”);
and, subsequent to the dissolution of the Former Agency, the County of Los Angeles
Redevelopment Refunding Authority, on behalf of the Successor Agency (and others, as
to the Series 2013D Various Redevelopment Project Areas bonds), issued the following
series of bonds to provide moneys to refund obligations of the Former Agency incurred in
1999 for the Project A and Alameda Project Areas:
(iii) County of Los Angeles Redevelopment Refunding Authority Tax Allocation
Revenue Refunding Bonds Series 2013D Various Redevelopment Project Areas
(the “County Series 2013D Bonds”), which was supported in part by Successor to
Lynwood Redevelopment Agency Lynwood (Project A) Refunding Bonds (the
“2013 Project A Bonds”); and
(iv) County of Los Angeles Redevelopment Refunding Authority Tax Allocation
Revenue Refunding Bonds Series 2013F Lynwood Redevelopment Agency
Alameda Project Area (the “County Series 2013F Bonds”), which were supported
in full by Successor to Lynwood Redevelopment Agency Lynwood (Alameda)
Refunding Bonds (the “2013 Alameda Project Bonds” and together with the 2013
Project A Bonds, the “2013 Bonds”);
WHEREAS, the 2011 Series A Bonds, 2011 Series B Bonds, 2013 Project A Bonds and
2013 Alameda Project Bonds are collectively referred to herein as the “Prior Bonds”; and
Lynwood Successor Agency - Page 5 of 115
2
WHEREAS, Section 34177.5 authorizes the Successor Agency to issue refunding bonds
pursuant to Article 11 (commencing with Section 53580) of Chapter 3 of Part 1 of Division 2 of
Title 5 of the Government Code (the “Refunding Law”) for the purpose of achieving debt service
savings within the parameters set forth in Section 34177.5(a)(1) (the “Savings Parameters”);
WHEREAS, the Successor Agency, pursuant to Resolution No. 2022.005 (the “SA
Resolution”), adopted on July 19, 2022, approved the issuance by the Lynwood Redevelopment
Agency 2022 Tax Allocation Refunding Bonds in one or more series (the “Refunding Bonds”),
subject to the Savings Parameters being met, to refund the Prior Bonds;
WHEREAS, pursuant to Health and Safety Code Section 34179(q), commencing on and
after July 1, 2018, the County of Los Angeles, where more than 40 oversight boards were created
by the Dissolution Act, shall have five consolidated oversight boards each encompassing the five
supervisorial districts as so comprised on July 1, 2018;
WHEREAS, the Los Angeles County Second Supervisorial District Consolidated
Oversight Board (“Oversight Board”) has jurisdiction over the Successor Agency;
WHEREAS, the Oversight Board, by Resolution No. 2022.002 (the “OB Resolution”),
adopted July 19, 2022, approved the issuance of the Refunding Bonds by the Successor Agency,
and the OB Resolution, together with additional materials, were submitted to the California
Department of Finance for its approval of the OB Resolution and the issuance of the Refunding
Bonds;
WHEREAS, the Successor Agency and the Oversight Board, pursuant to the SA
Resolution and OB Resolution, respectively, each approved the issuance of the Refunding Bonds
as a single issue, or from time to time, in separate series, each of which may be issued on a
taxable or tax-exempt basis, as the Successor Agency shall determine is necessary to comply
with Federal tax laws;
WHEREAS, the Successor Agency, with the assistance of Jones Hall, A Professional Law
Corporation, as Disclosure Counsel, and Kosmont Financial Services, Inc., as Fiscal Consultant
and Municipal Advisor, has prepared a draft of the Official Statement for the Refunding Bonds
(the “Official Statement”), which contains, among other things, information regarding the
Refunding Bonds, the Former Agency and the Successor Agency, the preliminary form of which
is on file with the City Clerk of the City of Lynwood (the “City”), as the Secretary of the Successor
Agency;
WHEREAS, the Successor Agency, with the aid of its staff, has reviewed the Official
Statement and wishes at this time to approve its use and distribution as in the public interests of
the Successor Agency and applicable taxing entities;
NOW, THEREFORE, the Successor Agency to the Lynwood Redevelopment Agency
RESOLVES as follows:
1. Confirmation of Approval of Issuance of the Refunding Bonds. The Successor
Agency hereby confirms its actions in the SA Resolution authorizing and approving the issuance
and sale of the Refunding Bonds. Without limiting the foregoing, the Successor Agency hereby
reapproves the issuance of the Refunding Bonds as one or more series, each of which may be
issued on a taxable or tax-exempt basis, as the Successor Agency shall determine is necessary
to comply with Federal tax laws.
Lynwood Successor Agency - Page 6 of 115
3
2. Approval of Official Statement. The Successor Agency hereby approves the
preliminary Official Statement in substantially the form on file with the City Clerk of the City, as
the Secretary of the Successor Agency. Distribution of the preliminary Official Statement by the
Successor Agency and Samuel A. Ramirez & Co., Inc., as underwriter (the “Underwriter”), is
hereby approved and, prior to the distribution of the preliminary Official Statement, each of the
Mayor of the City of Lynwood (the “City”), as the Chair and presiding officer of the Successor
Agency, the City Manager of the City, as the chief administrative officer of the Successor Agency,
and the Finance Director of the City, as the chief financial officer of the Successor Agency, on
behalf of the Successor Agency (each, an “Authorized Officer”), each acting alone, are authorized
and directed, on behalf of the Successor Agency, to deem the preliminary Official Statement “final”
pursuant to Rule 15c2-12 under the Securities Exchange Act of 1934 (the “Rule”). The execution
of the final Official Statement, which shall include such changes and additions thereto deemed
advisable by the Authorized Officer executing the same (including, without limitation, the addition
of one or more series of Refunding Bonds, each of which may be issued on a taxable or tax-
exempt basis to the extent it is necessary to comply with Federal tax laws), and such information
permitted to be excluded from the preliminary Official Statement pursuant to the Rule, is hereby
approved for delivery to the purchasers of the Refunding Bonds, and each Authorized Officer,
acting alone, is authorized and directed to execute and deliver the final Official Statement for and
on behalf of the Successor Agency, to deliver to the Underwriter a certificate with respect to the
information set forth therein and to deliver to the Underwriter a Continuing Disclosure Certificate
substantially in the form appended to the final Official Statement.
3. Approval of Bond Purchase Agreement. The Successor Agency hereby approves
the Bond Purchase Agreement between the Underwriter and the Successor Agency, in
substantially the form on file with the City Clerk of the City, as the Secretary of the Successor
Agency. Each Authorized Officer, acting alone, is hereby authorized and directed, on behalf of
the Successor Agency, to execute and deliver the final form of the Bond Purchase Agreement,
which shall contain the pricing information for the Refunding Bonds; provided, that the Refunding
Bonds, viewed on an aggregate basis, must meet the Savings Parameters.
4. Official Actions. The Authorized Officers and any and all other officers of the
Successor Agency are hereby authorized and directed, for and in the name and on behalf of the
Successor Agency, to do any and all things and take any and all actions, which they, or any of
them, may deem necessary or advisable in connection with the issuance, sale and delivery of the
Refunding Bonds. Whenever in this Resolution any officer of the Successor Agency is directed
to execute or countersign any document or take any action, such execution, countersigning or
action may be taken on behalf of such officer by any person designated by such officer to act on
his or her behalf in the case such officer is absent or unavailable.
5. Effective Date. This Resolution shall take effect from and after the date of approval
and adoption thereof.
Lynwood Successor Agency - Page 7 of 115
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PASSED, APPROVED AND ADOPTED at a regular meeting this _____ day of _____
2022.
Jorge Casanova, Mayor
ATTEST:
Maria Quinonez, City Clerk
Ernie Hernandez, City Manager
APPROVED AS TO FORM:
Noel Tapia, City Attorney
APPROVED AS TO CONTENT:
Ernie Hernandez, City Manager
[Insert City Clerk certification page]
Lynwood Successor Agency - Page 8 of 115
Jones Hall Draft 9.27.22
PRELIMINARY OFFICIAL STATEMENT DATED ________, 2022
NEW ISSUE—BOOK-ENTRY RATINGS: S&P (Insured): “__”
S&P (Underlying): “__”
See “RATINGS”
In the opinion of Bond Counsel, interest on the 2022 Bonds is exempt from California personal income taxes. Interest on the 2022 Bonds
is not intended to be excluded from gross income for federal income tax purposes. See “TAX MATTERS” herein.
$___________*
SUCCESSOR AGENCY TO THE
LYNWOOD REDEVELOPMENT AGENCY
2022 TAX ALLOCATION REFUNDING BONDS
(FEDERALLY TAXABLE)
Dated: Delivery Date Due: September 1, as shown on the inside front cover
Purpose. The Successor Agency to the Lynwood Redevelopment Agency (the “Successor Agency”) is issuing the above-
captioned bonds (the “2022 Bonds”) to (a) refund certain prior bonds payable from tax increment revenue generated in the Project
Areas (defined herein), and (b) pay the costs of issuance of the 2022 Bonds, including premiums for the bond insurance policy
and the reserve policy, as applicable.
Payments; Book-Entry. The 2022 Bonds will be delivered as fully registered bonds, registered in the name of Cede & Co.
as nominee of The Depository Trust Company (“DTC”), and will be available to ultimate purchasers in the denomination of $5,000
or any integral multiple thereof, under the book-entry system maintained by DTC. Beneficial Owners will not be entitled to receive
delivery of bonds representing their ownership interest in the 2022 Bonds. Interest on the 2022 Bonds is payable on March 1 and
September 1 of each year, commencing March 1, 2023. Payment of the principal of, and interest on, the 2022 Bonds will be
made by U.S. Bank Trust Company, National Association, as trustee (the “Trustee”), to DTC for subsequent disbursement to
DTC participants, so long as DTC or its nominee remains the registered owner of the 2022 Bonds. See “THE 2022 BONDS.”
Security. The 2022 Bonds are payable from and secured by a pledge of Tax Revenues (defined herein) to be derived from
the Project Areas and moneys in certain funds and accounts established under the Indenture of Trust, dated as of November 1,
2022 (the “Indenture”), by and between the Successor Agency and the Trustee, as further described in this Official Statement.
See “SECURITY FOR THE 2022 BONDS.”
Redemption. The 2022 Bonds are subject to redemption prior to maturity. See “THE 2022 BONDS – Redemption.”
Municipal Bond Insurance. The Successor Agency has applied for a municipal bond insurance policy, and will make a
determination regarding bond insurance at the time of pricing of the 2022 Bonds.
Debt Service Reserve Account. The Successor Agency will fund a debt service reserve account in the amount of the
Reserve Requirement (defined herein) for the 2022 Bonds. It is anticipated that the bond insurer will provide a municipal bond
reserve insurance policy in the amount of the Reserve Requirement. See “SECURITY FOR THE 2022 BONDS – Debt Service
Reserve Account; Reserve Policy.”
Limited Obligations. The 2022 Bonds are special limited obligations of the Successor Agency and are secured by an
irrevocable pledge of, and are payable as to principal and interest from, Tax Revenues and the other funds described in this
Official Statement. The 2022 Bonds and the interest thereon are not a debt of the City of Lynwood (the “City”), the County of Los
Angeles (the “County”), the State of California (the “State”) or any of their political subdivisions, except the Successor Agency,
and none of the City, the County, the State or any of their political subdivisions except the Successor Agency is liable thereon.
The 2022 Bonds and the interest thereon are not payable out of any funds or properties other than those set forth in the Indenture.
Neither the members of the Successor Agency, the Los Angeles County Second District Consolidated Oversight Board, the
County Board of Supervisors nor any persons executing the 2022 Bonds are liable personally on the 2022 Bonds.
The 2022 Bonds are offered, when, as and if issued, subject to the approval of Jones Hall, A Professional Law Corporation,
San Francisco, Bond Counsel to the Successor Agency. Jones Hall, A Professional Law Corporation, is also acting as Disclosure
Counsel to the Successor Agency. Certain legal matters will be passed on for the Successor Agency by the City Attorney, and
for the Underwriter by Stradling Yocca Carlson & Rauth, a Professional Corporation, San Francisco, California, as Underwriter’s
Counsel. It is anticipated that the 2022 Bonds will be available for delivery through the facilities of DTC on or about ______,
2022.
[Ramirez and Co., Inc Logo]
The date of this Official Statement is __________ ___, 2022.
____________________
* Preliminary; subject to change
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Lynwood Successor Agency - Page 9 of 115
MATURITY SCHEDULE
$____________
SUCCESSOR AGENCY TO THE
LYNWOOD REDEVELOPMENT AGENCY
2022 TAX ALLOCATION REFUNDING BONDS
(FEDERALLY TAXABLE)
Maturity Date
(September 1)
Principal
Amount
Interest
Rate
Yield
CUSIP†
(Base _____)
$ ___________ Term Bonds due September 1, ____; Yield: _____%; CUSIP†: ______
† CUSIP® is a registered trademark of the American Bankers Association. CUSIP Global Services (CGS) is managed on
behalf of the American Bankers Association by FactSet Research Systems Inc. Copyright (c) 2022 CUSIP Global Services.
All rights reserved. CUSIP® data herein is provided by CUSIP Global Services. This data is not intended to create a
database and does not serve in any way as a substitute for the CGS database. CUSIP® numbers are provided for
convenience of reference only. None of the Authority, the Underwriter or their agents or counsel take any responsibility for
the accuracy of such numbers.
Lynwood Successor Agency - Page 10 of 115
SUCCESSOR AGENCY TO THE LYNWOOD REDEVELOPMENT AGENCY
(LOS ANGELES COUNTY, CALIFORNIA)
CITY COUNCIL
Jorge Casanova, Mayor
José Luis Solache, Mayor Pro Tem
Oscar Flores, Councilmember
Marisela Santana, Councilmember
Rita Soto, Councilmember
CITY/SUCCESSOR AGENCY STAFF
Ernie Hernandez, City Manager
Harry Wong, Finance Director
Gabriela Camacho, Treasurer
Noel Tapia, City Attorney
Maria Quiñonez, City Clerk
SPECIAL SERVICES
Municipal Advisor and Fiscal Consultant
Kosmont Financial Services, Inc.
Manhattan Beach, California
Bond Counsel and Disclosure Counsel
Jones Hall, A Professional Law Corporation
San Francisco, California
Trustee and Escrow Agent
U.S. Bank Trust Company, National Association
Los Angeles, California
Verification Agent
[Verification Agent Name]
_________, __________
Lynwood Successor Agency - Page 11 of 115
[INSERT MAP OF PROJECT AREAS]
Lynwood Successor Agency - Page 12 of 115
i
TABLE OF CONTENTS
Page Page
INTRODUCTION .................................................... 1
Authority and Purpose ........................................ 1
The City and the Successor Agency .................. 2
Security for the 2022 Bonds ............................... 3
Adjustments to Tax Increment ........................... 3
Municipal Bond Insurance .................................. 4
Debt Service Reserve Account; Reserve
Policy ............................................................. 4
The Project Areas .............................................. 4
Limited Obligation .............................................. 4
Senior Debt; Parity Debt .................................... 5
Professionals Involved in the Offering ................ 5
Further Information ............................................. 5
REFUNDING PLAN ............................................... 6
Refunding of the Prior Bonds ............................. 6
Verification of Mathematical Accuracy ............... 6
Estimated Sources and Uses of Funds .............. 7
Debt Service Schedule ....................................... 8
THE 2022 BONDS ................................................. 9
Authority for Issuance ........................................ 9
Description of the 2022 Bonds ........................... 9
Redemption ...................................................... 10
Senior Debt, Parity Debt and Subordinate
Debt ............................................................. 12
THE DISSOLUTION ACT .................................... 13
General ............................................................ 13
Recognized Obligation Payment Schedules .... 14
SECURITY FOR THE 2022 BONDS ................... 18
Pledge of Tax Revenues .................................. 18
Definition of Tax Revenues .............................. 19
Recognized Obligation Payment Schedule
(ROPS) Covenant ........................................ 19
Flow of Funds Under the Indenture .................. 21
Debt Service Reserve Account; Reserve
Policy ........................................................... 22
Pass-Through Payments .................................. 23
Limited Obligation ............................................ 24
PROPERTY TAXATION IN CALIFORNIA ........... 25
Property Tax Collection Procedures ................ 25
Unitary Property ............................................... 26
Article XIIIA of the State Constitution ............... 27
Appropriations Limitation - Article XIIIB ............ 28
Proposition 87 .................................................. 29
Appeals of Assessed Values ............................ 29
Propositions 218 and 26 .................................. 30
Future Initiatives .............................................. 30
THE SUCCESSOR AGENCY .............................. 31
The Dissolution Act .......................................... 31
Successor Agency Powers .............................. 31
City Audited Financial Statements ................... 32
THE PROJECT AREAS ....................................... 32
General ............................................................ 32
Land Use Types .............................................. 33
Assessed Valuation ......................................... 36
Recent and Potential Future Development in
the Project Areas ......................................... 38
Major Property Owners .................................... 38
Assessment Appeals ....................................... 40
Projected Tax Revenues and Debt Service
Coverage ..................................................... 42
RISK FACTORS .................................................. 46
Recognized Obligation Payment Schedule ..... 46
Challenges to Dissolution Act .......................... 46
Reduction in Taxable Value ............................. 47
Risks to Real Estate Market ............................ 48
Concentration of Property Ownership ............. 48
Reduction in Inflationary Rate ......................... 48
Development Risks .......................................... 49
Levy and Collection of Taxes .......................... 49
Bankruptcy and Foreclosure ............................ 49
Projected Tax Revenues ................................. 49
Natural Calamities ........................................... 50
Hazardous Substances ................................... 50
Potential Impact of Climate Change ................ 51
COVID-19 Pandemic ....................................... 51
Cyber Security ................................................. 51
Changes in the Law ......................................... 52
Loss of Tax-Exemption ..... Error! Bookmark not
defined.
Secondary Market ........................................... 52
TAX MATTERS .................................................... 52
RATINGS ............................................................. 52
CONTINUING DISCLOSURE .............................. 53
CONCLUDING INFORMATION .......................... 53
Underwriting .................................................... 53
Municipal Advisor ............................................ 54
Legal Matters ................................................... 54
No Litigation ..................................................... 54
Miscellaneous .................................................. 54
APPENDIX A – SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE
APPENDIX B – FISCAL CONSULTANT’S REPORT
APPENDIX C – SUPPLEMENTAL INFORMATION – CITY OF LYNWOOD AND COUNTY OF LOS ANGELES
APPENDIX D – FORM OF CONTINUING DISCLOSURE CERTIFICATE
APPENDIX E – CITY OF LYNWOOD ANNUAL COMPREHENSIVE FINANCIAL REPORT FOR FISCAL
YEAR ENDED JUNE 30, 2021
APPENDIX F – FORM OF BOND COUNSEL OPINION
APPENDIX G – BOOK-ENTRY ONLY SYSTEM
Lynwood Successor Agency - Page 13 of 115
GENERAL INFORMATION ABOUT THIS OFFICIAL STATEMENT
No Offering May Be Made Except by this Official Statement. No dealer, broker, salesperson or other person has been
authorized to give any information or to make any representations with respect to the 2022 Bonds other than as contained in this
Official Statement, and if given or made, such other information or representation must not be relied upon as having been authorized.
No Unlawful Offers or Solicitations. This Official Statement does not constitute an offer to sell or the solicitation of an
offer to buy in any state in which such offer or solicitation is not authorized or in which the person making such offer or solicitation is
not qualified to do so or to any person to whom it is unlawful to make such offer or solicitation.
Effective Date. This Official Statement speaks only as of its date, and the information and expressions of opinion contained
in this Official Statement are subject to change without notice. Neither the delivery of this Official Statement nor any sale of the 2022
Bonds will, under any circumstances, create any implication that there has been no change in the affairs of the Successor Agency or
the Project Areas since the date of this Official Statement.
Use of this Official Statement. This Official Statement is submitted in connection with the sale of the 2022 Bonds referred
to in this Official Statement and may not be reproduced or used, in whole or in part, for any other purpose. This Official Statement is
not a contract with the purchasers of the 2022 Bonds.
Preparation of this Official Statement. The information contained in this Official Statement has been obtained from
sources that are believed to be reliable, but this information is not guaranteed as to accuracy or completeness.
The Underwriter has provided the following sentence for inclusion in this Official Statement: The Underwriter has reviewed
the information in this Official Statement in accordance with, and as part of, their responsibilities to investors under the federal
securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or
completeness of such information.
Document References and Summaries. All references to and summaries of the Indenture or other documents contained
in this Official Statement are subject to the provisions of those documents and do not purport to be complete statements of those
documents.
Stabilization of and Changes to Offering Prices. The Underwriter may overallot or take other steps that stabilize or
maintain the market price of the 2022 Bonds at a level above that which might otherwise prevail in the open market. If commenced,
the Underwriter may discontinue such market stabilization at any time. The Underwriter may offer and sell the 2022 Bonds to certain
dealers, dealer banks and banks acting as agent at prices lower than the public offering prices stated on the cover page of this Official
Statement, and those public offering prices may be changed from time to time by the Underwriter.
Bonds are Exempt from Securities Laws Registration. The issuance and sale of the 2022 Bonds have not been
registered under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, in reliance upon
exemptions for the issuance and sale of municipal securities provided under Section 3(a)(2) of the Securities Act of 1933 and Section
3(a)(12) of the Securities Exchange Act of 1934.
Estimates and Projections. Certain statements included or incorporated by reference in this Official Statement constitute
“forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 21E of
the United States Securities Exchange Act of 1934, as amended, and Section 27A of the United States Securities Act of 1933, as
amended. Such statements are generally identifiable by the terminology used such as “plan,” “expect,” “estimate,” “budget” or other
similar words.
THE ACHIEVEMENT OF CERTAIN RESULTS OR OTHER EXPECTATIONS CONTAINED IN SUCH FORWARD-
LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS WHICH MAY
CAUSE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS DESCRIBED TO BE MATERIALLY DIFFERENT FROM ANY
FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING
STATEMENTS. THE SUCCESSOR AGENCY DOES NOT PLAN TO ISSUE ANY UPDATES OR REVISIONS TO THOSE
FORWARD-LOOKING STATEMENTS IF OR WHEN ITS EXPECTATIONS, OR EVENTS, CONDITIONS OR CIRCUMSTANCES ON
WHICH SUCH STATEMENTS ARE BASED OCCUR.
Website. The City maintains an Internet website, but the information on the website is not incorporated in this Official
Statement.
Lynwood Successor Agency - Page 14 of 115
1
OFFICIAL STATEMENT
$___________*
SUCCESSOR AGENCY TO THE LYNWOOD
REDEVELOPMENT AGENCY
2022 TAX ALLOCATION REFUNDING BONDS
(FEDERALLY TAXABLE)
This Official Statement, including the cover page, the inside cover page and the
appendices hereto, is provided to furnish information in connection with the sale by the Successor
Agency to the Lynwood Redevelopment Agency (the “Successor Agency”) of its 2022 Tax
Allocation Refunding Bonds (Federally Taxable) (the “2022 Bonds”).
INTRODUCTION
Authority and Purpose
The Successor Agency is issuing the 2022 Bonds pursuant to authority granted by Part 1
(commencing with Section 33000) and Part 1.85 of Division 24 (commencing with Section 34170)
of the California Health and Safety Code (the “Law”), Article 11 (commencing with Section 53580)
of Chapter 3 of Part 1 of Division 2 of Title 5 of the California Government Code (the “Refunding
Law”) and an Indenture of Trust dated as of November 1, 2022 (the “Indenture”) by and between
the Successor Agency and U.S. Bank Trust Company, National Association, as trustee (the
“Trustee”). See “THE 2022 BONDS – Authority for Issuance.”
The Successor Agency will use a portion of the proceeds of the 2022 Bonds to defease
and redeem/prepay all amounts outstanding with respect to the following bonds issued by the
former Lynwood Redevelopment Agency (the “Former Agency”) or the Successor Agency, as
applicable (collectively, the “Prior Bonds”):
(i) Tax Allocation Bonds (Project Area A - Subordinate Lien), 2011 Series A (the
“2011 Series A Bonds”);
(ii) Taxable Tax Allocation Bonds (Housing Project - Subordinate Lien), 2011 Series
B (the “2011 Series B Bonds” and together with the 2011 Series A Bonds, the
“2011 Bonds”);
(iii) Successor to the Lynwood Redevelopment Agency, Tax Allocation Refunding
Bonds (Project Area A), Series 2013A (the “2013 Project A Bonds”), which
supported in part the County of Los Angeles Redevelopment Refunding Authority
Tax Allocation Revenue Refunding Bonds Series 2013D (the “County Series
2013D Bonds”); and
(iv) Successor to the Lynwood Redevelopment Agency, (Alameda Project Area), Tax
Allocation Refunding Bonds, Series 2013A (the “2013 Alameda Project Bonds”
and together with the 2013 Project A Bonds, the “2013 Bonds”), which wholly
supported the County of Los Angeles Redevelopment Refunding Authority Tax
Lynwood Successor Agency - Page 15 of 115
2
Allocation Revenue Refunding Bonds Series 2013F (the “County Series 2013F
Bonds”).
The proceeds of the Prior Bonds were used to finance and/or refinance certain
redevelopment activities of benefit to property within the respective former Project Area A or
Alameda Project Area of the Former Agency (the “Project Areas”). The remaining proceeds of
the 2022 Bonds will be used to pay the costs of issuing the 2022 Bonds, including premiums for
a municipal bond insurance policy and reserve surety policy (if applicable), as described below.
The City and the Successor Agency
City and County. The City of Lynwood (the “City”) is a 4.8 square mile community located
in the Los Angeles Basin, midway between downtown Los Angeles and Long Beach. The City
was incorporated in 1921 under the general laws of the State of California (the “State”). The City
is situated approximately 13 miles south of downtown Los Angeles at the intersection of two major
freeways. The local economy represents a diverse blend of industrial, commercial, agricultural
and residential development. The City covers 4.9 square miles and serves a population of 66,723.
The County of Los Angeles (the “County”) is located along the southern coast of
California. Los Angeles County covers about 4,080 square miles. It measures approximately 75
miles from north to south and 70 miles from east to west. The county includes Santa Catalina
and San Clemente Islands and is bordered by the Pacific Ocean and Ventura, San Bernardino
and Orange Counties. The County’s sheriff’s division provides fire and police services in the City.
For additional demographic and statistical information on the City and the County, see
“APPENDIX C – Supplemental Information – City of Lynwood and County of Los Angeles.”
Former Agency. The Former Agency was a redevelopment agency with all of the powers
vested in such entities under the Community Redevelopment Law (the “Redevelopment Law”).
The City Council of the City was the governing board of the Former Agency.
Dissolution Act. On June 29, 2011, Assembly Bill No. 1X 26 (“AB 1X 26”) was enacted,
together with a companion bill, Assembly Bill No. 1X 27 (“AB 1X 27”). The provisions of AB 1X
26 provided for the dissolution of all redevelopment agencies statewide as of February 1, 2012.
The provisions of AB 1X 27 permitted redevelopment agencies to avoid such dissolution by the
payment of certain amounts. A lawsuit was brought in the California Supreme Court, California
Redevelopment Association, et al., v. Matosantos, et al., 53 Cal. 4th 231 (Cal. Dec. 29, 2011),
challenging the constitutionality of AB 1X 26 and AB 1X 27. On December 19, 2012, the California
Supreme Court largely upheld AB 1X 26, invalidated AB 1X 27, and held that AB 1X 26 may be
severed from AB 1X 27 and enforced independently. As a result of AB 1X 26 and the decision of
the California Supreme Court in the Matosantos case, as of February 1, 2012, all redevelopment
agencies in the State were dissolved, including the Former Agency, and successor agencies were
designated as successor entities to the former redevelopment agencies to expeditiously wind
down the affairs of the former redevelopment agencies.
The primary provisions enacted by AB 1X 26 relating to the dissolution and wind down of
former redevelopment agency affairs are found in Parts 1.8 (commencing with Section 34161)
and 1.85 (commencing with Section 34170) of Division 24 of the Health and Safety Code of the
State, as amended on June 27, 2012 by Assembly Bill No. 1484 (“AB 1484”), and further
amended on September 22, 2015 by Senate Bill No. 107 (“SB 107”) (as amended from time to
time, the “Dissolution Act”).
Lynwood Successor Agency - Page 16 of 115
3
Successor Agency. In accordance with Section 34173 of the Dissolution Act, the City
Council adopted a resolution pursuant to which it formally elected to act as the successor agency
to the Former Agency. Subdivision (g) of Section 34173 of the Dissolution Act, added by AB
1484, expressly affirms that the Successor Agency is a separate public entity and legal entity from
the City, that the two entities shall not merge, and that the liabilities of the Former Agency are not
transferred to the City nor will the assets of the Former Agency become assets of the City.
Security for the 2022 Bonds
The Dissolution Act authorizes the Successor Agency to issue refunding bonds secured
by a pledge of, and lien on, property tax revenues (as further defined herein, “Tax Revenues”)
deposited with respect to the Project Areas from time to time in the Redevelopment Property Tax
Trust Fund (the “Redevelopment Property Tax Trust Fund” or “RPTTF”) established and held
by the Los Angeles County Auditor-Controller (the “County Auditor-Controller”). See
“SECURITY FOR THE 2022 BONDS – Definition of Tax Revenues” for the complete definition of
“Tax Revenues.”
The Dissolution Act requires the County Auditor-Controller to determine the amount of
property taxes that would have been allocated to the Former Agency from the Project Areas had
the Former Agency not been dissolved, using current assessed values on the last equalized roll,
and to deposit that amount in the Redevelopment Property Tax Trust Fund. The Dissolution Act
provides that any bonds authorized thereunder to be issued by the Successor Agency will be
considered indebtedness incurred by the dissolved Former Agency, with the same lien priority
and legal effect as if the bonds had been issued prior to the effective date of AB 1X 26, in full
conformity with the applicable provisions of the Redevelopment Law that existed prior to that date,
and will be included in the Successor Agency’s Recognized Obligation Payment Schedules (see
“SECURITY FOR THE 2022 BONDS – Recognized Obligation Payment Schedule (ROPS)
Covenant”).
The Dissolution Act further provides that property tax revenues pledged to any bonds
authorized under the Dissolution Act, such as the 2022 Bonds, are taxes allocated to the
Successor Agency pursuant to the provisions of the Redevelopment Law and the State
Constitution. Property tax revenues will be allocated to the Successor Agency on a semi-annual
basis based on a Recognized Obligation Payment Schedule (“ROPS”) submitted by the
Successor Agency to the Los Angeles County Second District Consolidated Oversight Board (the
“Oversight Board”), which has replaced an oversight board previously established solely for the
Successor Agency, and the State Department of Finance (the “DOF”). The County Auditor-
Controller will distribute funds from the RPTTF for each six-month period in the order specified in
the Dissolution Act. See “THE DISSOLUTION ACT” and “SECURITY FOR THE 2022 BONDS –
Recognized Obligation Payment Schedule (ROPS) Covenant.”
The Successor Agency has no power to levy property taxes and must rely on the allocation
of taxes as described above. See “RISK FACTORS.”
Adjustments to Tax Increment
The tax increment revenues of the Project Areas are subject to certain adjustments.
Pursuant to 1994 legislation, AB 1290, certain affected taxing entities are entitled to receive
payment of a portion of the tax increment revenues generated in the Project Areas (the “Statutory
Pass-Through Payments”). Statutory Pass-Through Payments are only due on increases in
Lynwood Successor Agency - Page 17 of 115
4
assessed value above an adjusted assessed value base, and only those taxing entities which
have not entered into negotiated pass-through agreements with the Successor Agency are
eligible to receive such payments. Under the Dissolution Act, the County Auditor-Controller, and
not the Successor Agency, is responsible for calculating and disbursing Statutory Pass-Through
Payments to such eligible taxing agencies. For additional information on the Statutory Pass-
Through Payments, the Senior Pass-Through Agreement (defined herein) and the negotiated
pass-through agreements with the school districts, see “SECURITY FOR THE 2022 BONDS
– Pass-Through Payments.”
Municipal Bond Insurance
The Successor Agency has applied for a municipal bond insurance policy, and will make
a determination regarding bond insurance at the time of pricing of the 2022 Bonds.
Debt Service Reserve Account; Reserve Policy
The Successor Agency will fund a debt service reserve account (the “Debt Service
Reserve Account”) in the amount of the Reserve Requirement (defined herein) for the 2022
Bonds. It is anticipated that the bond insurer providing the municipal bond insurance policy (the
“Bond Insurer”) will provide a municipal bond reserve insurance policy (the “Reserve Policy”) in
the amount of the Reserve Requirement. See “SECURITY FOR THE 2022 BONDS – Debt
Service Reserve Account; Reserve Policy.”
The Project Areas
The Successor Agency receives tax increment from two former redevelopment project
Areas: Project Area A and Alameda Project Area. Project Area A was approved by the City
Council in 1973 and currently consists of approximately 734 acres, representing 24% of the total
incorporated area within the City. Property was added to the Redevelopment Project by
annexations in 1981 and 1989. The Alameda Project Area was approved by the City Council in
1975 and encompasses approximately 170 acres, representing approximately 6% of the total
incorporated area of the City, and is made up almost entirely of industrial land uses.
The Dissolution Act provides that formerly applicable time and financial limits no longer
apply to the repayment of enforceable obligations of the Successor Agency (which includes
bonded indebtedness) that are on a Successor Agency’s DOF-approved ROPS. See “THE
SUCCESSOR AGENCY – The Dissolution Act” below.
Limited Obligation
The 2022 Bonds are special limited obligations of the Successor Agency and are secured
by an irrevocable pledge of and lien on, and are payable as to principal and interest from Tax
Revenues and certain other funds pledged under the Indenture. The 2022 Bonds and the interest
thereon are not a debt of the City, the County, the State or any of their political subdivisions except
the Successor Agency, and none of the City, the County, the State nor any of their political
subdivisions (except the Successor Agency) are liable thereon. The 2022 Bonds and the interest
thereon are not payable out of any funds or properties other than those set forth in the Indenture.
No member, officer, agent, or employee of the Successor Agency, the Oversight Board, the
County Board of Supervisors or any person executing the 2022 Bonds is liable personally on the
2022 Bonds by reason of their issuance.
Lynwood Successor Agency - Page 18 of 115
5
Senior Debt; Parity Debt
Senior Debt. With the refunding of all of the Prior Bonds, no debt will be outstanding that
is payable from the Tax Revenues on a basis that is senior to the payment of the 2022 Bonds,
and the Indenture prohibits the future issuance of any senior obligations.
Parity Debt. The Indenture defines “Parity Debt” as any loan, bonds, notes, advances
or indebtedness payable from Tax Revenues on a parity with the 2022 Bonds as authorized by
the Indenture. Upon the issuance of the 2022 Bonds, there will be no Parity Debt outstanding.
However, the Indenture authorizes the issuance of Parity Debt by the Successor Agency in the
future, subject to the conditions set forth in the Indenture, which include the limitation that Parity
Debt can only be issued to refund the 2022 Bonds or other future Parity Debt and the condition
that such Parity Debt shall be issued for savings in accordance with the requirements of Section
34177.5(a) of the Dissolution Act (or any comparable provision of any successor statute). See
“APPENDIX A – Summary of Certain Provisions of the Indenture.”
Professionals Involved in the Offering
Kosmont Financial Services, Inc., Manhattan Beach, California, has served as municipal
advisor to the Successor Agency and has advised the Successor Agency with respect to the
financial structure of the refinancing and as to other financial aspects of the transaction. Kosmont
Financial Services, Inc., also serves the Successor Agency as fiscal consultant (the “Fiscal
Consultant”) and advised the Successor Agency as to the taxable values and Tax Revenues
projected to be available to pay debt service on the 2022 Bonds as referenced in this Official
Statement. The report prepared by the Fiscal Consultant is referred to as the “Fiscal
Consultant’s Report” and is attached as APPENDIX B.
U.S. Bank Trust Company, National Association, Los Angeles, California, is serving as
Trustee with respect to the 2022 Bonds.
All proceedings in connection with the issuance of the 2022 Bonds are subject to the
approval of Jones Hall, A Professional Law Corporation, San Francisco, California, Bond Counsel
to the Successor Agency. Jones Hall is also serving as Disclosure Counsel to the Successor
Agency. Certain legal matters will be passed on for the Successor Agency by the City Attorney,
and for the Underwriter by Stradling Yocca Carlson & Rauth, a Professional Corporation, San
Francisco, California.
Payment of the fees and expenses of the Municipal Advisor, Fiscal Consultant, Trustee,
Bond Counsel, Disclosure Counsel and Underwriter’s Counsel is contingent upon the sale and
delivery of the 2022 Bonds.
Further Information
Brief descriptions of the Redevelopment Law, the Dissolution Act, the Refunding Law, the
2022 Bonds, the Indenture, the Successor Agency, the Former Agency and the City are included
in this Official Statement. Such descriptions and information do not purport to be comprehensive
or definitive. All references in this Official Statement to the Redevelopment Law, the Dissolution
Act, the Refunding Law, the 2022 Bonds, the Indenture, the Constitution and the laws of the State
as well as the proceedings of the Former Agency, the Successor Agency, and the City are
qualified in their entirety by reference to such documents and laws. References in this Official
Statement to the 2022 Bonds are qualified in their entirety by the form included in the Indenture
Lynwood Successor Agency - Page 19 of 115
6
and by the provisions of the Indenture. Capitalized terms used in this Official Statement and not
otherwise defined shall have the meanings given to such terms as set forth in the Indenture. See
“APPENDIX A – Summary of Certain Provisions of the Indenture.”
REFUNDING PLAN
Refunding of the Prior Bonds
Pursuant to an Escrow Agreement, dated as of November 1, 2022 (the “Escrow
Agreement”), between the Successor Agency and U.S. Bank Trust Company, National
Association, as trustee for the Prior Bonds and escrow agent (in such capacity, the “Escrow
Agent”), the Successor Agency will deliver a portion of the proceeds of the 2022 Bonds, along
with other available amounts, to the Escrow Agent for deposit in an escrow fund created under
the Escrow Agreement (the “Escrow Fund”).
The Escrow Agent will hold a portion of the amounts in the Escrow Fund in cash
(uninvested) and a portion invested in federal securities and use the amounts to defease and
discharge all of the outstanding 2011 Bonds and 2013 Bonds. The 2011 Bonds will be optionally
redeemed on or about 30 days following the pricing date for the 2022 Bonds. The 2013 Bonds
maturing on September 1, 2023 will be paid as due on September 1, 2023, and the 2013 Bonds
maturing on and after September 1, 2024 will be optionally redeemed on their first optional
redemption date of September 1, 2023. The defeasance and optional redemption of the 2013
Bonds will result in the defeasance and optional redemption of a corresponding portion of the
County Series 2013D Bonds and all of the County Series 2013F Bonds.
The 2011 Bonds and the 2013 Bonds being optionally redeemed will be redeemed at a
redemption price equal to 100% of the outstanding principal amount thereof, together with
accrued interest thereon to the applicable date of redemption. The moneys and securities held
by the Escrow Agent pursuant to the Escrow Agreement are pledged solely to the amounts due
and payable by the Successor Agency for the 2011 Bonds and 2013 Bonds. Neither the funds
deposited with the Escrow Agent for such purpose, nor any interest thereon will be available for
the payment of debt service on the 2022 Bonds.
Verification of Mathematical Accuracy
[Verification Agent], ______, ________, as verification agent (the “Verification Agent”),
will deliver a report on the mathematical accuracy of certain computations, contained in schedules
provided to them which were prepared by or for the Successor Agency, relating to (1) the
sufficiency of the anticipated receipts from the amounts deposited pursuant to the Escrow
Agreement to pay, when due, the principal and interest on the Prior Bonds to and including their
applicable redemption dates, and (2) the yield on the 2022 Bonds, and federal securities to be
purchased pursuant to the Escrow Agreement.
Assuming the accuracy of the Verification Agent’s computations, as a result of the deposit
and application of funds as provided in the Escrow Agreement, the obligations of the Successor
Agency with respect to the Prior Bonds will be discharged. The Verification Agent will restrict its
procedures to examining the arithmetical accuracy of certain computations and will not make any
study or evaluation of the assumptions and information upon which the computations are based
and, accordingly, will not express an opinion on the data used, the reasonableness of the
assumptions, or the achievability of the forecasted outcome.
Lynwood Successor Agency - Page 20 of 115
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The report of the Verification Agent will include the statement that the scope of their
engagement is limited to verifying mathematical accuracy, of the computations contained in such
schedules provided to it, and that it has no obligation to update their report because of events
occurring, or data or information coming to its attention, subsequent to the date of its report.
Estimated Sources and Uses of Funds
The estimated sources and uses of funds related to the 2022 Bonds are summarized
below.
Sources:
Principal Amount of 2022 Bonds $
Plus/Less: [Net] Original Issue Premium/Discount
Plus: Prior Bonds - Available Funds
Total Sources $
Uses:
Refunding of Prior Bonds
Costs of Issuance(1)
Total Uses $
_______________
(1) Costs of Issuance include fees and expenses for Bond Counsel, Disclosure Counsel, Municipal Advisor, Fiscal
Consultant, and the Trustee, Underwriter’s discount, printing expenses, rating fee, and other costs related to the
issuance of the 2022 Bonds.
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Debt Service Schedule
The following table shows the annual debt service schedule for the 2022 Bonds, assuming
no optional redemption.
Bond Year
Ending Sept. 1 Principal Interest
Total
Debt Service
Totals
_____________
Source: Underwriter.
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THE 2022 BONDS
Authority for Issuance
The Dissolution Act authorizes the issuance of refunding bonds to provide savings to the
Successor Agency, provided that (i) the total interest cost to maturity on the refunding bonds or
other indebtedness plus the principal amount of the refunding bonds or other indebtedness does
not exceed the total remaining interest cost to maturity on the bonds or other indebtedness to be
refunded plus the remaining principal of the bonds or other indebtedness to be refunded, and
(ii) the principal amount of the refunding bonds or other indebtedness does not exceed the amount
required to defease the refunded bonds or other indebtedness, to establish customary debt
service reserves, and to pay related costs of issuance.
The issuance of the 2022 Bonds and the execution and delivery of the Indenture were
authorized by the Successor Agency pursuant to a resolution adopted on July 19, 2022 (the
“Resolution”), and by the Oversight Board pursuant to a resolution adopted on July 19, 2022 (the
“Oversight Board Resolution”). Pursuant to the Dissolution Act, written notice of the Oversight
Board Resolution was provided to the DOF. On ______, 2022, the DOF provided a letter to the
Successor Agency stating that based on the DOF’s review and application of the law, the
Oversight Board Resolution approving the issuance of the 2022 Bonds is approved by the DOF.
Section 34177.5(f) of the Dissolution Act provides that when, as here, a successor agency
issues refunding bonds with the approval of the oversight board and the DOF, the oversight board
may not unilaterally approve any amendments to or early termination of the bonds, and the
scheduled payments on the bonds shall be listed in the Recognized Obligation Payment Schedule
and are not subject to further review and approval by the DOF or the California State Controller.
Description of the 2022 Bonds
The 2022 Bonds will be issued and delivered in fully-registered form without coupons in
the denomination of $5,000 or any integral multiple thereof for each maturity, initially in the name
of Cede & Co., as nominee for The Depository Trust Company (“DTC”), as registered owner of
all 2022 Bonds. The initially executed and delivered Bonds will be dated the date of delivery (the
“Closing Date”) and mature on September 1 in the years and in the amounts shown on the inside
cover page of this Official Statement.
Interest on the 2022 Bonds will be calculated on the basis of a 360-day year of twelve 30-
day months at the rates shown on the inside cover page of this Official Statement, payable
semiannually on March 1 and September 1 in each year, commencing on March 1, 2023, by
check mailed to the registered owners thereof or upon the request of the Owners of $1,000,000
or more in principal amount of 2022 Bonds, by wire transfer to an account in the United States
which shall be designated in written instructions by such Owner to the Trustee on or before the
Record Date preceding the Interest Payment Date. “Record Date” as defined in the Indenture
means, with respect to any Interest Payment Date, the close of business on the 15th calendar
day of the month preceding such Interest Payment Date, whether or not such 15th calendar day
is a Business Day.
One fully-registered bond will be issued for each series and maturity of the 2022 Bonds,
each in the aggregate principal amount of such series and maturity, and will be deposited with
DTC. See “APPENDIX G – Book-Entry Only System.”
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Redemption*
Optional Redemption. The 2022 Bonds maturing on or prior to September 1, 20__, are
not subject to optional redemption. The 2022 Bonds maturing on or after September 1, 20__, shall
be subject to redemption, at the option of the Successor Agency on any date on or after
September 1, 20__, as a whole or in part, by such maturities as shall be determined by the
Successor Agency, and by lot within a maturity, from any available source of funds, at a
redemption price equal to 100% of the principal amount of 2022 Bonds redeemed, plus accrued
interest thereon to the date of redemption.
Mandatory Sinking Account Redemption. The 2022 Bonds maturing on September 1,
20___ and September 1, 20___ (the “2022 Term Bonds”) shall also be subject to mandatory
redemption in part by lot on September 1, _____ and on September 1 in each year thereafter to
and including September 1, ____, from sinking account payments made by the Successor
Agency, at a redemption price equal to the principal amount thereof to be redeemed together with
accrued interest thereon to the redemption date, without premium, or in lieu thereof shall, at the
Successor Agency’s option, be purchased in whole or in part pursuant to the Indenture, in the
aggregate respective principal amounts and on the respective dates as set forth in the following
tables; provided, however, that if some but not all of the 2022 Term Bonds have been redeemed
at the option of the Successor Agency, as described above, the total amount of all future sinking
account payments shall be reduced by the aggregate principal amount of 2022 Term Bonds so
redeemed, to be allocated among the sinking account payments as are thereafter payable on a
pro rata basis in integral multiples of $5,000 as determined by the Successor Agency (notice of
which determination shall be given by the Successor Agency to the Trustee).
2022 Term Bonds
Maturing September 1, 20__
Sinking Account
Redemption Date
(September 1)
Principal Amount
To Be Redeemed
2022 Term Bonds
Maturing September 1, 20__
Sinking Account
Redemption Date
(September 1)
Principal Amount
To Be Redeemed
Notice of Redemption. The Trustee on behalf of and at the expense of the Successor
Agency will mail (by first class mail, postage prepaid) notice of any redemption at least 20 but not
more than 60 days prior to the redemption date, (i) to the Owners of any 2022 Bonds designated
for redemption at their respective addresses appearing on the Registration Books, and (ii) to the
* Preliminary; subject to change.
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Securities Depositories and one or more Information Services; but such mailing will not be a
condition precedent to a redemption and neither failure to receive a redemption notice nor any
defect in the redemption notice will affect the validity of the proceedings for the redemption of
such 2022 Bonds or the cessation of the accrual of interest on the 2022 Bonds to be redeemed.
The redemption notice will state the redemption date and the redemption price, will state
that such redemption is conditioned upon the timely delivery of the redemption price by the
Successor Agency to the Trustee for deposit in the Escrow Fund, will designate the CUSIP
number of the 2022 Bonds to be redeemed, state the individual number of each Bond to be
redeemed or state that all Bonds between two stated numbers (both inclusive) or all of the 2022
Bonds Outstanding are to be redeemed, and will require that such Bonds be then surrendered at
the Designated Corporate Trust Office of the Trustee for redemption at the redemption price,
giving notice also that further interest on the 2022 Bonds to be redeemed will not accrue from and
after the redemption date.
Upon the payment of the redemption price of 2022 Bonds being redeemed, each check
or other transfer of funds issued for such purpose will, to the extent practicable, bear the CUSIP
number identifying, by issue and maturity, the 2022 Bonds being redeemed with the proceeds of
such check or other transfer.
Right to Rescind Notice. The Successor Agency has the right to rescind any notice of
the optional redemption of 2022 Bonds by written notice to the Trustee, upon no less than three
days’ prior written notice to the Trustee, on or prior to the date fixed for redemption. Any notice
of optional redemption will be cancelled and annulled if for any reason funds will not be or are not
available on the date fixed for redemption for the payment in full of the 2022 Bonds then called
for redemption, and such cancellation will not constitute an Event of Default. The Successor
Agency and the Trustee have no liability to the Owners or any other party related to or arising
from such rescission of redemption. The Trustee will mail notice of such rescission of redemption
in the same manner as the original notice of redemption was sent.
Partial Redemption. In the event only a portion of any 2022 Bond is called for
redemption, then upon surrender of such 2022 Bond the Successor Agency will execute and the
Trustee will authenticate and deliver to the Owner thereof, at the expense of the Successor
Agency, a new 2022 Bond or 2022 Bonds of the same interest rate and maturity, of authorized
denominations, in aggregate principal amount equal to the unredeemed portion of the 2022 Bond
to be redeemed.
Effect of Redemption. From and after the date fixed for redemption, if funds available
for the payment of the redemption price of and interest on the 2022 Bonds so called for redemption
have been duly deposited with the Trustee, the 2022 Bonds so called will cease to be entitled to
any benefit under the Indenture other than the right to receive payment of the redemption price
and accrued interest to the redemption date, and no interest will accrue thereon from and after
the redemption date specified in such notice.
Manner of Redemption. Whenever any 2022 Bonds or portions thereof are to be selected
for redemption by lot, the Trustee will make the selection, in accordance with DTC procedures.
In the event of redemption by lot of 2022 Bonds, the Trustee shall assign to each 2022 Bond then
Outstanding a distinctive number for each $5,000 of the principal amount of each such 2022 Bond.
The 2022 Bonds to be redeemed shall be the 2022 Bonds to which were assigned numbers so
selected, but only so much of the principal amount of each such 2022 Bond of a denomination of
more than $5,000 shall be redeemed as shall equal $5,000 for each number assigned to it and
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so selected. All 2022 Bonds redeemed or purchased pursuant to the Indenture shall be cancelled
and disposed of by the Trustee, in accordance with its then customary practices.
Purchase in Lieu of Redemption. In lieu of redemption of any Term Bonds, amounts on
deposit in the Debt Service Fund or in the Principal Account may also be used and withdrawn by
the Successor Agency and the Trustee, respectively, at any time, upon the Written Request of
the Successor Agency, for the purchase of the Term Bonds at public or private sale as and when
and at such prices (including brokerage and other charges, but excluding accrued interest, which
is payable from the Interest Account) as the Successor Agency may in its discretion determine.
The par amount of any Term Bonds so purchased by the Successor Agency in any twelve-month
period ending on September 1 in any year shall be credited towards and shall reduce the par
amount of the Term Bonds required to be redeemed pursuant to the mandatory sinking-fund
redemption provisions on September 1 in each year; provided that evidence satisfactory to the
Trustee of such purchase has been delivered to the Trustee by said September 1.
Senior Debt, Parity Debt and Subordinate Debt
Senior Debt. With the refunding of all of the Prior Bonds, no debt will be outstanding that
is payable from the Tax Revenues on a basis that is senior to the payment of the 2022 Bonds,
and the Indenture prohibits the future issuance of any senior obligations.
Parity Debt. The Indenture defines “Parity Debt” as any loan, bonds, notes, advances
or indebtedness secured and payable from Tax Revenues on a parity with the 2022 Bonds as
authorized by the Indenture. Upon the issuance of the 2022 Bonds, the Successor Agency will
have no Parity Debt outstanding. However, the Indenture authorizes the issuance of Parity Debt
by the Successor Agency in the future, subject to the conditions set forth in the Indenture, which
include the limitation that Parity Debt can only be issued to refund the 2022 Bonds or future Parity
Debt and the condition that such Parity Debt shall be issued for savings in accordance with the
requirements of Section 34177.5(a) of the Dissolution Act (or any comparable provision of any
successor statute). See “APPENDIX A – Summary of Certain Provisions of the Indenture” for
additional details.
Subordinate Debt. The Indenture permits the Successor Agency to issue and sell
Subordinate Debt (as defined in the Indenture). Such Subordinate Debt would be payable from,
or secured by a pledge or lien upon, the Tax Revenues on a subordinate basis to the payment of
debt service on the 2022 Bonds. No issuances of Subordinate Debt are contemplated.
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THE DISSOLUTION ACT
General
The information in this section describes the amendment to the Redevelopment Law
pursuant to the Dissolution Act. The following section entitled “SECURITY FOR THE 2022
BONDS” describes the specific pledge of Tax Revenues in favor of the holders of the 2022 Bonds
and related matters.
Pre-Dissolution Act Redevelopment Tax Increment System. Prior to the enactment
of AB X1 26, the Redevelopment Law authorized the financing of redevelopment projects through
the use of tax increment revenues. This method provided that the taxable valuation of the property
within a redevelopment project area on the property tax roll last equalized prior to the effective
date of the ordinance which adopts the redevelopment plan became the base year valuation.
Assuming the taxable valuation never dropped below the base year level, the taxing agencies
thereafter received that portion of the taxes produced by applying then current tax rates to the
base year valuation, and the redevelopment agency was allocated the remaining portion
produced by applying then current tax rates to the increase in valuation over the base year. Such
incremental tax revenues allocated to a redevelopment agency were authorized to be pledged to
the payment of redevelopment agency obligations.
Impact of Dissolution on Redevelopment Tax Increment System. The Dissolution Act
requires each county auditor-controller to determine, based on property taxes collected in a
redevelopment project area, the amount of property taxes that would have been allocated to the
former redevelopment agency (pursuant to subdivision (b) of Section 33670 of the
Redevelopment Law and Section 16 of Article XVI of the State Constitution) had the former
redevelopment agency not been dissolved pursuant to the operation of AB X1 26, using current
assessed values on the last equalized roll on August 20, and to deposit that amount in the
Redevelopment Property Tax Trust Fund for the successor agency established and held by the
county auditor-controller pursuant to the Dissolution Act.
Post-Dissolution Refunding Bonds. The Dissolution Act provides that any bonds
authorized thereunder to be issued by a successor agency will be considered indebtedness
incurred by the former redevelopment agency, with the same lien priority and legal effect as if the
bonds had been issued prior to the effective date of AB X1 26, in full conformity with the applicable
provisions of the Redevelopment Law that existed prior to that date, and will be included in the
successor agency’s Recognized Obligation Payment Schedule (see “– Recognized Obligation
Payment Schedules” below).
The Dissolution Act further provides that bonds authorized by the Dissolution Act to be
issued by a successor agency will be secured by a pledge of, and lien on, and will be repaid from
moneys deposited from time to time in the Redevelopment Property Tax Trust Fund, and that
property tax revenues pledged to any bonds authorized to be issued by the successor agency
under the Dissolution Act are taxes allocated to the successor agency pursuant to subdivision (b)
of Section 33670 of the Redevelopment Law and Section 16 of Article XVI of the State
Constitution.
Pursuant to subdivision (b) of Section 33670 of the Redevelopment Law and Section 16
of Article XVI of the State Constitution and as provided in the redevelopment plans for each
redevelopment project area, taxes levied upon taxable property in the project area each year by
or for the benefit of the State, any city, county, city and county, district, or other public corporation
(herein sometimes collectively called “taxing agencies”) after the effective date of the ordinance
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approving the redevelopment plans, or the respective effective dates of ordinances approving
amendments to the redevelopment plans that added territory to the project area, as applicable,
are to be divided as follows:
(a) To Taxing Agencies: That portion of the taxes which would be produced
by the rate upon which the tax is levied each year by or for each of the taxing agencies
upon the total sum of the assessed value of the taxable property in the redevelopment
project area as shown upon the assessment roll used in connection with the taxation of
such property by such taxing agency last equalized prior to the effective date of the
ordinances adopting the redevelopment plans, or the respective effective dates of
ordinances approving amendments to the redevelopment plans that added territory to the
redevelopment project area, as applicable (each, a “base year valuation”), will be
allocated to, and when collected will be paid into, the funds of the respective taxing
agencies as taxes by or for the taxing agencies on all other property are paid; and
(b) To the Former Redevelopment Agency/Successor Agency: Except for that
portion of the taxes in excess of the amount identified in (a) above which are attributable
to a tax rate levied by a taxing agency for the purpose of producing revenues in an amount
sufficient to make annual repayments of the principal of, and the interest on, any bonded
indebtedness approved by the voters of the taxing agency on or after January 1, 1989 for
the acquisition or improvement of real property, which portion shall be allocated to, and
when collected shall be paid into, the fund of that taxing agency, that portion of the levied
taxes each year in excess of such amount, annually allocated within the redevelopment
plan limits, when collected will be paid into a special fund of the successor agency.
Section 34172 of the Dissolution Act provides that, for purposes of Section 16 of Article
XVI of the State Constitution, the Redevelopment Property Tax Trust Fund shall be
deemed to be a special fund of the successor agency to pay the debt service on
indebtedness incurred by the former redevelopment agency or the successor agency to
finance or refinance the redevelopment projects of the former redevelopment agency.
That portion of the levied taxes described in paragraph (b) above, less amounts deducted
pursuant to Section 34183(a) of the Dissolution Act for permitted administrative costs of the
county auditor-controller, constitute the amounts required under the Dissolution Act to be
deposited by the county auditor-controller into the Redevelopment Property Tax Trust Fund for
each successor agency. In addition, Section 34183 of the Dissolution Act effectively eliminates
the January 1, 1989 date from paragraph (b) above. Pursuant to SB 107, effective September
22, 2015, debt service override revenues approved by the voters for the purpose of supporting
pension programs or capital projects, and programs related to the State Water Project, that are
not pledged to or needed for debt service on successor agency obligations are allocated and paid
to the entity that levies the override and will not be deposited into the Redevelopment Property
Tax Trust Fund. No such overrides are pledged as security for the payment of debt service on
the 2022 Bonds under the Indenture.
Recognized Obligation Payment Schedules
Submission of ROPS. The Dissolution Act requires successor agencies to prepare, and
submit to the successor agency’s Oversight Board and the DOF for approval, a Recognized
Obligation Payment Schedule pursuant to which enforceable obligations (as defined in the
Dissolution Act) of the successor agency are listed, together with the source of funds to be used
to pay for each enforceable obligation. Successor agencies are required to file Recognized
Obligation Payment Schedules with the DOF for approval each February 1 for the July 1 through
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June 30 period immediately following such February 1 (the next succeeding fiscal year). Pursuant
to Section 34177(o)(1)(E) of the Dissolution Act, once per the Recognized Obligation Payment
Schedule period, and no later than October 1, a successor agency may submit one amendment
to DOF for the second half of the yearly Recognized Obligation Payment Schedule period
(January-June), if the Oversight Board makes a finding that a revision is necessary to pay
enforceable obligations during the second half of the Recognized Obligation Payment Schedule
period. Currently, DOF does not allow successor agencies to add additional enforceable
obligations to the Recognized Obligation Payment Schedule when submitting the Amended
Recognized Obligation Payment Schedule.
Prior Period Adjustments. Subject to review by the county auditor-controller, differences
between actual payments and past estimated obligations on Recognized Obligation Payment
Schedules shall be reported in subsequent Recognized Obligation Payment Schedules and shall
adjust the amount to be transferred to the Redevelopment Obligation Retirement Fund.
Penalties for Failure to Timely File ROPS. There are strong incentives for a successor
agency to submit Recognized Obligation Payment Schedules on time. If a successor agency
does not submit a Recognized Obligation Payment Schedule to the Oversight Board and the DOF
by each February 1 (unless a successor agency has an approved last and final Recognized
Obligation Payment Schedule), then a successor agency will be subject to a $10,000 per day civil
penalty for every day the schedule is late. Additionally, if a successor agency does not submit a
Recognized Obligation Payment Schedule to the Oversight Board and the DOF at least 10 days
after each February 1 (unless a successor agency has an approved last and final Recognized
Obligation Payment Schedule), then a successor agency’s administrative cost allowance may be
reduced by up to 25%. For additional information regarding procedures under the Dissolution Act
relating to late Recognized Obligation Payment Schedules and implications for the 2022 Bonds,
see “RISK FACTORS – Recognized Obligation Payment Schedule.”
Payment of Amounts Listed on the ROPS. As defined in the Dissolution Act,
“enforceable obligation” includes bonds, including the required debt service, reserve set-asides,
and any other payments required under the indenture or similar documents governing the
issuance of the outstanding bonds of the former redevelopment agency or the successor agency,
as well as other obligations such as loans, judgments or settlements against the former
redevelopment agency or the successor agency, any legally binding and enforceable agreement
that is not otherwise void as violating the debt limit or public policy, contracts necessary for the
administration or operation of the successor agency, and, under certain circumstances, amounts
borrowed from the successor agency’s low and moderate income housing fund.
A reserve may be included on the Recognized Obligation Payment Schedule and held by
the successor agency when required by a bond indenture or when the next property tax allocation
will be insufficient to pay all obligations due under the provisions of the bonds for the next payment
due in the following half of the calendar year.
Order of Priority of Distributions from RPTTF. Typically, under the Redevelopment
Property Tax Trust Fund distribution provisions of the Dissolution Act, a county auditor-controller
is to distribute funds for each six-month period as specified in Section 34183 of the Dissolution
Act, which is as follows:
(i) first, subject to certain adjustments (as described below) for subordinations
for statutory and negotiated pass-through amounts to the extent permitted under the
Dissolution Act and no later than each January 2 and June 1, to each local taxing agency
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and school entity, to the extent applicable, amounts required for pass-through payments
such entity would have received under provisions of the Redevelopment Law, as those
provisions read on January 1, 2011, including negotiated pass-through agreements and
statutory pass-through obligations;
(ii) second, on each January 2 and June 1, to the successor agency for
payments listed in its Recognized Obligation Payment Schedule, with debt service
payments (and amounts required to replenish the related reserve funds, if any) scheduled
to be made for tax allocation bonds having the highest priority over payments scheduled
for other debts and obligations listed on the Recognized Obligation Payment Schedule;
(iii) third, on each January 2 and June 1, to the successor agency for the
administrative cost allowance, as defined in the Dissolution Act; and
(iv) fourth, on each January 2 and June 1, to taxing entities any moneys
remaining in the Redevelopment Property Tax Trust Fund after the payments and
transfers authorized by clauses (i) through (iii), in an amount proportionate to such taxing
entity’s share of property tax revenues in the tax rate area in that fiscal year (without giving
effect to any pass-through obligations that were established under the Redevelopment
Law).
The Dissolution Act requires the county auditor-controller to distribute from the
Redevelopment Property Tax Trust Fund amounts required to be distributed for statutory pass-
through obligations to the taxing entities on each January 2 and June 1 before amounts are
distributed by the county auditor-controller from the Redevelopment Property Tax Trust Fund to
a successor agency’s Redevelopment Obligation Retirement Fund, unless: (i) pass-through
payment obligations have been made subordinate to debt service payments for the bonded
indebtedness of the former redevelopment agency, as succeeded to by the successor agency;
(ii) the successor agency has reported, no later than the September 1 and May 1 preceding the
applicable January 2 or June 1 distribution date, that the total amount available to the successor
agency from the Redevelopment Property Tax Trust Fund allocation to the successor agency’s
Redevelopment Obligation Retirement Fund, from other funds transferred from the former
redevelopment agency and from funds that have or will become available through asset sales
and all redevelopment operations, is insufficient to fund the successor agency’s enforceable
obligations, pass-through payments and the successor agency’s administrative cost allowance
for the applicable Recognized Obligation Payment Schedule period; and (iii) the State Controller
has concurred with the successor agency that there are insufficient funds for such purposes.
Consequences of Insufficient Property Tax Revenue. If the requirements set forth in
clauses (i) through (iii) of the foregoing paragraph have been met, the Dissolution Act provides
for certain modifications in the distributions otherwise calculated to be distributed on the
applicable January 2 or June 1 property tax distribution date (as adjusted for weekends and
holidays). To provide for calculated shortages to be paid to the successor agency for enforceable
obligations, the amount of the deficiency will first be deducted from the residual amount otherwise
calculated to be distributed to the taxing entities under the Dissolution Act after payment of the
successor agency’s enforceable obligations, pass-through payments and the successor agency’s
administrative cost allowance. If such residual amount is exhausted, the amount of the remaining
deficiency will be deducted from amounts available for distribution to the successor agency for
administrative costs for the applicable Recognized Obligation Payment Schedule period in order
to fund the enforceable obligations. Finally, funds required for servicing bond debt may be
deducted from the amounts to be distributed as pass-through payments, whether contractual or
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statutory, in order to be paid to the successor agency for bonded indebtedness, but only after the
amounts described in the previous two sentences have been exhausted. If there is still an
insufficiency, the Dissolution Act permits, but does not require, a loan to be made from the county
treasury to the successor agency. For a description of the Successor Agency’s pass-through
payment obligations, see “SECURITY FOR THE 2022 BONDS – Statutory Pass-Through (AB
1290) Payments” and “– Pass-Through Agreements.”
Sources of Payments for Enforceable Obligations. Under the Dissolution Act, the
categories of sources of payments for enforceable obligations listed on a Recognized Obligation
Payment Schedule are the following: (i) the low and moderate income housing fund, (ii) bond
proceeds, (iii) reserve balances, (iv) administrative cost allowance (successor agencies are
entitled to receive not less than $250,000, unless that amount is reduced by agreement of the
successor agency and the oversight board), (v) the Redevelopment Property Tax Trust Fund (but
only to the extent no other funding source is available or when payment from property tax
revenues is required by an enforceable obligation or otherwise required under the Dissolution
Act), or (vi) other revenue sources (including rents, concessions, asset sale proceeds, interest
earnings, and any other revenues derived from the successor agency, as approved by the
oversight board).
The Dissolution Act provides that only those payments listed in the approved Recognized
Obligation Payment Schedule may be made by a successor agency and only from the funds
specified in the Recognized Obligation Payment Schedule.
No Applicable Redevelopment Plan Limits. In accordance with the Redevelopment
Law, redevelopment plans were required to include certain limits on the financing of the
redevelopment projects. These required limits included a time limit on the life of the
redevelopment plan, a time limit on the incurrence of indebtedness, a time limit on the receipt of
property tax increment and the repayment of indebtedness, and a limit on the total cumulative
amount of tax increment revenues that could be received by the redevelopment agency and a
limit on the amount of bonded. The Dissolution Act, as amended by SB 107 as of September 22,
2015, clarifies that former tax increment limits set forth in redevelopment plans no longer apply
for purposes of paying approved enforceable obligations.
Redevelopment Obligation Retirement Fund. Each successor agency has established
within its treasury a “Redevelopment Obligation Retirement Fund” pursuant to Section 34170.5 of
the Dissolution Act. Under the Dissolution Act, the county auditor-controller is obligated to transfer
each January 2 and June 1, from available moneys held in the Redevelopment Property Tax Trust
Fund of the successor agency into the Redevelopment Obligation Retirement Fund of the
successor agency, an amount of tax increment revenue equal to that specified in the successor
agency’s Recognized Obligation Payment Schedule as approved by the DOF as payable from
the Redevelopment Property Tax Trust Fund, subject to certain limitations established by the
Dissolution Act.
Elimination of Housing Set-Aside. Before it was amended by the Dissolution Act, the
Redevelopment Law required each redevelopment agency to set aside not less than 20% of all
tax increment generated in project areas into a low and moderate income housing fund to be used
for the purpose of increasing, improving and/or preserving the supply of low and moderate income
housing. These tax increment revenues were commonly referred to as “Housing Set-Aside.”
The Dissolution Act eliminates the characterization of certain tax increment revenues as Housing
Set-Aside.
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Last and Final ROPS. Commencing on September 22, 2015, successor agencies that
have received a Finding of Completion and the concurrence of the DOF as to the items that qualify
for payment, among other conditions, at their option, may file a “Last and Final” Recognized
Obligation Payment Schedule. If approved by the DOF, the Last and Final Recognized Obligation
Payment Schedule will be binding on all parties and the successor agency will no longer submit
future Recognized Obligation Payment Schedules to the DOF or the oversight board. The county
auditor-controller would thereafter remit tax revenues held in the successor agency’s
Redevelopment Property Tax Trust Fund to the Successor Agency on each June 1 and January
2 in accordance with the approved Last and Final Recognized Obligation Payment Schedule until
each remaining enforceable obligation has been fully paid. A Last and Final Recognized
Obligation Payment Schedule may only be amended twice, and only with approval of the DOF
and the county auditor-controller.
The Successor Agency currently has no plans to file a “Last and Final” Recognized
Obligation Payment Schedule.
SECURITY FOR THE 2022 BONDS
The County Auditor-Controller will deposit Tax Revenues into the Redevelopment
Property Tax Trust Fund pursuant to the requirements of the Dissolution Act, including Health and
Safety Code sections 34183 and 34170.5(b). The 2022 Bonds are payable from and secured
primarily by the Tax Revenues.
Pledge of Tax Revenues
Except as required to compensate or indemnify the Trustee, the 2022 Bonds and any
Parity Debt are equally secured by a pledge of, security interest in and lien on all of the Tax
Revenues, including all of the Tax Revenues in the Redevelopment Obligation Retirement Fund
and by a first and exclusive pledge and lien upon all of the moneys in the Debt Service Fund, the
Interest Account, and the Principal Account, without preference or priority for series, issue,
number, dated date, sale date, date of execution or date of delivery. The 2022 Bonds are
additionally secured by a first and exclusive pledge of, security interest in and lien upon all of the
moneys in the Debt Service Reserve Account established for the 2022 Bonds. The Bonds are
also equally secured by the pledge and lien created with respect to the Bonds by Section
34177.5(g) of the Dissolution Act on moneys deposited from time to time in the Redevelopment
Property Tax Trust Fund. Except for the Tax Revenues and such moneys, no funds or properties
of the Successor Agency are pledged to, or otherwise liable for, the payment of principal of, or
interest on, the Bonds.
In consideration of the acceptance of the 2022 Bonds by purchasers of the 2022 Bonds,
the Indenture will be deemed to be and will constitute a contract between the Successor Agency
and the Trustee for the benefit of the Owners from time to time of the 2022 Bonds, and the
covenants and agreements set forth in the Indenture to be performed on behalf of the Successor
Agency are for the equal and proportionate benefit, security and protection of all Owners of the
2022 Bonds without preference, priority or distinction as to security or otherwise of any of the
2022 Bonds over any of the others by reason of the number or date thereof or the time of sale,
execution and delivery thereof, or otherwise for any cause whatsoever, except as expressly
provided therein or in the Indenture.
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Definition of Tax Revenues
“Tax Revenues” is defined in the Indenture to mean all taxes that were eligible for
allocation to the Former Agency with respect to the Project Areas and are allocated to the
Successor Agency pursuant to Article 6 of Chapter 6 (commencing with Section 33670) of the
Law and Section 16 of Article XVI of the Constitution of the State, or pursuant to other applicable
State laws and that are deposited in the Redevelopment Property Tax Trust Fund for transfer to
the Successor Agency for deposit into the Redevelopment Obligation Retirement Fund, excluding
amounts payable by the Successor Agency to taxing entities pursuant to the ___________
Agreement, or Sections 33492.15, 33607.5 and 33607.7 of the Law, unless such payments are
subordinated to payments on the Bonds in accordance with the Law. As used in the Indenture,
the term “Senior Pass-Through Agreement” means the _________________. Amounts
payable under Sections 33607.5 and 33607.7 of the Law are sometimes referred to herein as
“Statutory Pass-Through Payments.”
Amounts payable under the Senior Pass-Through Agreement have not been
subordinated, and therefore are payable on a basis senior to payment of debt service on the 2022
Bonds. For additional information on amounts payable as Statutory Pass-Through Payments,
and under the School District Pass-Through Agreements and the Senior Pass-Through
Agreement, see “– Statutory Pass-Through (AB 1290) Payments,” and “– Pass-Through
Agreements,” respectively.
Recognized Obligation Payment Schedule (ROPS) Covenant
The Successor Agency covenants in the Indenture that it will comply with all of the
requirements of the Law. Pursuant to Section 34177 of the Law, not later than each date a
Recognized Obligation Payment Schedule is due, the Successor Agency shall submit to the
Oversight Board and the State Department of Finance, a Recognized Obligation Payment
Schedule. The Successor Agency shall take all actions required under the Law to include in the
Recognized Obligation Payment Schedule for each semiannual period (i) debt service on the
Bonds so as to enable the Los Angeles County Auditor-Controller to distribute from the
Redevelopment Property Tax Trust Fund for deposit in the Redevelopment Obligation Retirement
Fund on each January 2 and June 1, as applicable, amounts required to enable the Successor
Agency to pay timely principal of, and interest on, the Bonds on a timely basis, as such amounts
of debt service are set forth in the Indenture.
In order to ensure that amounts are available for the Trustee to pay debt service on all
Outstanding Bonds and all amounts due hereunder on a timely basis, the Successor Agency
acknowledges that, based on available funds and moneys received from the RPTTF on the June
1, 2022 distribution date and to be received on the January 2, 2023 RPTTF distribution date, the
Successor Agency will have sufficient funds to pay debt service on the 2022 Bonds on March 1,
2023.
Thereafter, not later than February 1, 2023 and each February 1 thereafter (or at such
other time as may be required by the Dissolution Act), for so long as any Bonds are outstanding,
the Successor Agency shall submit an Oversight Board-approved Recognized Obligation
Payment Schedule to the State Department of Finance and to the Los Angeles County Auditor-
Controller (which may be alternatively be submitted as a Last and Final ROPS) that shall at least
include the following amounts:
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(i) 100% of the amount of principal and interest on the 2022 Bonds
payable and any Parity Debt coming due within the Recognized Obligation
Payment Schedule period and 100% of the principal and interest payment due on
the next succeeding September 1 (as illustrated below);
(ii) any amount required under this Indenture or any Parity Debt
Instrument to replenish the Debt Service Reserve Account under the Indenture or
the reserve account established under any Parity Debt Instrument, and
[(iii) amounts due to the Bond Insurer in connection with the Insurance
Policy or Reserve Policy or any other issuer of a Qualified Reserve Account Credit
Instrument under the Indenture or under an insurance or surety bond agreement,]
in each annual Recognized Obligation Payment Schedule so as to enable the Los
Angeles County Auditor-Controller to distribute from the Redevelopment Property
Tax Trust Fund to the Successor Agency’s Redevelopment Obligation Retirement
Fund on each January 2 and June 1 amounts required for the Successor Agency
to pay principal of, and interest on, the Bonds coming due in the respective
subsequent six-month period [and to pay amounts owed to the Bond Insurer in
connection with the Insurance Policy or Reserve Policy] or any other issuer of a
Qualified Reserve Account Credit Instrument, as well as the other amounts set
forth above.
By way of illustration, the amount requested under the foregoing clause (i) on the
Recognized Obligation Payment Schedule that is filed by February 1, 2023 shall include 100% of
the amount of principal of and interest on the 2022 Bonds and any Parity Debt coming due and
payable on September 1, 2024, March 1, 2025 and September 1, 2025.
The foregoing actions will also include, without limitation, placing on the periodic
Recognized Obligation Payment Schedule for approval by the Oversight Board and State
Department of Finance the amounts to be held by the Successor Agency as a reserve until the
next six-month period, as contemplated by paragraph (1)(A) of subdivision (d) of Section 34171
of the Dissolution Act, that are necessary to comply with the Indenture.
In the event the provisions set forth in the Dissolution Act as of the Closing Date of the
2022 Bonds that relate to the filing of Recognized Obligation Payment Schedules are amended
or modified in any manner, the Successor Agency agrees to take all such actions as are
necessary to comply with such amended or modified provisions so as to ensure the timely
payment of debt service on the Bonds and, if the timing of distributions of the Redevelopment
Property Tax Trust Fund is changed, the receipt of (i) not less than one of half of debt service due
during each Bond Year on all Outstanding Bonds prior to March 1 of such Bond Year, and (ii) the
remainder of debt service due during such Bond Year on all Outstanding Bonds prior to the next
succeeding September 1.
If any amounts then due and payable to the Bond Insurer under the Indenture are not
included on any current Recognized Obligation Payment Schedule and the Successor Agency is
then legally permitted to amend such Recognized Obligation Payment Schedule, the Successor
Agency will submit to the Oversight Board and the State Department of Finance a request to
amend such Recognized Obligation Payment Schedule to include such amounts then due and
payable to the Bond Insurer
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Last and Final Recognized Obligation Payment Schedule. The Successor Agency shall
not submit the final amendment to a “Last and Final” Recognized Obligation Payment Schedule
without the prior written consent of the Bond Insurer unless all amounts that could become due
to the Bond Insurer are included as a line item on the “last and final” Recognized Obligation
Payment Schedule.
The Successor Agency has no power to levy and collect taxes, and various factors beyond
its control could affect the amount of Tax Revenues available in any six-month period to pay the
principal of and interest on the 2022 Bonds (see “RISK FACTORS”).
Flow of Funds Under the Indenture
General. The Successor Agency previously established the Redevelopment Obligation
Retirement Fund pursuant to Section 34170.5(a) of the Dissolution Act and agrees to hold and
maintain the Redevelopment Obligation Retirement Fund as long as any of the Bonds are
Outstanding or any amounts are due and owing to the Bond Insurer in respect of the Reserve
Policy.
Deposit in Redevelopment Obligation Retirement Fund; Transfer to Debt Service
Fund. The Indenture provides that the Successor Agency shall deposit all of the Tax Revenues
received with respect to any Bond Year into the Redevelopment Obligation Retirement Fund
promptly upon receipt thereof. All Tax Revenues received by the Successor Agency in excess of
the amount required to pay debt service on the 2022 Bonds and any Parity Debt in any Bond
Year, and except as may be provided to the contrary in the Indenture or Parity Debt Instrument,
shall be released from the pledge and lien under the Indenture and shall be applied in accordance
with the Law, including but not limited to the payment of debt service on any Subordinate Debt.
Prior to the payment in full of the principal of and interest and redemption premium (if any) on the
2022 Bonds and the payment in full of all other amounts payable under the Indenture and under
any Supplemental Indentures, the Successor Agency shall not have any beneficial right or interest
in the moneys on deposit in the Redevelopment Obligation Retirement Fund, except as may be
provided in the Indenture and in any Supplemental Indenture.
Deposit of Amounts by Trustee. There is established a trust fund to be known as the
Debt Service Fund, which will be held by the Trustee under the Indenture in trust. Concurrently
with transfers with respect to Parity Debt pursuant to Parity Debt Instruments, moneys in the
Redevelopment Obligation Retirement Fund shall be transferred by the Successor Agency to the
Trustee in the following amounts, at the following times, and deposited by the Trustee in the
following respective special accounts, which are hereby established in the Debt Service Fund,
and in the following order of priority:
Interest Account. On or before the 5th Business Day preceding each Interest
Payment Date, the Successor Agency shall withdraw from the Redevelopment Obligation
Retirement Fund and transfer to the Trustee, for deposit in the Interest Account an amount
which, when added to the amount contained in the Interest Account on that date, will be
equal to the aggregate amount of the interest becoming due and payable on the
Outstanding Bonds on such Interest Payment Date. No such deposit need be made to
the Interest Account if the amount contained therein is at least equal to the interest to
become due on the next succeeding Interest Payment Date upon all of the Outstanding
Bonds. All moneys in the Interest Account shall be used and withdrawn by the Trustee
solely for the purpose of paying the interest on the Bonds as it shall become due and
payable.
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Principal Account. On or before the 5th Business Day preceding each September
1 on which the principal of the Bonds becomes due and payable, and at maturity, the
Successor Agency shall withdraw from the Redevelopment Obligation Retirement Fund
and transfer to the Trustee for deposit in the Principal Account an amount which, when
added to the amount then on deposit in the Principal Account, will be equal to the amount
of principal coming due and payable on such date on the Bonds. No such deposit need
be made to the Principal Account if the amount contained therein is at least equal to the
principal to become due on the next September 1 on all of the Outstanding Bonds and any
Parity Debt. All moneys in the Principal Account shall be used and withdrawn by the
Trustee solely for the purpose of paying the principal of the Bonds and any Parity Debt as
it shall become due and payable.
Debt Service Reserve Account. There is established in the Debt Service Fund a
separate account known as the “Debt Service Reserve Account,” solely as security for
payments on the 2022 Bonds, which shall be held by the Trustee in trust for the benefit of
the Owners of the 2022 Bonds. The Debt Service Reserve Account will be utilized as set
forth below under “–Debt Service Reserve Account; Reserve Policy.” In connection with
the future issuance of Bonds pursuant to the Indenture, if any, the Successor Agency shall
determine whether such Bonds shall be secured by a separate debt service reserve
account.
Debt Service Reserve Account; Reserve Policy
Deposit of Reserve Policy. On the date of issuance of the 2022 Bonds, it is anticipated
the Successor Agency will cause the Reserve Policy, in an amount equal to the Reserve
Requirement for the 2022 Bonds and issued by the Bond Insurer, to be deposited into the Debt
Service Reserve Account. The amounts available under the Reserve Policy shall be used and
withdrawn by the Trustee solely for the purpose of making transfers to the Interest Account and
the Principal Account for the 2022 Bonds in such order of priority, in the event of any deficiency
at any time in any of such accounts. The Trustee shall comply with all documentation relating to
the Reserve Policy as shall be required to maintain the Reserve Policy in full force and effect and
as shall be required to receive payments thereunder in the event and to the extent required to
make any payment when and as required by the Indenture, including the reimbursement of all
amounts due and owing to the Bond Insurer in respect of the Reserve Policy.
The Successor Agency shall have no obligation to replace the Reserve Policy or to fund
the Debt Service Reserve Account with cash if, at any time that the 2022 Bonds are Outstanding,
amounts are not available under the Reserve Policy or if the rating of the claims-paying ability of
the Bond Insurer is downgraded or withdrawn. In connection with the future issuance of Bonds
pursuant to the Indenture, the Successor Agency shall determine whether or not such Bonds shall
be secured by a debt service reserve fund. For additional details on the Reserve Policy, see
“APPENDIX A – Summary of Certain Provisions of the Indenture.”
Definition of Reserve Requirement. The Indenture defines “Reserve Requirement” to
mean, with respect to the 2022 Bonds and each series of Parity Debt issued in the form of Bonds
for which a reserve is required, the least of:
(i) 125% of the average Annual Debt Service with respect to that series of
Bonds,
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(ii) Maximum Annual Debt Service with respect to that series of Bonds, or
(iii) with respect to an individual series of Bonds, 10% of the original principal
amount of such series of Bonds (or, if such series of Bonds has more than a de minimis
amount of original issue discount or premium, 10% of the issue price of such series of
Bonds);
provided, that the Reserve Requirement shall be determined on an individual basis for each series
of Bonds, and in no event shall the Successor Agency, in connection with the issuance of Parity
Debt in the form of Bonds pursuant to a Supplemental Indenture be obligated to deposit an
amount in the Debt Service Reserve Account or other reserve account which is in excess of the
amount permitted by the applicable provisions of the Code to be so deposited from the proceeds
of tax-exempt bonds without having to restrict the yield of any investment purchased with any
portion of such deposit and, in the event the amount of any such deposit is so limited, the Reserve
Requirement shall, in connection with the issuance of such Parity Debt issued in the form of
Bonds, be increased only by the amount of such deposit as permitted by the Code; and, provided
further that the Successor Agency may meet all or a portion of the Reserve Requirement by
depositing a Qualified Reserve Account Credit Instrument meeting the requirements of the
Indenture.
In the event a Qualified Reserve Account Credit Instrument is delivered at any time to
meet the entirety of the Reserve Requirement with respect to any series of Bonds (that is, no cash
is being deposited or will remain deposited in the Debt Service Reserve Account or other reserve
account with respect to those series of Bonds), then, notwithstanding the foregoing definition, the
Reserve Requirement will, with respect to those series of Bonds, be determined only at the time
of the delivery of the Qualified Reserve Account Credit Instrument and will not be subject to
increase or decrease at a later date.
Pass-Through Payments
Statutory Pass-Through (AB 1290) Payments. All new redevelopment plans that were
adopted, or existing redevelopment plans that were amended in certain manners, after January
1, 1994, became subject to statutorily defined pass-through requirements and plan limitations
generally known as AB1290 requirements. The payments required to be made to taxing entities
pursuant to the AB1290 requirements are referred to as “Statutory Pass-Through Payments.”
The Successor Agency has not requested subordination of amounts payable as Statutory Pass-
Through Payments.
Under the AB1290 mechanism, pass-through payments are made to all jurisdictions
receiving a portion of the basic 1% property tax levy, except jurisdictions having pre-existing
contractual pass-through agreements. The pass-through payments are made in three periods, or
tiers, each beginning in a different year (years 1, 11, and 31), and extending through the plan’s
remaining duration. The payments received by each jurisdiction are based on a specified
percentage of the growth in assessed valuation over a base (the assessed valuation in the year
prior to the beginning of a period), multiplied by the property tax apportionment factor for the
jurisdiction. The City is entitled to passthrough payments from the first tier only.
The initial statutory payments are a percentage of tax increment received by the
Successor Agency. For payments under tiers two and three, payments derive from future base
levels of assessed valuation. Under Redevelopment Law, the initial base year for the tier two
payments was set in the 10th year in which a redevelopment agency received tax increment
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payments or, for older amended plans, the 10th year after the earliest amended fiscal limit is
reached. See “APPENDIX B – FISCAL CONSULTANT’S REPORT” for further information.
Pass-Through Agreements. Pursuant to former Section 33401 of the Redevelopment
Law, the Former Agency entered into [[CONFIRM-- two pass-through agreements: (1) dated
November 18, 1980, by and between the Agency and the County (on behalf of the County, the
County Flood Control District and the County Library District), and (ii) that certain agreement,
dated June 21, 1988, by and between the Agency and the County, the County Flood Control
District and the County Library District.]] The agreements provide that the Successor Agency will
pay each taxing entity an amount of money to alleviate the fiscal detriment created by the
respective Project Area.
[[details- subordination, etc. From Fiscal Consultant report: The Agency’s obligations
under the 5th Amendment Area pass-through agreement with the County are subordinate to the
Agency’s obligations to make principal and interest payments with respect to any tax allocation
bonds including the 2013 Bonds. Applicable to both project areas?]]
See APPENDIX B and “THE PROJECT AREAS – Projected Tax Revenues and Debt
Service Coverage” for additional information on the pass-through agreements.
Limited Obligation
The 2022 Bonds are not a debt of the City, the County, the State or any of their political
subdivisions except the Successor Agency, and none of the City, the County, the State or any of
their political subdivisions except the Successor Agency are liable therefor. The 2022 Bonds do
not constitute an indebtedness within the meaning of any constitutional or statutory debt limitation
or restriction. No member of the Successor Agency, the Oversight Board or the Board of
Supervisors of the County shall be individually or personally liable for the payment of the principal
of or interest on the 2022 Bonds; but nothing contained in the Indenture relieves any such
member, officer, agent or employee from the performance of any official duty provided by law.
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PROPERTY TAXATION IN CALIFORNIA
Property Tax Collection Procedures
Classification. In the State, property which is subject to ad valorem taxes is classified as
“secured” or “unsecured.” Secured and unsecured property are entered on separate parts of the
assessment roll maintained by the County assessor. The secured classification includes property
on which any property tax levied by a county becomes a lien on that property. A tax levied on
unsecured property does not become a lien against the taxed unsecured property, but may
become a lien on certain other property owned by the taxpayer. Every tax which becomes a lien
on secured property has priority over all other liens on the secured property arising pursuant to
State law, regardless of the time of the creation of other liens.
Generally, ad valorem taxes are collected by a county (the “Taxing Authority”) for the
benefit of the various entities (e.g., cities, schools and special districts) that share in the ad
valorem tax (each a taxing entity) and successor agencies eligible to receive distributions from
the respective redevelopment property tax trust funds.
Collections. Secured and unsecured property are entered separately on the assessment
roll maintained by the county assessor. The method of collecting delinquent taxes is substantially
different for the two classifications of property. The taxing authority has four ways of collecting
unsecured personal property taxes: (i) initiating a civil action against the taxpayer, (ii) filing a
certificate in the office of the county clerk specifying certain facts in order to obtain a judgment
lien on certain property of the taxpayer, (iii) filing a certificate of delinquency for record in the
county recorder’s office to obtain a lien on certain property of the taxpayer, and (iv) seizing and
selling personal property, improvements or possessory interests belonging or assessed to the
assessee. The exclusive means of enforcing the payment of delinquent taxes with respect to
property on the secured roll is the sale of the property securing the taxes to the State for the
amount of taxes which are delinquent.
Penalty. A 10% penalty is added to delinquent taxes which have been levied with respect
to property on the secured roll. In addition, property on the secured roll on which taxes are
delinquent is declared in default by operation of law and declaration of the tax collector on or
about June 30 of each fiscal year. Such property may thereafter be redeemed by payment of the
delinquent taxes and a delinquency penalty, plus a redemption penalty of 1.5% per month to the
time of redemption. If taxes are unpaid for a period of five years or more, the property is deeded
to the State and then is subject to sale by the county tax collector. A 10% penalty also applies to
delinquent taxes with respect to property on the unsecured roll, and further, an additional penalty
of 1.5% per month accrues with respect to such taxes beginning on varying dates related to the
tax bill mailing date.
Delinquencies. The valuation of property is determined as of the January 1 lien date as
equalized in August of each year and equal installments of taxes levied upon secured property
become delinquent on the following September 10 and April 10. Taxes on unsecured property
are due January 1 and become delinquent August 31.
Supplemental Assessments. California Revenue and Taxation Code Section 75.70
provides for the reassessment and taxation of property as of the occurrence of a change of
ownership or completion of new construction. Such reassessment is referred to as the
Supplemental Assessment and is determined by applying the current year’s tax rate to the amount
of the increase or decrease in a property’s value and prorating the resulting property taxes to
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reflect the portion of the tax year remaining as determined by the date of the change in ownership
or completion of new construction. Supplemental Assessments become a lien against real
property. Prior to the enactment of this law, the assessment of such changes was permitted only
as of the next tax lien date following the change, and this delayed the realization of increased
property taxes from the new assessments for up to 14 months. Since fiscal year 1984-85,
revenues derived from Supplemental Assessments have been allocated to redevelopment
agencies and taxing entities in the same manner as the general property tax. The receipt of
Supplemental Assessment revenues by taxing entities typically follows the change of ownership
by a year or more. This statute provides increased revenue to the Redevelopment Property Tax
Trust Fund to the extent that supplemental assessments of new construction or changes of
ownership occur within the boundaries of redevelopment projects subsequent to the January 1
lien date. To the extent such supplemental assessments occur within the Project Areas, tax
increment may increase.
The Successor Agency received approximately $______ in supplemental revenues in
Fiscal Year 2020-21. Given their variability and unpredictability, revenues resulting from
Supplemental Assessments have not been included in the Fiscal Consultant’s projections of tax
increment available to pay debt service on the 2022 Bonds.
Property Tax Administrative Costs. In 1990, the Legislature enacted SB 2557 (Chapter
466, Statutes of 1990) which allows counties to charge for the cost of assessing, collecting and
allocating property tax revenues to local government jurisdictions in proportion to the tax-derived
revenues allocated to each. SB 1559 (Chapter 697, Statutes of 1992) explicitly includes
redevelopment agencies among the jurisdictions which are subject to such charges. The portions
of the reimbursement amount that are allocated to each taxing entity within the County are based
on the percentage of the total assessed value in the County that each taxing entity’s assessed
value represents.
In addition, Sections 34182(e) and 34183(a) of the Dissolution Act allow administrative
costs of the County Auditor-Controller for the cost of administering the provisions of the
Dissolution Act to be deducted from tax increment revenues before monies are deposited into the
Redevelopment Property Tax Trust Fund.
The combined property tax and AB x1 26 administration fees are estimated to amount to
approximately $_______ in fiscal year 2021-22, or approximately _____% of the tax increment
revenue from the Project Area A and $_______, or approximately _____% of the tax increment
revenue from the Alameda Project Area.
Unitary Property
Assembly Bill (“AB”) 2890 (Statutes of 1986, Chapter 1457) provides that, commencing
with fiscal year 1988-89, tax revenues derived from unitary property and assessed by the State
Board of Equalization are accumulated in a single Tax Rate Area for the County. The tax
revenues are then to be allocated to each taxing entity county-wide as follows: (i) each taxing
entity will receive the same amount as in the previous year plus an increase for inflation of up to
2%; (ii) if utility tax revenues are insufficient to provide the same amount as in the previous year,
each taxing entity’s share would be reduced pro rata county wide; and (iii) any increase in revenue
above 2% would be allocated in the same proportion as the taxing entity’s local secured taxable
values are to the local secured taxable values of the County.
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AB 454 (Statutes of 1987, Chapter 921) further modified Chapter 1457 regarding the
distribution of tax revenues derived from property assessed by the State Board of Equalization.
Chapter 921 provides for the consolidation of all State-assessed property, except for regulated
railroad property, into a single tax rate area in each county. Chapter 921 further provides for a
new method of establishing tax rates on State-assessed property and distribution of property tax
revenue derived from State-assessed property to taxing jurisdictions within each county in
accordance with a new formula. Railroads will continue to be assessed and revenues allocated
to all tax rate areas where railroad property is sited.
The County includes the taxable value of utilities as part of the reported taxable values of
the Project Areas. Consequently, the base year values of redevelopment projects are increased
by the amount of utility value that existed originally in the base year.
Article XIIIA of the State Constitution
Article XIIIA limits the amount of ad valorem taxes on real property to 1% of “full cash
value” of such property, as determined by the county assessor. Article XIIIA defines “full cash
value” to mean “the County Assessor’s valuation of real property as shown on the 1975-76 tax
bill under ‘full cash value,’ or, thereafter, the appraised value of real property when purchased,
newly constructed, or a change in ownership has occurred after the 1975 assessment.”
Furthermore, the “full cash value” of all real property may be increased to reflect the rate of
inflation, as shown by the consumer price index, not to exceed 2% per year, or may be reduced.
Article XIIIA has subsequently been amended to permit reduction of the “full cash value”
base in the event of declining property values caused by substantial damage, destruction or other
factors, and to provide that there would be no increase in the “full cash value” base in the event
of reconstruction of property damaged or destroyed in a disaster and in other special
circumstances.
Article XIIIA (i) exempts from the 1% tax limitation taxes to pay debt service on (a)
indebtedness approved by the voters prior to July 1, 1978 or (b) bonded indebtedness for the
acquisition or improvement of real property approved on or after July 1, 1978, by two-thirds of the
votes cast by the voters voting on the proposition; (ii) requires a vote of two-thirds of the qualified
electorate to impose special taxes, or certain additional ad valorem taxes; and (iii) requires the
approval of two-thirds of all members of the State Legislature to change any State tax laws
resulting in increased tax revenues.
The validity of Article XIIIA has been upheld by both the California Supreme Court and the
United States Supreme Court.
In the general election held November 4, 1986, voters of the State approved two
measures, Propositions 58 and 60, which further amended Article XIIIA. Proposition 58 amended
Article XIIIA to provide that the terms “purchase” and “change of ownership,” for the purposes of
determining full cash value of property under Article XIIIA, do not include the purchase or transfer
of (1) real property between spouses and (2) the principal residence and the first $1,000,000 of
other property between parents and children. This amendment to Article XIIIA may reduce the
rate of growth of local property tax revenues.
Proposition 60 amended Article XIIIA to permit the State Legislature to allow persons over
the age of 55 who sell their residence and buy or build another of equal or lesser value within two
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years in the same county, to transfer the old residence assessed value to the new residence. As
a result of the State Legislature’s action, the growth of property tax revenues may decline.
Legislation enacted by the State Legislature to implement Article XIIIA provides that all
taxable property is shown at full-assessed value as described above. In conformity with this
procedure, all taxable property value included in this Official Statement is shown at 100% of
assessed value and all general tax rates reflect the $1 per $100 of taxable value (except as noted).
Tax rates for voter-approved bonded indebtedness and pension liabilities are also applied to
100% of assessed value.
Each year the SBE announces the applicable adjustment factor. Since the adoption of
Proposition 13, inflation has, in most years, exceeded 2% and the announced factor has reflected
the 2% cap. The changes in the California Consumer Price Index from October of one year and
October of the next year are used to determine the adjustment factor for the January assessment
date. As shown in the following table, during the ten previous fiscal years, the inflation factor has
been less than 2% on four occasions.
Historical Inflation Adjustment Factors
Fiscal Year Inflation Adj. Factor
2012-13 2.000
2013-14 2.000
2014-15 0.454
2015-16 1.998
2016-17 1.525
2017-18 2.000
2018-19 2.000
2019-20 2.000
2020-21 2.000
2021-22 1.036
Appropriations Limitation - Article XIIIB
Article XIIIB limits the annual appropriations of the State and its political subdivisions to
the level of appropriations for the prior fiscal year, as adjusted for changes in the cost of living,
population and services rendered by the government entity. The “base year” for establishing such
appropriations limit is the 1978/79 fiscal year, and the limit is to be adjusted annually to reflect
changes in population, consumer prices and certain increases in the cost of services provided by
these public agencies.
Section 33678 of the Redevelopment Law provides that the allocation of taxes to a
redevelopment agency for the purpose of paying principal of, or interest on, loans, advances, or
indebtedness shall not be deemed the receipt by a redevelopment agency of proceeds of taxes
levied by or on behalf of a redevelopment agency within the meaning of Article XIIIB, nor shall
such portion of taxes be deemed receipt of proceeds of taxes by, or an appropriation subject to
the limitation of, any other public body within the meaning or for the purpose of the Constitution
and laws of the State, including Section 33678 of the Redevelopment Law. The constitutionality
of Section 33678 has been upheld in two California appellate court decisions. On the basis of
these decisions, the Successor Agency has not adopted an appropriations limit.
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Proposition 87
On November 8, 1988, the voters of the State approved Proposition 87, which amended
Article XVI, Section 16 of the State Constitution to provide that property tax revenue attributable
to the imposition of taxes on property within a redevelopment project area for the purpose of
paying debt service on certain bonded indebtedness issued by a taxing entity (not the Former
Agency or the Successor Agency) and approved by the voters of the taxing entity after
January 1, 1989 will be allocated solely to the payment of such indebtedness and not to
redevelopment agencies.
Appeals of Assessed Values
General. Pursuant to California law, a property owner may apply for a reduction of the
property tax assessment for such owner’s property by filing a written application, in a form
prescribed by the State Board of Equalization, with the appropriate county board of equalization
or assessment appeals board. In the County, a property owner desiring to reduce the assessed
value of such owner’s property in any one year must submit an application to the County
Assessment Appeals Board (the “Appeals Board”). Applications for any tax year must be
submitted by September 15 of such tax year. Following a review of each application by the staff
of the County Assessor’s Office, the staff makes a recommendation to the Appeals Board on each
application which has not been rejected for incompleteness or untimeliness or withdrawn. The
Appeals Board holds a hearing and either reduces the assessment or confirms the assessment.
The Appeals Board generally is required to determine the outcome of appeals within two
years of each appeal’s filing date. Any reduction in the assessment ultimately granted applies
only to the year for which application is made and during which the written application is filed.
The assessed value increases to its pre-reduction level for fiscal years following the year for which
the reduction application is filed. However, if the taxpayer establishes through proof of
comparable values that the property continues to be overvalued (known as “ongoing hardship”),
the County Assessor has the power to grant a reduction not only for the year for which application
was originally made, but also for the then current year as well.
Base Year Appeals. Appeals for reduction in the “base year” value of an assessment,
which generally must be made within three years of the date of change in ownership or completion
of new construction that determined the base year, if successful, reduce the assessment for the
year in which the appeal is taken and prospectively thereafter. Moreover, in the case of any
reduction in any one year of assessed value granted for “ongoing hardship” in the then current
year, and also in any cases involving stipulated appeals for prior years relating to base year and
personal property assessments, the tax increment revenues attributable to such properties will be
reduced in the then current year. In practice, such a reduced assessment may remain in effect
beyond the year in which it is granted.
Proposition 8 Appeals. Proposition 8, approved in 1978 (California Revenue and
Taxation Code Section 51(b)), provides for the assessment of real property at the lesser of its
originally determined (base year) full cash value compounded annually by the inflation factor, or
its full cash value as of the lien date, taking into account reductions in value due to damage,
destruction, obsolescence or other factors causing a decline in market value. Reductions under
this code section may be initiated by the County Assessor or requested by the property owner.
After a roll reduction is granted under this code section, the property is reviewed on an
annual basis to determine its full cash value and the valuation is adjusted accordingly. This may
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result in further reductions or in value increases. Such increases must be in accordance with the
full cash value of the property and may exceed the maximum annual inflationary growth rate
allowed on other properties under Article XIIIA of the State Constitution. Once the property has
regained its prior value, adjusted for inflation, it again became subject to the annual inflationary
factor growth rate allowed under Article XIIIA.
The Successor Agency cannot guarantee that reductions undertaken by the County
Assessor or requested by a property owner pursuant to Proposition 8 will not in the future reduce
the assessed valuation of property in the Project Areas and, therefore, the Tax Revenues that
secure the 2022 Bonds.
See “THE PROJECT AREAS – Assessment Appeals” and “APPENDIX B – Fiscal
Consultant’s Report” for additional information.
Propositions 218 and 26
On November 5, 1996, California voters approved Proposition 218—Voter Approval for
Local Government Taxes—Limitation on Fees, Assessments, and Charges—Initiative
Constitutional Amendment. Proposition 218 added Articles XIIIC and XIIID to the State
Constitution, imposing certain vote requirements and other limitations on the imposition of new or
increased taxes, assessments and property-related fees and charges. On November 2, 2010,
California voters approved Proposition 26, the “Supermajority Vote to Pass New Taxes and Fees
Act.” Proposition 26 amended Article XIIIC of the California Constitution by adding an expansive
definition for the term “tax,” which previously was not defined under the California Constitution.
Tax Revenues securing the 2022 Bonds are derived from property taxes that are outside
the scope of taxes, assessments and property-related fees and charges which are limited by
Proposition 218 and Proposition 26.
Future Initiatives
Article XIIIA, Article XIIIB, Article XIIIC and Article XIIID and certain other propositions
affecting property tax levies were each adopted as measures which qualified for the ballot
pursuant to California’s initiative process. From time to time other initiative measures could be
adopted, further affecting Successor Agency revenues or the Successor Agency’s ability to
expend revenues.
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THE SUCCESSOR AGENCY
The Dissolution Act
On June 28, 2011, AB 1X 26 was signed into law, thereby dissolving redevelopment
agencies throughout the State of California (the “State”). Additionally, AB 1X 26 changed the way
that property tax monies are collected and allocated to successor agencies of former
redevelopment agencies.
As authorized by AB 1X 26 and subsequently amended by AB 1484 and Senate Bill 107
(collectively, the “Dissolution Act” or “Act”), county auditor-controllers throughout the State are
responsible for allocating property tax revenues to successor agencies in order to pay existing
debt and other contractual obligations (“Enforceable Obligation(s)”) as allowed by the State
Department of Finance (“DOF”). TI revenues generated from within a project area are allocated
to the RPTTF for distribution to each successor agency as property tax revenue is collected. In
order to receive TI, each successor agency is annually required to prepare and submit to the DOF
by February 1st a Recognized Obligation Payment Schedule (“ROPS”). The ROPS lists a
successor agency’s Enforceable Obligations coming due over the ensuing 12-month fiscal year
period (commencing July 1) and the amount of TI needed to satisfy these obligations.
It is important to note that bond debt service receives the highest priority on the ROPS in
terms of how TI is allocated (net of State and County Auditor administrative fees certain tax
sharing payments required to be made to affected taxing entities). The ROPS must be approved
by a successor agency’s oversight board as well as the DOF prior to a county auditor-controller’s
disbursement of TI from the RPTTF to a successor agency. The disbursement of TI currently
occurs twice per year; the first payment for the fiscal year is made on June 1st and the second
fiscal-year payment is made on January 2nd.
Successor Agency Powers
The Successor Agency is governed by a five-member board of directors (“Successor
Agency Board”) which is comprised of the five City Council members of the City. The Dissolution
Act provides that a city, county, or city and county that authorized the creation of a redevelopment
agency may elect to serve as the “successor agency” to that former redevelopment agency. In
2012 the City elected to serve as the Successor Agency to the Lynwood Redevelopment Agency.
As established by statute, the Successor Agency is charged with winding down the affairs of the
Former Agency in accordance with the Act as codified within the California Health and Safety
Code (“HSC”). This work includes: paying existing bond debt and following through on pre-existing
contractual obligations, maintaining reserves, enforcing the rights of the Former Agency to protect
and benefit bondholders, disposing of Former Agency assets, managing properties until
contracted work has been completed and preparing an administrative budget and ROPS.
As of July 1, 2018, in accordance with SB 107 and pursuant to HSC § 34179(j), the
activities and actions of successor agencies throughout the State are now overseen and approved
by a single seven-member countywide oversight board in their respective counties. Accordingly,
the Successor Agency’s activities are now overseen by the Oversight Board. The Oversight Board
consists of representatives of the affected taxing agencies that are located within the County, a
member appointed by the city selection committee established pursuant to Section 50270 of the
Government Code, and a member of the public.
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City Audited Financial Statements
The City of Lynwood’s Annual Comprehensive Financial Report for Fiscal Year Ended
June 30, 2021 (the “City ACFR”) is attached as APPENDIX E. The City ACFR includes certain
information related to the Successor Agency for the fiscal year ended June 30, 2021. The
Successor Agency’s audited financial statements were audited by The Pun Group, LLP Santa
Ana, California (the “Auditor”). The Auditor has not been asked to consent to the inclusion of the
City ACFR in this Official Statement and has not reviewed this Official Statement.
As described in “SECURITY FOR THE 2022 BONDS – Limited Obligation,” the 2022
Bonds are payable from and secured by a pledge of Tax Revenues and the 2022 Bonds are not
a debt of the City. The City ACFR is attached as APPENDIX E to this Official Statement only
because it includes certain financial information related to the Successor Agency.
THE PROJECT AREAS
General
Project Area A. Project Area A was approved by the City Council by Ordinance No. 945
adopted on July 10, 1973. The Project Area has grown from an original land area of 20 acres to
consists of approximately 734 acres (approximately 1.15 square miles) today, representing 24%
of the total incorporated area within the City. Property was added to the Redevelopment Project
by subsequent annexations. The Project Area A consists of the Original Area, the 1981 Amended
Area and the 1989 Amended Area. Property was added to the Original Redevelopment Plan; the
first was adopted on December 16, 1980, which added approximately 342 acres; the second was
adopted on July 19, 1998, which added approximately 991 acres. Project Area A extends
throughout the City and contains diverse commercial, residential, institutional and industrial uses,
and public facilities including City Hall, schools and recreation facilities. The Redevelopment
Project is comprised of comparatively small land holdings under multiple ownerships. The
Redevelopment Project contains the majority of retail and office uses within the City and is home
to the Saint Francis Hospital. The area encompasses the City’s primary circulation corridors and
select properties that abut these corridors, throughout the City, as well as property located at the
East edge of the City between the Long Beach Freeway and Wright Road. The primary circulation
corridors include Martin Luther King Boulevard, Imperial Highway, Long Beach Boulevard, Atlantic
Avenue, and portions of Alameda Boulevard.
Alameda Project Area. Alameda Project Area was approved by the City Council by
Ordinance No. 993 on December 18, 1975. Encompassing approximately 170 acres
(approximately 0.27 square miles), the Alameda Project Area represents about 6% of the total
incorporated area of the City. The Alameda Project Area is made up almost entirely of industrial
land uses.
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Land Use Types
The following tables show the taxable value of existing land uses for fiscal year 2021-22
in the Project Areas combined and for Project Area A and the Alameda Project Area.
TABLE 1A
SUCCESSOR AGENCY TO THE LYNWOOD REDEVELOPMENT AGENCY
Land Use Within the Project Area A
Fiscal Year 2021-22
Land Use # Of Parcels Secured
Assessed Value(1) % Of Value
Commercial 274 $304,196,166 21.13%
Retail 28 229,027,425 15.91%
Industrial 189 400,573,502 27.82%
Residential 411 186,386,454 12.94%
Vacant 226 156,484,638 10.87%
Institutional 157 47,112,591 3.27%
Possessory Interest 7 4,290,858 0.30%
Recreational 1 251,097 0.02%
Miscellaneous 1 109,224 0.01%
Government 14 0 0.00%
Utility 22 0 0.00%
Total Secured Value 1,330 $1,328,431,955 92.26%
Unsecured Value $111,431,943 7.74%
Total Value $1,439,863,898 100.00%
(1) Net of all other exemptions except homeowner's exemption. Prime Desert Properties (aka St. Francis
Hospital, $23,795,387) and Earl M. Jorgensen Co ($21,096,125) occur within the Top 10 Taxpayers but have been
removed from this report as these entities do not contribute to tax increment. Assessed value of $44,891,512 for
these entities has been removed from the total secured value.
Source: Parcel Quest.
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TABLE 1B
SUCCESSOR AGENCY TO THE LYNWOOD REDEVELOPMENT AGENCY
Land Use Within the Project Area A
Fiscal Year 2021-22
Land Use # Of Parcels Secured
Assessed Value(1) % Of Value
Commercial 260 $428,688,598 36.86%
Retail 249 269,022,582 23.13%
Industrial 162 186,367,072 16.02%
Residential 411 175,469,293 15.09%
Vacant 137 25,467,617 2.19%
Institutional 21 4,377,333 0.38%
Possessory Interest 5 3,051,602 0.26%
Recreational 1 246,174 0.02%
Miscellaneous 1 107,083 0.01%
Government 8 -- 0.00%
Utility 19 -- 0.00%
Total Secured Value 1,274 $1,092,797,354 93.96%
(2) Net of all other exemptions except homeowner's exemption.
Source: Parcel Quest.
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TABLE 1C
SUCCESSOR AGENCY TO THE LYNWOOD REDEVELOPMENT AGENCY
Land Use Within the Alameda Project Area
Fiscal Year 2021-22
Land Use # Of
Parcels
Secured
Assessed Value(1) % Of Value
Industrial 31 $211,045,885 85.65%
Vacant 19 2,393,907 0.97%
Parking Lot 4 2,323,461 0.94%
Possessory Interest 2 1,172,710 0.48%
Utility 5 - 0.00%
Commercial 1 - 0.00%
Government 3 - 0.00%
Office 2 - 0.00%
Total Secured Value 67 $216,935,963 88.04%
(1) Net of all other exemptions except homeowner's exemption.
Source: Parcel Quest.
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Assessed Valuation
The following tables show the historical taxable values for the Project Areas combined
and for Project Area A and Alameda Project Area over the past five fiscal years, respectively.
TABLE 2A
SUCCESSOR AGENCY TO THE LYNWOOD REDEVELOPMENT AGENCY
Historical Assessed and Incremental Valuations in the Project Area A
Fiscal Years 2017-18 through 2021-22
Project Area
#1-A
(Combined)
Fiscal Year 2017-18 2018-19 2019-20 2020-21 2021-22 2021-22
Secured $855,368,524 $1,016,949,901 $988,859,222 $1,134,361,749 $1,092,558,176 $1,092,558,176
Unsecured 39,465,864 41,864,061 40,995,270 41,737,553 70,389,228 70,389,228
Utility 815,902,660 975,085,840 947,863,952 1,092,624,196 - -
Total AV 83,866,070 123,660,365 127,910,235 95,322,421 1,162,947,404 1,162,947,404
Base Year AV 899,768,730 1,098,745,737 1,075,774,187 1,187,946,617 (125,830,614) (125,830,614)
Incremental AV 172,829,342 172,829,342 172,829,342 172,630,903 1,037,116,790 1,037,116,790
Estimated TI
Receipts 726,939,512 925,916,519 902,944,845 1,015,315,714 10,371,168 10,371,168
Gross TI
Receipts 7,269,395 9,259,165 9,029,448 10,153,157 9,167,117 9,167,117
County
Administrative
Fees 8,308,808 9,455,595 10,800,743 10,536,872 (150,705) (150,705)
Pass Through
Payments 136,269 189,585 183,170 179,757 (1,707,290) (1,707,290)
Net TI Receipts 1,262,966 1,502,820 1,773,620 1,952,899 7,309,121 7,309,121
TABLE 2B
SUCCESSOR AGENCY TO THE LYNWOOD REDEVELOPMENT AGENCY
Historical Assessed and Incremental Valuations in the Project Area A
Fiscal Years 2017-18 through 2021-22
Project Area #1-A (Combined)
Fiscal Year 2017-18 2018-19 2019-20 2020-21 2021-22
Secured $686,831,758 $727,750,689 $768,940,566 $814,489,797 $1,092,558,176
Unsecured 52,174,677 86,772,409 95,150,587 65,676,372 70,389,228
Utility - - - - -
Total AV 739,006,435 814,523,098 864,091,153 880,166,169 1,162,947,404
Base Year AV (126,028,929) (126,028,929) (125,830,614) (125,830,614) (125,830,614)
Incremental AV 612,977,506 688,494,169 738,260,539 754,335,555 1,037,116,790
Estimated TI Receipts 6,129,775 6,884,942 7,382,605 7,543,356 10,371,168
Gross TI Receipts 6,912,570 7,311,615 8,921,938 7,760,926 9,167,117
County Administrative Fees (115,003) (130,161) (150,143) (136,072) (150,705)
Pass Through Payments (1,133,018) (1,291,614) (1,476,863) (1,596,005) (1,707,290)
Net TI Receipts 5,664,548 5,889,840 7,294,933 6,028,849 7,309,121
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TABLE 2C
SUCCESSOR AGENCY TO THE LYNWOOD REDEVELOPMENT AGENCY
Historical Assessed and Incremental Valuations in the Alameda Project Area
Fiscal Years 2017-18 through 2021-22
Alameda Project Area
Fiscal Year 2017-18 2018-19 2019-20 2020-21 2021-22
Secured $141,142,679 $181,653,403 $214,441,292 $215,554,667 $216,935,963
Unsecured 31,758,407 31,669,123 29,998,313 29,501,463 29,464,928
Utility - - - - -
Total AV 172,901,086 213,322,526 244,439,605 245,056,130 246,400,891
Base Year AV (46,800,289) (46,800,289) (46,800,289) (46,800,289) (46,800,289)
Incremental AV 126,100,797 166,522,237 197,639,316 198,255,841 199,600,602
Estimated TI Receipts 1,261,008 1,665,222 1,976,393 1,982,558 1,996,006
Gross TI Receipts 1,396,238 2,143,980 1,878,805 2,775,947 2,239,408
County Administrative Fees (21,266) (59,424) (33,027) (43,686) (32,611)
Pass Through Payments (129,947) (211,206) (296,758) (356,895) (403,875)
Net TI Receipts $1,245,025 $1,873,350 $1,549,020 $2,375,367 $1,802,922
Source: County Auditor, Successor Agency
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Recent and Potential Future Development in the Project Areas
[[to come: are there any pending developments to mention]]
[Since the dissolution of the Former Agency, there has been a limited amount of
development activity within the Project Areas. As noted above, within the past five fiscal years
Assessed Valuations in the Project Area A have grown steadily from Fiscal Year 2017-18 to Fiscal
Year 2021-22, with fiscal year growth rates ranging from ____% to ____%. [[Note decline in
Alameda Project Area?].
The Fiscal Consultant does not assume any increased assessed valuation from new
development in the Project Areas in the Fiscal Consultant’s Report. See APPENDIX B. Similarly,
the projected debt service coverage table included in this Official Statement do not assume any
increased assessed valuation from new development. See “– Projected Tax Revenues and Debt
Service Coverage.”
Major Property Owners
A summary of the top ten largest secured taxpayers within the Project Areas and for
Project Area A and Alameda Project Area for Fiscal Year 2021-22, respectively, is provided
below.
TABLE 5A
SUCCESSOR AGENCY TO THE LYNWOOD REDEVELOPMENT AGENCY
Top Ten Secured Taxpayers (1) - Project Area A
Fiscal Year 2021-22
Taxpayer
Land Use
Secured
Assessed
Value(1)
% of
Incremental
Assessed
Value
% of
Secured
Assessed
Value
% of Total
Assessed
Value
1. MPT of Lynwood LP Hospital Area A $204,000,000 16.10% 15.36%
2. Duke Realty Limited Partnership Industrial Alameda 77,246,240 6.10% 5.81%
3. Terreno Lynwood LLC Industrial Alameda 66,185,351 5.22% 4.98%
4. Plamex Investment LLC Shopping Centers Area A 48,096,962 3.80% 3.62%
5. Centerpoint Properties Trust Vacant Area A 26,245,000 2.07% 1.98%
6. Rexford Industrial Industry Way LLC Industrial Alameda 24,915,666 1.97% 1.88%
7. Primrose19 LP Shopping Centers Area A 22,074,747 1.74% 1.66%
8. EK Lynwood LLC Shopping Centers Area A 16,973,385 1.34% 1.28%
9. Albi Lynwood Investments LLC Retail Sales Area A 16,003,199 1.26% 1.20%
10. 805 Property LLC Shopping Centers Area A 15,112,472 1.19% 1.14%
Total $516,853,022 40.79% 38.91%
Total Incremental Assessed Value $1,267,232,995
Total Secured Assessed Value $1,328,431,955
Total Project Area Assessed Value $1,439,863,898
(1) Prime Desert Properties (aka St. Francis Hospital, $23,795,387) and Earl M. Jorgensen Co ($21,096,125) occur within the Top 10
Taxpayers but have been removed from this report as these entities do not contribute to tax increment. Assessed value of $44,891,512
for these entities has been removed from the total secured value.
Source: Parcel Quest.
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TABLE 5B
SUCCESSOR AGENCY TO THE LYNWOOD REDEVELOPMENT AGENCY
Top Ten Secured Taxpayers - Project Area A
Fiscal Year 2021-22
Taxpayer
Land Use
Secured
Assessed
Value(1)
% of
Incremental
Assessed
Value
% of
Secured
Assessed
Value
% of Total
Assessed
Value
1. MPT of Lynwood LP(1) Hospital $203,500,822 19.62% 18.63% 17.50%
2. Plamex Investment LLC Shopping Centers 47,153,893 4.55% 4.32% 4.05%
3. Prime Desert Properties LLC LSO(2) Medical/Dental/Labs 23,328,813 2.25% 2.14% 2.01%
4. Primrose19 LP(3) Shopping Centers 21,641,910 2.09% 1.98% 1.86%
5. Earl M Jorgensen Co Industrial 20,682,478 1.99% 1.89% 1.78%
6. EK Lynwood LC Shopping Centers 16,640,575 1.60% 1.52% 1.43%
7. Lee Riviera Enterprises LLC Medical/Dental/Labs 15,282,705 1.47% 1.40% 1.31%
8. Albi Lynwood Investments LLC(4) Retail Sales 14,937,452 1.44% 1.37% 1.28%
9. 805 Property LLC Shopping Centers 14,816,150 1.43% 1.36% 1.27%
10. Lynwood MFT LLC Medical/Dental/Labs 11,232,643 1.08% 1.03% 0.97%
Total $389,217,441 37.53% 35.62% 33.47%
Total Incremental Assessed Value $1,037,116,790
Total Secured Assessed Value $1,092,558,176
Total Project Area Assessed Value $1,162,947,404
(2) MPT of Lynwood LP currently has pending assessment appeals for 2021-22, seeking a reduction of $110MM.
(3) Prime Desert Properties currently has 1 pending assessment appeal for 2020-21, seeking a reuction of $1.8MM.
(4) Primrose19 LP currently has pending assessment appeals for 2020-21 and 2021-22, seeking a reduction of $10MM.
(5) Albi Lynwood Investment LLC currently has 1 pending assessment appeal for 2021-22, seeking a reduction of $2.5MM.
Source: Parcel Quest.
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TABLE 5B
SUCCESSOR AGENCY TO THE LYNWOOD REDEVELOPMENT AGENCY
Top Ten Secured Taxpayers - Alameda Project Area
Fiscal Year 2021-22
Taxpayer
Land Use
Secured
Assessed
Value(1)
% of
Incremental
Assessed
Value
% of
Secured
Assessed
Value
% of Total
Assessed
Value
1. Terreno Lynwood LLC(1) Industrial $64,887,602 32.51% 29.91% 26.33%
2. Duke Realty Limited Partnership Industrial 41,774,505 20.93% 19.26% 16.95%
3. Duke Lynwood LLP Industrial 30,642,997 15.35% 14.13% 12.44%
4. Rexford Industrial Industry Way LLC Industrial 24,427,126 12.24% 11.26% 9.91%
5. Shapco Partnership(2) Industrial 11,864,476 5.94% 5.47% 4.82%
6. Economic Resources Corp Industrial 6,372,965 3.19% 2.94% 2.59%
7. Felipe Alcazar Industrial 6,139,761 3.08% 2.83% 2.49%
8. 11511 Bellinger Holdings LLC Industrial 5,623,804 2.82% 2.59% 2.28%
9. Bre Investment Group LLC Industrial 3,752,707 1.88% 1.73% 1.52%
10. PCCR USA Inc. Industrial 3,314,108 1.66% 1.53% 1.35%
Total $198,800,051 99.60% 91.64% 80.68%
Total Incremental Assessed Value $199,600,602
Total Secured Assessed Value $216,935,963
Total Project Area Assessed Value $246,400,891
(1) Terreno Lynwood LLC currently has pending assessment appeals for 2020-21 and 2021-22, seeking a reduction of $31
million per year.
(2) Shapco Partnership currently has 1 pending assessment appeal for 2021-22, seeking a reduction of $6 milllion.
Source: Parcel Quest.
Assessment Appeals
Appeals of assessments by property owners in the Project Areas can result in reductions
in assessed valuations that could potentially affect the Successor Agency. Reductions in prior-
year assessed valuations do not currently affect the Successor Agency’s allocation of regular tax
increment revenue due to the County Auditor-Controller’s practice of deducting taxpayer refunds
from supplemental revenue payments to the Successor Agency and not from the regular tax
increment apportionment. However, as described below, the Assessor can reduce annual
assessed valuations on specific properties, which can affect the Successor Agency.
The most common type of appeal filed is known as a Proposition 8 appeal, in which the
property owner seeks a reduction in a particular year’s assessment based on the current
economic value of the property. The assessor may also adjust valuations based on Proposition
8 criteria. Reductions in valuation made under Proposition 8 are temporary, with valuations
restored to their full assessments once the economic reason for the reduction no longer applies.
Such reductions can affect the Successor Agency’s tax increment while they are in effect.
Property owners may also appeal the Proposition 13 base assessment of a property.
Although less frequently filed, such appeals, if successful, can permanently reduce the enrolled
valuation of a property and consequently affect the Successor Agency’s annual revenue. As
noted, the County Auditor-Controller’s office applies tax refunds due to successful property tax
appeals to the Successor Agency’s total tax increment, including supplemental assessments.
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Property taxpayers that wish to appeal the value of their property may file an assessment
appeal with the Clerk of the Board of Supervisors (“Clerk of the Board”) of the County. The filing
period for regular assessments is between July 2nd and November 30th of each year.
Supplemental assessments and escape assessments must be filed within 60 days after the
mailing date printed on the property owner’s property tax bill.
The Clerk of the Board has provided the following information regarding the top ten
secured taxpayers within the Project Areas that have assessment appeals pending:
TABLE 6
SUCCESSOR AGENCY TO THE LYNWOOD REDEVELOPMENT AGENCY
Pending Assessment Appeals
Total No. of
Appeals
No. of Resolved
Appeals
No. of
Successful
Appeals
Reduction in
Value
No. of
Pending
Appeals
Est No. of
Pending
Appeals
Allowed (2)
RP 1A 21 4 1 1,245,000 17 2
RP 1A '81 Annex 134 66 10 1,655,786 68 9
RP 1A '89 Annex 62 39 3 280,262 23 3
Combined Area 1A:217 109 14 3,181,048 108 14
City of Lynwood Successor Agency to the Former Redevelopment Agency
RP #1A Combined
Appeals History
Fiscal Years 2017-18 through 2021-22
Total No. of
Appeals
No. of
Resolved
Appeals
No. of
Successful
Appeals
Average
Reduction in
Value
No. of
Pending
Appeals
Est No. of
Pending
Appeals
Allowed (2)
47 41 0 $0 6 0
City of Lynwood Successor Agency to the Former Redevelopment Agency
Alameda Project
Appeals History
Fiscal Years 2017-18 through 2021-22
Lynwood Successor Agency - Page 55 of 115
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Projected Tax Revenues and Debt Service Coverage
The Successor Agency has retained the Fiscal Consultant to provide projections of taxable
valuations on land in the Project Areas and projected Tax Revenues available for debt service on
the 2022 Bonds.
Tax Revenues are projected over the duration of the 2022 Bonds, as shown in Tables 8
and 9 below. Table 8 shows a projection assuming 0% growth each fiscal year, starting in Fiscal
Year 2022-23. Table 9 shows a projection assuming 2% growth and no new development. In
both tables, taxable value has been reduced for open assessment appeals. The other property
categories of value have been held constant in both projections.
The Successor Agency believes that the assumptions used in the Fiscal Consultant’s
Report and its footnotes, upon which the projections in Tables 8 and 9, respectively, below are
based, are reasonable; however, the actual growth rate of assessed valuation may be less than
the projected rate in the Project Areas and may decrease. Therefore, the actual Tax Revenues
received during the forecast period may vary from the projections and the variations may be
material.
Table 10 provides a projection of debt service coverage on the 2022 Bonds, using the
information set forth in Tables 8 and 9.
Lynwood Successor Agency - Page 56 of 115
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TABLE 8
SUCCESSOR AGENCY TO THE LYNWOOD REDEVELOPMENT AGENCY
Projection of Tax Revenues
(In Thousands of Dollars)
(0% Growth)
Projected Future Gross Tax Increment Revenues - 2% AV Growth
Lynwood Successor Agency
Fiscal
Year
Est. Gross
Tax Incr.
Revenue(1)
Total Est.
Revenues
Est. County
Admin. Fees1
Senior Pass-
thrus
Avail. For Debt
Service on the
Bonds
Subordinate
Pass-thrus Net TI
2021-22(2) $10,021,867 $ 10,021,867 $ (167,857) $ (2,102,899) $ 12,292,623 $ (377,137) $ 11,915,486
2022-23(3) 12,677,276 12,677,276 (219,317) (2,440,575) 15,337,168 (421,701) 14,915,466
2023-24 12,677,276 12,677,276 (219,317) (2,440,575) 15,337,168 (421,701) 14,915,466
2024-25 12,677,276 12,677,276 (219,317) (2,440,575) 15,337,168 (421,701) 14,915,466
2025-26 12,677,276 12,677,276 (219,317) (2,440,575) 15,337,168 (421,701) 14,915,466
2026-27 12,677,276 12,677,276 (219,317) (2,440,575) 15,337,168 (421,701) 14,915,466
2027-28 12,677,276 12,677,276 (219,317) (2,440,575) 15,337,168 (421,701) 14,915,466
2028-29 12,677,276 12,677,276 (219,317) (2,440,575) 15,337,168 (421,701) 14,915,466
2029-30 12,677,276 12,677,276 (219,317) (2,440,575) 15,337,168 (421,701) 14,915,466
2030-31 12,677,276 12,677,276 (219,317) (2,440,575) 15,337,168 (421,701) 14,915,466
2031-32 12,677,276 12,677,276 (219,317) (2,440,575) 15,337,168 (421,701) 14,915,466
2032-33 12,677,276 12,677,276 (219,317) (2,440,575) 15,337,168 (421,701) 14,915,466
2033-34 12,677,276 12,677,276 (219,317) (2,440,575) 15,337,168 (421,701) 14,915,466
2034-35 12,677,276 12,677,276 (219,317) (2,440,575) 15,337,168 (421,701) 14,915,466
2035-36 12,677,276 12,677,276 (219,317) (2,440,575) 15,337,168 (421,701) 14,915,466
2036-37 12,677,276 12,677,276 (219,317) (2,440,575) 15,337,168 (421,701) 14,915,466
2037-38 12,677,276 12,677,276 (219,317) (2,440,575) 15,337,168 (421,701) 14,915,466
2038-39 12,677,276 12,677,276 (219,317) (2,440,575) 15,337,168 (421,701) 14,915,466
1Represents SB 2557, SCO audit and oversight, and County administrative fees, estimated at 1.73%
2Actual
3There is no Unitary Revenue attributable to Lynwood SA
Source: County of Los Angeles Auditor-Controller's Office; KFS
Lynwood Successor Agency - Page 57 of 115
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TABLE 9
SUCCESSOR AGENCY TO THE LYNWOOD REDEVELOPMENT AGENCY
Projection of Tax Revenues
(In Thousands of Dollars)
(2% Growth)
Projected Future Gross Tax Increment Revenues - 2% AV Growth
Lynwood Successor Agency
Fiscal
Year
Est. Gross
Tax Incr.
Revenue(1)
Total Est.
Revenues
Est. County
Admin. Fees1
Senior Pass-
thrus
Avail. For Debt
Service on the
Bonds
Subordinate
Pass-thrus Net TI
2021-22(2) $10,021,867 $ 10,021,867 $ (167,857) $ (2,102,899) $ 12,292,623 $ (377,137) $ 11,915,486
2022-23(3) 12,677,276 12,677,276 (219,317) (2,440,575) 15,337,168 (421,701) 14,915,466
2023-24 12,965,387 12,965,387 (224,301) (2,531,588) 15,721,276 (433,560) 15,287,716
2024-25 13,259,261 13,259,261 (229,385) (2,624,420) 16,113,066 (445,655) 15,667,411
2025-26 13,559,012 13,559,012 (234,571) (2,719,109) 16,512,692 (457,992) 16,054,700
2026-27 13,864,758 13,864,758 (239,860) (2,815,692) 16,920,310 (470,576) 16,449,734
2027-28 14,176,619 14,176,619 (245,256) (2,914,207) 17,336,081 (483,412) 16,852,669
2028-29 14,494,717 14,494,717 (250,759) (3,014,692) 17,760,168 (496,504) 17,263,663
2029-30 14,819,177 14,819,177 (256,372) (3,117,187) 18,192,736 (509,859) 17,682,877
2030-31 15,150,127 15,150,127 (262,097) (3,221,731) 18,633,955 (523,480) 18,110,475
2031-32 15,487,695 15,487,695 (267,937) (3,328,366) 19,083,999 (537,374) 18,546,625
2032-33 15,832,015 15,832,015 (273,894) (3,437,135) 19,543,043 (551,545) 18,991,498
2033-34 16,183,221 16,183,221 (279,970) (3,548,078) 20,011,269 (566,000) 19,445,268
2034-35 16,541,451 16,541,451 (286,167) (3,524,189) 20,351,808 (580,744) 19,771,063
2035-36 16,906,846 16,906,846 (292,488) (3,635,252) 20,834,586 (595,784) 20,238,803
2036-37 17,279,549 17,279,549 (298,936) (3,748,535) 21,327,020 (611,123) 20,715,897
2037-38 17,659,706 17,659,706 (305,513) (3,864,084) 21,829,303 (626,770) 21,202,533
2038-39 18,047,466 18,047,466 (312,221) (3,981,944) 22,341,631 (642,730) 21,698,902
1Represents SB 2557, SCO audit and oversight, and County administrative fees, estimated at 1.73%
2Actual
3There is no Unitary Revenue attributable to Lynwood SA
Source: County of Los Angeles Auditor-Controller's Office; KFS
Sources: County of Los Angeles, Kosmont Financial Services, Inc.
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TABLE 10
SUCCESSOR AGENCY TO THE LYNWOOD REDEVELOPMENT AGENCY
Projected Debt Service Coverage
(In Thousands of Dollars)
(0% Growth and 2% Growth)
Bond Year
Ending
Dec. 1
2022 Bonds
Debt
Service*
Tax Revenues
(0% Growth)
Debt Service
Coverage
(0% Growth)*
Tax
Revenues
(2% Growth)
Debt Service
Coverage
(2% Growth)*
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
______________________
* Preliminary; subject to change.
Sources: Underwriter and Kosmont Financial Services, Inc..
Lynwood Successor Agency - Page 59 of 115
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RISK FACTORS
The following information should be considered by prospective investors in evaluating the
2022 Bonds. However, the following does not purport to be an exhaustive listing of risks and other
considerations which may be relevant to investing in the 2022 Bonds. In addition, the order in
which the following information is presented is not intended to reflect the relative importance of
any such risks.
The various legal opinions to be delivered concurrently with the issuance of the 2022
Bonds will be qualified as to the enforceability of the various legal instruments by limitations
imposed by State and federal laws, rulings and decisions affecting remedies, and by bankruptcy,
reorganization or other laws of general application affecting the enforcement of creditors’ rights,
including equitable principles.
Recognized Obligation Payment Schedule
Tax Revenues will not be withdrawn from the Redevelopment Property Tax Trust Fund by
the County Auditor-Controller and remitted to the Successor Agency without a duly approved and
effective Recognized Obligation Payment Schedule to pay debt service on the 2022 Bonds and
to pay other enforceable obligations for each applicable annual period. In the event the Successor
Agency failed to file a Recognized Obligation Payment Schedule as required, the availability of
Tax Revenues to the Successor Agency could be adversely affected for such period. See “THE
DISSOLUTION ACT – Recognized Obligation Payment Schedules.”
AB 1484 also added provisions to the Dissolution Act implementing certain penalties in
the event a successor agency does not timely submit a Recognized Obligation Payment Schedule
as required. Specifically, an oversight board approved Recognized Obligation Payment Schedule
must be submitted by the successor agency to the county auditor-controller and the DOF, no later
than each February 1 for the subsequent annual period. If a successor agency does not submit
a Recognized Obligation Payment Schedule by such deadlines, the city or county that established
the redevelopment agency will be subject to a civil penalty equal to $10,000 per day for every day
the schedule is not submitted to the DOF. Additionally, a successor agency’s administrative cost
allowance is reduced by 25% if the successor agency does not submit an oversight board-
approved Recognized Obligation Payment Schedule within 10 days of the February 1 deadline,
with respect to the Recognized Obligation Payment Schedule for the subsequent annual period.
Challenges to Dissolution Act
In 2012, several successor agencies, cities and other entities filed judicial actions
challenging the legality of various provisions of the Dissolution Act. One such challenge was an
action filed on August 1, 2012, by Syncora Guarantee Inc. and Syncora Capital Assurance Inc.
(collectively, “Syncora”) against the State, the State Controller, the State Director of Finance, and
the Auditor-Controller of San Bernardino County on his own behalf and as the representative of
all other County Auditors in the State (Superior Court of the State of California, County of
Sacramento, Case No. 34-2012-80001215). Syncora was a monoline financial guaranty insurer
domiciled in the State of New York, and as such, provided credit enhancement on bonds issued
by state and local governments and did not sell other kinds of insurance such as life, health, or
property insurance. Syncora provided bond insurance and other related insurance policies for
bonds issued by former California redevelopment agencies.
Lynwood Successor Agency - Page 60 of 115
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The complaint alleged that the Dissolution Act, and specifically the “Redistribution
Provisions” thereof (i.e., California Health and Safety Code Sections 34172(d), 34174, 34177(d),
34183(a)(4), and 34188) violate the “contract clauses” of the United States and California
Constitutions (U.S. Const. art. 1, §10, cl.1; Cal. Const. art. 1, §9) because they unconstitutionally
impair the contracts among the former redevelopment agencies, bondholders and Syncora. The
complaint also alleged that the Redistribution Provisions violate the “Takings Clauses” of the
United States and California Constitutions (U.S. Const. amend. V; Cal Const. art. 1 § 19) because
they unconstitutionally take and appropriate bondholders’ and Syncora’s contractual right to
critical security mechanisms without just compensation.
After hearing by the Sacramento County Superior Court on May 3, 2013, the Superior
Court ruled that Syncora’s constitutional claims based on contractual impairment were premature.
The Superior Court also held that Syncora’s takings claims, to the extent based on the same
arguments, were also premature. Pursuant to a Judgment stipulated to by the parties, the
Superior Court on October 3, 2013, entered its order dismissing the action. The judgment,
however, provided that Syncora preserved its rights to reassert its challenges to the Dissolution
Act in the future. The Successor Agency does not guarantee that any reassertion of challenges
by Syncora or that the final results of any of the judicial actions brought by others challenging the
Dissolution Act will not result in an outcome that may have a material adverse effect on the
Successor Agency’s ability to timely pay debt service on the 2022 Bonds.
Reduction in Taxable Value
Tax increment revenue available to pay principal of and interest on the 2022 Bonds are
determined by the amount of incremental taxable value in the Project Areas and the current rate
or rates at which property in the Project Areas is taxed. The reduction of taxable values of property
in the Project Areas caused by economic factors beyond the Successor Agency’s control, such
as relocation out of the Project Areas by one or more major property owners, sale of property to
a non-profit corporation exempt from property taxation, or the complete or partial destruction of
such property caused by, among other eventualities, earthquake or other natural disaster, could
cause a reduction in the tax increment available to pay debt service on the 2022 Bonds. Such
reduction of tax increment available to pay debt service on the 2022 Bonds could have an adverse
effect on the Successor Agency’s ability to make timely payments of principal of and interest on
the 2022 Bonds; this risk could be increased by the significant concentration of property
ownership in the Project Areas (see “THE PROJECT AREAS – Major Property Owners”).
As described in greater detail under the heading “PROPERTY TAXATION IN
CALIFORNIA – Article XIIIA of the State Constitution,” Article XIIIA provides that the full cash
value base of real property used in determining taxable value may be adjusted from year to year
to reflect the inflation rate, not to exceed a two percent increase for any given year, or may be
reduced to reflect a reduction in the consumer price index, comparable local data or any reduction
in the event of declining property value caused by damage, destruction or other factors (as
described above). Such measure is computed on a calendar year basis. Any resulting reduction
in the full cash value base over the term of the 2022 Bonds could reduce tax increment available
to pay debt service on the 2022 Bonds.
In addition to the other limitations on, and required application under the Dissolution Act
of Tax Revenues on deposit in the Redevelopment Property Tax Trust Fund, the State electorate
or Legislature could adopt a constitutional or legislative property tax reduction with the effect of
reducing Tax Revenues allocated to the Redevelopment Property Tax Trust Fund and available
to the Successor Agency. Although the federal and State Constitutions include clauses generally
Lynwood Successor Agency - Page 61 of 115
48
prohibiting the Legislature’s impairment of contracts, there are also recognized exceptions to
these prohibitions. There is no assurance that the State electorate or Legislature will not at some
future time approve additional limitations that could reduce the tax increment available to pay debt
service on the 2022 Bonds and adversely affect the source of repayment and security of the 2022
Bonds.
Risks to Real Estate Market
The Successor Agency’s ability to make payments on the 2022 Bonds will be dependent
upon the economic strength of the Project Areas. The general economy of the Project Areas will
be subject to all of the risks generally associated with urban real estate markets. Real estate
prices and development may be adversely affected by changes in general economic conditions,
fluctuations in the real estate market and interest rates, unexpected increases in development
costs and by other similar factors. Further, real estate development within the Project Areas could
be adversely affected by limitations of infrastructure or future governmental policies, including
governmental policies to restrict or control development. In addition, if there is a significant decline
in the general economy of the Project Areas, the owners of property within the Project Areas may
be less able or less willing to make timely payments of property taxes or may petition for reduced
assessed valuation causing a delay or interruption in the receipt of Tax Revenues by the
Successor Agency from the Project Areas. See “THE PROJECT AREAS – Projected Tax
Revenues and Debt Service Coverage” for a description of the debt service coverage on the 2022
Bonds.
Concentration of Property Ownership
The ten largest assessees in the Project Area A for Fiscal Year 202-22 represent
approximately 17.5% of the total taxable value in the Project Area A and ____% of the incremental
value, as shown above. The ten largest assessees in the Alameda Project Area for Fiscal Year
202-22 represent approximately 26.3% of the total taxable value in the Alameda Project Area and
____% of the incremental value, as shown above.
The bankruptcy, termination of operations or departure from one of the Project Areas by
one of the largest property owners from the Project Areas could adversely impact the availability
of Tax Revenues to pay debt service on the 2022 Bonds. In addition, the resolution of any future
assessment appeal by a top ten assessee in the Project Areas could have a material adverse
impact on the amount of Tax Revenues.
Reduction in Inflationary Rate
As described in greater detail below, Article XIIIA of the State Constitution provides that
the full cash value of real property used in determining taxable value may be adjusted from year
to year to reflect the inflationary rate, not to exceed a 2% increase for any given year, or may be
reduced to reflect a reduction in the consumer price index or comparable local data. Such
measure is computed on a calendar year basis. Because Article XIIIA limits inflationary assessed
value adjustments to the lesser of the actual inflationary rate or 2%, there have been years in
which the assessed values were adjusted by actual inflationary rates, which were less than 2%.
Since Article XIIIA was approved, the annual adjustment for inflation has fallen below the
2% limitation several times; in fiscal year 2010-11, the inflationary value adjustment was negative
for the first time at -0.237%. The Successor Agency is unable to predict if any adjustments to the
Lynwood Successor Agency - Page 62 of 115
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full cash value of real property within the Project Areas, whether an increase or a reduction, will
be realized in the future.
Development Risks
The general economy of a redevelopment project area will be subject to all the risks
generally associated with real estate development. Projected development within a
redevelopment project area may be subject to unexpected delays, disruptions and changes. Real
estate development operations may be adversely affected by changes in general economic
conditions, fluctuations in the real estate market and interest rates, unexpected increases in
development costs and by other similar factors. Further, real estate development operations
within a redevelopment project area could be adversely affected by future governmental policies,
including governmental policies to restrict or control development. If projected development in a
redevelopment project area is delayed or halted, the economy of the redevelopment project area
could be affected. If such events lead to a decline in assessed values, they could cause a
reduction in incremental property tax revenues.
Levy and Collection of Taxes
The Successor Agency has no independent power to levy or collect property taxes. Any
reduction in the tax rate or the implementation of any constitutional or legislative property tax
decrease could reduce the tax increment available to pay debt service on the 2022 Bonds.
Delinquencies in the payment of property taxes by the owners of land in the Project Areas, and
the impact of bankruptcy proceedings on the ability of taxing agencies to collect property taxes,
could have an adverse effect on the Successor Agency’s ability to make timely payments on the
2022 Bonds.
Bankruptcy and Foreclosure
The payment of the property taxes from which Tax Revenues are derived and the ability
of the County to foreclose the lien of a delinquent unpaid tax may be limited by bankruptcy,
insolvency, or other laws generally affecting creditors’ rights or by the laws of the State relating to
judicial foreclosure. The various legal opinions to be delivered concurrently with the delivery of
the 2022 Bonds (including Bond Counsel’s approving legal opinion) will be qualified as to the
enforceability of the various legal instruments by bankruptcy, insolvency, reorganization,
moratorium, or other similar laws affecting creditors’ rights, by the application of equitable
principles and by the exercise of judicial discretion in appropriate cases.
Although bankruptcy proceedings would not cause the liens to become extinguished,
bankruptcy of a property owner could result in a delay in prosecuting superior court foreclosure
proceedings.
Projected Tax Revenues
In estimating that projected Tax Revenues will be sufficient to pay debt service on the
2022 Bonds, the Successor Agency has made certain assumptions with regard to present and
future assessed valuation in the Project Areas, future tax rates and percentage of taxes collected.
The Successor Agency believes these assumptions to be reasonable, but there is no assurance
these assumptions will be realized and to the extent that the assessed valuation and the tax rates
are less than expected, the net tax increment available to pay debt service on the 2022 Bonds
will be less than those projected and such reduced net tax increment may be insufficient to provide
Lynwood Successor Agency - Page 63 of 115
50
for the payment of principal of, and interest on, the 2022 Bonds. See “THE PROJECT AREAS –
Projected Tax Revenues and Debt Service Coverage.”
Natural Calamities
Land within the Project Areas in the City, like nearly all California communities, may be
subject to unpredictable seismic activity, wildfires, flood, or other natural disasters. Seismic
activity, wildfires, floods and other natural disasters represent a potential risk for damage to
buildings, roads, bridges and other property within the Project Areas. Such natural calamities may
adversely affect economic activity in the Project Areas, which could have a negative impact on
the property values and Tax Revenues.
Fire Hazards. In recent years, wildfires have caused extensive damage throughout the
State. Certain of these fires have burned thousands of acres and destroyed hundreds and in
some cases thousands of homes. In some instances, entire neighborhoods have been destroyed.
In Los Angeles County, wildland fires historically have occurred in the brush-covered hills
that frame many communities, including the Palos Verdes Hills, in the southern portion of the City,
and south of the City, in what is now Rolling Hills, Rolling Hills Estates, and Palos Verdes Estates.
Small vegetation fires occasionally still occur on these slopes, but the Fire Department is able to
respond quickly and minimize threats to adjacent structures. To prevent fires in the City’s hillside
areas, the City’s municipal code allows the Fire Chief broad authority to carry out preventive
measures to minimize fire risks.
Droughts. California is subject to droughts from time-to-time, including currently. On
April 1, 2015, for the first time in California’s history, Governor Edmund G. Brown directed the
State Water Resources Control Board to implement mandatory water reductions in cities and
towns across California to reduce water usage by 25%. After a few wet years which alleviated
drought conditions, California is once again in a drought following a dry 2021-22 winter. The City
cannot predict or make any representations regarding the effects that the recent (or future)
droughts and related conditions had or may have on the value of taxable property within the City,
or to what extent the effects the current (or future) droughts may have had or have on economic
activity in the City. See also “– Potential Impact of Climate Change” below.
Hazardous Substances
Owners and operators of real property may be required by law to remedy conditions of the
property relating to releases or threatened releases of hazardous substances. The federal
Comprehensive Environmental Response, Compensation and Liability Act of 1980, sometimes
referred to as “CERCLA” or the “Superfund Act,” is the most well-known and widely applicable of
these laws, but California laws with regard to hazardous substances area also stringent and
similar. Under many of these laws, the owner (or operator) is obligated to remedy a hazardous
substance condition of property whether or not the owner (or operator) has anything to do with
creating or handling the hazardous substance. Further, such liabilities may arise not simply from
the existence of a hazardous substance but from the method of handling it. All of these
possibilities could significantly and adversely affect assessed values of property in the Project
Areas and the ability of the Successor Agency to pay the 2022 Bonds.
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Potential Impact of Climate Change
The issue of climate change has become an important factor in water resources planning
in the State. There is evidence that increasing concentrations of greenhouse gases have caused
and will continue to cause a rise in temperatures around the world, which will result in a wide
range of changes in climate patterns. Moreover, there is evidence that a warming trend occurred
during the latter part of the 20th century and will likely continue through the 21st century. These
changes will have a direct effect on water resources in the State, and numerous studies on climate
and water in the State have been conducted to determine the potential impacts. Based on these
studies, global warming could result in the following types of water resources impacts in the State,
including potentially adverse impacts on property values within the Project Areas.
The Successor Agency is unable to predict timing or magnitude of the impacts of climate
change, if any, or whether they will have a material adverse effect on the property values within
the Project Areas or the ability of the Successor Agency to make payment on the 2022 Bonds.
COVID-19 Pandemic
The spread of COVID-19 has impacted governments, businesses and people in a manner
that is having negative effects on global and local economies. In response to the pandemic, the
City took actions to activate its emergency operations center, temporarily close all non-essential
City services, introduced teleworking as and where appropriate, implemented daily screening of
all employees, and abided by all state and federal guidelines and orders. The City actively
monitors the COVID-19 situation in the community and acts swiftly to issue executive orders to
mitigate the spread of the virus. Additionally, the City has forged a strong relationship with the
Mendocino County Health Department and local medical clinics to ensure timely sharing of
information and coordinated responses to issues.
The City continues to monitor the spread of COVID-19 and is working with local, state,
and national agencies to address the potential impact of the pandemic upon the City and its
related entities such as the Successor Agency. There can be no assurances that the spread of
COVID-19 and/or responses intended to slow the spread of COVID-19 such as declining business
and travel activity, will not materially adversely impact the state and national economies and,
accordingly, materially adversely impact property values within the Project Areas.
Cyber Security
The Successor Agency, like many other public and private entities, relies on computer and
other digital networks and systems to conduct its operations. As a recipient and provider of
personal, private or other sensitive electronic information, the Successor Agency is potentially
subject to multiple cyber threats, including without limitation hacking, viruses, ransomware,
malware and other attacks. No assurance can be given that the Successor Agency’s efforts to
manage cyber threats and attacks will be successful in all cases, or that any such attack will not
materially impact the operations or finances of the Successor Agency. The Successor Agency is
also reliant on other entities and service providers in connection with the administration of the
2022 Bonds, including without limitation the County tax collector for the levy and collection of
funds in the RPTTF, and the Trustee.
No assurance can be given that the Successor Agency and the other entities the
Successor Agency relies on will not be affected by cyber threats and attacks in a manner that
may affect the owners of the 2022 Bonds.
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Changes in the Law
There can be no assurance that the California electorate will not at some future time adopt
initiatives or that the Legislature will not enact legislation that will amend the Dissolution Act, the
Redevelopment Law or other laws or the Constitution of the State resulting in a reduction of tax
increment available to pay debt service on the 2022 Bonds.
Secondary Market
There can be no guarantee that there will be a secondary market for the 2022 Bonds, or,
if a secondary market exists, that the 2022 Bonds can be sold for any particular price.
Occasionally, because of general market conditions or because of adverse history or economic
prospects connected with a particular issue, secondary marketing practices in connection with a
particular issue are suspended or terminated. Additionally, prices of issues for which a market is
being made will depend upon the then prevailing circumstances.
TAX MATTERS
California Tax Status. In the opinion of Bond Counsel, interest on the 2022 Bonds is
exempt from California personal income taxes.
Federal Tax Status. Interest on the 2022 Bonds is not intended to be excluded from gross
income for federal income tax purposes.
Other Tax Considerations. The opinions expressed by Bond Counsel are based upon
existing legislation and regulations as interpreted by relevant judicial and regulatory authorities
as of the date of such opinion, and Bond Counsel has expressed no opinion with respect to any
proposed legislation or as to the tax treatment of interest on the 2022 Bonds, or as to the
consequences of owning or receiving interest on the 2022 Bonds, as of any future date.
Prospective purchasers of the 2022 Bonds should consult their own tax advisors regarding any
pending or proposed federal or state tax legislation, regulations or litigation, as to which Bond
Counsel expresses no opinion. Owners of the 2022 Bonds should also be aware that the
ownership or disposition of, or the accrual or receipt of interest on, the 2022 Bonds may have
federal or state tax consequences other than as described above. Other than as expressly
described above, Bond Counsel expresses no opinion regarding other federal or state tax
consequences arising with respect to the 2022 Bonds, the ownership, sale or disposition of the
2022 Bonds, or the amount, accrual or receipt of interest on the 2022 Bonds.
RATINGS
S&P Global Ratings, a business unit of Standard & Poor’s Financial Services LLC (“S&P”),
is expected to assign its rating of “___” to the 2022 Bonds, based on the understanding that the
Bond Insurer will deliver its municipal bond insurance policy with respect to the 2022 Bonds. In
addition, S&P has assigned its underlying municipal bond rating of “___” to the 2022 Bonds.
These ratings reflect only the view of S&P, and an explanation of the significance of the
ratings, and any outlook assigned to or associated with the ratings, should be obtained from S&P.
Generally, a rating agency bases its rating on the information and materials furnished to it and on
investigations, studies and assumptions of its own. The Successor Agency has provided certain
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additional information and materials to S&P (some of which does not appear in this Official
Statement).
There is no assurance that these ratings will continue for any given period of time or that
the ratings will not be revised downward or withdrawn entirely by S&P, if in the judgment of S&P,
circumstances so warrant. Any such downward revision or withdrawal of any rating on the 2022
Bonds may have an adverse effect on the market price or marketability of the 2022 Bonds.
CONTINUING DISCLOSURE
The Successor Agency will covenant for the benefit of owners of the 2022 Bonds to
provide certain financial information and operating data relating to the Successor Agency by not
later than April 1 after the end of each fiscal year of the Successor Agency (currently June 30th),
commencing not later than April 1, 2023 with the report for the 2021-22 fiscal year (the “Annual
Report”), and to provide notices of the occurrence of certain listed events. The specific nature of
the information to be contained in the Annual Report or the notices of listed events is summarized
in “APPENDIX D – Form of Continuing Disclosure Certificate,” attached to this Official Statement.
These covenants have been made in order to assist the Underwriter in complying with Securities
Exchange Commission Rule 15c2-12(b)(5) (the “Rule”).
The City and its related governmental entities, including the Successor Agency, have
previously entered into numerous disclosure undertakings under the Rule in connection with the
issuance of long-term obligations. During the last five years, the City and its related entities failed
to comply in certain respects with continuing disclosure obligations related to outstanding bonded
indebtedness. Such failures to comply included:
• the failure to file on a timely basis the City’s audited financial statements;
• the failure to file on a timely basis certain required annual operating data; and
• the failure to file on a timely basis significant event notices pertaining to rating
changes. [Confirm]
Subsequently, the City has engaged Kosmont Financial Services, Inc. as its dissemination
agent, to remediate its prior instances of non-compliance and ensure future compliance with its
continuing disclosure undertakings. Prior to the sale of the 2022 Bonds, the City has made all
remedial filings of all audited financial statements, annual operating data, and significant event
notices covering the prior five-year period.
CONCLUDING INFORMATION
Underwriting
The 2022 Bonds are being purchased by Ramirez & Co., Inc., as underwriter (the
“Underwriter”). The Underwriter has agreed to purchase the 2022 Bonds at a price of
$_________ (being the principal amount of the 2022 Bonds plus/less a [net] original issue
premium/discount of $_________ and less an Underwriter’s discount of $_________). The initial
public offering prices set forth on the cover page hereof may be changed by the Underwriter. The
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Underwriter may offer and sell the 2022 Bonds to certain dealers and others at a price lower than
the public offering prices set forth on inside cover page hereof.
The Underwriter may offer and sell 2022 Bonds to certain dealers and others at a price
lower than the offering price stated on the inside cover page of this Official Statement. The
offering price may be changed from time to time by the Underwriter.
Municipal Advisor
The Successor Agency has retained the services of Kosmont Financial Services, Inc.,
Manhattan Beach, California, as municipal advisor in connection with the sale of the 2022 Bonds.
The municipal advisor is not obligated to undertake, and has not undertaken to make, an
independent verification or to assume responsibility for the accuracy, completeness or fairness of
the information contained in this Official Statement. Compensation paid to the Municipal Advisor
is contingent upon the sale and delivery of the 2022 Bonds.
Legal Matters
The final approving opinion of Jones Hall, A Professional Law Corporation, San Francisco,
California, Bond Counsel, will be delivered at the time of delivery of the 2022 Bonds. A copy of
the proposed form of Bond Counsel’s final approving opinion with respect to the 2022 Bonds is
attached hereto as APPENDIX F. In addition, certain legal matters will be passed on by Jones
Hall, A Professional Law Corporation, as Disclosure Counsel and Stradling Yocca Carlson &
Rauth, as Underwriter’s Counsel. Certain legal matters will be passed on for the Successor
Agency by the City Attorney as counsel to the Successor Agency. Compensation paid to Bond
Counsel, Disclosure Counsel and Underwriter’s Counsel is contingent upon the sale and delivery
of the 2022 Bonds.
No Litigation
There is no action, suit or proceeding known to the Successor Agency to be pending and
notice of which has been served upon and received by the Successor Agency, or threatened,
restraining or enjoining the execution or delivery of the 2022 Bonds or the Indenture or in any way
contesting or affecting the validity of the foregoing or any proceedings of the Successor Agency
taken with respect to any of the foregoing.
Miscellaneous
All of the preceding summaries of the Indenture, the Redevelopment Law, the Dissolution
Act, other applicable legislation, the Project Areas, agreements and other documents are made
subject to the provisions of such documents respectively and do not purport to be complete
statements of any or all of such provisions. Reference is hereby made to such documents on file
with the Successor Agency for further information in connection therewith.
This Official Statement does not constitute a contract with the purchasers of the 2022
Bonds. Any statements made in this Official Statement involving matters of opinion or estimates,
whether or not so expressly stated, are set forth as such and not as representations of fact, and
no representation is made that any of the estimates will be realized.
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The execution and delivery of this Official Statement has been duly authorized by the
Successor Agency.
SUCCESSOR AGENCY TO THE
LYNWOOD REDEVELOPMENT AGENCY
By:
City Manager of the City of Lynwood
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APPENDIX A
SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE
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APPENDIX B
FISCAL CONSULTANT’S REPORT
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APPENDIX C
SUPPLEMENTAL INFORMATION – CITY OF LYNWOOD AND COUNTY OF LOS ANGELES
The following information concerning the City of Lynwood (the “City”) and the County of
Los Angeles (the “County”), is included only for the purpose of supplying general information.
The 2022 Bonds are not a debt of the City, the County, the State of California (the “State”) or any
of its political subdivisions, and neither the City, the County, the State nor any of its political
subdivisions is liable therefor.
General
The City. The City of Lynwood (the “City”) was incorporated in 1921 under the general
laws of the State of California (the “State”). The City is situated approximately 13 miles south of
downtown Los Angeles at the intersection of two major freeways. The local economy represents
a diverse blend of industrial, commercial, agricultural and residential development. The City
covers 4.9 square miles and serves a population of 66,723.
The County. The County of Los Angeles (the “County”) is located along the southern
coast of California, Los Angeles County covers about 4,080 square miles. It measures
approximately 75 miles from north to south and 70 miles from east to west. The county includes
Santa Catalina and San Clemente Islands and is bordered by the Pacific Ocean and Ventura,
San Bernardino and Orange Counties.
Almost half of the county is mountainous and some 14 percent is a coastal plain known
as the Los Angeles Basin. The low Santa Monica Mountains and Hollywood Hills run east and
west and form the northern boundary of the Basin and the southern boundary of the San Fernando
Valley. The San Fernando Valley terminates at the base of the San Gabriel Mountains whose
highest peak is over 10,000 feet. Beyond this mountain range the rest of the county is a semi-dry
plateau, the beginning of the vast Mojave Desert.
According to the Los Angeles County Regional Planning Commission, the 86 incorporated
cities in the county cover about 1,344 square miles or 27 percent of the total county. About 16
percent of the land in the County is devoted to residential use and over two thirds of the land is
open space and vacant.
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Population
The following table shows population estimates for the City, the County and the State for
the last five years.
CITY OF LYNWOOD, LOS ANGELES COUNTY, AND STATE OF CALIFORNIA
Population Estimates
Years 2018 through 2022, as of January 1
Year
City of
Lynwood
Los Angeles
County
State of
California
2018 71,972 10,192,593 39,519,535
2019 71,726 10,163,139 39,605,361
2020 68,575 10,014,009 39,538,223
2021 67,260 9,931,338 39,303,157
2022 66,723 9,861,224 39,185,605
Source: California Department of Finance, Demographic Research Unit.
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Employment and Industry
The seasonally adjusted unemployment rate in Los Angeles County increased over the
month to 5.3 percent in June 2022 from a revised 5.2 percent in May 2022 and was below the
rate of 9.7 percent a year ago. Civilian employment increased by 9,000 to 4,802,000 in June 2022,
while unemployment increased by 7,000 to 268,000 over the month. The civilian labor force
increased by 17,000 over the month to 5,071,000 in June 2022. All of the above figures are
seasonally adjusted. The unadjusted unemployment rate for the county was 5.2 percent in June
2022.
The California seasonally adjusted unemployment rate was 4.2 percent in June 2022, 4.3
percent in May 2022, and 7.9 percent a year ago in June 2021. The comparable estimates for the
nation were 3.6 percent in June 2022, 3.6 percent in May 2022, and 5.9 percent a year ago.
The table below lists employment by industry group for the County for the past five years
for which data is available.
LOS ANGELES-LONG BEACH-GLENDALE MD (LOS ANGELES COUNTY)
Annual Average Civilian Labor Force, Employment and Unemployment,
Calendar Years 2017 through 2021
(March 2021 benchmark)
2017 2018 2019 2020 2021
Civilian Labor Force (1) 5,109,800 5,121,300 5,153,100 4,968,900 4,994,100
Employment 4,864,100 4,885,300 4,926,100 4,355,900 4,548,900
Unemployment 245,700 235,900 227,000 613,000 445,200
Unemployment Rate 4.8% 4.6% 4.4% 12.3% 8.9%
Wage and Salary Employment:(2)
Agriculture 5,700 4,600 4,400 4,400 4,600
Mining and Logging 2,000 1,900 1,900 1,700 1,600
Construction 138,700 146,300 149,800 146,500 149,800
Manufacturing 350,400 342,600 340,700 315,100 311,700
Wholesale Trade 221,500 223,200 220,500 200,000 202,000
Retail Trade 425,900 424,600 417,700 380,200 401,400
Transportation, Warehousing, Utilities 198,200 203,600 212,900 207,800 214,200
Information 214,000 214,700 215,300 191,000 213,200
Financial Activities 221,600 223,200 223,600 212,600 210,800
Professional and Business Services 613,200 632,300 647,000 599,800 629,500
Educational and Health Services 797,400 817,900 839,900 820,300 839,600
Leisure and Hospitality 524,600 536,500 547,200 393,500 429,300
Other Services 155,700 158,800 158,400 128,700 134,100
Federal Government 48,000 47,300 47,300 50,200 47,600
State Government 92,500 91,700 86,500 89,000 89,200
Local Government 445,600 451,600 453,000 431,000 421,400
Total all Industries (3) 4,455,000 4,520,700 4,566,100 4,171,700 4,300,000
(1) Labor force data is by place of residence; includes self-employed individuals, unpaid family workers, household domestic workers,
and workers on strike.
(2) Industry employment is by place of work; excludes self-employed individuals, unpaid family workers, household domestic workers,
and workers on strike.
(3) Columns may not sum to totals due to rounding.
Source: State of California Employment Development Department.
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Principal Employers
The following table lists the principal employers within the City for fiscal year 2020-21.
CITY OF LYNWOOD
Principal Employers
Fiscal Year 2020-21
Employer Name
No. of
Employees
St. Francis Medical Center 1,853
Lynwood Unified School District 1,468
LA County Sheriff Department 263
City of Lynwood 202
PL Development 175
California Post-Acute Care 174
Granada Post-Acute 145
El Super 130
Superior Warehouse Grocers Inc. 127
Earle M. Jorgensen Company 120
Source: City of Lynwood.
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The following table lists, in alphabetical order, the largest manufacturing and non-
manufacturing employers within the County as of July 2022.
COUNTY OF LOS ANGELES
Major Employers
As of July 2022
(In Alphabetical Order)
Employer Name Location Industry
AHMC Healthcare Inc Alhambra Health Care Management
All Nations Church Sylmar Churches
California State Univ NRTHRDG Northridge Schools-Universities & Colleges Academic
Cedars-Sinai Health System West Hollywood Health Care Management
Infineon Technologies Americas El Segundo Semiconductor Devices (mfrs)
Kaiser Permanente Los Angeles Los Angeles Hospitals
Live Nation Los Angeles Entertainment Bureaus
Long Beach City Hall Long Beach City Hall
Longshore Dispatch Wilmington Nonclassified Establishments
Los Angeles County Sheriff Monterey Park Government Offices-County
Los Angeles Intl Airport-Lax Los Angeles Airports
Los Angeles Medical Ctr Los Angeles Pathologists
Los Angeles Police Dept Los Angeles Police Departments
National Institutes of Health Pasadena Physicians & Surgeons
Security Industry Specialist Culver City Security Systems Consultants
Six Flags Valencia Amusement & Theme Parks
Sony Pictures Entrtn Inc Culver City Motion Picture Producers & Studios
Space Exploration Tech Corp Hawthorne Aerospace Industries (mfrs)
Twentieth Century Fox Los Angeles Motion Picture Producers & Studios
UCLA Community Based Learning Los Angeles Junior-Community College-Tech Institutes
University of Ca Los Angeles Los Angeles Schools-Universities & Colleges Academic
University of Ca Los Angeles Los Angeles University-College Dept/Facility/Office
Vision X Los Angeles Call Centers
Walt Disney Co Burbank Water Parks
Water Garden Management Santa Monica Office Buildings & Parks
Source: State of California Employment Development Department, extracted from The America’s Labor Market Information System
(ALMIS) Employer Database, 2022 2nd edition.
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Effective Buying Income
“Effective Buying Income” is defined as personal income less personal tax and nontax
payments, a number often referred to as “disposable” or “after-tax” income. Personal income is
the aggregate of wages and salaries, other labor-related income (such as employer contributions
to private pension funds), proprietor’s income, rental income (which includes imputed rental
income of owner-occupants of non-farm dwellings), dividends paid by corporations, interest
income from all sources, and transfer payments (such as pensions and welfare assistance).
Deducted from this total are personal taxes (federal, state and local), nontax payments (fines,
fees, penalties, etc.) and personal contributions to social insurance. According to U.S.
government definitions, the resultant figure is commonly known as “disposable personal income.”
The following table summarizes the total effective buying income for the City, the County,
the State and the United States for the period 2018 through 2022.
CITY OF LYNWOOD AND COUNTY OF LOS ANGELES
Effective Buying Income
As of January 1, 2018 through 2022
Year
Area
Total Effective
Buying Income
(000’s Omitted)
Median
Household
Effective
Buying Income
2018 City of Lynwood $773,863 $43,143
Los Angeles County 271,483,825 56,831
California 1,183,264,399 62,637
United States 9,017,967,563 52,841
2019 City of Lynwood $811,764 $44,123
Los Angeles County 271,483,825 56,831
California 1,183,264,399 62,637
United States 9,017,967,563 52,841
2020 City of Lynwood $854,790 $46,137
Los Angeles County 281,835,290 60,174
California 1,243,564,816 65,870
United States 9,487,165,436 55,303
2021 City of Lynwood $894,319 $48,821
Los Angeles County 289,720,470 62,353
California 1,290,894,604 67,956
United States 9,809,944,764 56,790
2022 City of Lynwood $1,035,105 $57,406
Los Angeles County 327,445,237 71,404
California 1,452,426,153 77,058
United States 11,208,582,541 64,448
Source: The Nielsen Company (US), Inc for year 2018; Claritas, LLC for 2019 through 2022.
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Commercial Activity
A summary of historic taxable sales within the City and the County during the past five
years for which data is available is shown in the following tables.
Total taxable sales during the first quarter of calendar year 2022 in the City were reported
to be $134,795,375 a 21.42% increase over the total taxable sales of $111,015,634 reported
during the first quarter of calendar year 2021.
CITY OF LYNWOOD
Taxable Transactions
Number of Permits and Valuation of Taxable Transactions
(Dollars in Thousands)
Retail Stores Total All Outlets
Number
of Permits
Taxable
Transactions
Number
of Permits
Taxable
Transactions
2017 837 $307,586 1,199 $351,191
2018 879 331,014 1,285 371,417
2019 925 342,942 1,384 387,448
2020 1,040 321,844 1,582 374,323
2021 1,017 407,495 1,541 504,825
Source: State Department of Tax and Fee Administration.
Total taxable sales during the first quarter of calendar year 2022 in the County were
reported to be approximately $49,264,891,104, a 21.61% increase over the total taxable sales of
approximately $40,509,416,417 reported during the first quarter of calendar year 2021.
COUNTY OF LOS ANGELES
Taxable Retail Sales
Number of Permits and Valuation of Taxable Transactions
(Figures in Thousands)
Retail Stores Total All Outlets
Number
of Permits
Taxable
Transactions
Number
of Permits
Taxable
Transactions
2017 197,452 $113,280,347 313,226 $159,259,356
2018 200,603 119,145,054 328,047 166,023,796
2019 206,732 122,137,664 342,359 171,776,327
2020 226,643 112,044,029 376,990 155,678,156
2021 208,412 138,932,925 349,061 192,273,178
Source: State Department of Tax and Fee Administration.
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Construction
Construction activity in the City and the County for the past five years for which data is
available is shown in the following tables.
CITY OF LYNWOOD
Building Permit Valuation
For Calendar Years 2017 through 2021
(Dollars in Thousands)(1)
2017 2018 2019 2020 2021
Permit Valuation
New Single-family $2,806.0 $1,587.0 $1,458.8 $0.0 $3,278.6
New Multi-family 565.0 0.0 0.0 0.0 2,802.6
Res. Alterations/Additions 0.0 4,468.0 906.3 240.0 270.0
Total Residential 3,371.0 6,055.0 2,365.1 240.0 6,351.2
New Commercial 0.0 0.0 3,900.0 0.0 0.0
New Industrial 0.0 0.0 0.0 0.0 0.0
New Other 0.0 1,035.4 259.1 55.0 140.0
Com. Alterations/Additions 0.0 12,238.0 751.0 190.0 5.0
Total Nonresidential 0.0 13,273.4 4,910.1 245.0 145.0
New Dwelling Units
Single Family 14 8 10 0 41
Multiple Family 3 0 0 0 7
TOTAL 17 8 10 0 48
(1) Totals may not foot due to rounding.
Source: Construction Industry Research Board, Building Permit Summary.
LOS ANGELES COUNTY
Building Permit Valuation
For Calendar Years 2017 through 2021
(Dollars in Thousands)(1)
2017 2018 2019 2020 2021
Permit Valuation
New Single-family $2,352,614.8 $2,277,101.5 $1,967,219.3 $1,874,304.5 $2,085,629.2
New Multi-family 3,257,833.4 3,222,530.3 2,61,257.4 2,789,673.9 3,026,725.8
Res. Alterations/Additions 1,757,904.1 1,941,369.5 1,625,839.3 1,014,422.1 908,148.2
Total Residential 7,368,352.3 7,441,001.3 6,554,316.0 5,678,400.5 6,020,503.2
New Commercial 2,196,089.2 2,844,173.0 2,675,678.8 1,885,027.0 577,756.7
New Industrial 134,534.3 101,201.3 63,727.8 32,196.2 27,844.8
New Other 563,679.3 952,347.7 446,182.7 354,758.2 311,726.3
Com. Alterations/Additions 3,143,200.2 2,796,375.3 3,404,012.3 1,241,068.1 946,020.7
Total Nonresidential 6,037,503.0 6,694,097.3 6,589,601.6 3,513,049.5 1,863,348.5
New Dwelling Units
Single Family 5,456 6,070 5,738 6,198 7,327
Multiple Family 17,023 17,152 15,884 14,056 16,718
TOTAL 22,479 23,222 21,622 20,254 24,045
(1) Totals may not foot due to rounding.
Source: Construction Industry Research Board, Building Permit Summary.
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APPENDIX D
FORM OF CONTINUING DISCLOSURE CERTIFICATE
$_____________
SUCCESSOR AGENCY TO THE
LYNWOOD REDEVELOPMENT AGENCY
2022 TAX ALLOCATION REFUNDING BONDS
(FEDERALLY TAXABLE)
This CONTINUING DISCLOSURE CERTIFICATE (this “Disclosure Certificate”) is
executed and delivered by the SUCCESSOR AGENCY TO THE LYNWOOD REDEVELOPMENT
AGENCY (the “Successor Agency”) in connection with the execution and delivery of the bonds
captioned above (the “Bonds”). The Bonds are being issued pursuant to an Indenture of Trust,
dated as of November 1, 2022 (the “Indenture”), by and between the Successor Agency and U.S.
Bank Trust Company, National Association, as trustee.
The Successor Agency covenants and agrees as follows:
Section 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being
executed and delivered by the Successor Agency for the benefit of the holders and beneficial
owners of the Bonds and in order to assist the Participating Underwriter in complying with S.E.C.
Rule 15c2-12(b)(5).
Section 2. Definitions. In addition to the definitions set forth above and in the Indenture,
which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in
this Section 2, the following capitalized terms shall have the following meanings:
“Annual Report” means any Annual Report provided by the Successor Agency pursuant
to, and as described in, Sections 3 and 4 of this Disclosure Certificate.
“Annual Report Date” means the date that is nine months after the end of the Successor
Agency’s fiscal year (currently April 1 based on the Successor Agency’s fiscal year end of June
30).
“Dissemination Agent” means Kosmont Financial Services, Inc., or any successor
Dissemination Agent designated in writing by the Successor Agency and which has filed with the
Successor Agency a written acceptance of such designation.
“Listed Events” means any of the events listed in Section 5(a) of this Disclosure Certificate.
“MSRB” means the Municipal Securities Rulemaking Board, which has been designated
by the Securities and Exchange Commission as the sole repository of disclosure information for
purposes of the Rule, or any other repository of disclosure information that may be designated by
the Securities and Exchange Commission as such for purposes of the Rule in the future.
“Official Statement” means the final official statement executed by the Successor Agency
in connection with the issuance of the Bonds.
“Participating Underwriter” means Ramirez & Co., Inc., as the original underwriter of the
Bonds required to comply with the Rule in connection with offering of the Bonds.
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“Rule” means Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission
under the Securities Exchange Act of 1934, as it may be amended from time to time.
Section 3. Provision of Annual Reports.
(a) The Successor Agency shall, or shall cause the Dissemination Agent to, not later
than the Annual Report Date, commencing April 1, 2023, with the report for the 2021-22 fiscal
year, provide to the MSRB, in an electronic format as prescribed by the MSRB, an Annual Report
that is consistent with the requirements of Section 4 of this Disclosure Certificate. Not later than
15 Business Days prior to the Annual Report Date, the Successor Agency shall provide the Annual
Report to the Dissemination Agent (if other than the Successor Agency). If by 15 Business Days
prior to the Annual Report Date the Dissemination Agent (if other than the Successor Agency)
has not received a copy of the Annual Report, the Dissemination Agent shall contact the
Successor Agency to determine if the Successor Agency is in compliance with the previous
sentence. The Annual Report may be submitted as a single document or as separate documents
comprising a package, and may include by reference other information as provided in Section 4
of this Disclosure Certificate; provided that the audited financial statements of the Successor
Agency may be submitted separately from the balance of the Annual Report, and later than the
Annual Report Date, if not available by that date. If the Successor Agency’s fiscal year changes,
it shall give notice of such change in the same manner as for a Listed Event under Section 5(c).
The Successor Agency shall provide a written certification with each Annual Report furnished to
the Dissemination Agent to the effect that such Annual Report constitutes the Annual Report
required to be furnished by the Successor Agency hereunder.
(b) If the Successor Agency does not provide (or cause the Dissemination Agent to
provide) an Annual Report by the Annual Report Date, the Successor Agency shall provide (or
cause the Dissemination Agent to provide) to the MSRB, in an electronic format as prescribed by
the MSRB, a notice in substantially the form attached as Exhibit A.
(c) With respect to each Annual Report, the Dissemination Agent shall:
(i) determine each year prior to the Annual Report Date the then-applicable
rules and electronic format prescribed by the MSRB for the filing of annual continuing
disclosure reports; and
(ii) if the Dissemination Agent is other than the Successor Agency, file a report
with the Successor Agency certifying that the Annual Report has been provided pursuant
to this Disclosure Certificate, and stating the date it was provided.
Section 4. Content of Annual Reports. The Successor Agency’s Annual Report shall
contain or incorporate by reference the following:
(a) The Successor Agency’s audited financial statements prepared in accordance with
generally accepted accounting principles as promulgated to apply to governmental entities from
time to time by the Governmental Accounting Standards Board. If the Successor Agency’s
audited financial statements are not available by the Annual Report Date, the Annual Report shall
contain unaudited financial statements in a format similar to the financial statements contained in
the final Official Statement, and the audited financial statements shall be filed in the same manner
as the Annual Report when they become available.
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(b) Unless otherwise provided in the audited financial statements filed on or before the
Annual Report Date, financial information and operating data with respect to the Successor
Agency for the preceding fiscal year, substantially similar to that provided in the corresponding
tables in the Official Statement:
(i) Principal amount of Bonds outstanding as of June 30 of the most recently-
completed fiscal year.
(ii) Balance in the Debt Service Reserve Account and a statement of any draws on
the Reserve Policy as of June 30 of the most recently-completed fiscal year.
(iii) The information in the following tables of the Official Statement for the most
recently completed fiscal year: Table 1A and Table 1B, Table 2A and Table 2B,
Table 5A and Table 5B, and Table 10 (most recently completed fiscal year only).
[To be finalized]
(c) In addition to any of the information expressly required to be provided under this
Disclosure Certificate, the Successor Agency shall provide such further material information, if
any, as may be necessary to make the specifically required statements, in the light of the
circumstances under which they are made, not misleading.
(d) Any or all of the items listed above may be included by specific reference to other
documents, including official statements of debt issues of the Successor Agency or related public
entities, which are available to the public on the MSRB’s Internet web site or filed with the
Securities and Exchange Commission. The Successor Agency shall clearly identify each such
other document so included by reference.
Section 5. Reporting of Significant Events.
(a) The Successor Agency shall give, or cause to be given, notice of the occurrence
of any of the following Listed Events with respect to the Bonds:
(1) Principal and interest payment delinquencies.
(2) Non-payment related defaults, if material.
(3) Unscheduled draws on debt service reserves reflecting financial difficulties.
(4) Unscheduled draws on credit enhancements reflecting financial difficulties.
(5) Substitution of credit or liquidity providers, or their failure to perform.
(6) Adverse tax opinions, the issuance by the Internal Revenue Service of
proposed or final determinations of taxability, Notices of Proposed Issue
(IRS Form 5701-TEB) or other material notices or determinations with
respect to the tax status of the security, or other material events affecting
the tax status of the security.
(7) Modifications to rights of security holders, if material.
(8) Bond calls, if material, and tender offers.
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(9) Defeasances.
(10) Release, substitution, or sale of property securing repayment of the
securities, if material.
(11) Rating changes.
(12) Bankruptcy, insolvency, receivership or similar event of the Successor
Agency or other obligated person.
(13) The consummation of a merger, consolidation, or acquisition involving the
Successor Agency or an obligated person, or the sale of all or substantially
all of the assets of the Successor Agency or an obligated person (other
than in the ordinary course of business), the entry into a definitive
agreement to undertake such an action, or the termination of a definitive
agreement relating to any such actions, other than pursuant to its terms, if
material.
(14) Appointment of a successor or additional trustee or the change of name of
a trustee, if material.
(15) Incurrence of a financial obligation of the Successor Agency, if material, or
agreement to covenants, events of default, remedies, priority rights, or
other similar terms of a financial obligation of the Successor Agency, any
of which affect security holders, if material (for the definition of “financial
obligation,” see clause (e)).
(16) Default, event of acceleration, termination event, modification of terms, or
other similar events under the terms of a financial obligation of the
Successor Agency, any of which reflect financial difficulties (for the
definition of “financial obligation,” see clause (e)).
(b) Whenever the Successor Agency obtains knowledge of the occurrence of a Listed
Event, the Successor Agency shall, or shall cause the Dissemination Agent (if not the Successor
Agency) to, file a notice of such occurrence with the MSRB, in an electronic format as prescribed
by the MSRB, in a timely manner not in excess of 10 business days after the occurrence of the
Listed Event. Notwithstanding the foregoing, notice of Listed Events described in subsections
(a)(8) and (9) above need not be given under this subsection any earlier than the notice (if any)
of the underlying event is given to holders of affected Bonds under the Indenture.
(c) The Successor Agency acknowledges that the events described in subparagraphs
(a)(2), (a)(7), (a)(8) (if the event is a bond call), (a)(10), (a)(13), (a)(14) and (a)(15) of this Section
5 contain the qualifier “if material” and that subparagraph (a)(6) also contains the qualifier
“material” with respect to certain notices, determinations or other events affecting the tax status
of the Bonds. The Successor Agency shall cause a notice to be filed as set forth in paragraph (b)
above with respect to any such event only to the extent that it determines the event’s occurrence
is material for purposes of U.S. federal securities law. Whenever the Successor Agency obtains
knowledge of the occurrence of any of these Listed Events, the Successor Agency will as soon
as possible determine if such event would be material under applicable federal securities law. If
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such event is determined to be material, the Successor Agency will cause a notice to be filed as
set forth in paragraph (b) above.
(d) For purposes of this Disclosure Certificate, any event described in paragraph
(a)(12) above is considered to occur when any of the following occur: the appointment of a
receiver, fiscal agent, or similar officer for the Successor Agency in a proceeding under the United
States Bankruptcy Code or in any other proceeding under state or federal law in which a court or
governmental authority has assumed jurisdiction over substantially all of the assets or business
of the Successor Agency, or if such jurisdiction has been assumed by leaving the existing
governing body and officials or officers in possession but subject to the supervision and orders of
a court or governmental authority, or the entry of an order confirming a plan of reorganization,
arrangement, or liquidation by a court or governmental authority having supervision or jurisdiction
over substantially all of the assets or business of the Successor Agency.
(e) For purposes of Section 5(a)(15) and (16), “financial obligation” means a (i) debt
obligation; (ii) derivative instrument entered into in connection with, or pledged as security or a
source of payment for, an existing or planned debt obligation; or (iii) guarantee of (i) or (ii). The
term financial obligation shall not include municipal securities as to which a final official statement
has been provided to the MSRB consistent with the Rule.
Section 6. Identifying Information for Filings with the MSRB. All documents provided to
the MSRB under the Disclosure Certificate shall be accompanied by identifying information as
prescribed by the MSRB.
Section 7. Termination of Reporting Obligation. The Successor Agency’s obligations under
this Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or payment
in full of all of the Bonds. If such termination occurs prior to the final maturity of the Bonds, the
Successor Agency shall give notice of such termination in the same manner as for a Listed Event
under Section 5(b).
Section 8. Dissemination Agent. The Successor Agency may, from time to time, appoint
or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure
Certificate, and may discharge any Dissemination Agent, with or without appointing a successor
Dissemination Agent. The initial Dissemination Agent shall be the Successor Agency. Any
Dissemination Agent may resign by providing 30 days’ written notice to the Successor Agency.
Section 9. Amendment; Waiver. Notwithstanding any other provision of this Disclosure
Certificate, the Successor Agency may amend this Disclosure Certificate, and any provision of
this Disclosure Certificate may be waived, provided that the following conditions are satisfied:
(a) if the amendment or waiver relates to the provisions of Sections 3(a), 4 or
5(a), it may only be made in connection with a change in circumstances that arises from
a change in legal requirements, change in law, or change in the identity, nature, or status
of an obligated person with respect to the Bonds, or type of business conducted;
(b) the undertakings herein, as proposed to be amended or waived, would, in
the opinion of nationally recognized bond counsel, have complied with the requirements
of the Rule at the time of the primary offering of the Bonds, after taking into account any
amendments or interpretations of the Rule, as well as any change in circumstances; and
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(c) the proposed amendment or waiver either (i) is approved by holders of the
Bonds in the manner provided in the Indenture for amendments to the Indenture with the
consent of holders, or (ii) does not, in the opinion of nationally recognized bond counsel,
materially impair the interests of the holders or beneficial owners of the Bonds.
If the annual financial information or operating data to be provided in the Annual Report is
amended pursuant to the provisions hereof, the first Annual Report filed pursuant hereto
containing the amended operating data or financial information shall explain, in narrative form,
the reasons for the amendment and the impact of the change in the type of operating data or
financial information being provided.
If an amendment is made to this Disclosure Certificate modifying the accounting principles
to be followed in preparing financial statements, the Annual Report for the year in which the
change is made shall present a comparison between the financial statements or information
prepared on the basis of the new accounting principles and those prepared on the basis of the
former accounting principles. The comparison shall include a qualitative discussion of the
differences in the accounting principles and the impact of the change in the accounting principles
on the presentation of the financial information, in order to provide information to investors to
enable them to evaluate the ability of the Successor Agency to meet its obligations. To the extent
reasonably feasible, the comparison shall be quantitative.
A notice of any amendment made pursuant to this Section 9 shall be filed in the same
manner as for a Listed Event under Section 5(b).
Section 10. Additional Information. Nothing in this Disclosure Certificate shall be deemed
to prevent the Successor Agency from disseminating any other information, using the means of
dissemination set forth in this Disclosure Certificate or any other means of communication, or
including any other information in any Annual Report or notice of occurrence of a Listed Event, in
addition to that which is required by this Disclosure Certificate. If the Successor Agency chooses
to include any information in any Annual Report or notice of occurrence of a Listed Event in
addition to that which is specifically required by this Disclosure Certificate, the Successor Agency
shall have no obligation under this Disclosure Certificate to update such information or include it
in any future Annual Report or notice of occurrence of a Listed Event.
Section 11. Default. If the Successor Agency fails to comply with any provision of this
Disclosure Certificate, the Participating Underwriter or any holder or beneficial owner of the Bonds
may take such actions as may be necessary and appropriate, including seeking mandate or
specific performance by court order, to cause the Successor Agency to comply with its obligations
under this Disclosure Certificate. A default under this Disclosure Certificate shall not be deemed
an Event of Default under the Indenture, and the sole remedy under this Disclosure Certificate in
the event of any failure of the Successor Agency to comply with this Disclosure Certificate shall
be an action to compel performance.
Section 12. Duties, Immunities and Liabilities of Dissemination Agent.
(a) The Dissemination Agent shall have only such duties as are specifically set forth in this
Disclosure Certificate, and the Successor Agency agrees to indemnify and save the
Dissemination Agent, its officers, directors, employees and agents, harmless against any loss,
expense and liabilities which they may incur arising out of or in the exercise or performance of its
powers and duties hereunder, including the costs and expenses (including attorneys’ fees) of
defending against any claim of liability, but excluding liabilities due to the Dissemination Agent’s
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negligence or willful misconduct. The Dissemination Agent shall have no duty or obligation to
review any information provided to it by the Successor Agency hereunder, and shall not be
deemed to be acting in any fiduciary capacity for the Successor Agency, the Bond holders or any
other party. The obligations of the Successor Agency under this Section shall survive resignation
or removal of the Dissemination Agent and payment of the Bonds.
(b) The Dissemination Agent shall be paid compensation by the Successor Agency for its
services provided hereunder in accordance with its schedule of fees as amended from time to
time, and shall be reimbursed for all expenses, legal fees and advances made or incurred by the
Dissemination Agent in the performance of its duties hereunder.
Section 13. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the
Successor Agency, the Dissemination Agent, the Participating Underwriter and the holders and
beneficial owners from time to time of the Bonds, and shall create no rights in any other person
or entity.
Section 14. Counterparts. This Disclosure Certificate may be executed in several
counterparts, each of which shall be regarded as an original, and all of which shall constitute one
and the same instrument.
Date: ___________, 2022
SUCCESSOR AGENCY TO THE
LYNWOOD REDEVELOPMENT AGENCY
By:
Authorized Officer
Acknowledged and Agreed to by:
KOSMONT FINANCIAL SERVICES,
INC., as Dissemination Agent
By:________________________________
Authorized Officer
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EXHIBIT A
NOTICE OF FAILURE TO FILE ANNUAL REPORT
Name of Issuer: Successor Agency to the Lynwood Redevelopment Agency
Name of Issue: 2022 Tax Allocation Refunding Bonds (Federally Taxable)
Date of Issuance: _________, 2022
NOTICE IS HEREBY GIVEN that the Successor Agency has not provided an Annual Report with
respect to the above-named Bonds as required by the Continuing Disclosure Certificate dated as of ______,
2022. The Successor Agency anticipates that the Annual Report will be filed by ________________.
Dated:
DISSEMINATION AGENT:
KOSMONT FINANCIAL SERVICES, INC.
By:
Its:
cc: Successor Agency to the Lynwood
Redevelopment Agency
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APPENDIX E
CITY OF LYNWOOD ANNUAL COMPREHENSIVE FINANCIAL REPORT
FOR FISCAL YEAR ENDED JUNE 30, 2021
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APPENDIX F
FORM OF BOND COUNSEL OPINION
[Closing Date]
Successor Agency to the Lynwood Redevelopment Agency
11330 Bullis Road
Lynwood, CA 90262
OPINION: $___________ Successor Agency to the Lynwood Redevelopment Agency
2022 Tax Allocation Refunding Bonds (Federally Taxable)
Members of the Successor Agency:
We have acted as bond counsel to the Successor Agency to the Lynwood Redevelopment
Agency (the “Agency”) in connection with the issuance by the Agency of its $__________
aggregate principal amount of Successor Agency to the Lynwood Redevelopment Agency 2022
Tax Allocation Refunding Bonds (Federally Taxable) (the “Bonds”).
The Bonds are issued under the Community Redevelopment Law (being Part 1 of Division
24 of the California Health and Safety Code) (the “Law”), under Part 1.85 (commencing with
Section 34170) of Division 24 of the California Health and Safety Code (the “Dissolution Act”),
under the provisions of Article 11 (commencing with Section 53580) of Chapter 3 of Part 1 of
Division 2 of Title 5 of the California Government Code (the “Refunding Law”), and under an
Indenture of Trust dated as of November 1, 2022, by and between the Agency and U.S. Bank
Trust Company, National Association, as trustee (the “Indenture”). We have examined the law
and such certified proceedings and other papers as we deem necessary to render this opinion.
Regarding questions of fact material to our opinion, we have relied on representations of
the Agency contained in the Indenture and in certified proceedings and other certifications of
public officials furnished to us, without undertaking to verify the same by independent
investigation.
Based upon the foregoing, we are of the opinion, under existing law, as follows:
1. The Agency is validly existing as a public entity, with the power to execute and deliver
the Indenture, perform the agreements on its part contained therein, and issue the Bonds.
2. The Indenture has been duly executed and delivered by the Agency and constitutes
the valid and binding obligation of the Agency enforceable upon the Agency.
3. Pursuant to the Law, the Indenture creates a valid lien on the funds pledged by the
Indenture for the security of the Bonds, subject to no prior lien granted under the Law and the
Dissolution Act, except as provided therein.
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4. The Bonds have been duly authorized, executed and delivered by the Agency and
are valid and binding special obligations of the Agency payable solely from the sources provided
therefor in the Indenture.
5. The interest on the Bonds is exempt from personal income taxation imposed by the
State of California.
We express no opinion regarding any other tax consequences arising with respect to the
ownership, sale or disposition of, or the amount, accrual or receipt of interest on, the Bonds.
The rights of the owners of the Bonds, and the enforceability of the Bonds and the
Indenture, are limited by bankruptcy, insolvency, reorganization, moratorium and other similar
laws affecting creditors’ rights generally, and by equitable principles, whether considered at law
or in equity.
This opinion is given as of the date hereof, and we assume no obligation to revise or
supplement this opinion to reflect any facts or circumstances that may hereafter come to our
attention, or any changes in law that may hereafter occur. Our engagement with respect to this
matter has terminated as of the date hereof.
Respectfully submitted,
A Professional Law Corporation
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APPENDIX G
BOOK-ENTRY ONLY SYSTEM
The information in this Appendix concerning The Depository Trust Company (“DTC”), and
DTC’s book-entry system has been obtained from DTC and the Successor Agency takes no
responsibility for the completeness or accuracy thereof. The Successor Agency cannot and does
not give any assurances that DTC, DTC Participants or Indirect Participants will distribute to the
Beneficial Owners (a) payments of interest, principal or premium, if any, with respect to the 2022
Bonds, (b) certificates representing ownership interest in or other confirmation or ownership
interest in the 2022 Bonds, or (c) redemption or other notices sent to DTC or Cede & Co., its
nominee, as the registered owner of the 2022 Bonds, or that they will so do on a timely basis, or
that DTC, DTC Participants or DTC Indirect Participants will act in the manner described in this
Appendix. The current “Rules” applicable to DTC are on file with the Securities and Exchange
Commission and the current “Procedures” of DTC to be followed in dealing with DTC Participants
are on file with DTC.
The Depository Trust Company (“DTC”) will act as securities depository for the 2022
Bonds. The 2022 Bonds will be issued as fully-registered securities registered in the name of
Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an
authorized representative of DTC. One fully-registered certificate will be issued for each maturity
of the 2022 Bonds, each in the aggregate principal amount of such maturity, and will be deposited
with DTC.
DTC, the world’s largest securities depository, is a limited-purpose trust company
organized under the New York Banking Law, a “banking organization” within the meaning of the
New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within
the meaning of the New York Uniform Commercial Code, and a “clearing Successor Agency”
registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC
holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues,
corporate and municipal debt issues, and money market instruments (from over 100 countries)
that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post-
trade settlement among Direct Participants of sales and other securities transactions in deposited
securities, through electronic computerized book-entry transfers and pledges between Direct
Participants’ accounts. This eliminates the need for physical movement of securities certificates.
Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust
companies, clearing corporations, and certain other organizations. DTC is a wholly-owned
subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding
company for DTC, National Securities Clearing Corporation and Fixed Income Clearing
Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its
regulated subsidiaries. Access to the DTC system is also available to others such as both U.S.
and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations
that clear through or maintain a custodial relationship with a Direct Participant, either directly or
indirectly (“Indirect Participants”). DTC has a Standard & Poor’s rating of AA+. The DTC Rules
applicable to its Participants are on file with the Securities and Exchange Commission. More
information about DTC can be found at www.dtcc.com. The information set forth on such website
is not incorporated herein by reference.
Purchases of Bonds under the DTC system must be made by or through Direct
Participants, which will receive a credit for the 2022 Bonds on DTC’s records. The ownership
interest of each actual purchaser of each Bond (“Beneficial Owner”) is in turn to be recorded on
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the Direct and Indirect Participants’ records. Beneficial Owners will not receive written
confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive
written confirmations providing details of the transaction, as well as periodic statements of their
holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into
the transaction. Transfers of ownership interests in the 2022 Bonds are to be accomplished by
entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial
Owners. Beneficial Owners will not receive certificates representing their ownership interests in
Bonds, except in the event that use of the book-entry system for the 2022 Bonds is discontinued.
To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are
registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may
be requested by an authorized representative of DTC. The deposit of Bonds with DTC and their
registration in the name of Cede & Co. or such other DTC nominee do not effect any change in
beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the 2022 Bonds;
DTC’s records reflect only the identity of the Direct Participants to whose accounts such Bonds
are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants
will remain responsible for keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct Participants, by Direct
Participants to Indirect Participants, and by Direct Participants and Indirect Participants to
Beneficial Owners will be governed by arrangements among them, subject to any statutory or
regulatory requirements as may be in effect from time to time. Beneficial Owners of Bonds may
wish to take certain steps to augment the transmission to them of notices of significant events
with respect to the 2022 Bonds, such as redemptions, tenders, defaults, and proposed
amendments to the legal documents for the 2022 Bonds. For example, Beneficial Owners of
Bonds may wish to ascertain that the nominee holding the 2022 Bonds for their benefit has agreed
to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may
wish to provide their names and addresses to the registrar and request that copies of notices be
provided directly to them.
Redemption notices shall be sent to DTC. If less than all of the 2022 Bonds within a
maturity are being redeemed, DTC’s practice is to determine by lot the amount of the interest of
each Direct Participant in such maturity to be redeemed.
Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with
respect to Bonds unless authorized by a Direct Participant in accordance with DTC’s MMI
Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Successor Agency
as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting
or voting rights to those Direct Participants to whose accounts Bonds are credited on the record
date (identified in a listing attached to the Omnibus Proxy).
Principal, premium (if any), and interest payments on the 2022 Bonds will be made to
Cede & Co., or such other nominee as may be requested by an authorized representative of DTC.
DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and
corresponding detail information from the Successor Agency or the Trustee, on payable date in
accordance with their respective holdings shown on DTC’s records. Payments by Participants to
Beneficial Owners will be governed by standing instructions and customary practices, as is the
case with securities held for the accounts of customers in bearer form or registered in “street
name,” and will be the responsibility of such Participant and not of DTC, the Trustee, or the
Successor Agency, subject to any statutory or regulatory requirements as may be in effect from
time to time. Principal, premium (if any), and interest payments with respect to the 2022 Bonds
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to Cede & Co. (or such other nominee as may be requested by an authorized representative of
DTC) is the responsibility of the Successor Agency or the Trustee, disbursement of such
payments to Direct Participants will be the responsibility of DTC, and disbursement of such
payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.
DTC may discontinue providing its services as depository with respect to the 2022 Bonds
at any time by giving reasonable notice to the Successor Agency or the Trustee. Under such
circumstances, in the event that a successor depository is not obtained, certificates representing
the 2022 Bonds are required to be printed and delivered.
The Successor Agency may decide to discontinue use of the system of book-entry-only
transfers through DTC (or a successor securities depository). In that event, representing the 2022
Bonds will be printed and delivered to DTC in accordance with the provisions of the Indenture.
The information in this section concerning DTC and DTC’s book-entry system has been
obtained from sources that the Successor Agency believes to be reliable, but the Successor
Agency takes no responsibility for the accuracy thereof.
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$_______
Successor Agency to the Redevelopment Agency of the City of Lynwood
2022 Tax Allocation Refunding Bonds (Taxable)
BOND PURCHASE AGREEMENT
_______, 2022
Successor Agency to the Redevelopment Agency of the City of Lynwood
11330 Bullis Road
Lynwood, California
Ladies and Gentlemen:
Samuel A. Ramirez & Company, Inc. (the “Underwriter”) offers to enter into this Bond
Purchase Agreement (this “Purchase Agreement”) with the Successor Agency to the Redevelopment
Agency of the City of Lynwood (the “Agency”) which will be binding upon the Agency and the
Underwriter upon the acceptance hereof by the Agency. This offer is made subject to its acceptance
by the Agency by execution of this Purchase Agreement and its delivery to the Underwriter on or
before 5:00 p.m., California time, on the date hereof. All terms used herein and not otherwise
defined shall have the respective meanings given to such terms in the Indenture (as hereinafter
defined).
The Agency acknowledges and agrees that: (a) the purchase and sale of the Bonds pursuant
to this Purchase Agreement is an arm’s-length commercial transaction between the Agency and the
Underwriter, and the only obligations that the Underwriter has to the Agency with respect to the
transaction contemplated hereby expressly are set forth in this Purchase Agreement; (b) in connection
therewith and with the discussions, undertakings and procedures leading up to the consummation of
such transaction, the Underwriter is and has been acting solely as principal and is not acting as a
Municipal Advisor (as such term is defined in Section 15B of The Securities Exchange Act of 1934,
as amended) to the Agency; (c) the Underwriter has not assumed an advisory or fiduciary
responsibility in favor of the Agency with respect to the offering contemplated hereby or the
discussions, undertakings and procedures leading thereto (irrespective of whether the Underwriter
has provided other services or is currently providing other services to the Agency on other matters);
(d) the Underwriter has financial and other interests that may differ from and be adverse to those of
the Agency; and (e) the Agency has consulted its own legal, financial, accounting, tax and other
advisors to the extent that it has deemed appropriate.
1. Purchase, Sale and Delivery of the Bonds. Upon the terms and conditions and upon
the basis of the representations, warranties and agreements hereinafter set forth, the Underwriter
hereby agrees to purchase from the Agency for offering to the public, and the Agency hereby agrees
to sell to the Underwriter for such purpose, all (but not less than all) of the $_____aggregate principal
amount of the Agency’s 2022 Tax Allocation Refunding Bonds (Taxable) (the “Bonds”), at a
purchase price equal to $_____ (being the aggregate principal amount thereof, plus original issue
premium of $_____and less an Underwriter’s discount of $______). The Bonds are to be purchased
by the Underwriter from the Agency. As an accommodation to the Agency, the Underwriter shall
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wire directly to the Insurer (defined below) $_____representing the premium with respect to the
Policy (defined below) and the Reserve Policy (defined below). Such payment and delivery and the
other actions contemplated hereby to take place at the time of such payment and delivery are herein
sometimes called the “Closing.”
2. The Bonds and Related Documents. The Bonds shall be substantially in the form
described in, and shall be issued and secured under the provisions of an Indenture of Trust (the
“Indenture”), dated as of ____1, 2022, by and between the Agency and U.S. Bank Trust Company,
National Association, as trustee (the “Trustee”) and pursuant Part 1.8 and Part 1.85 of Division 24 of
the California Health and Safety Code (the “Law”) and Article 11 of Chapter 3 of Part 1 of Division
2 of Title 5 of the California Government Code (the “Act”) and resolutions of the Agency adopted
on _______ and _________(the “Agency Resolutions”). The issuance of the Bonds was approved by
the Countywide Oversight Board for the County of Los Angeles by resolution on ______(the
“Oversight Board Resolution”). The Bonds shall be as described in the Indenture and the Official
Statement dated the date hereof relating to the Bonds (which, together with all exhibits and
appendices included therein or attached thereto and such amendments or supplements thereto which
shall be approved by the Underwriter, is hereinafter called the “Official Statement”).
The net proceeds of the Bonds will be used to refund on a current basis all of the outstanding
former Redevelopment Agency of the City of Lynwood (i) Tax Allocation Bonds (Project Area A -
Subordinate Lien), 2011 Series A (the “2011 Series A Bonds”); (ii) Taxable Tax Allocation Bonds
(Housing Project –Subordinate Lien), 2011 Series B (the “2011 Series B Bonds”);(iii) Lynwood
(Project A) Refunding Bonds (the “2013 Project A Bonds”), which supported in part the County of Los
Angeles Redevelopment Refunding Authority Tax Allocation Revenue Refunding
Bonds Series 2013D Various Redevelopment Project Areas and (iv) (Alameda Project Area) Refunding
Bonds (the “2013 Alameda Project Bonds” and together with the 2013Project A Bonds, the 2011 Series A
Bonds and the 2011 Series B Bonds, the “Refunded Bonds”)”, all as set forth in an Escrow Agreement
(the “Escrow Agreement”) by and between the Agency and the Trustee, as escrow agent for the
Refunded Bonds.
The Bonds shall be insured under a municipal bond insurance policy (the “Policy”) from
_______(the “Insurer”). Additionally, the reserve fund for the Bonds shall be funded with a debt
service reserve fund surety policy (the “Reserve Policy”) to be issued by the Insurer.
The Agency will undertake pursuant to the provisions of a Continuing Disclosure Agreement,
to be dated the date of the Closing (the “Continuing Disclosure Agreement”) and executed by the
Agency, to provide certain annual information and notices of the occurrence of certain events. A
description of the undertaking is set forth in the Preliminary Official Statement (as defined below)
and will also be set forth in the Official Statement.
The Indenture, the Continuing Disclosure Agreement, the Escrow Agreement and this
Purchase Agreement are sometimes collectively referred to herein as the “Agency Legal
Documents.”
3. Offering. It shall be a condition to the Agency’s obligations to sell and to deliver the
Bonds to the Underwriter and to the Underwriter’s obligations to purchase, to accept delivery of and
to pay for the Bonds that the entire $_____aggregate principal amount of the Bonds shall be issued,
sold and delivered by the Agency and purchased, accepted and paid for by the Underwriter at the
Closing. The Underwriter agrees to make a bona fide public offering of all of the Bonds at the initial
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public offering prices or yields set forth in Exhibit A hereto and on the inside front cover page of the
Official Statement. The Underwriter reserves the right to change, subsequent to the initial public
offering, such initial offering prices as it shall deem necessary in connection with the marketing of
the Bonds.
4. Use and Preparation of Documents. The Agency has caused to be prepared and
delivered to the Underwriter prior to the execution of this Purchase Agreement copies of the
Preliminary Official Statement dated_____, 2022, relating to the Bonds (the “Preliminary Official
Statement”), which was approved by a resolution of the Agency dated ____, 2022 (the “Agency OS
Resolution”). The Agency ratifies, confirms and approves the use by the Underwriter prior to the
date hereof of the Preliminary Official Statement. The Agency has previously deemed the
Preliminary Official Statement to be final as of its date for purposes of Rule 15c2-12 promulgated
under the Securities Exchange Act of 1934 (“Rule 15c2-12”), except for information permitted to be
omitted therefrom by Rule 15c2-12. The Agency hereby agrees to deliver or cause to be delivered to
the Underwriter, within seven (7) business days of the date hereof, but not less than one (1) business
day prior to Closing a sufficient number of copies of the final Official Statement relating to the
Bonds, dated the date hereof, which includes all information permitted to be omitted by Rule 15c2-12
and any amendments or supplements to such Official Statement as have been approved by the
Agency and the Underwriter (the “Official Statement”) to enable the Underwriter to distribute a
single copy of each Official Statement to any potential customer of the Underwriter requesting an
Official Statement during the time period beginning when the Official Statement becomes available
and ending 25 days after the End of the Underwriting Period (defined below). The Agency hereby
approves of the use and distribution (including the electronic distribution) by the Underwriter of the
Preliminary Official Statement and the Official Statement in connection with the offer and sale of the
Bonds. The Underwriter agrees that it will not confirm the sale of any Bonds unless the confirmation
of sale is accompanied or preceded by the delivery of a copy of the Official Statement.
5. Representations, Warranties and Agreements of the Agency. The Agency hereby
represents, warrants and agrees as follows:
(a) The Agency is a public entity existing under the laws of the State of
California, including the Law.
(b) The Agency has full legal right, power and authority to enter into the
Agency Legal Documents and carry out and consummate the transactions contemplated by
the Agency Legal Documents.
(c) By all necessary official action of the Agency prior to or concurrently
with the acceptance hereof, the Agency has duly authorized and approved the preparation and
use of the Preliminary Official Statement and the Official Statement, the execution and
delivery of the Official Statement and the Agency Legal Documents, and the performance by
the Agency of all transactions on its part contemplated by the Agency Legal Documents; and
the Agency Legal Documents will constitute legal, valid and binding obligations of the
Agency, enforceable against the Agency in accordance with their respective terms, except as
enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws or equitable principles relating to or limiting creditors’ rights against public
entities in the State of California.
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(d) The Agency is not in any material respect in breach of or default
under any applicable constitutional provision, law or administrative regulation to which it is
subject or any applicable judgment or decree or any loan agreement, indenture, bond, note,
resolution, agreement (including, without limitation, the Indenture) or other instrument to
which the Agency is a party or to which the Agency or any of its property or assets is
otherwise subject, and no event has occurred and is continuing which with the passage of
time or the giving of notice, or both, would constitute such a default or event of default under
any such instrument; and the execution and delivery of the Agency Legal Documents, and
compliance with the provisions on the Agency’s part contained therein, will not in any
material respect conflict with or constitute a material breach of or a material default under
any constitutional provision, law, administrative regulation, judgment, decree, loan
agreement, indenture, bond, note, resolution, agreement or other instrument to which the
Agency is a party or to which the Agency or any of its property or assets is otherwise subject,
nor will any such execution, delivery, adoption or compliance result in the creation or
imposition of any lien, charge or other security interest or encumbrance of any nature
whatsoever upon any of the property or assets of the Agency or under the terms of any such
constitutional provision, law, regulation or instrument, except as provided by the Indenture
and the Escrow Agreement.
(e) Except as described in or contemplated by the Preliminary Official
Statement, all authorizations, approvals, licenses, permits, consents and orders of any
governmental authority, board, agency or commission having jurisdiction of the matter which
are required for the due authorization by, or which would constitute a condition precedent to
or the absence of which would materially adversely affect the due performance by, the
Agency of its obligations under the Agency Legal Documents have been duly obtained.
(f) Except as otherwise disclosed in the Preliminary Official Statement,
between the date of this Purchase Agreement and the date of the Closing, the Agency will
not, without the prior written consent of the Underwriter, offer or issue any bonds, notes or
other obligations for borrowed money, or incur any material liabilities, direct or contingent,
payable from Tax Revenues (as defined in the Indenture), nor will there be any adverse
change of a material nature in the financial position, results of operations or condition,
financial or otherwise, of the Agency.
(g) As of the date hereof and except as otherwise disclosed in the
Preliminary Official Statement, there is no action, suit, proceeding, inquiry or investigation,
at law or in equity before or by any court, government agency, public board or body, pending
and notice of which has been served upon and received by the Agency or threatened against
the Agency, affecting the existence of the Agency or the titles of its officers to their
respective offices, or affecting or seeking to prohibit, restrain or enjoin the execution and
delivery of the Agency Legal Documents or the collection of the Tax Revenues or contesting
or affecting, as to the Agency, the validity or enforceability of the Agency Legal Documents,
or contesting the exclusion from gross income of interest on the Bonds for federal income tax
purposes, or contesting the completeness or accuracy of the Preliminary Official Statement or
the Official Statement, or contesting the powers of the Agency, or in any way contesting or
challenging the consummation of the transactions contemplated hereby, or which might result
in a material adverse change in the financial condition of the Agency or which might
materially adversely affect the Tax Revenues of the Agency; nor is there any known basis for
any such action, suit, proceeding, inquiry or investigation, wherein an unfavorable decision,
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ruling or finding would materially adversely affect the validity of the authorization,
execution, delivery or performance by the Agency of the Agency Legal Documents.
(h) As of the time of acceptance hereof and as of the date of the Closing,
the Agency does not and will not have outstanding any indebtedness which indebtedness is
secured by a lien on the Tax Revenues of the Agency superior to or on a parity with the lien
provided for in the Indenture on the Tax Revenues, other than as disclosed in the Preliminary
Official Statement.
(i) As of the time of acceptance hereof and as of the date of the Closing,
the Agency has complied with the filing requirements of the Law, including, without
limitation, the filing of all Recognized Obligation Payment Schedules, as required by the
Law, other than as disclosed in the Preliminary Official Statement.
(j) As of the date thereof, the Preliminary Official Statement did not
contain any untrue statement of a material fact or omit to state a material fact necessary to
make the statements therein in light of the circumstances under which they were made, not
misleading (except that this representation does not include information relating to The
Depository Trust Company or the book-entry only system, the Insurer, the Policy or the
Reserve Policy).
(k) As of the date thereof and at all times subsequent thereto to and
including the date which is 25 days following the End of the Underwriting Period (as such
term is hereinafter defined) for the Bonds, the Preliminary Official Statement did not and the
Official Statement will not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements therein, in light
of the circumstances under which they were made not misleading (except that this
representation does not include information relating to The Depository Trust Company or the
book-entry only system).
(l) If between the date hereof and the date which is 25 days after the End
of the Underwriting Period for the Bonds, an event occurs which would cause the
information contained in the Official Statement, as then supplemented or amended, to contain
an untrue statement of a material fact or to omit to state a material fact required to be stated
therein or necessary to make such information herein, in the light of the circumstances under
which it was presented, not misleading, the Agency will notify the Underwriter, and, if in the
reasonable opinion of the Underwriter or the Agency, or their respective counsel, such event
requires the preparation and publication of a supplement or amendment to the Official
Statement, the Agency will cooperate in the preparation of an amendment or supplement to
the Official Statement in a form and manner approved by the Underwriter, which approval
shall not be unreasonably withheld, and shall pay all expenses thereby incurred. For the
purposes of this subsection, between the date hereof and the date which is 25 days of the End
of the Underwriting Period for the Bonds, the Agency will furnish such information with
respect to itself as the Underwriter may from time to time reasonably request. As used
herein, the term “End of the Underwriting Period” means the later of such time as: (i) the
Agency delivers the Bonds to the Underwriter; or (ii) the Underwriter does not retain,
directly or as members of an underwriting syndicate, an unsold balance of the Bonds for sale
to the public. Notwithstanding the foregoing, unless the Underwriter gives notice to the
contrary, the “End of the Underwriting Period” shall be the date of Closing.
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(m) If the information contained in the Official Statement is amended or
supplemented pursuant to paragraph (l) hereof, at the time of each supplement or amendment
thereto and (unless subsequently again supplemented or amended pursuant to such
subparagraph) at all times subsequent thereto up to and including the date which is 25 days
after the End of the Underwriting Period for the Bonds, the portions of the Official Statement
so supplemented or amended (including any financial and statistical data contained therein)
will not contain any untrue statement of a material fact required to be stated therein or
necessary to make such information therein in the light of the circumstances under which it
was presented, not misleading (except that this representation does not include information
relating to The Depository Trust Company or the book-entry only system).
(n) After the Closing, the Agency will not participate in the issuance of
any amendment of or supplement to the Official Statement to which, after being furnished
with a copy, the Underwriter shall reasonably object in writing or which shall be disapproved
by counsel for the Underwriter.
(o) Any certificate signed by any officer of the Agency and delivered to
the Underwriter shall be deemed a representation by the Agency to the Underwriter as to the
statements made therein.
(p) The Agency will apply the proceeds from the sale of the Bonds for
the purposes specified in the Indenture and the Official Statement.
(q) The Agency will furnish such information, execute such instruments
and take such other action in cooperation with the Underwriter, at the expense of the
Underwriter, as it may reasonably request in order to qualify the Bonds for offer and sale
under the “blue sky” or other securities laws and regulations of such states and other
jurisdictions of the United States of America as the Underwriter may designate; provided,
however, that the Agency will not be required to execute a special or general consent to
service of process or qualify as a foreign corporation in connection with any such
qualification in any jurisdiction.
(r) The Agency will not act or fail to act in any manner that results in the
inclusion in gross income for State of California income tax purposes of the interest on the
Bonds.
(s) Except as disclosed in the Preliminary Official Statement, the Agency
has not defaulted in any material respect under any prior continuing disclosure undertaking
within the previous five years.
(t) The Oversight Board has duly adopted the Oversight Board
Resolution approving the issuance of the Bonds and no further Oversight Board approval or
consent is required for the issuing of the Bonds or the consummation of the transactions
described in the Preliminary Official Statement.
(u) The Department of Finance of the State (the “Department of
Finance”) has issued a letter, dated _____(the “DOF Letter”), approving the issuance of the
Bonds. No further Department of Finance approval or consent is required for the issuance of
the Bonds or the consummation of the transactions described in the Preliminary Official
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Statement. Except as disclosed in the Preliminary Official Statement, the Agency is not
aware of the Department of Finance directing or having any basis to direct the County
Auditor-Controller to deduct unpaid unencumbered funds from future allocations of property
tax to the Agency pursuant to Section 34183 of the Dissolution Act.
6. Closing. At 8:00 A.M., California time, on ____, 2022 (the “Closing” or the
“Closing Date”), or on such other date as may be mutually agreed upon by the Agency and the
Underwriter, the Agency will, subject to the terms and conditions hereof, sell and deliver the Bonds
to the Underwriter, duly executed and authenticated, together with the other documents hereinafter
mentioned, and, subject to the terms and conditions hereof, the Underwriter will accept such delivery
and pay the purchase price of the Bonds as set forth in Section 1 hereof in federal funds. Sale,
delivery and payment as aforesaid shall be made at the offices of Jones Hall, a Professional Law
Corporation (“Bond Counsel”), or such other place as shall have been mutually agreed upon by the
Agency and the Underwriter, except that the Bonds (with one certificate for each maturity and
otherwise in a form suitable for the book-entry system) shall be delivered to the Underwriter in New
York, New York, through the book-entry system of The Depository Trust Company (“DTC”).
Unless the DTC Fast Automated Securities Transfer (“FAST”) is utilized, the Bonds will be made
available for inspection by DTC at least one business day prior to the Closing.
7. Closing Conditions. The Underwriter has entered into this Purchase Agreement in
reliance upon the representations and warranties of the Agency contained herein, and in reliance
upon the representations and warranties to be contained in the documents and instruments to be
delivered at the Closing and upon the performance by the Agency of its obligations hereunder, both
as of the date hereof and as of the date of the Closing. Accordingly, the Underwriter’s obligations
under this Purchase Agreement to purchase, to accept delivery of and to pay for the Bonds shall be
conditioned upon the performance by the Agency of its obligations to be performed hereunder and
under such documents and instruments at or prior to the Closing, and shall also be subject to the
following additional conditions:
(a) The Underwriter shall receive, within seven (7) business days of the
date hereof, but in no event less than 1 business day prior to Closing, copies of the Official
Statement (including all information previously permitted to have been omitted from the
Preliminary Official Statement by Rule 15c2-12 and any amendments or supplements as have
been approved by the Underwriter), in such reasonable quantity as the Underwriter shall have
requested;
(b) The representations and warranties of the Agency contained herein
shall be true, complete and correct on the date hereof and on and as of the date of the
Closing, as if made on the date of the Closing, and the statements of the officers and other
officials of the Agency and the Trustee made in any certificate or other document furnished
pursuant to the provisions hereof are accurate;
(c) At the time of the Closing, the Agency Legal Documents shall have
been duly authorized, executed and delivered by the respective parties thereto, and the
Official Statement shall have been duly authorized, executed and delivered by the Agency,
all in substantially the forms heretofore submitted to the Underwriter, with only such changes
as shall have been agreed to in writing by the Underwriter, and shall be in full force and
effect; and there shall be in full force and effect such resolution or resolutions of the
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governing body of the Agency as, in the opinion of Bond Counsel, shall be necessary or
appropriate in connection with the transactions contemplated hereby;
(d) At the time of the Closing, all necessary official action of the Agency
relating to the Official Statement and the Agency Legal Documents shall have been taken and
shall be in full force and effect and shall not have been amended, modified or supplemented
in any material respect; and
(e) At or prior to the Closing, the Underwriter shall have received copies
of each of the following documents:
(1) Bond Counsel Opinion. The approving opinion of Bond
Counsel to the Agency, addressed to the Underwriter or accompanied by a letter addressed to
the Underwriter entitling the Underwriter to rely on the approving opinion, dated the date of
the Closing and substantially in the form included as Appendix F to the Official Statement;
(2) Supplemental Opinion of Bond Counsel. A supplemental
opinion or opinions of Bond Counsel addressed to the Underwriter, in form and substance
acceptable to the Underwriter, and dated the date of the Closing, stating that the Underwriter
may rely on the opinions of Bond Counsel described in paragraph (1) above as if such
opinion were addressed to the Underwriter and to the following effect:
(i) The Agency Legal Documents (excluding the
Indenture, opinions with respect to which are set forth in Bond Counsel’s approving opinion)
have been duly authorized, executed and delivered by the Agency and, assuming due
authorization, execution and delivery by the other parties thereto, the Agency Legal
documents constitute the valid, legal and binding obligations of the Agency enforceable in
accordance with their respective terms, except as enforcement thereof may be limited by
bankruptcy, insolvency or other laws affecting enforcement of creditors rights and by the
application of equitable principles if equitable remedies are sought. The preparation,
delivery and execution of the Preliminary Official Statement and Official Statement have
been duly authorized by the Agency;
(ii) the statements contained in the Official Statement
under the captions “INTRODUCTION,” “REFUNDING PLAN,” “THE 2022 BONDS,”
“SECURITY FOR THE 2022 BONDS,” “TAX MATTERS” and in Appendices A and F,
insofar as such statements purport to summarize certain provisions of the Indenture, the
Escrow Agreement or the opinion of Bond Counsel, are accurate in all material respects
(excluding information under Book-Entry Only System, financial provisions or projections,
and the Recognized Obligation Payment Schedule submissions, or Recognized Obligation
Payment Schedule submission history);
(iii) the Bonds are not subject to the registration
requirements of the Securities Act of 1933, as amended, and the Indenture is exempt from
qualification pursuant to the Trust Indenture Act of 1939, as amended; and
(iv) The Refunded Bonds have been legally defeased and
discharged.
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(3) Agency Counsel Opinion. An opinion of_____, as Counsel
to the Agency, dated the date of the Closing and addressed to the Underwriter, in form and
substance acceptable to the Underwriter to the following effect:
(i) the Agency is a public body, duly existing under the
Constitution and laws of the State, with full right, power and authority to execute, deliver and
perform its obligations under the Agency Legal Documents;
(ii) the Agency Resolution and the Agency OS Resolution
were duly adopted at meetings of the Agency, called and held pursuant to law, with all public
notice required by law and at which quorums were present and acting throughout; and the
Agency Resolution and the Agency OS Resolution are in full force and effect and have not
been modified amended or rescinded since their respective adoption date;
(iii) The Agency Legal Documents have been duly
authorized, executed and delivered by the Agency and, assuming due authorization,
execution and delivery by the other parties thereto, the Agency Legal documents constitute
the valid, legal and binding obligations of the Agency enforceable in accordance with their
respective terms, except as enforcement thereof may be limited by bankruptcy, insolvency or
other laws affecting enforcement of creditors rights and by the application of equitable
principles if equitable remedies are sought. The preparation, delivery and execution of the
Official Statement has been duly authorized by the Agency;
(iv) The execution and delivery of the Agency Legal
Documents and the Official Statement and compliance with the provisions of the Agency
Legal Documents, under the circumstances contemplated thereby, (1) do not and will not in
any material respect conflict with or constitute on the part of the Agency a breach of or
default under any agreement or other instrument to which the Agency is a party or by which
it is bound, and (2) do not and will not in any material respect constitute on the part of the
Agency a violation, breach of or default under any existing law, regulation, court order or
consent decree to which the Agency is subject;
(v) There is no action, suit, or proceeding, pending and
served against the Agency, or (to the best of such counsel’s knowledge) threatened against
the Agency in writing and delivered to the Agency, challenging the creation, organization or
existence of the Agency, or the validity of the Bonds or the Agency Legal Documents or
seeking to restrain or enjoin any of the transactions referred to therein or contemplated
thereby, or under which a determination adverse to the Agency would have a material
adverse effect upon the financial condition or the revenues of the Agency, or which, in any
manner, questions the right of the Agency to issue, sell and deliver the Bonds, to enter into
the Indenture or to use the Tax Revenues for repayment of the Bonds or affects in any
manner the right or ability of the Agency to collect or pledge the Tax Revenues; and
(vi) The information in the Official Statement under the
captions “THE SUCCESSOR AGENCY,” “THE PROJECT AREAS,” “PROPERTY
TAXATION IN CALIFORNIA” and “CONCLUDING INFORMATION—No Litigation” is
true and accurate in all material respects; provided, however, that no opinion is expressed as
to any financial or statistical information contained therein (excluding information regarding
financial provisions or projections).
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(4) Trustee Counsel Opinion. The opinion of counsel to the
Trustee, dated the date of the Closing, addressed to the Underwriter, to the effect that:
(i) The Trustee is a national banking association, duly
organized and validly existing under the laws of the United States of America, having full
power to enter into, accept and administer the trusts created under the Indenture and the
Escrow Agreement;
(ii) The Indenture and the Escrow Agreement have been
duly authorized, executed and delivered by the Trustee and the Indenture and the Escrow
Agreement constitute the legal, valid and binding obligations of the Trustee, enforceable in
accordance with their terms, except as enforcement thereof may be limited by bankruptcy,
insolvency or other laws affecting the enforcement of creditors’ rights generally and by the
application of equitable principles, if equitable remedies are sought; and
(iii) The Bonds have been duly authenticated by the
Trustee; and
(iv) Except as may be required under Blue Sky or other
securities laws of any state, no consent, approval, authorization or other action by any
governmental or regulatory authority having jurisdiction over the Trustee that has not been
obtained is or will be required for the execution and delivery of the Indenture or the Escrow
Agreement, or the consummation of the transactions contemplated by the Indenture and the
Escrow Agreement.
(5) Agency Certificate. A certificate of the Agency, dated the
date of the Closing, signed on behalf of the Agency by a duly authorized officer of the
Agency, to the effect that:
(i) the representations and warranties of the Agency
contained herein are true and correct in all material respects on and as of the date of the
Closing as if made on the date of the Closing (except that references to the Preliminary
Official Statement shall be deemed to be references to the Preliminary Official Statement, as
of its date, and the Official Statement, as of its date and as of the Closing Date);
(ii) no event affecting the Agency has occurred since the
date of the Official Statement which has not been disclosed therein or in any supplement or
amendment thereto which event should be disclosed in the Official Statement in order to
make the statements therein, in the light of the circumstances under which they were made,
not misleading;
(iii) The refunding of the Refunded Bonds with the
proceeds of the Bonds will achieve debt service savings in compliance with the parameters
set forth in §34177.5(a) of the Health and Safety Code of the State of California in that (A)
the total interest cost to maturity on the Bonds plus the principal amount of the Bonds shall
not exceed the total remaining interest cost to maturity on the Refunded Bonds plus the
remaining principal amount of the Refunded Bonds, and (B) the principal amount of the
Bonds shall not exceed the amount required to defease the Refunded Bonds, to establish
customary debt service reserves, and to pay related costs of issuance. All Costs of Issuance
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being paid from proceeds of the Bonds constitute related costs of issuance within the
meaning of Section 34177.5(a) of the Health and Safety Code and all Costs of Issuance are
properly chargeable to the Bonds in accordance with proper governmental accounting
principles.
(iv) The Bonds and the Indenture are consistent with the
terms of the Department of Finance approval thereof and no further Department of Finance
approval or consent is required for the issuance of the Bonds or the consummation of the
transactions described in the Preliminary Official Statement or the Official Statement;
(v) The Bonds and the Indenture are consistent with the
terms of the Oversight Board approval thereof; and
(vi) No further consent is required to be obtained for the
inclusion of the Agency’s audited financial statements, including the accompanying
accountant’s letter, for Fiscal Year 2020-21 in the Official Statement.
(6) Trustee’s Certificate. A certificate of Trustee, dated the date
of Closing, and signed on behalf of the Trustee by a duly authorized officer of the Trustee, to
the effect that:
(i) The Trustee is a national banking association duly
organized and validly existing under the laws of the United States of America;
(ii) The Trustee has full power, authority and legal right
to comply with the terms of the Indenture and the Escrow Agreement and to perform its
obligations stated therein; and
(iii) the Indenture and the Escrow Agreement have been
duly authorized, executed and delivered by the Trustee and (assuming due authorization,
execution and delivery by the Agency) constitute legal, valid and binding obligations of the
Trustee in accordance with their respective terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable
principles relating to or limiting creditors’ rights generally.
(7) Legal Documents. Executed copies of this Purchase
Agreement and the other Agency Legal Documents.
(8) Rating Letters. Evidence that the insured and underlying
ratings on the Bonds of “__” and “__,” respectively, by S&P Global Ratings are in full force
and effect on the Closing Date.
(9) Disclosure Letter. A letter of Jones Hall, A Professional Law
Corporation, San Francisco, California, in its capacity as Disclosure Counsel, dated the
Closing Date and addressed to the Agency and the Underwriter, to the effect that, based upon
the information made available to them in the course of their participation in the preparation
of the Preliminary Official Statement and the Official Statement and without passing on and
without assuming any responsibility for the accuracy, completeness and fairness of the
statements in the Preliminary Official Statement and the Official Statement, and having made
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no independent investigation or verification thereof, and stated as a matter of fact and not
opinion that, during the course of its representation of the Agency in connection with the
preparation of the Preliminary Official Statement and the Official Statement, no facts came to
the attention of the attorneys in its firm rendering legal services in connection with the
Preliminary Official Statement and the Official Statement which caused them to believe that
the Preliminary Official Statement (as of its date and as of the date of this Purchase
Agreement) or the Official Statement (as of its date and as of the Closing Date) (except any
CUSIP numbers, financial, accounting, statistical or economic, engineering or demographic
data or forecasts, numbers, charts, tables, graphs, estimates, projections, assumptions or
expressions of opinion, management discussion and analysis, environmental litigation,
environmental matters, information relating to The Depository Trust Company and its book-
entry system, information relating to the Insurer, the Policy or the Reserve Policy, and
Appendices A, E, F, G, and H thereto, included or referred to therein, which shall be
expressly excluded from the scope of this paragraph and as to which such firm will express
no opinion or view) contained any untrue statement of a material fact or omitted to state any
material fact necessary to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
(10) Municipal Advisor Certificate. A certificate, dated the date of
Closing, signed by a duly authorized official of the Kosmont Financial Services (the
“Municipal Advisor”) addressed to the Underwriter and the Agency to the effect that:
(i) In connection with its participation in the preparation
of the Official Statement and without undertaking any independent investigation and without
having undertaken to determine independently the fairness, accuracy or completeness of the
statements contained in the Official Statement, nothing has come to the attention of the
Municipal Advisor that would lead it to believe that the statements and information contained
in the Official Statement as of the date thereof and the date of the Closing, contains an untrue
statement of a material fact or omits to state a material fact required to be stated therein as
necessary to make the statements therein, in light of the circumstances in which they were
made, not misleading; and
(ii) The refunding of the Refunded Bonds with the
proceeds of the Bonds will achieve debt service savings in compliance with the parameters
set forth in §34177.5(a)(1) of the Health and Safety Code of the State of California in that
(A) the total interest cost to maturity on the Bonds plus the principal amount of the Bonds
shall not exceed the total remaining interest cost to maturity on the Refunded Bonds plus the
remaining principal amount of the Refunded Bonds, and (B) the principal amount of the
Bonds shall not exceed the amount required to defease the Refunded Bonds, to establish
customary debt service reserves, and to pay related costs of issuance.
(11) Fiscal Consultant Certificate. A certificate of Kosmont
Financial Services (the “Fiscal Consultant”), dated the date of Closing, to the effect that the
report of the Fiscal Consultant (the “Report”) contained in the Official Statement and the
information set forth under the captions “THE PROJECT AREAS” in the Official Statement
do not contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances under which they
were made, not misleading, consenting to the use of the Report in the Preliminary and
Official Statement and stating that to the best of the Fiscal Consultant’s knowledge, nothing
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has to come the Fiscal Consultant’s attention between the date of such Report and the
Closing Date which would materially alter any of the conclusions set forth in the Report.
(12) Oversight Board Resolution and DOF Letter. A copy of the
adopted Oversight Board Resolution, together with a copy of the DOF Letter.
(13) Certificate Regarding Oversight Board Action. Either (a) a
certificate of the Clerk or other appropriate officer of the Oversight Board to the effect that
(i) the Oversight Board Resolution was validly adopted at a duly held and properly noticed
meeting during which a quorum was present and acting throughout, and (ii) the Oversight
Board Resolution remains in full force and effect, and has not been amended, supplemented,
modified, superseded or repealed since its date of adoption, or (b) a certificate of the Agency
Secretary to the effect that, to the best knowledge of the undersigned, after due inquiry, the
Oversight Board Resolution remains in full force and effect and has not been amended,
supplemented, modified, superseded or repealed by any other action of the Oversight Board
since its date of adoption.
(14) Underwriter’s Counsel Opinion. An opinion of Stradling
Yocca Carlson & Rauth, a Professional Corporation, dated the date of Closing, addressed to
the Underwriter, in form and substance satisfactory to the Underwriter.
(15) Verification. A verification report prepared by ________in
form and substance satisfactory to Bond Counsel and the Underwriter.
(16) Reserved.
(17) DTC Letter of Representations. The executed Blanket Letter
of Representations of the Agency.
(18) CDIAC Forms. Reports of proposed debt issuance,
acknowledgements thereof and final reports to the California Debt and Investment Advisory
Commission with respect to each series of the Bonds.
(19) Policy. Evidence satisfactory to the Underwriter of the
issuance of the Policy by the Insurer.
(20) Reserve Policy. Evidence satisfactory to the Underwriter that
the Trustee shall have received the Reserve Policy from the Insurer.
(21) Opinion of Counsel to the Insurer. An opinion of counsel to
the Insurer, in form and substance satisfactory to the Underwriter, Bond Counsel and
Underwriter’s Counsel, with respect to, among other matters, the Policy and the Reserve
Policy, and disclosures relating thereto and to the Insurer in the Official Statement.
(22) Certificate of the Insurer. A certificate of the Insurer, in form
and substance satisfactory to the Underwriter, Bond Counsel, and Underwriter’s Counsel,
with respect to, among other matters, the Policy and the Reserve Policy.
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(23) No-Default Certificate of the Insurer. A no-default certificate
of the Insurer, in form and substance satisfactory to the Underwriter, Bond Counsel and
Underwriter’s Counsel.
(24) Additional Documents. Such additional certificates,
instruments and other documents as Bond Counsel, the Agency or the Underwriter may
reasonably deem necessary.
All the opinions, letters, certificates, instruments and other documents mentioned above or
elsewhere in this Purchase Agreement shall be deemed to be in compliance with the provisions
hereof if, but only if, they are in form and substance satisfactory to the Underwriter.
If the Agency or the Trustee shall be unable to satisfy the conditions to the obligations of the
Underwriter to purchase, to accept delivery of and to pay for the Bonds contained in this Purchase
Agreement, if the Agency shall determine in good faith (and provide written notice to the
Underwriter) that legislation has been introduced or proposals made by the Governor of the State
which if enacted and effective would impose additional limitations or burdens on the Agency by
reason of the issuance of the Bonds or which purport to prohibit the issuance of the Bonds, or if the
obligations of the Underwriter to purchase, to accept delivery of and to pay for the Bonds shall be
terminated for any reason permitted by this Purchase Agreement, this Purchase Agreement shall
terminate and the Underwriter shall be under no further obligation hereunder; provided that Section 9
hereof shall remain in effect in any event.
8. Termination. The Underwriter shall have the right to terminate this Purchase
Agreement, without liability therefor, by notification to the Agency if at any time between the date
hereof and prior to the Closing:
(a) the marketability of the Bonds or the market price thereof, in the
opinion of the Underwriter, has been materially adversely affected by an amendment to the
Constitution of the United States or by any legislation in or by the Congress of the United
States or by the State of California, or the amendment of legislation pending as of the date of
this Purchase Agreement in the Congress of the United States, or the recommendation to
Congress or endorsement for passage (by press release, other form of notice or otherwise) of
legislation by the President of the United States, the Treasury Department of the United
States, the Internal Revenue Service or the Chairman or ranking minority member of the
Committee on Finance of the United States Senate or the Committee on Ways and Means of
the United States House of Representatives, or the proposal for consideration of legislation
by either such Committee or by any member thereof, or the presentment of legislation by the
staff of either such Committee, or by the staff of the Joint Committee on taxation of the
Congress of the United States, or the favorable reporting for passage of legislation to either
House of the Congress of the United States by a Committee of such House to which such
legislation has been referred for consideration, or any decision of any federal or state court or
any ruling or regulation (final, temporary or proposed) or official statement on behalf of the
United States Treasury Department, the Internal Revenue Service or other federal or state
authority affecting the federal or state tax status of the Agency, or the interest on bonds or
notes (including the Bonds);
(b) there shall exist any event which in the reasonable opinion of the
Underwriter either: (i) makes untrue or incorrect in any material respect any statement or
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information contained in the Official Statement; or (ii) is not reflected in the Official
Statement but should be reflected therein in order to make the statements and information
that are contained therein not misleading in any material respect;
(c) there shall have occurred any new outbreak of hostilities, an armed
military invasion or other national or international calamity or crisis or the escalation of any
such outbreak, calamity or crisis, the effect of such outbreak, calamity, crisis or escalation on
the financial markets of the United States being such that it, in the reasonable opinion of the
Underwriter, materially adversely affects the market price or marketability of the Bonds;
(d) there shall be in force a general suspension of trading on the New
York Stock Exchange or other minimum or maximum prices for trading shall have been fixed
and be in force, or maximum ranges for prices for securities shall have been required and be
in force on the New York Stock Exchange or such other exchange, whether by virtue of a
determination by that exchange or such other exchange or by orders of the Securities and
Exchange Commission or any other governmental authority;
(e) a general banking moratorium shall have been declared by either
federal, California or New York authorities having jurisdiction over such matters, which
moratorium is in force;
(f) there shall be established any new restrictions on transactions in
securities that materially affect the free market for securities (including the imposition of any
limitations on interest rates) or the extension of credit by, or the charge to the net capital
requirements of, underwriters established by the New York Stock Exchange, the Securities
and Exchange Commission, any other federal or state agency or the Congress of the United
States, or by Executive Order;
(g) an adverse event has occurred that affects the financial condition or
operation of, the Agency which, in the opinion of the Underwriter, requires or has required a
supplement or amendment to the Official Statement;
(h) the ratings of the Bonds or any of the Agency’s obligations secured in
a like manner shall have been downgraded, placed on credit watch or withdrawn by a
national rating service, which, in the Underwriter’s opinion, materially adversely affects the
market price of the Bonds;
(i) any legislation, ordinance, rule or regulation shall be introduced in, or
be enacted by, any governmental body, department or agency of the State, or a decision by
any court of competent jurisdiction within the State or any court of the United States shall be
rendered which, in the reasonable opinion of the Underwriter, materially adversely affects the
market price or marketability of the Bonds;
(j) any action, suit or proceeding described in Section 5(g) hereof shall
have been commenced which, in the judgment of the Underwriter, materially adversely
affects the market price of the Bonds; or
(k) legislation shall be enacted by the Congress of the United States, or a
decision by a court of the United States shall be rendered, or a stop order, ruling, regulation
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or official statement by, or on behalf of, the Securities and Exchange Commission or any
other governmental agency that has jurisdiction of the subject matter shall be issued or made
to the effect that the issuance, offering or sale of obligations of the general character of the
Bonds, or the issuance, offering or sale of the Bonds, including all underlying obligations, as
contemplated hereby or by the Official Statement, is in violation or would be in violation of,
or that obligations of the general character of the Bonds, or the Bonds, are not exempt from
registration under, any provision of the federal securities laws, including the Securities Act of
1933, as amended and as then in effect, or that the Indenture needs to be qualified under the
Trust Indenture Act of 1939, as amended and as then in effect.
9. Expenses. The Agency will pay or cause to be paid the approved expenses incident
to the performance of its obligations hereunder and certain expenses relating to the sale of the Bonds,
including, but not limited to, (a) the cost of the preparation and printing or other reproduction of the
Agency Legal Documents (other than this Purchase Agreement); (b) the fees and disbursements of
Bond Counsel, Disclosure Counsel, the Municipal Advisor, the Fiscal Consultant, counsel to the
Agency and any other experts or other consultants retained by the Agency; (c) the costs and fees of
the credit rating agencies; (d) the cost of preparing and delivering the definitive Bonds; (e) the cost of
providing immediately available funds on the Closing Date; (f) the cost of the printing or other
reproduction of the Preliminary Official Statement and Official Statement and any amendment or
supplement thereto, including a reasonable number of certified or conformed copies thereof; and
(g) expenses (included in the expense component of the underwriter’s discount) incurred by the
Underwriter on behalf of the City’s or the Agency’s employees which are incidental to implementing
this Purchase Agreement, including, but not limited to, meals, transportation, lodging, entertainment
of those employees and expenses incurred for the rating presentation and the investor presentation,
which are to be reimbursed to the Underwriter by the Successor Agency.
The Underwriter will pay the expenses of the preparation of this Purchase Agreement and all
other expenses incurred by the Underwriter in connection with the public offering and distribution of
the Bonds, including costs associated with the marketing of the Bonds, and the fee and disbursements
of Underwriter’s Counsel. The Underwriter is required to pay the fees of the California Debt and
Investment Advisory Commission in connection with the offering of the Bonds and MSRB and
CUSIP Bureau fees and expenses to qualify the Bonds for sale under any “blue sky” laws. The
Agency acknowledges that it has had an opportunity, in consultation with such advisors as it may
deem appropriate, if any, to evaluate and consider such fees. Notwithstanding that such fees are
solely the legal obligation of the Underwriter, the Agency acknowledges that the Underwriter will
pay from the underwriter’s expense allocation of the underwriting discount certain fees, including the
applicable per bond assessment charge by the California Debt and Investment Advisory Commission.
The Underwriter shall pay, and the Agency shall be under no obligation to pay, all expenses
incurred by the Underwriter in connection with the public offering and distribution of the Bonds.
10. Notices. Any notice or other communication to be given to the Agency under this
Purchase Agreement may be given by delivering the same in writing at the Agency’s address set
forth above; Attention: City Manager, and to the Underwriter under this Purchase Agreement may be
given by delivering the same in writing to Samuel A. Ramirez & Co., Inc., 633 West Fifth Street,
Suite 2693, Los Angeles, California 90071, Attention: Michael Mejia.
11. Parties in Interest. This Purchase Agreement is made solely for the benefit of the
Agency and the Underwriter and no other person shall acquire or have any right hereunder or by
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virtue hereof. All of the representations, warranties and agreements of the Agency contained in this
Purchase Agreement shall remain operative and in full force and effect, regardless of: (i) any
investigations made by or on behalf of the Underwriter; (ii) delivery of and payment for the Bonds
pursuant to this Purchase Agreement; and (iii) any termination of this Purchase Agreement.
12. Effectiveness and Counterpart Signatures. This Purchase Agreement shall become
effective upon the execution of the acceptance by an authorized officer of the Agency and shall be
valid and enforceable at the time of such acceptance and approval. This Purchase Agreement may be
executed by the parties hereto by facsimile transmission and in separate counterparts, each of which
when so executed and delivered (including delivery by facsimile transmission) shall be an original,
but all such counterparts shall together constitute but one and the same instrument.
13. Headings. The headings of the sections of this Purchase Agreement are inserted for
convenience only and shall not be deemed to be a part hereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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14. Governing Law. This Purchase Agreement shall be construed in accordance with the
laws of the State of California.
Very truly yours,
SAMUEL A. RAMIREZ & COMPANY, INC.
as Underwriter
By:
Its: Authorized Officer
Accepted:
SUCCESSOR AGENCY TO THE
REDEVELOPMENT AGENCY OF THE CITY OF LYNWOOD
By:
Finance Director of the City of Lynwood ,
acting on behalf of the Agency
Time of Execution: _____ p.m. Pacific Time
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EXHIBIT A
MATURITY SCHEDULE
$____
Successor Agency to the Redevelopment Agency of the City of Lynwood
2022 Tax Allocation Refunding Bonds (Taxable)
Maturity Date
(September 1)
Principal
Amount Interest Rate Yield
Optional Redemption. The Bonds maturing on or before September 1, 20__ are not subject to
optional redemption prior to maturity. The Bonds maturing on or after September 1, 20__ may be
redeemed at the option of the Agency prior to maturity on any date on or after September 1, 20__ as
a whole, or in part from such maturities as are selected by the Agency, and by lot within a maturity,
from funds derived by the Agency from any source, at a redemption price equal to the principal
amount of the Bonds being redeemed, without premium, together with accrued interest thereon to the
date of redemption.
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