SR-062596-CC/HA/RA/PA-4
COI #A/RA1PA- 'I
JUN 2 5 1996
FI:CMD.sd.f \finance\admin\staffrpts\sretopn.wp
Council Meeting: June 25, 1996 Santa Monica, Californ~a
TO: CITY COUNCIL AND REDEVELOPMENT AGENCY
FROM: City and Agency Staff
SUBJECT: EXTENSION OF TIME FOR OUTSTANDING PROMISSORY NOTES
Introduct1.on
The City of Santa Monlca has held 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. F~ve Notes, last renewed by the Agency
January I, 1995, for twelve months, need to be renewed for the
period January 1/ 1996 through June 30/ 1997. One Note WhlCh
has been fully repald as of June 30, 1996 only needs to be
renewed for the period January I, 1996 through June 30, 1996.
Hereafter, the remalning flve Notes will be renewed dur~ng June
each year for the subsequent fiscal year.
Backqround
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.
Until payment ~n full is received by the City, it is necessary
that the Notes be renewed.
JUN 2 5 1996
-l- ee/ JlA IRA/1M-If
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Attachment I details the f~nanc~al history of each of the
Promlssory Notes, lncluding amounts repaid to date, and
presents the sources and uses of budgeted FY 1996-97
Redevelopment Agency income. To date, $6.5 million has been
repaid on these Notes, and Promissory Note #3 has been paid in
full. An add~t~onal $0.2 million has been budgeted to be
repa1d 1n FY 1996-97.
Budqet/Flnanc1al Impact
There 1S no budgetary lmpact resulting from the renewal of
these Promlssory Notes. The flnancial impact is to decrease
the llablllty of the Agency by $101,651 94 which represents net
accrued lnterest and repayments to the General Fund for the
period January 1, 1995 through June 30, 1996 (see Attachment
II) . Continuing the policy adopted 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
City's actual rate of investment earnings. 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 ~nterest, 5.98%, as is being paid
for the refunded Downtown Redevelopment Project Parking Lease
Revenue Bonds.
Recommendation
It is recommended that:
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(A) The City Council agree to renew the six loans to the
Redevelopment Agency and to accept the attached Promissory
Notes; and
(8 ) The Redevelopment Agency approve and authorize the
Chairperson to execute the six attached Proffilssory Notes
between the Agency and the Clty
Prepared by: Mlke Dennls, Director of Finance
Blll 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
promlssory notes between the Redevelopment Agency and the City, and the
total net accrued interest for each promlssory note as of 6/30/96, the
hlstory of note payments is footnoted by promissory note.
Original Total Net Accrued Promissory
Promissory Debt Interest Note
Note Amount Through Balance
Number (date) 6/30/96 7/1/96
Downtown proiect
1. Downtown
Redevelopment
Project $ 871,840.00 $ 890,743.58(g} $ 1,762,583.58
(6/30/81) (a)
6. Downtown
Redevelopment
Project $4,400,000.00
(10/24/78) (f) $7,084,765.62(h) $11,484,765.62
Sub-total $5,271,840.00 $7,975,509.20 $13,247,349.20
Ocean Park Prolect
2. Ocean Park
Project $1,243,266.88 $2,298,451.53(i) $ 3,541,718.41
(6/30/81) (b)
3. Ocean Park
Project $ 824,449.00 $ (824,449.00) (j) $ -0-
(1/1/82) (c)
4. Ocean Park
Project $ 772,568.08 $ 20,297.86(k) $ 792,865.94
(9/13/83) (d)
5. Ocean Park
ProJect $ 280,837.00 $ 123,710.51(1) $ 404,547.51
(9/14/83) (e)
Sub-total $3,121,120.96 $1,618,010 90 $ 4,739,131.86
Total $8,392,960.96 $9,593,520 10 $17,986,481.06
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Notes'
(a) and (c) represent General Fund funds advanced to the Agency for various
adm~n~strative 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
~nterest on outstanding Federal project notes (per Agency Resolution 371,
1/12/82) .
(d) Represents General Fund funds advanced to the Agency to pay off 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 for the Downtown Redevelopment Project (per Agency
Resolution 352, 10/24/78) .
(g) Reflects payments of $150,000 ln FY1983/84 and $347,548 in FY1986/87.
(h) Reflects payments of $1,149,452 in FY1986!S 7, $200,000 in FY1990/91
(budgeted ~n FY1989/90) , $428,425 52 in FY1992/93, $53,312.68 in
FY1993/94, $129,199.25 in FY1994!95, and $122,395 40 in FY1995!96.
(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, $130,696 in
interest in FY1992/93, payments of $1,095,456.60 in FY1994/95, and
$139,897.38 in FY1995/96
(k) Reflects payments of $563,975 in ~nterest and principal in FY1987/88,
$130,696 in interest in FY1992/93, and $160,384 02 in interest and
principal ~n FY1995/96.
(1 ) Reflects payment of $205,011 in interest in FY1987/88.
II. FY1996(97 F~nancial Abil~ty of Redevelopment Agency to Repay Promissory
Notes
The following table summarizes (in mill ions) the budget for sources and uses
of Redevelopment Agency income for FY1996!97.
Downtown Ocean Park
Sources Project Proiect
Tax Increment $1.2 $1. 5
City Lease Payment for
Park~ng Structures* 1.1 -
Other .1 ---:..1.
Total Sources $2.4 $1. 6
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* 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 parklng structure from the City, and b) $.5 milllon
payment from Redevelopment Agency for putting credit of the General Fund
behlnd the 1992 bond issue.
Uses
Operations $2 0* $1.4*
Capital Projects ~** ~**
Total Uses $2.2 $1.6
Net 2*** $ -0-
* Consists of the following costs: Downtown prolect - a) $1 1 million debt
service payment on 1992 bonds; b) $.5 million payment to the General Fund
for putting credlt of the General Fund behind the Redevelopment Agency's
1992 bond issue, and c) $.4 million reimbursement to the General Fund
consistlng of $.2 million for earthquake insurance on Parking Structures,
$ 1 mlll~on for general admlnlstrative costs, and $.1 million repayment
of interest to the General Fund on outstand~ng promJ.ssory notes; and
Ocean Park Project - a) $.9 million debt service on 1992 refunded bonds;
b) $.5 million relmbursement to the General Fund consisting of $.1
million for varlOUS administrative support services, $.1 million
repayment of interest to the General Fund on outstanding promissory
notes, $.1 milllon annual lease payment to Parking Authority 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.
** Conslsts of the following capl tal proj ects: a) Downtown Prol ect - $.2
million for housing projects of benefit to the project area, and b) Ocean
Park Prolect - $.2 million for housing projects of beneflt to the project
area.
*** Increases fund balance to ensure sufflclent funds necessary for ongoing
operations
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PRO MIS S 0 ~ y NOT E
Downtown Santa Monica, California
Redevelopment Project January 1, 1996
On June 30, 1997, 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, Seven Hundred Eight Thousand, Six
Hundred Seventy-Four Dollars and Eighty-Nine Cents ($1,708,674.89) , with
interest from January 1, 1996, at the rate of one-ha)f of one percentage
point ( . 5%) more than the City's actual rate of investment earnings for
fiscal years 1995-96 (January 1, 1996 - June 30, 1996) and 1996-97. This
total amount now owed represents the original June 30, 1981 debt less
subsequent payments plus subsequently incurred interest. One Million, Six
Hundred Ten Thousand, Four Hundred Thirty-Eight Dollars and Sixteen Cents
($1,610,438.16) of the total amount owed represents debt incurred as of
December 31, 1994, and the remainder represents debt incurred January 1,
1995 through December 31, 1995. In no event shall the interest rate be
more than 12% per annum. Principal and interest are payable in lawful
money of the Uni ted 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 k;~.~
B~n~ _~c.-d BY:
Maria Stewart ' Paul Rosenstein
Secretary Chairperson
APPROVED AS TO FORM:
BY, ~A._~
arsba~nes Moutrie
Agency torney
P.N. #1
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PRO MIS S 0 R Y NOT E
Ocean Park Santa Monica, California
Federal Allocation January 1, 1996
On June 30, 1997, 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, Four Hundred Thirty-Three
Thousand, Three Hundred Ninety-Four Dollars and Eighty Cents
($3,433,394.80), with interest from January 1, 1996, at the rate of one-
half of one percentage point ( .5%) more than the City's actual rate of
investment earnings for fiscal years 1995-96 (January 1, 1996 - June 30,
1996) and 1996-97. This total amount now owed represents the original
June 30, 1981 debt less subsequent payments plus subsequently incurred
interest. Three Million, Two Hundred Thirty-Five Thousand, Nine Hundred
Ninety-Eight Dollars and Eighty-Seven Cents ($3,235,998.87) of the total
amount owed represents debt incurred as of December 31, 1994, and the
remainder represents debt incurred from January 1, 1995 through December
31, 1995. In no event shall the interest rate be mon~ 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 RedevelopmE~nt Agency of
the City of Santa Monica
ATTEST
\...-u ~~.,~""* /1J~
BY: BY:
Maria Stewart l Paul Rosenstein
Secretary Chairpers;on
APPROVED AS TO FORM:
BY: ~~~
Marsha ~es Moutrie
Agency torney
P.N. #2
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PRO MIS S 0 R Y NOT E
Ocean Park Santa Monica, California
Federal Allocation January I, 1996
On June 30, 1996, for the value received, the undersigned promises to pay
to the order of the City of Santa Monica, a munic1.pal corporation, at
Santa Monica, the sum of One Hundred Thirty-Seven Thousand, Seven Hundred
Fifty-Eight Dollars and no cents ($137,758.00), with interest from January
1, 1996, at the rate of one-half of one percentage point (.5%) more than
the City's actual rate of investment earnings through June 3D, 1996. This
total amount now owed represents the original January I, 1982 debt less
subsequent payments plus subsequently incurred interest. One Million, One
Hundred Seventy-Seven Thousand, Four Hundred Thirteen Dollars and Forty-
Two Cents ($1,177,413.42) of the total amount o"lIl1ed represents debt
incurred as of December 31, 1994, and the remainder represents net debt
repayments and accrued interest from January 1, 1995 through December 31,
1995. 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 RedevelopmE'nt Agency of
the City of Santa Monica
ATTEST 1tJ~.~
B~~0 ~a-J BY:
Maria Stewart ' Paul Rosenstein
Secretary Chairperson
APPROVED AS TO FORM:
BY, ~,_tv~
Marsha J~e~-~butrie
Agency Pi. orney
P.N. #3
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PRO MIS S 0 R Y NOT E
Ocean Park Santa Monica, California
Federal Allocation January 1, 1996
On June 3 0 , 1997, for the value received, the undersigned promises to pay
to the order of the City of Santa Monica, a munic~pal corporation, at
Santa Monica, the sum of Nine Hundred Twenty-Six Thousand, Five Hundred
Forty-Seven Dollars and Forty-Five Cents ($926,547.45), with interest from
January 1, 1996, at the rate of one-half of one percentage point (.5%)
more than the City's actual rate of investment earnings for fiscal years
1995-96 (January 1, 1996 - June 30, 1996) and 1996-97. This total amount
now owed represents the original September 13, 1983 debt less subsequent
payments plus subsequently incurred interest. Eight Hundred Seventy-Three
Thousand, Two Hundred Seven-Seven Dollars and Fifty-Three Cents
($873,277.53) of the total amount owed represents debt incurred as of
December 31, 1994, and the remainder represents debt incurred from January
1, 1995 through December 31, 1995. 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 institutr:d 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 kJ~
B~~ Cb4~_.~ BY:
Maria Stewart Paul Rosenstein
Secretary Chairperson
APPROVED AS TO FORM:
BY: ~~
~arsha J~S Moutrie
Agency A orney
P.N. #4
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PRO MIS S 0 R Y NOT E
Ocean Park Santa Monica, California
Federal Allocation January 1, 1996
On June 30, 1997, for the value received, the undersigned promises to pay
to the order of the City of Santa Monica, a municLpal corporation, at
Santa Monica, the sum of Three Hundred Ninety-Two Thousand, One Hundred
Seventy-Four Dollars and Forty-One Cents {$392,174.41t, with interest from
January 1, 1996, at the rate of one-half of one percentage point (.5%)
more than the City's actual rate of investment earnings for fiscal years
1995-96 (January 1, 1996 - June 30, 1996) and 1996-97. This amount now
owed represents the original September 14, 1983 debt less subsequent
payments plus subsequently incurred interest. Three Hundred Sixty-Nine
Thousand, Six Hundred Twenty-Seven Dollars and Sixtee~ Cents ($369,627.16)
of the total amount owed represents debt incurred as of December 31, 1994,
and the remainder represents debt incurred from January I, 1995 through
December 31, 1995. In no event shall the interest rate be more than 12%
per annum. Principal and interest are payable in lawful money of the
Un1ted States. If action be 1nstituted 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 M~~~
.... ~~~~~J
BY: BY:
Maria Stewart '- 'llaul Rosenstein
Secretary Chairperson
APPROVED AS TO FORM:
BY: ~PJ~
Marsha J~S Moutrie
Agency At: orney
P.N. #5
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PRO MIS S 0 R Y NOT E
Downtown Santa Monica, California
Redevelopment Project January 1, 1996
On June 30, 1997, for the value received, the undersigned promises to pay
to the order of the City of Santa Monica, a municipal corporation, at
Santa Monlca, the sum of Eleven Million, Two Hundred Nine Thousand, One
Hundred Ninety-Five Dollars and Eleven Cents ($11,209,195.11) , with
interest from January I, 1996, at the rate of five and ninety-eight one
hundredths percent (5.98%) per annum. This amount now owed represents the
original October 24, 1978 debt less subsequent payments plus subsequently
incurred interest. Ten Million, Seven Hundred Sixty-Five Thousand,
Seventy-Elght Dollars and Thirty-Six Cents ($10,765,078.36) of the total
amount owed represents debt incurred as of December 31, 1994, and the
remainder represents debt incurred from January 1, 1995 through December
31, 1995. 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
~ ~~
BY: ilI~ t"\ ~~ BY: ..--=::::.,
Maria Stewa-rl:'" Paul Rosenstein
Secretary Chairperson
APPROVED AS TO FORM:
BY: ~~
Marsha Jotts Moutrie
Agency At rney
P.N. #6
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ATTACHMENT I I
City of Santa Monica
Extension of Time for Outstanding Notes*
Promissory Accrued Repayment To Promissory
Note Interest General Fund Note
Promissory Balance 1/1/95- 1/1/95 - Balance
Note Number 1/1/95 6/30/96 6/30/96 7/1/96
Downtown Prolects
1. Downtown $ 1,610,438.16 $152,145.42 $ -0- $ 1,762,583.58
Redevelopment
project**
6. Downtown 10,765,078.36 971,282.21 251,594.95 11,484,765.62
Redevelopment
project******
Sub-total
Downtown
ProJect $12,375(516.52 $1(123(427.63 $251,594.95 $13,247(349.20
Ocean Park Prolect
2. Ocean Park $ 3,235,998.87 $305,719.54 $ -0- $3,541,718.41
Federal
Allocation***
3. Ocean Park 1,177,413.42 57,940.55 1,235,353.97 $ -0-
Federal
AllocatJ..on**
4. Ocean Park 873,277.53 79,972.44 160,384.03 792,865.94
Federal
Allocatlon****
5. Ocean Park 369,627.16 34,920.35 -0- 404,547.51
Federal
Allocation*****
Sub-total
Ocean Park
Project $ 5,656,316.98 $ 478,552.88 $1,395,738.00 $ 4,739,131.86
Total $18(031(833.50 $1,601(980.51 $1,647,332.95 $17,986,481.06
* Effective July 1, 1996 Notes 1, 2, 4 and 5 will carry an interest rate
one half a percentage point ( . 5%) hJ..gher than the City's actual rate of
lnvestment earnings for fiscal year 1996-97. However, Note 6 will
continue to carry an interest rate of 5.98%. This is the same rate of
lnterest on the refunded Downtown Redevelopment Project Parking Lease
Revenue Bonds.
** Reimbursement for various administrative support and service costs; owed
to City's General Fund.
*** Reimbursement of CDBG funds used to pay interest on outstanding Federal
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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.
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