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HomeMy Public PortalAbout02-24-2004LRA_sp-v. "t .. ._ .: OF.LYryyL e9~ ~r~~ 11330 Bl1LLIS ROAD LYNINOOD, CALIFORNIA 20262-3845 ~ (3yR10y} 603-0220 OITY QF l YiVW00D Louis Byrd, CHAIRMAN - trlT~~ ~~~~~ ~~- .~~~-,~~ Leticia Vasquez, VICE CHAIRMAN Fernando Pedroza, MEMBER E=EB. 2 3 2~J0~~ .Ramon Rodriguez, MEMBER ~ p~~ Maria T.` Santillan, MEMBER ~J~l9B~B11B~B112B3j/)~/B~t~y This Agenda contains a brief general description of each item to be considered. Copies of the Staff reports' orb -`1G ' 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. A person who has a question concerning any of the agenda~~ items may'call the City Manager at (310) 603-0220, ext. 200. G ® /~i LYNWOOD REDEVELOPMENT AGENCY FEBRUARY 24, 2004 SPECIAL MEETING 6:00 P.M. LYNWOOD CITY HALL, 11330 BULLIS ROAD LOUIS BYRD CHAIRMAN LETICIA VASQUEZ FERNANDO PEDROZA . VICE CHAIRMAN MEMBER RAON RODRIGUEZ MARIA T. SANTILLAN MEMBER ~ MEMBER EXECUTIVE DIRECTOR AGENCY COUNSEL - - ~ LORRY HEMPE~ RONALD N. WILSON `OPENING CEREMONIES: A. Calla Meeting to Order. ' B. Rolf Call (PEDROZA-RODRIGUEZ-SANTILLAN-VASQUEZ-BYRD) C. ~ Certification of Agenda. Posting by Secretary 1 , PUBLIC ORAL COMMUNICATIONS ~. (Regarding Agenda Items Only) CONSENT CALENDAR 1. CONSIDERATION OF A PROPOSED THIRD AMENDMENT TO THE COMMERCIAL REHABILITATION. LOAN AGREEMENT ("CRLA") BETWEEN THE AGENCY AND LTC DEVELOPMENT ("DEVELOPER"). Comment: To have the Lynwood Redevelopment Agency (the "Agency") consider a Third amendment to the CRLA between the Agency and LTC Development. Recommendation: Staff respectfully requests that after consideration that the Agency approve the Second Amendment to the CRLA and adopt and approve the following resolution: A RESOLUTION OF THE LYNWOOD REDEVELOPMENT AGENCY APPROVING THE THIRD AMENDMENT TO THE COMMERCIAL REHABILITATION LOAN AGREEMENT BETWEEN THE AGENCY AND LTC DEVELOPMENT. DISCUSSION ITEM 2: RELOCATION SERVICES (LYNWOOD PLAZA) Comment: To .have the Agency discuss the possibility of engaging a Relocation. Consultant to assist the businesses within the Lynwood Plaza. Recommendation: Staff respectfully requests that after consideration the Agency direct staff accordingly. CLOSED SESSION 3 WITH RESPECT TO EVERY ITEM OF BUSINESS TO BE DISCUSSED IN CLOSED SESSION PURSUANT TO SECTION 54956.8 CONFERENCE WITH REAL PROPERTY NEGOTIATORS. Property: Lynwood Towne Center Agency Negotiator: Agency, Agency Staff and Agency Counsel 2 Negotiating parties: Agency & 'LTC Development Under Negotiations: Price and terms ., ADJOURNMENT THE NEXT REGULAR MEETING WILL BE HELD ON March 2, 2004 AT 6:00 P.M. IN THE COUNCIL CHAMBERS OF CITY HALL, 11330 BULLIS ROAD, LYNWOOD, CALIFORNIA. • DATE: FEBRUARY 24.2004 TO!: HONORABLE CHAIRMAN AND MEMBERS F THE AGENCY FROM: Lorry Hempe, Executive Director By Louis Morales, Deputy Executive Director SUBJECT: CONSIDERATION OF A PROPOSED THIRD AMENDMENT TO THE COMMERCIAL REHABILITATION LOAN AGREEMENT ("CRLA") BETWEEN THE AGENCY AND LTC DEVELOPMENT ("DEVELOPER"). Purpose: To have the Lynwood Redevelopment Agency (the "Agency") consider a Third amendment to the CRLA between. the Agency and LTC Development.. Facts: ,1. The original development agreements and environmental findings -for Plaza Mexico were approved on November 2, 1999. 2. The CRLA is a forgivable loan in the amount of $2 million to be used to upgrade the existing Lynwood Towne Center. 3. In September 2003 the Agency approved a second amendment to the CRLA. 4. In December 2003, the Agency was presented with the initial terms for the proposed Third Amendment to the CRLA and the Agency provided staff with direction. The Developer countered to the Agency terms and; such counter was presented to the Agency in February 2004, which is a .result of the draft Third Amendment to the CRLA. The proposed development under the proposed Third Amendment to the CRLA will remain the same and. is consistent with the. redevelopment goals of the Agency and Redevelopment Project Area "A'. 5. A draft Third Amendment to the CRLA has been prepared and is attached for Agency review and consideration. A,GEN-~ ITEM u~, H:word/Redevelp/(morales/PlazaMexLTCRehbstfreport ' -. ' ! • Summary of Third Amendment to the CRLA. ` The Second Amendment to the CRLA essentially provided that $2 Million may, in addition to rehabilitation, also be used for new construction. The proposed amendment also provides a new completion date of December 31, 2003, which will coincided with the completion date of the improvements under the ;other agreements in connection with Plaza Mexico. The $2 million under the Second Amendment was to be secured with a 2"d trust deed which, subordinated to a 1St trust deed..The Second Amendment to the CRLA enabled the Developer to spend $2 million on any of the improvements to meet their obligation; The Developer will have to complete all the improvements to the Towne Center and be issued a Certificate of Completion before the 2"d trust deed is conveyed.'to the Developer. The Second Amendment to the CRLA also provides for assignment provided that the assigned entity meets the provisions established by the DDA and any and all amendments. The Third Amendment to the CRLA will remove the 2"d Trust deed from the property and will require that the $2 million be put into an escrow account until such time that the Developer performs certain improvements as identified by the scope of work in the Second Amendment to the CRLA. Essentially the Developer . -has to spend a minimum of $6 million of their own funds and then use the $2 ' million to complete he work on the final bldg. The removal of the 2"d deed of trust will enable the Developer to refinance and obtain a new loan and. free up the $2 million lien. that is currently maintained by the'Agency.'"The Third Amendment will also allow the Agency to ensure that a certain level of improvemenfts be completed before releasing the $2 million. Recommendation: Staff respectfully requests that after consideration that the Agency approve the Second Amendment to ~ the"`CRL`A"'and' adopt andapprove the following resolution: A RESOLUTION ~ OF THE LYNWOOD REDEVELOPMENT AGENCY APPROVING THE THIRD AMENDMENT TO THE COMMERCJAL REHABILITATION. LOAN AGREEMENT BETWEEN THE AGENCY, AND LTC DEVELOPMENT. ~ H:word/Red evelp/I mora les/Plaza MexLTCReh b.stfreport {i1 ~~ . ~!; {t'j ~(I" „~; iki' ~~~ ~ ~, },; . ,;;;? ~a ,i~i~ .~, . ~!~,` ;~~~ ~:.. ,~ , ~,.;;,, k'a ' ~'' . r~~~~ t ,. ~1 ~'' ~f li~~ . ~1i lii~ j . y ##, i,, . !'~a ` ' y ., ;: ;~:. ,. , ;';,,. '' I ~~ q;';~; . L~ ~~ ,'. r; '~ ;; ~i "'- f .. - ~ ~ - T~ THIRD AMENDMENT. TO COMMERCIAL REHABILITATION LOAN AGREEMENT (Between LTC Development, Inc. and The Lynwood Redevelopment Agency) 1. PARTIES TO THIRD AMENDMENT TO COMMERCIAL REHABILITATION LOAN AGREEMENT. ' THIS THIRD AMENDMENT TO "THE COMMERCIAL REHABILITATION LOAN AGREEMENT" ("THIRD AMENDMENT") is entered into by and between the following .parties:. .. - a. LYNW000 REDEVELOPMENT AGENCY, a public body corporate and political; exercising governmental functions and powers, and organized and existing under Chapter 2 of the Community Redevelopment Law of the State of California (California Health and Safety Code Sections 33000, et seg.) (hereinafter: the . "AGENCY"); and b. LTC DEVELOPMENT, INC., a. California corporation (hereinafter the "OWNER"). 2. UNDERLYING COMMERCIAh REHABILITATION LOAN AGREEMENT BETWEEN. THE AGENCY AND THE OWNER DATED APRIL 17 ' 2000. The Underlying Commercial Rehabilitation Loan Agreement (hereinafter CRLA) between the AGENCY and the OWNER, was entered into on April 17, 20,00 . Said .CRLA provided for among oth®r things rehabilitation and expansion by the OWNER of . a;commercial and retail neighborhood shopping center located within the AGENCY project area. Under the CRLA ,the Agency.made a loan to OWNERin the original principal amount of $2,000,000.00 (Two Million Dollars) (hereinafter the "AGENCY LOAN"). The CRLA provided for the loan to be forgiven upon, the O,WNER'S expenditure of $2,000,000.00 (Two Million Dollars) for agreed upon improvements on the Project "SITE" as referenced in and as defined in the CRLA.. The performance of OWNER'S obligations in connection with the AGENCY LOAN was secured by a Deed of Trust securing the AGENCY LOAN with" Assignment of Rents, dated April 17, 2000, by and between OWNER, as Trustor, Stewart Title Insurance Company, as Trustee, and the AGENCY, as Beneficiary,.encumbering the SITE, recorded in the Official Records of :the County Recorder of Los Angeles, as Instrument No. 00-0751605. (hereinafter the "AGENCY DEED OF TRUST"). . ;. C:1Documenls and Setting5lSussnlMy Documenls\Lynwood3rdAmendAgr021204(RNW) ', 1 . ze ~~~~ 77GI!?t~S~~C'T7 ~ ' 7+i _C1T fif7fl7 /7T /7f] • • i 3. ;FIRST AMENDMENT TO CRLA CJULY 24, 20011.. A First Amendnent'to the CRLA was entered into between the parties herein on July 24; 2001. 4. SECOND AMENDMENT TO CRLA jSEPTEMBER 4. ZOQ3i. r A Second Amendment the CRLA. was entered into between the.. parties herein on September 4, 2003. 5. MODIFICATION AND AMENDMENT OF CRLA BY THIS THIRD ' AMENDMENT. `The AGENCY and LTCIOWNER wish. to clarify and modify their respective rights and obligations under the CRLA as set forth in this Third Amendment and as more particularly described below. Specifically, because, the OWNER continues to. (a) need and require additional time to .perform and fulfill ifs obligations under the CRLA; and {bJ need and require additional funding to complete its' obligations .under the CRLA,. the AGENCY and the OWNER agree that the CRLA is amended by this THIRD AMENDMENT as follows: 'OWNER hereby represents and warrants to AGENCY that it will reasonably and ...diligently refinance said. Project SITE for the ..purpose of obtaining sufficient additional, -funds to complete and construct the improvements specified in Exhibif "A" attached hereto and incorporated herein by this reference .(hereinafter referred to as "Refinancing"). OWNER further represents and warrants that as a result of said Refinancing it will receive no less than $8,359,000 for use.. in constructing, improving and completing all of the items specified in Exhibit "A" attached hereto and incorporated herein by this reference. The OWNER further hereby represents and- warrants that it will spend no less than $6,359,000 to construct, improve and complete items 1 thru 6 in the .manner and at the times identified in Exhibit "A." The OWNER further hereby r®presents and warrants that it will spend no less than $2,000,000.00 (Two Million Dollars) to construct, improve and complete Buildingi35 in the manner and at the times identified in Exhibit "A." In reliance upon said representations and warranties specified .herein, the AGENCY h®reby agrees to relinquish its encumbrance and.deed of trust currently held on the Project SITE and to cancel the same to facilitate a new encumbrance iri said Refinancing. subject to and contingent upon the terms and conditions of this Tfird Am®ndment. The parties hereto agree that AGENCY is not obligated to relinquish its encumbrance or in anyway subordinate its security interest in said Project SITE unless G:IDocuments and Settings\Susan\My Documents\Lynwooa3rdAmandAgr021 Zo4(RNW) 2 t~GIG17 /7T!7R • '~ i and until the.AGENCY's Executive Director, in his/her sole .discretion,. is satisfied that no less than $8,359;000 will be available from the escrow of said Refinancing as and for>irproving and completing all of the items specified in Exhibit "A." OWNER hereby agrees to establish an escrow account at a reputable escrow company sal isfactory to the Executive Director of the AGENCY for the purpose of completing the Refinancing. of the Project SITE. The OWNER further agrees that the AGENCY shall receive $2,,000,000.00 (Two Million Dollars) from said escrow at the close of escrow.payable to or wired directly to "Lynwood Redevelopment AGENCY". The.AGENCY hereby agrees to retain said funds and hold them for use to construct, improve and complete Building 5 as specified in Exhibit "A° attached hereto and incorporated herein by this reference . The OWNER and AGENCY hereby agree that said $2,000,000,00 (Two . Million -Dollars) shall be placed in an .interest-bearing account ~in the sole and exclusive Warne of the AGENCY with alt interest payable exclusively to the AGENCY. i The parties hereto agree that the AGENCY is hereby granted full and complete authority to disburse said $2,000,000.00 (Two Million Dollars) upon the terms and conditions and at such times as he AGENCY, in its dole discretion,:deems in the best interests of.the AGENCY and all for the purpose of constructing, improving and completing Buildin~5 €~ as specified in Exhibit "A." If OWNER fails and/or refuses to complete Buildin~5 or any of the other items listed in Exhibit "A" as agreed, the entire $2,000,000.00 (Two Million Dollars) or such portion thereof as remains undisbursed for completion of Building 5 shall revert, to and become the sole and exclusive property of the AGENCY. ;The parties hereto further agree that at such time as the OWNER presents a Certificate of Occupancy from the Lynwood $uilding Departm®nt and obtains a Certificate ~'of Completion from the AGENCY for all of the items listed in Exhibit "A" and on or before the dates specified in Exhibit "A" as agreed, that said OWNER shall be entitled to receive the balance, if any, of said $2,000,000.00 (Two Million Dollars). After: receipt of said balance, if any,, the OWNER shall have no right, title oC claim to any otherfunds, moneys orproperties of the AGENCY pursuant to this Third Amendment, the'CRLA or otherwise... . 6. PROOF OF EXPENDITURES AND COMPLETION OF WORK SET FORTH 1N ..EXHIBIT "/~„ Proof of Expenditures as referenced herein shalt be by cancelled check's and a visual inspection conducted by the AGENCY. In addition, work shall not be deemed completed. as set forth in Exhibit A unless and until the OWNER provides a Certificate . of Occupancy from. the Lynwood City Building Department and a Certificate of.~ Completion from the AGENCY for the construction and building items set forth~in the attached Exhibit "A." ~ C:1Document's end SeftingslSusen\MyDocumentelLynwood3rdAmendAgrU21204(RNW) 3 b ~ ~9t~d ~~ . . • 2 Proof of expenditures, Certificates of Occupancy and Certificates of Completion ~ ~ must be received by the Executive/Director by 5:00 p.m. on the dates andaime set forth ~~' ~ in the attached Exhibit "A" at the following address: ~~~ ~ Lynwood R®development Agency City of Lynwood 11T330 Bullis Road Lynwood,. California 90262. 7. ATTORNEYS FEES. ~ ~ ~. OWNER shall be responsible for the payment of reasonable attorney fees, costs - and expense to the AGENCY for any efforts to enforce or secure compliari,ce with the terms and conditions of this Third Amendment whether by litigation or otherwise, 8. NO JOINT VENTURE. i It is not the intent of the partes to create a joint venture or partnership. Nothing contained herein shall be deemed to create a joint venture or partnership betwaen the parties to this Third Amendment. 9. EFFECTIVE DATE. The Effective Date of this Third Amendment shall be the date when it is signed . by the Executive Director of the Lynwood Redevelopment Agency.. ' t ` ~ ' - 1 - ~ ~ r ,. I j " .. ; CaDocuments and Sattingsl5usamMy DocumentslLynwood3rdAmandAgr0212o4(RNW) I r ~' u0 ~9yd 77.R~b~rrT7 ~7b:9T bIaG17/7T/7fa . -. ~~ • IN WITNESS VI/HEREOF, the parties hereto have executed this Second Amendment as of ahe Effective Date. ~ .,~. . Dated: , .2004 LYNINOOD REDEVELOPMENT AGENCY . ; ay: - { Name: , Title: Executive Director ` , .. Dated: , 2004 ~- _ ~i ~ ~. LTD DEVELOPMENT, INC. ; a California corporation:. f G By. Name: Donald Chae ' . Title: President APPROVED AS TO FORM: ~ ' By: Agency Counsel i . ~ C:1Documenls.and SeHing6lSusan\My DocumentslLynwood3rdAmendAgr021204(RNW) 5 9e ~~Hd . ' Develo. er Obli ations to be com feted. b 7-30-04 . ~ Cost 1 Com letion of fa ade chap e for Buildin A-3 Food For Less i $1,200,000 2) Demolition and construction of Buildin N6 School Buildin $1,702,000 3 Com letion of fa ade Chan e for. Buildin A7 ~ $487,000 ,._ 5j' Com Com letion of construction of Buildin B6c letion of construction of Buildin B6a i i $832,000 $1,243,OQ0 Com letion of construction of Buildin b6b =$8J5;000 Total $fi,359,00.0 . , .~ After completion of the above, the Agency will fund the following: Pro'ect to be com feted b 12-31-04 Cost 1 Construction of Buifdih B5 '• $1,220,000 Contiri enc ~ j _:^780,000 Total ~ ;' $2,000,000 RESOLUTION NO. A RESOLUTION OF LYNWOOD REDEVELOPMENT AGENCY APPROVING THE PROPOSED THIRD AMENDMENT.TO THE COMMERCIAL REHABILITATION LOAN AGREEMENT BETWEEN THE AGENCY AND LTC DEVELOPMENT WHEREAS, the Redevelopment Plan for Lynwood Project Area "A" ("Redevelopment Plan"), was duly approved and adopted on July 3, 1973 by Ordinance No. 945 and subsequently amended on December 27, 1973 by Ordinance No. 960, on August 19, 1975 by Ordinance No. 990, on June 1, 1976 by Ordinance No. 1000, on December 7, 1976 by Ordinance No. 1010, on December 16, 1980 by Ordinance No. 1111, July 19, 1988 by Ordinance No. 88-1308, and on March 20, 2001 by Ordinance No. 1504; and WHEREAS, the Lynwood- Redevelopment. Agency ("Agency") is engaged in activities necessary to execute and implement the Redevelopment Plan for Redevelopment Project Area "A" ("Redevelopment Project") in the City of Lynwood and in order to do so the Agency proposes to approve a Third Amendment to the Commercial Rehabilitation Loan Agreement ("CRLA"), which provides for reconveyance of an Agency 2nd Trust peed forthe continued rehabilitation and development of a retail center; and WHEREAS, the Agency desires to consider the amendment in connection with the development and .rehabilitation of the Site by the Developer; and WHEREAS, the proposed Amendment contains all the provisions, terms, conditions and obligations required by state and local law; and WHEREAS, the Developer possesses the qualifications and parcels necessary to insure development of the Site proposed in accordance with the' purposes and objectives of the Redevelopment Plan; and WHEREAS, the Agency conducted a meeting on the proposed Amendment; WHEREAS, t he A gency c onsidei-ed t he p roposed a mendment a nd believes that development and .rehabilitation pursuant thereto is in the best interest of the City of Lynwood and in furtherance. of the goals and objectives of the Lynwood Redevelopment Agency to reduce blight and~promote~ecoriomic'development in the Project Area; NOW, THEREFORE, IT IS RESOLVED by the Lynwood Redevelopment Agency as follows: H:WORD/REDEVELP/LMORALES/PlazaMexLTCRehab3AmndLRA.RESO • ;Section 1. The Agency hereby finds and determines that the development of the Site pursuant to the Amendment is in the best interest of the City of Lynwood and the health, safety, morals and welfare of its residents, and. in accord with the public purposes and provisions of applicable State and local law. Section 2. The Agency hereby finds and determines that the development of the Site pursuant to the proposed Amendment is necessary to effectuate the purpose of the Redevelopment Plan for the .Redevelopment Project. Section 3. The Agency hereby finds and determines that the development of the Site pursuant to the proposed Amendment will be consistent with the development permitted at that location by Lynwood's Zoning Ordinance. Section 4. The Agency conducted a public meeting and received, heard and considered all oral and written-objections to the proposed Amendment and to the actions connected therewith, and hereby overrules all such oral and written objections. ..Section 5. The Agency will reconvey it's 2nd .Trust Deed in the amount of $2 million and. put the funds in an interest bearing escrow account in the Agency's favor where in turn the ,Developer shall be required to expend their own funds on items specifically described in the amendment (Exhibit. "A") prior, to the Agency ,releasing it's funds to be used to complete the construction of the final buildings on site. Section 6. The Executive Director of the Agency is hereby authorized to execute the Amendments. Section 7. The Executive Director of the Agency, or his designee, is hereby authorized, on behalf of the Agency, to sign all documents necessary and appropriate to carry out and implement the Amendment„and to administer and implement the Agency's obligations, responsibilities and duties to be performed under the Amendment. '.APPROVED AND ADOPTED this 24th day of February 2004. LOUIS BYRD, CHAIRMAN H:WORD/REDEVELP/LMORALES/PlazaMexLTCRehab3AmndLRA.RESO • • ATTEST: Andrea L. Hooper, Secretary APPROVED AS TO FORM: Ron Wilson, Agency Counsel. Lorry Hempe, Executive Director APPROVED AS TO CONTENT: Louis Morales, Deputy Executive Director H:WORD/REDEVELP/LMORALES/PlazaMexLTCRehab3AmndLRA.RESO • i . Date: February 24, 2004 To: Chairman and Members of the Redevelopment Agency From: Lorry Hempe, Executive Director By: Louis Morales, Deputy .Executive Director Subject:. Relocation Services (Lynwood Plaza) .Purpose:. . To have the Agency discuss the possibility of engaging a Relocation Consultant to assist the businesses within the Lynwood Plaza. Facts: 1. On January 28th and February 5, 2004, the. businesses at Lynwood Plaza met to discuss its issues surrounding the Lynwood Unified School Districts ("LUSD") plans to construct a new school 2. LUSD's Relocation Team, Consultants, Superintendent, Board Members, Council Members and city staff attended the meetings. 3. The businesses claim that they have not been informed of the acquisition and relocation process and are essentially in the dark with respect to their rights and timing to have to move. 4. The meetings shed some light on the fact that there has been little communication between the LUSD consultants and the businesses within the Lynwood Plaza. Discussion: The -LUSD Board Members and the Superintendent agreed to have their Consultants meet with each business on an individual basis to discuss the process and to review the information necessary to establish the grounds for relocation and acquisition. ~ . A the meetings and at a previous Council Meeting some of the Council Members expressed concern and offered to assist by ,perhaps hiring a Relocation Consultant to assist the businesses. Although this is apparently the responsibility of the businesses and the LUSD, the City feels compelled to offer its support, thereby making this suggestion. The LUSD has offered to be more proactive in their approach and it may be in th'e best interest of ,the City to wait on the outcome of negotiations between the .LUSD and the Business Owners. The Agency at its discretion may opt to direct staff to contact Relocation Consultants and obtain bids for their services and upon receipt of the bids either refer them to the businesses for them to consider and hire or have the Agency consider the proposals. Recommendation: ' Staff. respectfully requests that after consideration the Agency direct staff accordingly.