SR-CC/RA-2 (2)
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'AN -i ) "~"-.
FI:CMD:br:sretopn ... , 1 _ I..)"",
Council Meeting: January 12, 1993 Santa Monica, California
TO: CITY COUNCIL AND REDEVELOPMENT AGENCY
FROM: Clty and Agency Staff
SUBJECT: EXTENSION OF TIME FOR OUTSTANDING PROMISSORY NOTES
Introductlon
The city of Santa Monica holds six Promissory Notes, two for the
Downtown Redevelopment Project and four for the Ocean Park
Redevelopment ProJect, for funds loaned to the Redevelopment
Agency by the City. These Notes, last renewed by the Agency
January I, 1992, need to be renewed for the 1993 calendar year
effective January 1, 1993.
Background
The city has loaned the Agency funds for various administrative,
operat~onal and mlscellaneous expenses. These loans have been
formalized in the form of Promissory Notes with payment due
annually. until payment in full is received by the city, it is
necessary that the Notes be renewed.
Attachment I details the financlal history of each of the
Promlssory Notes, includlng amounts repaid to date, and presents
the sources and uses of budgeted FY 1992/93 Redevelopment Agency
income. To date, approximately $4.4 million has been budgeted
for repayment on these Notes.
BUdget/Financial Impact
There is no budgetary impact resultlng from the renewal of these
ProIDlssory Notes. The financl.al impact is to increase the
llability of the Agency by $1,067,083.58 whl.ch represents net
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accrued interest for the period January 1, 1992 through December
31, 1992 (see Attachment II). continuing the policy adopted last
year by Council, staff once again recommends that the interest
rate for five ProID1ssory Notes be one-half of one percentage
point (.5%) more than the City's actual rate of investment
earnings for calendar year 1993. The addit10nal .5% is to
reimburse the City for carrying this debt. As required in the
or1ginal bond covenant, the s1xth Promissory Note must continue
at the same rate of interest, 5.98%, as the recently refunded
Downtown Redevelopment Project Parking Lease Revenue Bonds.
Recommendation
It 1S recommended that:
(A) The City council agree to renew the six loans to the
Redevelopment Agency and to accept the attached Promissory
Notes; and
(B) The Redevelopment Agency approve and authorize the
Cha1rperson to execute the S1X attached Promissory Notes
between the Agency and the Clty, extending the loans for the
1993 calendar year.
Prepared by: M1ke Denn1s, Director of F1nance
B111 J1as, Senior Accountant
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,
FI:CMD:br:sretopn
Councll Meeting: January 12, 1993 Santa Monica, California
TO: CITY COUNCIL AND REDEVELOPMENT AGENCY
FROM: Clty and Agency Staff
SUBJECT: EXTENSION OF TIME FOR OUTSTANDING PROMISSORY NOTES
Introduction
The City of Santa Monlca holds SlX promissory Notes, two for the
Downtown Redevelopment Project and four for the Ocean Park
Redevelopment Project, for funds loaned to the Redevelopment
Agency by the Clty. These Notes, last renewed by the Agency
January 1, 1992, need to be renewed for the 1993 calendar year
effective January 1, 1993.
Background
The Clty has loaned the Agency funds for various admlnlstrative,
operatlonal and mlscellaneous expenses. These loans have been
forITlallZed ln the form of ProIDlssory Notes wlth payment due
annually. until payment In full is received by the city, it is
necessary that the Notes be renewed.
Attachment I detalls the flnanclal history of each of the
Promlssory Notes, lncludlng amounts repald to date, and presents
the sources and uses of budgeted FY 1992/93 Redevelopment Agency
lncome. To date, approxlmately $4.4 mllllon has been budgeted
for repayment on these Notes.
BUdget/Financial Impact
There is no budgetary impact resulting from the renewal of these
Promlssory Notes. The flnanc1al lmpact 1S to increase the
llablllty of the Agency by $1,067,083.58 WhlCh represents net
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accrued interest for the perlod January 1, 1992 through December
31, 1992 (see Attachment II). Contlnuing the policy adopted last
year by council, staff once again recommends that the interest
rate for five Promissory Notes be one-half of one percentage
pOlnt ( .5%) more than the C:tty's actual rate of investment
earnlngs for calendar year 1993. The addJ.tional .5% is to
reimburse the City for carrying this debt. As required in the
original bond covenant, the sixth Promissory Note must continue
at the same rate of interest, 5.98%, as the recently refunded
Downtown Redevelopment Project Parking Lease Revenue Bonds.
Recommendatlon
It lS recommended that:
(A) The city Counell agree to renew the SlX loans to the
Redevelopment Agency and to accept the attached Promissory
Notesi and
(B) The Redevelopment Agency approve and authorize the
Chalrperson to execute the six attached Promissory Notes
between the Agency and the City, extending the loans for the
1993 calendar year.
Prepared by: Mlke Dennls, Director of Finance
Bill Jias, Senlor Accountant
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Attachment I
STATUS OF REDEVELOPMENT AGENCY PROMISSORY NOTES
I Hlstory of Promlssory Notes
The followlng lndlcates the orlglnal debt amount of each of the SlX promlssory
notes between the Redevelopment Agency and the Clty, and the total net accrued
lnterest for each promissory note as of 12/31/92; the hlstory of note payments
1S footnoted by promlssory note.
Onglnal Total Net Accrued Promlssory
Promlssory Debt Interest Note
Note Amount Through Balance
Number (date) 12/31/92 1/1/93
Downtown Project
1. Downtown
Redevelopment
Project S B71 ,840 00 $ 588,875 22(g) $ 1,460,715.22
(6/30/81)(a)
6. Downtown
Redevelopment
Project 4,400.000.00
(10/24;78) (f) 5,640.542.05(h) 10,040,542 05
Sub-total 55,271 ,840.00 $6,229,417.27 511.501.257.27
Ocean Park Project
2. Ocean Park
Project 51,243,266.88 S 1,691 ,880. 16 ( 1 ) 2,935.147.04
(6j30/81)(b)
3. Ocean Park
Project 824,449.00 374, 195.92(J} 1.198,644.92
(1/1/82) (c)
4. Ocean Park
Project 772,568.08 IS0.216.56(k) 922,784.64
(9/13/83)(d)
5. Ocean Park
Project 280,837.00 54,425.81(1) 335.262.81
(9/14 I 83) (e)
Sub-total $3,121.120.96 $2.270,718 45 S 5,391,839.41
T ota 1 $8,392,960.96 $8,500.135.72 $16.893,096.68
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Notes
(a) and (c) represent General Fund funds advanced to the Agency for van ous
adml n1 strat 1 ve and other expenses as of 6/30/81 (per Agency Resolut1on 371,
1/12/82) .
(b) Represents C1 ty CDBG funds advanced to the Agency for the payment of
1nterest on outstandlng Federal proJect notes (per Agency Resolutlon 371,
1/12/82)
(d) Represents General Fund funds advanced to the Agency to pay off the
outstand1ng Federal Ocean Park Urban Renewal Grant Note
(e) Represents C1ty CDBG funds held by the Federal government and applled to
payoff the outstand1ng Federal Ocean Park Urban Renewal Grant Note
(f) Represents the value of varlOUS parcels of property transferred from the
Clty to the Agency for the Downtown Redevelopment Project (per Agency
Resolutlon 352, 10/24/78)
(g) Reflects payments of S150,000 1n fY1983j84 and $347,548 1n FY1986j87.
(h) Reflects payment of $1,149,452 In FY1986/87 and S200,000 1n FYl990/91
(budgeted 1n FYI989/90)
(1) Reflects payment of S183,000 1n FYl984/85 and $445.779 1n 1nterest 1n
FYl987(88
(J) Reflects payment of 5365.000 of pr1mar11y 1nterest 1n FY1987/88, $480,000
1n 1nterest 1n FY1990/91 and S33,000 1n lnterest 1n fY1991/92
(k) Reflects payment of S563,975 In 1nterest and pr1nc1pal 1n FY1987/88
(1) Reflects payment of 5205,011 1n interest in FY1987/88
II. FYl991/92 Flnanclal Ab111ty of Redevelopment Agency to Repay Promissory
Notes
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The follow1ng table summanzes (In m111lOns) the adopted budget for sources
and uses of Redevelopment Agency 1ncome for FYI992/93.
Downtown Ocean Park
Sources ProJect ProJect
Tax Increment and Interest $1.0 51.7
C1ty Lease Payment for
Parklng Structures* 1.2 -
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Total Sources $2.2 51. 7
* Th1S lease payment 1 S made by the General Fund to the Redevelopment
Agency. The General Fund payment 1 s f1 nanced by. a) $.6 mlllion payment
from Santa Mon1ca Place to offset lost property taxes due to Propos1t1on
13, b) $.1 mllllon payment from Santa Monlca Place for sublease of park1ng
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structures: and c) 5.5 mllllOn payment from Redevelopment Agency for
puttlng credlt of the General Fund behlnd the 1978 bond lssue.
Uses ***
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Operatlons S2.0* $1.4*
Capltal ProJects .2** .2**
Total Uses $2.2 S1.6
Net $ .0 $ .1
* Conslsts of the followlng costs: Downtown Project - a) $1.3 mllllon debt
serVlce payment on 1978 bonds; b) $.5 mlll10n payment to the General Fund
for puttlng credlt of the General Fund beh1nd the Redevelopment Agency's
1978 bond lssue; c) $ 1 milllon earthquake lnsurance on Parking
Structures; and d) $ .1 mllllon in Redevelopment Agency other operatlng
expenses appllcable to the project area; and Ocean Park Project - a) $.9
mllllon debt serVlce on 1988 refunded bonds and the repayment of lnterest
to the General Fund on outs tand lng Promlssory Notes; b) $ .1 mllllOn
payment to the General Fund for varlOUS admlnlstratlve support serVlces;
c) $ 1 mllllon annual lease payment to Parklng Authority for development
of 175 Ocean Park Boulevard: d) S.2 mlllion relmbursement for Houslng
operatlons of beneflt to the project area, and e) $.1 mllllon In
Redeve 1 opment Agency other operat 1 og expenses app 11 cab 1 e to the project
area.
** Conslsts of the fo 11 OWl n9 capltal proJects: a) Downtown Project - $.2
mllllon for houslng projects of beneflt to the project area, and b) Ocean
Park Project - S.2 ml1110n for hous1ng projects of benef1t to the project
area.
*** Excludes uses relmbursed dlrectly from the General Fund for Bayslde
Dlstrlct Corporation and some assoclated admlnistratlve costs.
(sretopn3)
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Attachment II
C1ty of Santa Mon1ca
ExtensIon of Tlme for Outstandlng Notes*
Prom,ssory Accrued Repayment To Prom,ssory
Note Interest General Note
Prom, ssory Balance 1/ 1/92- Fund Balance
Note Number 1/1/92 12/31/92 12/31/92 1/1/93
Downtown Projects
1. Downtown S 1,380,377.26 $ 80,337.96 S -0- $ 1,460,715.22
Redevelopment
ProJect**
6. Downtown 9,318,368.49 722,173.56 -0- 10,040,542.05
Redevelopment
ProJect******
Sub-total
Downtown
ProJect S 10,698,745.75 $802,511. 52 S -0- 511,501,257.27
Ocean Park PrOJect
2. Ocean Park S 2,773,716.72 $161,430.32 $ -o- S 2,935, 147. 04
Federal
Allocatlon***
3. Ocean Park 1,164,694.60 66,950.32 S 33,000.00 $ 1,198,644.92
Federa 1
Allocatlon**
4. Ocean Park 872,032.36 50,752.28 -0- 922,784.64
Federa 1
Allocat1on****
5. Ocean Park 316,823.67 18,439,14 -0- 335,262.81
Federal
Allocat1on*****
Sub-total
Ocean Park
ProJect $ 5,127,267.35 S 297,572.06 $ 33,000.00 $ 5,391,839.41
Total $15,826,013.10 51,100,083.58 5 33,000.00 $16,893,096.68
* Effect1ve January 1, 1993 Notes 1 through 5 w1ll carry an 1nterest rate
one half a percentage p01nt (,5%) h1gher than the C1ty'S actual rate of
1nvestment earm ngs for calendar year 1993. However, note 6 will
contlnue to carry an 1nterest rate of 5.98%. Th1S 15 the same rate of
interest on the recently refunded Downtown Redevelopment ProJect
Parklng Lease Revenue Bonds.
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** Reimbursement for vanous admlnlstratlve support and serVlce costs;
owed to Clty'S General Fund.
*** Relmbursement of CD8G funds used to pay lnterest on outstandlng Federal
Urban Renewal Loan Note; owed to Clty'S COBG Fund.
**** Close out of Ocean Park Federal Urban Renewal ProJect; owed to the
City's General Fund.
***** Close out of Ocean Park Federal Urban Renewal Project; owed to the
Clty'S COBG Fund.
****** Represents the value of varlOUS parcels of property transferred from
the City to the Agency for the Downtown Redevelopment ProJect (per
Agency Resolution 352, 10/24/78). Owed to General Fund.
(sretopn4)
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PRO MIS S 0 R Y NOT E
Downtown Santa Monica, California
Redevelopment Project January 1, 1993
On December 31, 1993, for value received, the undersigned
promises to pay to the order of the City of Santa Monica, a
municipal corporation, at Santa Monica, the sum of One Million,
Four Hundred Sixty Thousand, Seven Hundred Fifteen Dollars and
Twenty-Two cents ($1,460,715.22) , with interest from January 1,
1993, at the rate of one-half of one percentage point (.5%) more
than the City's actual rate of investment earnings for calendar
year 1993. In no event shall the interest rate be more than 12%
per annum. principal and interest are payable ln lawful money of
the United states. If act~on be lnstituted on this note, the
underslgned promises to pay all costs of collection, ~ncluding
reasonable attorney's fees.
The Redevelopment Agency of
the city of Santa Monica
ATTEST
~~;(L2~ BY' L/1 ~A
Clarlce Dykhouse JudY/' bdo
Secretary Chairperson
APPROVED AS TO FORM:
BYd~~~
ose~h Lawrence
gency Attorney
P. N. #1
PRO MIS S 0 R Y NOT E
Downtown Santa Monica, California
Redevelopment ProJect January 1, 1993
On December 31, 1993, for value received, the undersigned
promises to pay to the order of the city of Santa Monica, a
municipal corporation, at Santa Monica, the sum of Ten Million,
Forty Thousand, Five Hundred Forty-Two Dollars and Five Cents
($10,040,542.05), with interest from January 1, 1993, at the rate
of five and ninety-eight one hundredths percent (5.98%) per
annum. In no event shall the interest rate be more than 12% per
annum. Principal and interest are payable in lawful money of the
united states. If action be instituted on this note, the
underslgned promises to pay all costs of collection, including
reasonable attorney's fees.
The Redevelopment Agency of
the city of Santa Monica
ATTEST
~~EjJ~ BY: a~ k?k
Clarice Dykhovse Judy fl,1;dO
Secretary Chairperson
APPROVED AS TO FORM:
Byc];A~~
oseph :Cawrence
geney Attorney
P.N. #6
, . .
PRO MIS S 0 R Y NOT E
Ocean Park Santa Monica, California
Federal Allocation January 1, 1993
On December 31, 1993, for value received, the undersigned
promises to pay to the order of the City of Santa Monica, a
municipal corporation, at Santa Monica, the sum of Three Hundred
Thirty-Five Thousand, Two Hundred Sixty-Two Dollars and
Eighty-One Cents ($335,262.81) , with interest from January 1,
1993, at the rate of one half of one percentage point ( . 5%) more
than the City's actual rate of investment earnings for calendar
year 1993. In no event shall the interest rate be more than 12%
per annum. Principal and interest are payable in lawful money of
the united states. If action be instituted on this note, the
undersigned promises to pay all costs of collection, including
reasonable attorney's fees.
The Redevelopment Agency of
the City of Santa Mon1ca
ATTEST
Byv~tA~ BY: a if A
ClariceDykho~e Jud \.bdO
Secretary Chairperson
APPROVED AS TO FORM:
~
P.N.
, . .
PRO MIS S 0 R Y NOT E
Ocean Park Santa Monica, California
Federal Allocation January 1, 1993
On December 31, 1993, for value received, the undersigned
promises to pay to the order of the city of Santa Monica, a
municipal corporation, at Santa Monica, the sum of Nine Hundred
Twenty-Two Thousand, Seven Hundred Eighty-Four Dollars and
Sixty-Four Cents ($922,784.64) , with interest from January 1,
1993, at the rate of one half of one percentage point ( . 5%) more
than the City's actual rate of investment earnings for calendar
year 1993. In no event shall the interest rate be more than 12%
per annum. principal and interest are payable in lawful money of
the united states. If action be instituted on this note, the
undersigned promises to pay all costs of collection, including
reasonable attorney's fees.
The Redevelopment Agency of
the City of Santa Monica
ATTEST
ByAbH,~j]~ BY: Q LrfA
- ~larice -Oykh6use Judy-Abdo
Secretary Chairperson
APPROVED AS TO FORM:
~
, . .
,
PRO MIS S 0 R Y NOT E
Ocean Park Santa Monica, California
Federal Allocation January 1, 1993
On December 31, 1993, for value received, the undersigned
promises to pay to the order of the City of Santa Monica, a
municipal corporation, at Santa Monica, the sum of One Million,
One Hundred Ninety-Eight Thousand, Six Hundred Forty-Four Dollars
and Ninety-Two Cents ($1,198,644.92) , with interest from January
1, 1993, at the rate of one half of one percentage point ( . 5%)
more than the City's actual rate of investment earnings for
calendar year 1993. In no event shall the interest rate be more
than 12% per annum. principal and interest are payable in lawful
money of the United States. If action be instituted on this
note, the undersigned promises to pay all costs of collection,
including reasonable attorney's fees.
The Redevelopment Agency of
the City of Santa Monica
ATTEST
~~/~ BY: ~tf/44
Clarice Dykhouse Jud
Secretary Chalrperson
APPROVED AS TO FORM:
~~
Lawrence
Attorney
P.N.
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. . .
,
PRO MIS S 0 R Y NOT E
Ocean Park Santa Monica, California
Federal Allocation January 1, 1993
On December 31, 1993, for value received, the undersigned
promises to pay to the order of the City of Santa Monica, a
municipal corporation, at Santa Monica, the sum of Two Million,
Nine Hundred Thirty-Five Thousand, One Hundred Forty-Seven
Dollars and Four Cents ($2,935,147.04) , with interest from
January 1, 1993, at the rate of one half of one percentage point
( .5%) more than the city's actual rate of investment earnings for
calendar year 1993. In no event shall the interest rate be more
than 12% per annum. Principal and interest are payable 1n lawful
money of the United states. If action be instituted on this
note, the undersigned promises to pay all costs of collection,
including reasonable attorney's fees.
The Redevelopment Agency of
the City of Santa Monica
ATTEST
BY: ~p%Xl~ BY: LlAlA
------ Clar1ce Dykhou~e Judf Abdo
Secretary Chairperson
APPROVED AS TO FORM: