SR-CC/RA-2 (3)
< CG/ 111- 7-
FI:CMD:br:sretopn JAN 1 1 1994
Council Meeting: January 11, 1994 Santa Monica, California
TO: CITY COUNCIL AND REDEVELOPMENT AGENCY
FROM: City and Agency Staff
SUBJECT: EXTENSION OF TIME FOR OUTSTANDING PROMISSORY NOTES
Introduction
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 1, 1993, need to be renewed for the 1994 calendar year
effective January 1, 1994.
Background
The city has loaned the Agency funds for various administrative,
operational and miscellaneous 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 financial history of each of the
Promissory Notes, including amounts repaid to date, and presents
the sources and uses of budgeted FY 1993/94 Redevelopment Agency
income. To date, approximately $4.8 million has been repaid on
these Notes.
BUdget/Financial Impact
There is no budgetary impact resulting from the renewal of these
Promissory Notes. The financial impact is to increase the
liability of the Agency by $233,035.86 which represents net
..IAN 1 1 1994
- 1 - C C./fl.A - 1-
accrued interest for the period January 1, 1993 through December
31, 1993 (see Attachment II). Continuing 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
point ( .5%) more than the City'S actual rate of investment
earnings for calendar year 1994. The additional .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.
Recommendation
It is 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
Chairperson to execute the six attached Promissory Notes
between the Agency and the City, extending the loans for the
1994 calendar year.
Prepared by: Mike Dennis, Director of Finance
Bill Jias, Senior Accountant
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Attachment I
STATUS OF REDEVELOPMENT AGENCY PROMISSORY NOTES
I. History of Promissory Notes
The fOllowing indicates the original debt amount of each of the six
promissory notes between the Redevelopment Agency and the City, and the
total net accrued interest for each promissory note as of 12/31/93; the
history of note payments is footnoted by promissory note.
Original Total Net Accrued Promissory
Promissory Debt Interest Note
Note Amount Through Balance
Number (date) 12/31/93 1/1/94
Downtown Project
1. Downtown
Redevelopment
Project $ 871,840.00 $ 661,180.62(g) $ 1,533,020.62
(6/30/81) (a)
6. Downtown
Redevelopment
Project $4,400,000.00
(10/24/78) (f) $S,SOS,707.36(h) $10,208,707.36
Sub-total $5,271,840.00 $6,469,887.98 $11,741,727.98
pcean Park project
2. Ocean Park
project $1,243,266.88 $1,837,169.93(i) $ 3,080,436.81
(6/30/81) (b)
3. Ocean Park
Project $ 824,449.00 $ 296,363.40(j) $ 1,120,812.40
(1/1/82) (c)
4. Ocean Park
Project $ 772,568.08 $ 58,728.95(k) $ 831,297.03
(9/13/83) (d)
5. Ocean Park
Project $ 280,837.00 $ 71,021.32(1) $ 351,858.32
(9/14/83) (e)
Sub-total $~ , 121, 120.96 $2,263,283.60 $ 5,384,404.56
Total $8,392,960.96 $8,733,171.58 $17,126,132.54
Notes:
(a) and ( c) represent General Fund funds advanced to the Agency for various
administrative and other expenses as of 6{30{81 (per Agency Resolution
371, 1/12/82) .
(b) Represents City CDBG funds advanced to the Agency for the payment of
interest on outstanding Federal project notes (per Agency Resolution
371, 1/12/82).
(d) Represents General Fund funds advanced to the Agency to payoff the
outstanding Federal Ocean Park Urban Renewal Grant Note.
(e) Represents City CDBG funds held by the Federal government and applied
to payoff the outstanding Federal Ocean Park Urban Renewal Grant Note.
(f) Represents the value of various parcels of property transferred from
the city to the Agency far the Downtown Redevelopment Project (per
Agency Resolution 352, 10/24/78) .
(g) Reflects payments of $150,000 in FY1983/84 and $347,548 in FY1986/87.
(h) Reflects payments of $1,149,452 in FY1986/87, $200,000 in FY1990/91
(budgeted in FY1989/90) and $428,425.52 in FY1992/93.
(i) Reflects payments of $183,000 in FY1984/85 and $445,779 in interest in
FY1987/88.
(j) Reflects payments of $365,000 of primarily interest in FY1987/88,
$480,000 in interest in FY1990/91, $33,000 in interest in FY1991/92 and
$130,696 in interest in FY1992/93.
(k) Reflects payments of $563,975 in interest and principal in FY1987/88
and $130,696 in interest in FY1992/93.
(1) Reflects payment of $205,011 in interest in FY1987/88.
II. FY1993/94 Financial Abllity of Redevelopment Agency to Repay
promissory Notes
The following table summarizes (in millions) the adopted budget for sources
and uses of Redevelopment Agency income for FY1993/94.
Downtown Ocean Park
Sources Project Project
Tax Increment and Interest $1.2 $1. 7
city Lease Payment for
Parking structures. 1.1 -
Total Sources $2.3 $1. 7
. This lease payment is made by the General Fund to the Redevelopment
Agency. The General Fund payment is financed by: a) $.6 million
payment from Santa Monica Place to offset lost property taxes due to
proposition 13 and sub-lease of parking structure from the city, and b)
$.5 million payment from Redevelopment Agency for putting credit of the
General Fund behind the 1992 bond issue.
Uses ...
Operations $2.0* $1.5*
Capital Projects .2*. .4*.
-
Total Uses $2.2 $1.9
- -
Net $ .1 $(.2)****
. Consists of the following costs: Downtown Project - a) $1.1 million
debt service payment on 1992 bonds; b) $.5 million payment to the
General Fund for putting credit of the General Fund behind the
Redevelopment Agency's 1992 bond issue; c) $.1 million earthquake
insurance on Parking structures; d} $.1 million state mandated
payment to the Los Angeles County Educational Revenue Augmentation
fund (per state Department of Finance); and e} $.2 ,million
administrative indirect costs; and Ocean Park project - a} $.9
million debt service on 1992 refunded bonds; b) $.2 million payment
to the General Fund for various administrative support services; c)
$.1 million annual lease payment to Parking Authority for development
of 175 Ocean Park Boulevard; d) $.1 million reimbursement for Housing
operations of benefit to the project area; e) $.l million state
mandated payment to the Los Angeles County Educational Revenue
Augmentation Fund (per state Department of Finance) i and f) $.1
million in Redevelopment Agency other operating expenses applicable
to the project area.
.. Consists of the following capital projects: a) Downtown project - $.2
million for housing projects of benefit to the project area, and b)
Ocean Park Project - $.4 million for housing projects of benefit to
the project area.
*.'" ExclUdes uses reimbursed directly from the General Fund for Bayside
District Corporation and some associated administrative costs.
"'."'. Financed from available fund balance.
(sretopn3)
Attachment II
city of Santa Monica
Extension of Time for Outstanding Notes*
Promissory Accrued Repayment To Promissory
Note Interest General Note
Promissory Balance 1/1/93- Fund Balance
Note Number 1/1/93 12/31/93 FY 1992/93 1/1/94
Downtown projects
1. Downtown $ 1,460,715.22 $ 72,305.40 $ -0- $ 1,533,020.62
Redevelopment
project**
6. Downtown 10,040,542.05 596,590.83 428,425.52 10,208,707.36
Redevelopment
project******
Sub-total
Downtown
Project $11,501,257.27 $668,896.23 $428,425.52 $11,741,727.98
Ocean Park Project
2. Ocean Park $ 2,935,147.04 $145,289.77 $ -0- $ 3,080,436.81
Federal
Allocation***
3. Ocean Park 1,198,644.92 52,863.48 $130,696.00 $ 1,120,812.40
Federal
Allocation**
4. Ocean Park 922,784.64 39,208.39 130,696.00 831,297.03
Federal
Allocation****
5. Ocean Park 335,262.81 16,595.51 -0- 351,858.32
Federal
Allocation*****
Sub-total
Ocean Park
Project $ 5,391,839.41 $253,957.15 $261(392.00 $ 5,384,404.56
Total $16,893,096.68 $922,853.38 $689,817.52 $17,126,132.54
* Effective January 1, 1994 Notes 1 through 5 will carry an interest
rate one half a percentage point (.5%) higher than the City'S actual
rate of investment earnings for calendar year 1994. However, note 6
will continue to carry an interest rate of 5.98%. This is the same
rate of interest on the recently refunded Downtown Redevelopment
Project Parking Lease Revenue Bonds.
** Reimbursement for various administrative support and service costs;
owed to City's General Fund.
*** Reimbursement of COBG funds used to pay interest on outstanding
Federal Urban Renewal Loan Note; owed to City's CDBG 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
City's CDBG Fund.
****** Represents the value of various 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 )
PRO MIS S 0 R Y NOT E
Ocean Park Santa Monica, California
Federal Allocation January 1, 1994
on December 31, 1994, for the 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 Eight Hundred
Thirty-One Thousand, Two Hundred Ninety-Seven Dollars and Three
cents ($831,297.03), with interest from January 1, 1994, at the
.
rate of one-half of one percentage point (.5%) more than the
city's actual rate of investment earnings for calendar year 1994.
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 - :: _~-- -~-J_ ~... ~
~
- -
- - --' - ~ -- - - ----
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Y__J_.'_--? a-.
- ~- - Al J.~ BY: $, (.R/b
. -.- ~
Clarice -Dyk9.o1.uie Ju Abdo
~ Secretary- - - Chairperson
-
- --
APPROVED AS TO FORM:
BY~~ *,-fu~
J sepi. La'wience
~ting Agency Attorney
P.N. #4
~
PRO MIS S 0 R Y NOT E
Ocean Park Santa Monica, California
Federal Allocation January 1, 1994
On December 31, 1994, for the 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 Twenty Thousand, Eight Hundred Twelve Dollars and
Forty cents ($1,120,812.40), with interest from January 1, 1994,
at the rate of one-half of one percentage point (.5t) more than
the City's actual rate of investment earnings for calendar year
1994. 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 ~:-'----~I_~ _~
, BY; ~"~ll~j~ BY: a ill
"""nl~ricl! ~knoulle Judyf)t{bdo
Secretary _ _ Chairperson
APPROVED AS TO FORM:
BY~. .~J\n~
~Lawrence
cting Agency Attorney
P.N. #3
.
PRO MIS S 0 R Y NOT E
Ocean Park Santa Monica, California
Federal Allocation January 1, 1994
-
On December 31, 1994, for the 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 Million,
Eighty Thousand, Four Hundred Thirty-Six Dollars and Eighty-One
cents ($3,080,436.81), with interest from January 1, 1994, at the
rate of one-half of one percentage point ( . 5%) more than the
. City's actual rate of investment earnings for calendar year 1994.
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.
v - - The Redevelopment Agency of
'-
~ - ---." ~- -
. the city of Santa Monica
- . .. _ - -_-J.
- - - -
ATTEST- ~
. - -
~___.J'~~ -------
. /. - .~ -;. c
BY:' ~?;o~~ BY: fY t&v&
"-"'""'"cla-rioe oykhous"'e Jud/j'" Abdo
secret~!-!' _~ . .: .- Chairperson
. APPROVED AS TO FORM:
By:Gr~dL~
J sepfi Lawrence
A ting Agency Attorney
P.N. #2
..
-.
PRO MIS S 0 R Y NOT E
..
Downtown santa Monica, California
Redevelopment Project January 1, 1994
On December 31, 1994, for the value received, the undersigned
promises to pay to the order of the ci ty of Santa Monica, a
municipal corporation, at Santa Monica, the sum of One Million,
Five Hundred Thirty-Three Thousand, Twenty Dollars and Sixty-Two
.
cents ($1,533,020.62), with interest from January 1, 1994, at the
rate of one-half of one percentage point (. 5%) more than the
city's actual rate of investment earnings for calendar year 1994.
In no event shall the interest rate be more than 12% per annum.
principal and interest are payable in lawful money of the United
States. If action be instituted on this note, the undersigned
promises to pay all costs of collection, including reasonable
attorney's fees.
_ ",-. The Redevelopment Agency of
- '" - the City of Santa Monica
~-
ATTEST _:------~..-- >
~-.---'-"~-.-._~~.- ,.t
~- . ,'. . . _.;, /J /
BY: ---- - - ~ BY:;t- Y
. Cl:aric"'-Dykho ...,~ JUd$~O
sec!etary Chairperson
APPROVED AS TO FORM:
!~~
Lawrence
Agency Attorney
P.N. #1
. .
PRO MIS S 0 R Y NOT E
Ocean Park Santa Monica, California
Federal Allocation January 1, 1994
On December 31, 1994, for the 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
Fifty-One Thousand, Eight Hundred Fifty-Eight Dollars and Thirty-
Two cents ($351,858.32) , with interest from January 1, 1994, at
the rate of one-half of one percentage point ( . 5%) more than the
City'S actual rate of investment earnings for calendar year 1994.
.
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 - _ - '-'-- J - -
-- - - -
BY: a~~
JU% Abd,
- ~ Ch irperson
. ~
- --
APPROVED AS TO FORM:
~~~
Lawrence
Agency Attorney
P.N. #5
. .
. PRO MIS S 0 R Y NOT E
Downtown Santa Monica, California
Redevelopment Project January 1, 1994
On December 31, 1994, for the 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,
~
Two Hundred Eight Thousand, Seven Hundred Seven Dollars and
Thirty-six cents ($10,208,707.36), with interest from January 1,
1994, at the rate of one-half of five and ninety-eight one
hundredths percent (5.98%-) 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
-/......._- ---
- ~-~
B~?L)P~ BY: %,C-S/b
Cbrrit;e DykhOuse -, Judy: do
Secretary - - Chairperson
. -
- --
APPROVED AS TO FORM:
BY~pQ ~~
J sepl'i Lawrence
~ting Agency Attorney
P.N. #6
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