SR-CC/RA-1 (4)
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"uN ~ 2 1999
F CMD RAH f \flnance\admln\stfrpts\sretopn5 wpd
Council Meetmg June 22, 1999 Santa MOnica, Callforma
TO CIty CouncIl and Redevelopment Agency
FROM City and Agency Staff
SUBJECT Extension Of Time For Outstanding Promissory Notes
IntroductIon
Currently, there are seven Promissory Notes for funds loaned by the City of Santa
MOnica to the Santa MOnica Redevelopment Agency two for the Downtown
Redevelopment ProJect, three for the Ocean Park Redevelopment Project, and two
for the Earthquake Recovery Redevelopment Project These Promissory Notes
need to be renewed for the penod July 1, 1999 through June 30,2000
Backaround
The City has loaned the Agency funds for vanous administrative. operatIonal and
miscellaneous expenses Until payment m 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, mcludmg
amounts repaid to date, and presents the sources and uses of budgeted FY 1999-00
Redevelopment Agency Income To date, $75 mlllron has been repaId on these
Notes, an additIonal $0 4 millIon has been budgeted to be repaid In FY 1999-00, and
Promissory Note #3 has been paid In full
-1- JUN 2 2 1Q99
CC/~A-J
Budaet/Fmanclallmoact
- .
There IS no budgetary Impact resulting from the renewal of these PromIssory Notes
The fmanclallmpact IS to mcrease the liabIlity of the Agency by $794,96563, which
represents the net of accrued Interest and repayments to the General Fund for the
penod July 1, 1998 through June 30, 1999 (see Attachment II) Continuing the polley
adopted by Council, staff once again recommends that the mterest rate for SIX
Promissory Notes be one-half of one percentage pOint (5%) more than the City's
actual rate of mvestment earnmgs The addItional 5% IS to reimburse the City for
carrymg this debt As required in the anginal bond covenant, the seventh Promissory
Note must continue at an equal rate of mterest, 5 98%, as IS being paid for the
refunded Downtown Redevelopment Project Parking Lease Revenue Bonds
Recommendation
It IS recommended that the CIty CouncIl agree to renew the seven outstanding
loans, and the Redevelopment Agency approve and authorize the Chairperson to
execute the attached Promissory Notes between the Agency and the City
Prepared by MIke Dennrs, DJrector of Finance
BIll Jlas, Actmg Accounts Payable Supervisor
Attachments I Status of Redevelopment Agency Promissory Notes
II FY 1998/99 Fmanclal ActIVIty on Outstanding Promissory
Notes
III Promissory Notes #1, #2, #4, #5, #6, #7, and #8
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ATTACHMENT I
ST A TUS OF REDEVELOPMENT AGENCY PROMISSORY NOTES
I History of Promissory Notes
The following mdlcates the onglnal debt amount of each of the eight promissory notes between the
Redevelopment Agency and the City, and the total net accrued mterest for each promissory note as of
6/30/99, the history of note payments by promissory note IS footnoted
Total Net
Ongmal Accrued
Debt Interest PromIssory
Promissory Note Amount Through Note Balance
Number and Descnotl<;m (date) 6/30/99 at 7/1/99
Downtown Prolect
1 Downtown
Redevelopment Project $ 871,84000 $ 1,117.525 26(g) $ 1,989,36526
(6/30/81 )[a)
6 Downtown
Redevelopment Project 4,400,000 00 8,535,401 17(h) 12,935,401 17
(10/24/78)(f)
Subtotal $ 5.271.840 00 $ 9,652.926 43 $ 14.924.766 43
Ocean Park Project
2 Ocean Park Project $ 1,243.266 88 $ 2,992,442 85(1) $ 4,235,709 73
(6/30J81)'b)
3 Ocean Park Project 824,449 00 (824,449 OO)(J) -0-
(1I1J82ye1
4 Ocean Park Project 772,568 08 (61.471 86)'k) 711.09622
(9/13/83)(di
5 Ocean Park Project 280,837 00 202,98063(1) 483,81763
(9/14/83)ie1
Subtotal $ 3,121,12096 $ 2,309.50262 $ 5,430.623 58
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Total Net
Onglnal Accrued
Debt Interest Promissory
Promissory Note Amount Through Note Balance
Number and Description (date) 6/30/99 at 7/1/99
Earthquake Recovery Project
7 Earthquake Recovery $ 400,000 00 $ 49,47764 $ 449,477 64
(6/28/94)imj
8 Earthquake Recovery 600,00000
(6/20/95)(ml 74,21646 674.21646
Sub total $ 1.000,000 00 $ 123.69410 $ 1.123.69410
Total $ 9,392.96096 $ 12,086,12315 $ 21,479,084 11
Notes
(a) Represents 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)
(c) same as "a" above
(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 outstandmg
Federal Ocean Park Urban Renewal Grant Note
(f) Represents the value of variOUS parcels of property transferred from the City to the Agency for the
Downtown Redevelopment Project (per Agency Resolution 352, 10/24n8)
(g) Reflects payments of $150,000 In FY1983/84, $347,548 In FY1986/87, $63,099 In FY1997/98 and
$45,646 In FY 1998/99
(h) Reflects payments of $1,149,452 In FY1986/87, $200,000 In FY1990/91 (budgeted In FY1989/90),
$428,42552 In FY1992/93. $53,31268 In FY1993/94, $129,19925 In FY1994/95, $122,39540 In
FY1995/96, $132.47384 In FY 1996/97, $289,397 89 In FY1997/98 and $258,552 00 In FY 1998/99
(I) Reflects payments of $183,000 In FY1984/85 and $445,779 In Interest In FY1987/88
(J) Reflects payments of $365.000 of prlmanly Interest In FY1987/88, $480,000 In mterest In FY1990/91,
$33,000 In Interest In FY1991/92. $130,696 In Interest In FY1992/93, payments of $1,095.45660 In
FY1994/95, and $139,897 38 In FY1995/96
(k) Reflects payments of $563,975 In Interest and principal In FY1987/88, $130,696 In Interest In
FY1992/93. $160.38402 In Interest and pnnclpalln FY199S/96, $102,20324 In Interest and pnnclpalln
FY1996/97, $63,09900 In Interest and principal In FY1997/98 and $45.64600 In mterest and pnnclpal
In FY 1998/99
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(I) Reflects payment of $205,011 In Interest In FY1987/88
(m) Represents General Fund funds advanced to the Agency for various administrative expenses
assOCiated with the Earthquake Recovery Project
II FY1999-00 Financial Ability of Redevelooment Agency to Repay Promlssorv Notes
The foHowmg table summanzes (m mIllions) the budgeted for sources and uses of Redevelopment Agency
funds for FY1999/00
Downtown Ocean Park Earthquake
Sources Project Project Recoverv Prolect
Tax Increment $12 $1 6 $75
City Lease Payment for Parking Structures\1) 1 1 - -
Other 03 01 03
Total Sources $26 $17 $78
Downtown Ocean Park Earthquake
Uses PrO/ect Project Recoverv Pralect
Operations (2) $22 $1 3 $ 20
Capital
Projects (3) -.0.2 02 75
Total Uses $24 $15 $ 95
Net $02(4) $02(4) $( 1 7)(5)
(1) 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 sublease 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
(2) Consists of the followmg costs Downtown ProJect - a) $1 1 million debt service payment on 1992
refunded bonds. b) $ 5 million payment to the General Fund for putting credIt of the General Fund
behind the Redevelopment Agency's 1992 bond Issue. and c) $ 6 million reimbursement to the General
Fund consisting of $ 1 mIllion for earthquake Insurance on Parking Structures, $ 2 million for housing
programs of benefit to the project area, and $ 3 million repayment of Interest to the General Fund on
outstanding promissory notes. Ocean Park Prolect - a) $ 9 million debt service on 1992 refunded
bonds. and b) $ 4 million reimbursement to the General Fund consisting of $ 1 million for various
administrative support services, $ 1 million annual lease payment to Parking Authonty for development
of 175 Ocean Park Boulevard (paid through the Low/Moderate Income Housing Fund), and $ 2 million
reimbursement for Housing programs of benefit to the project area, and Earthquake Recovery PrOlect -
a) $1 2 million payment to vanous government agencies for their tax Increment share, b) $ 7 million
payment to the General Fund for administrative support services. and c) $ 1 million payment to the Pier
Fund for EconomIc Development DIVISion staff support
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i3\ Consists of the following capital projects a) Downtown Project - $ 2 million for housing projects of
benefit to the project area, Ocean Park Project - $ 2 million for housing projects of benefit to the project
area, and Earthquake Recovery Project - $1 5 million for housing projects of benefit to the project area,
and $6 0 million for vanous other capital Improvements $1 7 million of eXisting fund balance IS being
used
..4) Increases fund balance to ensure sufficient funds necessary for ongoing operations
(5j These funds remain to be allocated to a reasonable operating fund balance and among various
approprrated and/or planned capItal Improvement projects
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ATTACHMENT 11
FY 1998/99 FINANCIAL ACTIVITY ON OUrST ANDING PROMISSORY NOTES(1)
Promissory Accrued Repayment To Promissory
Note Interest General Fund Note
Promissory Balance 7/1/98- 7/1198- Balance
Note Number 7/1198 6/30/99 6/30/99 7/1/99
Downtown Prolects
1 Downtown Redevelopment $ 1,929.93608 $ 105,07518 $ 45.646 00 $ 1,989,36526
ProJect{2l
6 Downtown Redevelopment $12.503,829 41 S 690.12376 $258,55200 $ 12,935,401 17
ProJecf(6)
Subtotal Downtown Project $14,433,76549 $ 795.19894 $304.198.00 $ 14.924.766 43
Ocean Park Prolect
2 Ocean Park Federal $ 4,008,811 03 $ 226,898 70 $ -0- $ 4,235,709 73
Allocatlon(3)
3 Ocean Park Federal $ -0- $ -0- $ -0- $ -0-
Allocatlon(2)
4 Ocean Park Federal $ 720.141 50 $ 36,60072 $ 45.646 00 $ 711,09622
Allocatlon(41
5 Ocean Park Federal $ 457,900 46 $ 25,917 17 $ -0- $ 483,81763
Allocatlonl5}
Subtotal Ocean Park Project $ 5,186.852.99 $ 289,41659 $ 45,646 00 $ 5.430.623 58
Earthauake Recoverv Prolect
7 Earthquake Recovery
Projectl71 $ 425,40000 $ 24,07764 $ -0- $ 449,4 77 64
8 Earthquake Recovery
ProJect<8j $ 638.10000 $ 36.11646 $ -0- $ 674.21646
Subtotal Earthquake
Recovery Project $ 1.063.500 00 $ 60,194 10 $ -0- $ 1.123.69410
Total $20.684.118 48 $1,144,809 63 $349.844 00 $21.479.084 11
'1', EffectIve July 1. 1999 Notes 1, 2, 4 , 5. 7 and 8 Will carry an Interest rate one half a percentage pornt
( 5%) higher than the City's actual rate of Investment earnings for fiscal year 1999-00 However, Note 6
WIll contmue to carry an mterest rate of 5 98% ThIs IS the same rate of mterest on the refunded
Downtown Redevelopment Project Parkmg Lease Revenue Bonds
(2} ReImbursement for vanous administrative support and service costs, owed to City's General Fund
(3) ReImbursement of CDSG funds used to pay mterest on outstandrng Federal Urban Renewal Loan Note.
owed to City's CDBG Fund
(4) Close out of Ocean Park Federal Urban Renewal ProJect, owed to the City'S General Fund
(51 Close out of Ocean Park Federal Urban Renewal ProJect, owed to the City's CDBG Fund
(6) Represents the value of vanous 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
(7) and (8) ReImbursement for various admmistratlve costs, owed the City's General Fund
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ATTACHMENT III
PROMISSORY NOTES
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PROMISSORY NOTE
Downtown Santa MOnica, California
Redevelopment Project July 1, 1999
On June 30,2000, for the value received, the undersigned promises to pay to the order of the City of Santa
MOnlca, a mUnicipal corporation, at Santa MOnica, the sum of Twelve Million. Nine Hundred ThIrty-Five
Thousand. Four Hundred One Dollars and Seventeen Cents ($12,935.401 17), With mterest from
July 1, 1999. at the rate offive and ninety-eight one hundredths percent (5 98%) per annum ThiS amount
now owed represents the onglnal October 24, 1978 debt less subsequent payments plus subsequently
Incurred Interest Pnnclpal 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, Includmg reasonable
attorney's fees
The Redevelopment Agency of
the City of Santa MOnica
ATTEST
BY ~~ J~H)~ By'1-&r.t\ ~crl'l,---_
Mana Stewart \- I Pam O'Connor
Secretary Chairperson
I
APPROVED AS TO FORM
j
r,,-, /: ~
BY , I /[.1., L.~, -l'?r~'-- ~ if dl ~~
...-y.."--' . ---...-
Marsha Jones Moutne
Agency Attorney
P N #6
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PROMISSORY NOTE
Downtown Santa MOnica, California
Redevelopment Project July 1, 1999
On June 30, 2000, for the v.a1ue 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, Nme Hundred Eighty-Nine
Thousand. Three Hundred SDcty-Frve Dollars and Twenty-Srx Cents ($1,989.36526), with Interest from July
1, 1999. at the rate of one-half of one percentage pomt ( 5%) more than the City's actual rate of mvestment
earnmgs for fiscal year 1999-00 (July 1, 1999 - June 30,2000) ThIS total amount now owed represents the
onglnal June 30, 1981 debt less subsequent payments plus subsequently Incurred Interest In no event
shall the Interest rate be more than 12% per annum Prrnclpal 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,
mcludlng reasonable attorney's fees
The Redevelopment Agency of
the City of Santa MOnica
ATTEST
'-- lJ0. ~ ~~ ~~ _r- . \
BY BY' ~{( j t 1 (r:i:'J~
Mana Stewart I Pam O'Connor -
Secretary Chairperson
APPROVED AS TO FORM
'... .....
BY !,' ,,-".: ;_/~ hh..c / ,C. \...-i"_<--~
.. 11 I I I
Marsha Jones Moutne
Agency Attorney
P N #1
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PROMISSORY NOTE
Ocean Park Santa MOnica, California
Federal Allocation July 1, 1999
On June 30. 2000. 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 Four Million. Two Hundred Thll1y-Flve
Thousand. Seven Hundred Nine Dollars and Seventy-Three Cents ($4,235,70973), with mterest from
July 1. 1999, at the rate of one-half of one percentage pomt (5%) more than the City'S actual rate of
Investment earnings for fiscal year 1999-00 (July 1, 1999 - June 30. 2000). ThiS total amount now owed
represents the onglnal June 30, 1981 debt less subsequent payments plus subsequently Incurred Interest
In no event shall the Interest rate be more than 12% per annum Pnnclpal and mterest are payable m 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~'-u,_~ BY 1ct ~~~ g~o~!::
Mana Stewart
Secretary : Chairperson
1
APPROVED AS TO FORM
BY , , l_ OJ ~c -' '-"-L
,.rt L .1__ f !},.J~
Marsha Jones Moutne
Agency Attorney
P N #2
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PROMISSORY NOTE
Ocean Park Santa MOnica, CalifornIa
Federal Allocation JUly1,1999
On June 30, 2000. 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 Seven Hundred Eleven Thousand, Ninety-SIx
Dollars and Twenty-Two Cents ($711,09622). wIth mterest from July 1, 1999, at the rate of one-half of one
percentage pOint ( 5%) more than the City'S actual rate of Investment earnmgs for fiscal year 1999-00
(July 1, 1999 - June 30, 2000) This total amount now owed represents the onglnal September 13, 1983
debt less subsequent payments plus subsequently Incurred Interest In no event shall the Interest rate be
more than 12% per annum Principal and mterest 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
~~ ~D LnG-t~ \
BY BY-_L~ 'I.)' C{{l!l____
Mana Stewart \ I Pam O'Connor
Secretary Chairperson
APPROVED AS TO FORM
,
BY ( j, t v_ __ 7~. .l.. /'" ...( ~ ~ t.. L-L(..
Marsha Jones Moutne
Agency Attorney
P N #4
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PROMISSORY NOTE
Ocean Park Santa MOnica, Cahforma
Federal AllocatIon July 1,1999
On June 30.2000, 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 Four Hundred Eighty-Three Thousand, Eight
Hundred Seventeen Dollars and Sixty-Three Cents ($483,81763), with Interest from July 1, 1999 at the
rate of one-half of one percentage pOint ( 5%) more than the City's actual rate of Investment earnings for
fiscal year 1999-00 (July 1, 1999 - June 30, 2000) ThiS amount now owed represents the onglnal
September 14. 1983 debt less subsequent payments plus subsequently Incurred mterest In no event shall
the Interest rate be more than 12% per annum Pnnclpal 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,
mcludmg reasonable attorney's fees
The Redevelopment Agency of
the City of Santa MOnica
ATTEST
BY ~ ~o_..~~ BV}iJ? Ii ~CO it- - -
Mana Stewart Pam O'Connor
Secretary Chairperson
I
APPROVED AS TO FORM
BY ~.. t A:"""-r..... ~1.-_----t'_ ,i- l..._. .......... "t._ l!
Marsha Jones Moutne
Agency Attorney
P N #5
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PROMISSORY NOTE
Earthquake Recovery Santa MOnica, California
Redevelopment Project July 1, 1999
On June 30, 2000, for the value received, the undersigned promises to pay to the order of the
City of Santa MOnlca, a mUnicipal corporation, at Santa MOnica, the sum of Four Hundred
Forty-NIne Thousand. Four Hundred Seventy-Seven Dollars and SIxty four Cents
($449,47764), with Interest from July 1, 1999, at the rate of one-half of one percentage pOint
(5%) more than the City's actual rate of Investment earnings for fiscal year 1999-00
(July 1. 1999 - June 3D, 2000) ThiS total amount now owed represents the anginal June 28.
1994 debt In no event shall the Interest rate be more than 12% per annum Pnnclpal and
Interest are payable In lawful money of the Umted States If action be Instituted on thiS note.
the undersigned promises to pay all costs of collection, Includmg reasonable attorney's fees
The Redevelopment Agency of
the City of Santa MOnica
ATTEST ,
------.... ~
" . ! ")}" / 'I
BY \~'_":-' ~~ BY .Hf ,[ I 'l U11- -
Mana Stewart I - J Pam O'Connor
Secretary : ChaIrperson
APPROVED AS TO FORM
BY , J, " . r. , ,t
. ...r.. . (' ~ _""" ),~_ ,,-/ ~t.- ."i.-,,-.; ~-L"-
Marsha Jones Moutne
Agency Attorney
P N #7
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PROMISSORY NOTE
Earthquake Recovery Santa MOnica, California .
Redevelopment Project July 1, 1999
On June 30. 2000, 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 SIX Hundred Seventy-Four
Thousand, Two Hundred SIxteen Dollars and Forty-SIx Cents ($674,21646), with Interest from
July 1, 1999, at the rate of one-half of one percentage pOint ( 5%) more than the City'S actual rate
of Investment earnings for fiscal year 1999-00 (July 1 t 1999 - June 30, 2000) This total amount
now owed represents the anginal June 20, 1995 debt 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 aU costs of collection, including
reasonable attorney's fees
The Redevelopment Agency of
the City of Santa MonIca
ATTEST
~~ I
~o..J- B; ~~ J rCe:,!i---- -
Mana Stewart "' Pam O'Connor
:
Secretary i Chairperson
APPROVED AS TO FORM
,f
BY I" C (I i
!,~:"-- <"..: "- f.L:"0..kL_' I :'C(/u-f'Li:;....{
Marsha Jones Moutne
Agency Attorney
P N #8
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