SR-417-006 (18)
~.B
SEP 1 4, 2004
Council Meeting: September 14, 2004
Santa Monica, California
TO:
Mayor and City Council
Chairperson and Redevelopment Agency
Chairperson and Parking Authority
FROM:
City Staff
SUBJECT:
Modification of the Amended and Restated Sale and Performance
Agreement of the Santa Monica Downtown Parking Garage
Acquisition and Retrofit Project and Related Promissory Note
INTRODUCTION
This staff report recommends that the City Council, Parking Authority and
Redevelopment Agency adopt the attached resolutions authorizing an amendment to
the Amended and Restated Sale and Performance Agreement for the Santa Monica
Parking Garage Acquisition and Retrofit Project and related promissory note. This
amendment will split the note into two separate notes and convert the variable interest
rate to a fixed rate on the new promissory notes resulting in a level debt service
payment during the remaining life of the notes.
BACKGROUND
On January 9, 2003, the City Council, Redevelopment Agency and parking Authority
approved the transfer of ownership of the downtown parking structures to the
Redevelopment Agency to accomplish the seismic retrofit of the structures and preserve
resources for this purpose. As part of that transaction, the Redevelopment Agency
executed a promissory note of $60 million to the Parking Authority, to be paid from
redevelopment tax increment revenues. The current outstanding balance of the note is
~~
SEP 1 4 2004
$58 million. The Parking Authority is required to use these payments to implement the
redevelopment plan and facilitate redevelopment of the area. The Redevelopment
Agency is also obligated to fund the seismic retrofit and other improvements of the
downtown parking structures.
DISCUSSION
The payment on the note is currently based on a fixed principal amount and with a
variable interest rate. In order to provide protection to the Redevelopment Agency
against the risk of increasing interest rates, provide budget certainty for the annual
amount to be paid under the note, and provide level debt service payments the
promissory note must be modified.
In addition to the interest rate conversion from a variable to fixed rate, the total
outstanding principal balance will be allocated between two separate notes according to
the Parking Authority's current financing needs. One note will correspond to the current
financing plan of the Parking Authority and the other note will be for the remainder of the
$58 million, with both notes using an interest rate not to exceed 7%. The term of the
new notes will remain the same as the current note and will be fully paid by 2033.
BUDGET/FINANCIAL IMPACT
The conversion of the promissory note into two fixed rate notes will result in a
predictable level payment and allow the Agency to budget these obligations with a
known interest expense over the remaining twenty-nine years of the notes. The
appropriate adjustments to the FY 04-05 budget for the Redevelopment Agency's
interest expense account #17274.577221 and the Parking Authority's revenue account
# 77610.404980 will be made when the Parking Authority's financing plan is completed.
RECOMMENDATION
It is recommended that:
1) The City Council adopt the attached resolution, authorizing an amendment to the
Amended and Restated Sale and Performance Agreement and modification to
the Promissory Note;
2) The Redevelopment Agency adopt the attached resolution, authorizing an
amendment to the Amended and Restated Sale and Performance Agreement
and modification to the Promissory Note; and
3) The Parking Authority adopt the attached resolution, authorizing an amendment
to the Amended and Restated Sale and Performance and Agreement and
modification to the Promissory Note.
Prepared by:
Steve Stark, Director of Finance
Jeff Mathieu, Director of Resource Management
Martin Kennerly, Administrative Services Officer
Tina Rodriguez, Redevelopment Administrator
Attachments:
Exhibit A: Resolution of the City of Santa Monica
Exhibit B: Resolution of the Redevelopment Agency
Exhibit C: Resolution of the Parking Authority
Exhibit D: Amendment NO.1 to Amended and Restated Sales and
Performance Agreement
Exhibit E: Promissory Note A
Exhibit F: Promissory Note B
Exhibit D
AMENDMENT NO.1 TO
AMENDED AND RESTATED SALE AND PERFORMANCE AGREEMENT
BY AND AMONG THE CITY OF SANTA MONICA,
THE PARKING AUTHORITY OF THE CITY OF SANTA MONICA
AND THE REDEVELOPMENT AGENCY OF THE CITY OF SANTA MONICA
FOR THE SANTA MONICA DOWNTOWN PARKING GARAGE
ACQUISITION AND RETROFIT PROJECT
This AMENDMENT NO. 1 TO AMENDED AND RESTATED SALE AND
PERFORMANCE AGREEMENT (the "Amendment No.1") is entered into and is effective as of
this day of , 2004 (the "Effective Date") by and among the CITY OF
SANTA MONICA (the "City"), the PARKING AUTHORITY OF THE CITY OF SANTA
MONICA (the "Authority") and the REDEVELOPMENT AGENCY OF THE CITY OF
SANTA MONICA (the "Agency") with reference to the following:
RECITALS:
WHEREAS, on January 9, 2003, the City, the Authority and the Agency entered into
that certain Sale and Performance Agreement (the "Agreement") pertaining to the Santa Monica
Downtown Parking Garage and Retrofit Project (the "Project");
WHEREAS, on June 20,2003, the City, the Authority and the Agency entered into that
certain Amended and Restated Sale and Performance Agreement (the "Amended Agreement") to
correct an error in title and to restate the terms upon which the Authority sold and/or conveyed
its interests in six (6) parking structures to the Agency, and the Agency purchased and/or
accepted conveyance from the Authority of the Authority's interest in such structures;
WHEREAS, in partial consideration of the transfer of the Authority Parking Structures
(as defined in the Amended Agreement), the Agency agreed to pay $60,000,000 to the Authority
pursuant to the terms of the Authority Promissory Note;
WHEREAS, the parties desire to amend the Amended Agreement to modify the terms of
the Authority Note to reflect two notes with fixed rates of interest instead of a variable interest
rate and to amortize principal to produce level annual note payments for the resulting notes; and
WHEREAS, the parties desire to replace the form of Authority Promissory Note
attached as Exhibit C to the Amended Agreement, which Authority Promissory Note is used to
secure the obligations under the Amended Agreement, to cancel the existing Authority
Promissory Note executed pursuant to the terms of the Agreement and the Amended Agreement
and to execute two (2) replacement notes ("Promissory Note A" and "Promissory Note B" and
collectively, the "Authority Replacement Promissory Notes"), in the forms attached hereto as
Exhibit C-l and C-2; and
WHEREAS, the parties desire that the principal amount and interest rate of the Authority
Promissory Note A shall be as designated by the Authority in furtherance of and corresponding
to the financing plan of the Authority, and, with respect to the Authority Promissory Note B, the
principal amount shall equal the remaining balance of unpaid principal of the Authority
Promissory Note after deducting for the principal amount of Authority Promissory Note A, and
the interest rate shall equal 7.00% per annum.
AGREEMENT:
NOW, THEREFORE, in consideration of the foregoing premises, the mutual covenants
herein contained and for other good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties hereto mutually agree as follows:
1.
Amendment to Amended A2reement.
1.1 All references in the Amended Agreement to "Authority Promissory Note" or
"Promissory Note" shall mean the "Authority Replacement Promissory Notes."
1.2 The reference to "Exhibit C" in Section C.1 shall mean "Exhibits C-1 and C-2"
and the reference therein in line 5 to "principal amount" shall mean "aggregate principal
amount. "
1.3
follows:
Section C.2. a., b. and c. of the Amended Agreement is hereby amended to read as
"C.2. Authority Replacement Promissory Notes. The Authority
Replacement Promissory Notes shall include the following provisions:
a. The Authority Replacement Promissory Notes shall be delivered as
two separate notes ("Promissory Note A" and "Promissory Note B") in the
aggregate principal amount equal to the unpaid principal amount of
Authority Parking Structures Purchase Price as of September 1, 2004. The
principal amount of Promissory Note A shall be $ and the
principal amount of Promissory Note B shall be $ . The term
of Promissory Note A and Promissory Note B each shall end on January 1,
2033.
b. The Agency shall pay to the Authority, or its assigns, principal and
interest due under Promissory Note A and Promissory Note B on each
January 1 through and including January 1, 2033, in the amounts set forth
on Schedule of Payments attached to each Promissory Note A or
Promissory Note B.
c The unpaid principal amount of Promissory Note A shall bear
interest at the rate( s) not to exceed 7% per annum and shall be as set forth
on Exhibit A to Promissory Note A. The unpaid principal amount of
Promissory Note B shall bear interest at the rate of7.00% per annum."
45504976.3
-2-
2. Amendment to Authority Promissory Note. The form of the Authority
Promissory Note attached as Exhibit C to the Amended Agreement is hereby replaced with the
form of Promissory Note A and Promissory Note B attached hereto as Exhibit C-1 and C-2 (the
"Authority Replacement Promissory Notes").
3. Aereement to Execute. The Agency hereto agrees to execute the Authority
Replacement Promissory Notes concurrently with the cancellation of any existing Authority
Promissory Note issued pursuant to the terms of the Amended Agreement, all concurrently with
the execution of this Amendment.
4. Miscellaneous. Except as hereinabove provided, the Amended Agreement shall
remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the
_ day of ,2004, to be effective as of the date first set forth above.
CITY OF SANTA MONICA
By:
Susan E. McCarthy, City Manager
Attest:
By:
Maria Stewart, City Clerk
PARKING AUTHORITY OF THE CITY OF
SANTA MONICA
By:
Susan E. McCarthy, Executive Secretary
Attest:
By:
Maria Stewart, Authority Clerk
45504976.3
-3-
Attest:
By:
Maria Stewart, Secretary
APPROVED AS TO FORM:
Marsha Jones Moutrie
City Attorney and Authority and Agency
General Counsel
45504976.3
REDEVELOPMENT AGENCY OF THE CITY
OF SANTA MONICA
By:
Susan E. McCarthy, Executive Director
~4-
Exhibit E
EXHIBIT C-1
PROMISSORY NOTE A
SECURED BY DEED OF TRUST
(AUTHORITY)
Principal Amount
Santa Monica, California
Dated: , 2004
$
A. The REVELOPMENT AGENCY OF THE CITY OF SANTA MONICA (the "Borrower"),
the CITY OF SANTA MONICA (the "City"), and the PARKING AUTHORITY OF THE
CITY OF SANTA MONICA ("Lender"), have entered into that certain Sale and
Performance Agreement dated as of January 9, 2003 ("Agreement") and amended by that
certain Amended and Restated Sale and Performance Agreement dated as of June 20, 2003
(the "2003 Agreement"), and as further amended by the Amendment No. I to the 2003
Agreement dated _, 2004 ("Amendment No. I," and, together with the 2003
Agreement, the "Amended Agreement") regarding the acquisition by the Borrower of the
Lender's interest in the Authority Parking Structures. Any capitalized term not otherwise
defined herein shall have the meaning ascribed to such term in the Amended Agreement.
This Note is made pursuant to, entitled to the benefits of, and referred to as the "Promissory
Note A" in the Amended Agreement.
B. Pursuant to the Amended Agreement, Lender has agreed to permit Borrower to acquire its
interest in the Authority Parking Structures, subject to the terms thereof. To induce Lender
to permit such acquisition, Borrower has agreed, among other things to execute this Note.
This Note is secured by, among other things, the Amended Deed of Trust dated on or about
the same date as this Note, executed by Borrower as Trustor, in favor of the Lender as
beneficiary and encumbering the real property described in the Amended Deed of Trust (the.
"Property"). The Amended Deed of Trust also secures that certain Note B, dated the same
date as this Note, in the principal amount of$
NOW, THEREFORE, in consideration of the foregoing, Borrower hereby agrees as
follows:
1. Principal. The Borrower promises to pay to the order of the Lender at 1685 Main
Street Santa Monica, CA 90401, or at such other place as Lender may from time to time
designate in writing or to the assignee of Lender, the principal sum of Million
Dollars ($ ) ("Principal"), with interest, as set forth in this Note.
2. Tntered. Commencing on the date of this Note first written above, the principal
amount of this Note shall bear simple interest calculated on an annual basis at the rate(s) of
interest not to exceed 7% per annum, as shall be designated by Lender in furtherance of and
corresponding to the financing plan of Lender, in the amounts set forth in Exhibit A to this
Note.
3. Repayment Terms.
a. Borrower shall make payments to the Lender as provided in this Section 3.
b. ill accordance with the Amended Agreement, Borrower shall make a total of twenty-
seven (27) payments to the Lender, each such payment to be made on January 1st of
each year for a period of twenty-seven (27) years commencing on January I, 2007.
Each payment of principal and interest shall be in an amount as set forth in the
Schedule of Payments attached hereto as Exhibit A and incorporated herein by this
reference.
c. Consistent with the proper and orderly implementation of the Redevelopment Plan
for the Santa Monica Earthquake Recovery Redevelopment Project (the "Project
Area"), all payments made by Borrower pursuant to this Note shall be made from
legally available funds of the Project Area.
d. Borrower's obligation to make any payment to Lender shall not be construed as a
"pledge" of property tax revenue for the purposes of Section 33671.5 of the
California Community Redevelopment Law (Health & Safety Code Section 33000
et seq.).
e. The indebtedness of the Borrower created by the Agreement and this Note shall be
subordinate to the Borrower's existing indebtedness and bond issuance(s) and the
refunding or refinancing thereof and any future bonds and/or other indebtedness the
Borrower may issue and the indebtedness incurred in connection therewith;
provided that the Borrower determines at the time of issuance of any such future
bonds and/or other indebtedness that the issuance and indebtedness will not
materially adversely affect the Borrower's ability to perform its obligations under
this Note. illdebtedness includes any indebtedness incurred by the Borrower for
bonds, notes, interim certificates, debentures, certificates of participation or other
obligations issued by the Borrower.
4. Prf>p,.yment. Borrower may refinance or prepay the outstanding indebtedness under this
Note, in whole or in part, together with any accrued but unpaid interest and other sums
owed to the Lender under this Note, at any time and from time to time, without penalty.
5. T ,awful Money. All sums due and owing under this Note are payable in lawful money of
the United States of America.
2
6. Applications of Payments: T ,ate Charges.
a. Any payments received by the Lender pursuant to the terms hereof shall be applied
first to sums, other than principal and interest, due the Lender pursuant to this Note,
next to the payment of all interest accrued to the date of such payment, and the
balance, if any, to the payment of principal.
b. If any payment is not received by the Lender within ten (10) days following the due
date thereof, then in addition to the remedies conferred upon the Lender pursuant to
this Note, the Amended Deed of Trust and the Amended Agreement, Borrower shall
pay, at Lender's option, a late charge of not less than One Hundred Dollars ($100)
and not more than One Thousand Dollars ($1,000) to compensate the Lender for the
expense of handling the delinquency. Borrower shall pay this late charge only once
on any payment.
7. Rvent of nefault
a. Upon the failure of Borrower to perform or observe any term or provision of this
Note, or upon the occurrence of any event of default under the terms and conditions
of the Amended Deed of Trust or the Amended Agreement, then the Lender may
exercise its rights or remedies hereunder or thereunder.
b. Subject to the provisions of Section 8 and 15 hereof, the occurrence of any of the
following shall be deemed to be an event of default ("Event of Default) hereunder:
(1) Failure by Borrower to make any payments provided for herein; or
(2) Failure by Borrower to perform any covenant or agreement in this Note, the
Deed of Trust or the Agreement.
8. Notice ofnefault.
a. Subject to the extensions of time set forth in Section 15, and subject to the further
provisions of this Section 8, failure or delay by Borrower to perform any material
term or provision of this Note, the Amended Deed of Trust, or the Amended
Agreement constitutes a default under this Note. Any failures or delays by Lender
in asserting any of its rights and remedies as to any default shall not operate as a
waiver of any default or of any such rights or remedies. Delays by Lender in
asserting any of its rights and remedies shall not deprive Lender of its right to
institute and maintain any actions or proceedings which it may deem necessary to
protect, assert, or enforce any such rights or remedies.
3
b. Upon any default described in this Section 8, Lender shall deliver written notice to
Borrower ("Notice of Default"), which notice shall specify the nature of the default.
If the default is not cured within ten (10) days after receipt of the Notice of Default
if an obligation to pay money, or within thirty (30) days after receipt of the Notice of
Default otherwise, or if such default (other than the payment of money) is of a type
which is not capable of being cured within thirty (30) days after receipt ofthe Notice
of Default (or if commencement of a cure cannot reasonably begin within thirty (30)
days, then within such reasonable period of time as Lender may allow to commence
to cure the default) and is not cured promptly in a continuous and diligent manner
within a reasonable period of time after commencement, Lender shall be entitled to
exercise any and all rights or remedies which may be available at law or in equity.
Any and all rights or remedies available to Lender shall be cumulative, not
alternative.
c. Any notice of default that is transmitted by electronic facsimile transmISSIOn
followed by delivery of a "hard" copy shall be deemed delivered upon its
transmission; any notice of default that is personally delivered (including by means
of professional messenger service, courier service such as United Parcel Service or
Federal Express, or by u.s. Postal Service), shall be deemed received on the
documented date of receipt by Borrower, or two (2) days after deposit of such notice
in the United States mail, postage prepaid, return receipt requested. Any notice to
any party shall be addressed to the party as follows:
Lender:
Parking Authority of the City of Santa Monica
1685 Main Street
Santa Monica, CA 90401
Attn: Executive Secretary
Borrower:
Redevelopment Agency of the City of Santa Monica
1685 Main Street
Santa Monica, CA 90401
Attn: Executive Director
9. Remerlie~. Upon the occurrence of an Event of Default, the giving of notice and the
expiration of any applicable cure period therefore, Lender may declare all sums evidenced
hereby immediately due and payable by delivery to the Borrower of a written declaration of
default and demand for payment.
10. Waiver, Borrower hereby waives diligence, presentment, protest and demand, notice
of protest, dishonor and nonpayment of this Note, and expressly agrees that, without in any
way affecting the liability of Borrower hereunder, Lender may extend any maturity date or
the time for payment of any installment due hereunder, accept additional security, release
4
any party liable hereunder and release any security now or hereafter securing this Note.
Borrower further waives, to the full extent permitted by law, the right to plead any and all
statutes of limitations as a defense to any demand on this Note, or on any deed of trust,
security agreement, guaranty or other agreement now or hereafter securing this Note.
11. Attorneys' Fees, In the event of any dispute, legal proceeding, foreclosure or other
enforcement action, reference or arbitration between the parties arising out of or relating to
this Note or its breach, the prevailing party shall be entitled to recover from the non-
prevailing party all fees, costs and expenses, including but not limited to attorneys' and
expert witness fees, incurred in connection with such dispute, legal proceeding, foreclosure
or other enforcement action, reference or arbitration, with any counterclaims or cross-
complaints, with any appeals, and with any proceeding to establish and recover such costs
and expenses, in such amount as the court deems reasonable.
12. Sevp.rahility. Every provision in this Note is intended to be severable. In the event any
term or provision hereof is declared by a court of competent jurisdiction to be illegal or
invalid for any reason whatsoever, such illegality or invalidity shall not affect the balance of
the terms and provisions hereof, which terms and provisions shall remain binding and
enforceable.
13. 'nip.red Rate' ,imitation. It is the intent of the Borrower and Lender in the execution of
this Note and all other instruments securing this Note that the loan evidenced hereby be
exempt from the restrictions of the usury laws of the State of California. The Lender and
Borrower stipulate and agree that none of the terms and provisions contained herein or in
any of the loan instruments shall ever be construed to create a contract for the use,
forbearance or detention of money requiring payment of interest at a rate in excess of the
maximum interest rate permitted to be charged by the laws of the State of California. In
such event, if the Lender shall collect monies which are deemed to constitute interest, which
would otherwise increase the effective interest rate on this Note to a rate in excess of such
maximum rate shall, at the option of the Lender, be credited to the payment of the sums
hereunder or returned to Borrower.
14. Numher and Gender. In this Note, the singular shall include the plural and the masculine
shall include the feminine and neuter gender, and vice versa, ifthe context so requires.
15. F.nforl'p.d np.lay, For purposes of any provision ofthis Note, no party, nor any successors
or assign of any party, shall be considered in breach of, or default in, its obligations under
this Note as a result of the enforced delay in the performance of such obligations due to
causes beyond such party's reasonable control, including, without limitation, failure of
governmental agencies to act or to issue necessary permits or licenses, acts of God, acts of
the public enemy, acts of the State or Federal governments, acts of any other party
(including, but not limited to, delays in performing such other party's obligations pursuant
5
to this Note), fires, floods, epidemics, quarantine restrictions, strikes, labor disputes, freight
embargoes, inability to obtain materials or supplies or unusually severe weather or delays of
contractors and subcontractors due to such causes; it being the purpose and intent of this
provision that in the event of the occurrence of any such enforced delay, the time or times
for performance of the obligations of such party shall be extended for the period of the
enforced delay.
16. Security. This Note, including any extensions or amendments hereto, and Borrower's
obligation to pay the indebtedness evidenced by this Note, is secured by the Amended Deed
of Trust.
17. Nonrecourse Ohlieation. Notwithstanding anything contained to the contrary in this Note,
this Note shall be payable by Borrower without personal liability of the Borrower, or any
officer, director, agent, attorney, servant or employee of Borrower, and the Note holder shall
have no recourse for such payment with interest except against the Property against which
this Note is secured.
18. .Joint Venture. The relationship of Borrower and Lender under this Note is solely that of
borrower and lender, and the loan evidence by this Note and secured by the Amended Deed
of Trust will in no manner make the Borrower the partner of joint venturer of Borrower.
IN WITNESS WHEREOF, Borrower has executed this Note as of the day and year set forth
above.
Attest:
REDEVELOPMENT AGENCY OF THE
CITY OF SANTA MONICA
By:
Maria Stewart
Secretary
Susan E. McCarthy
Executive Director
Approved As To Form:
Marsha Jones Moutrie
City Attorney and Authority and
Agency General Counsel
6
EXHIBIT A
*
SCHEDULE OF PAYMENTS
Payment Date Principal Interest
(January 1) Amount Amount Total Payment
2007 $ 810,000.00 $ 809,641.88 $ 1,619,641.88
2008 835,000.00 1,594,983.76 2,429,983.76
2009 865,000.00 1,565,758.76 2,430,758.76
2010 895,000.00 1,535,483.76 2,430,483.76
2011 925,000.00 1,504,158.76 2,429,158.76
2012 955,000.00 1,471,783.76 2,426,783.76
2013 995,000.00 1,433,583.76 2,428,583.76
2014 1,030,000.00 1,398,758.76 2,428,758.76
2015 1,065,000.00 1,362,708.76 2,427,708.76
2016 1,105,000.00 1,322,771.26 2,427,771.26
2017 1,150,000.00 1,281,333.76 2,431,333.76
2018 1,195,000.00 1,235,333.76 2,430,333.76
2019 1,240,000.00 1,187,533.76 2,427,533.76
2020 1,295,000.00 1,136,383.76 2,431,393.76
2021 1,345,000.00 1,081,346.26 2,426,346.26
2022 1,405,000.00 1,022,502.50 2,427,502.50
2023 1,470,000.00 959,277.50 2,429,277.50
2024 1,535,000.00 893,127.50 2,428,127.50
2025 1,605,000.00 824,052.50 2,429,052.50
2026 1,680,000.00 750,222.50 2,430,222.50
2027 1,760,000.00 671,262.50 2,431,262.50
2028 1,840,000.00 588,542.50 2,428,542.50
2029 1,925,000.00 502,062.50 2,427,062.50
2030 2,015,000.00 411,587.50 2,426,587.50
2031 2,115,000.00 315,875.00 2,430,875.00
2032 2,215,000.00 215,412.50 2,430,412.50
2033 2,320,000.00 110200.00 2,430200.00
TOTAL $37,590,000.00 $27,185,689.52 $64,775,689.52
* Preliminary, subject to change.
Exhibit F
EXHillIT C-2
PROMISSORY NOTE B
SECURED BY DEED OF TRUST
(AUTHORITY)
$
Principal Amount
Santa Monica, California
Dated: , 2004
A. The REVELOPMENT AGENCY OF THE CITY OF SANTA MONICA (the "Borrower"),
the CITY OF SANTA MONICA (the "City"), and the PARKING AUTHORITY OF THE
CITY OF SANTA MONICA ("Lender"), have entered into that certain Sale and
Performance Agreement dated as of January 9, 2003 ("Agreement") and amended by that
certain Amended and Restated Sale and Performance Agreement dated as of June 20,2003
(the "2003 Agreement"), and as further amended by the Amendment No.1 to the 2003
Agreement dated , 2004 ("Amendment No.1," and, together with the 2003
Agreement, the "Amended Agreement") regarding the acquisition by the Borrower of the
Lender's interest in the Authority Parking Structures. Any capitalized term not otherwise
defined herein shall have the meaning ascribed to such term in the Amended Agreement.
This Note is made pursuant to, entitled to the benefits of, and referred to as the "Promissory
Note B" in the Amended Agreement.
B. Pursuant to the Amended Agreement, Lender has agreed to permit Borrower to acquire its
interest in the Authority Parking Structures, subject to the terms thereof. To induce Lender
to permit such acquisition, Borrower has agreed, among other things to execute this Note.
This Note is secured by, among other things, the Amended Deed of Trust dated on or about
the same date as this Note, executed by Borrower as Trustor, in favor of the Lender as
beneficiary and encumbering the real property described in the Amended Deed of Trust (the
"Property"). The Amended Deed of Trust also secures that certain Note A, dated the same
date as this Note, in the principal amount of$
NOW, THEREFORE, in consideration of the foregoing, Borrower hereby agrees as
follows:
1. Prindpal. The Borrower promises to pay to the order of the Lender at 1685 Main
Street Santa Monica, CA 90401, or at such other place as Lender may :from time to time
designate in writing or to the assignee of Lender, the principal sum of Million
Dollars ($ ) ("Principal"), with interest, as set forth in this Note.
2. Tntered, Commencing on the date of this Note first written above, the principal
amount of this Note shall bear simple interest calculated on an annual basis at the interest
rate of7.00% per annum.
3. Repayment Terms.
a. Borrower shall make payments to the Lender as provided in this Section 3.
b. In accordance with the Amended Agreement, Borrower shall make a total of twenty-
nine (29) payments to the Lender, each such payment to be made on January 1st of
each year for a period of twenty-nine (29) years commencing on January 1, 2005.
Each payment of principal and interest shall be in an amount as set forth in the
Schedule of Payments attached hereto as Exhibit A and incorporated herein by this
reference.
c. Consistent with the proper and orderly implementation of the Redevelopment Plan
for the Santa Monica Earthquake Recovery Redevelopment Project (the "Project
Area"), all payments made by Borrower pursuant to this Note shall be made from
legally available funds ofthe Project Area.
d. Borrower's obligation to make any payment to Lender shall not be construed as a
"pledge" of property tax revenue for the purposes of Section 33671.5 of the
California Community Redevelopment Law (Health & Safety Code Section 33000
et seq.).
e. The indebtedness of the Borrower created by the Agreement and this Note shall be
subordinate to the Borrower's existing indebtedness and bond issuance(s) and the
refunding or refinancing thereof and any future bonds and/or other indebtedness the
Borrower may issue and the indebtedness incurred in connection therewith;
provided that the Borrower determines at the time of issuance of any such future
bonds and/or other indebtedness that the issuance and indebtedness will not
materially adversely affect the Borrower's ability to perform its obligations under
this Note. Indebtedness includes any indebtedness incurred by the Borrower for
bonds, notes, interim certificates, debentures, certificates of participation or other
obligations issued by the Borrower.
4. Prepayment Borrower may refinance or prepay the outstanding indebtedness under this
Note, in whole or in part, together with any accrued but unpaid interest and other sums
owed to the Lender under this Note, at any time and from time to time, without penalty.
5. T ,awful Monp.y, All sums due and owing under this Note are payable in lawful money of
the United States of America.
6. Applications of Payments~ T ,ate Charees.
a. Any payments received by the Lender pursuant to the terms hereof shall be applied
2
first to sums, other than principal and interest, due the Lender pursuant to this Note,
next to the payment of all interest accrued to the date of such payment, and the
balance, if any, to the payment of principal.
b. If any payment is not received by the Lender within ten (10) days following the due
date thereof, then in addition to the remedies conferred upon the Lender pursuant to
this Note, the Amended Deed of Trust and the Amended Agreement, Borrower shall
pay, at Lender's option, a late charge of not less than One Hundred Dollars ($100)
and not more than One Thousand Dollars ($1,000) to compensate the Lender for the
expense of handling the delinquency. Borrower shall pay this late charge only once
on any payment.
7. Rvent of Default.
a. Upon the failure of Borrower to perform or observe any term or provision of this
Note, or upon the occurrence of any event of default under the terms and conditions
of the Amended Deed of Trust or the Amended Agreement, then the Lender may
exercise its rights or remedies hereunder or thereunder.
b. Subject to the provisions of Section 8 and 15 hereof, the occurrence of any of the
following shall be deemed to be an event of default ("Event of Default) hereunder:
(1) Failure by Borrower to make any payments provided for herein; or
(2) Failure by Borrower to perform any covenant or agreement in this Note, the
Deed of Trust or the Agreement.
8. Noti"e of Defanlt
a. Subject to the extensions oftime set forth in Section 15, and subject to the further
provisions of this Section 8, failure or delay by Borrower to perform any material
term or provision of this Note, the Amended Deed of Trust, or the Amended
Agreement constitutes a default under this Note. Any failures or delays by Lender
in asserting any of its rights and remedies as to any default shall not operate as a
waiver of any default or of any such rights or remedies. Delays by Lender in
asserting any of its rights and remedies shall not deprive Lender of its right to
institute and maintain any actions or proceedings which it may deem necessary to
protect, assert, or enforce any such rights or remedies.
b. Upon any default described in this Section 8, Lender shall deliver written notice to
Borrower ("Notice of Default"), which notice shall specify the nature of the default.
If the default is not cured within ten (10) days after receipt of the Notice of Default
3
if an obligation to pay money, or within thirty (30) days after receipt of the Notice of
Default otherwise, or if such default (other than the payment of money) is of a type
which is not capable of being cured within thirty (30) days after receipt ofthe Notice
of Default (or if commencement of a cure cannot reasonably begin within thirty (30)
days, then within such reasonable period of time as Lender may allow to commence
to cure the default) and is not cured promptly in a continuous and diligent manner
within a reasonable period of time after commencement, Lender shall be entitled to
exercise any and all rights or remedies which may be available at law or in equity.
Any and all rights or remedies available to Lender shall be cumulative, not
alternative.
c. Any notice of default that is transmitted by electronic facsimile transmISSIon
followed by delivery of a "hard" copy shall be deemed delivered upon its
transmission; any notice of default that is personally delivered (including by means
of professional messenger service, courier service such as United Parcel Service or
Federal Express, or by u.s. Postal Service), shall be deemed received on the
documented date of receipt by Borrower, or two (2) days after deposit of such notice
in the United States mail, postage prepaid, return receipt requested. Any notice to
any party shall be addressed to the party as follows:
Lender:
Parking Authority of the City of Santa Monica
1685 Main Street
Santa Monica, CA 90401
Attn: Executive Secretary
Borrower:
Redevelopment Agency ofthe City of Santa Monica
1685 Main Street
Santa Monica, CA 90401
Attn: Executive Director
9. Remedies. Upon the occurrence of an Event of Default, the giving of notice and the
expiration of any applicable cure period therefore, Lender may declare all sums evidenced
hereby immediately due and payable by delivery to the Borrower of a written declaration of
default and demand for payment.
10. Waiver. Borrower hereby waives diligence, presentment, protest and demand, notice
of protest, dishonor and nonpayment of this Note, and expressly agrees that, without in any
way affecting the liability of Borrower hereunder, Lender may extend any maturity date or
the time for payment of any installment due hereunder, accept additional security, release
any party liable hereunder and release any security now or hereafter securing this Note.
Borrower further waives, to the full extent permitted by law, the right to plead any and all
statutes of limitations as a defense to any demand on this Note, or on any deed of trust,
4
security agreement, guaranty or other agreement now or hereafter securing this Note.
11. Attorn~ys' Fees. In the event of any dispute, legal proceeding, foreclosure or other
enforcement action, reference or arbitration between the parties arising out of or relating to
this Note or its br~ach, the prevailing party shall be entitled to recover from the non-
prevailing party all fees, costs and expenses, including but not limited to attorneys' and
expert witness fees, incurred in connection with such dispute, legal proceeding, foreclosure
or other enforcement action, reference or arbitration, with any counterclaims or cross-
complaints, with any appeals, and with any proceeding to establish and recover such costs
and expenses, in such amount as the court deems reasonable.
12. Severahility. Every provision in this Note is intended to be severable. In the event any
term or provision hereof is declared by a court of competent jurisdiction to be illegal or
invalid for any reason whatsoever, such illegality or invalidity shall not affect the balance of
the terms and provisions hereof, which terms and provisions shall remain binding and
enforceable.
13. T nterest Rate Limitation. It is the intent of the Borrower and Lender in the execution of
this Note and all other instruments securing this Note that the loan evidenced hereby be
exempt from the restrictions of the usury laws of the State of California. The Lender and
Borrower stipulate and agree that none of the terms and provisions contained herein or in
any of the loan instruments shall ever be construed to create a contract for the use,
forbearance or detention of money requiring payment of interest at a rate in excess of the
maximum interest rate permitted to be charged by the laws of the State of California. In
such event, if the Lender shall collect monies which are deemed to constitute interest, which
would otherwise increase the effective interest rate on this Note to a rate in excess of such
maximum rate shall, at the option of the Lender, be credited to the payment of the sums
hereunder or returned to Borrower.
14. Nllmher ami Gender. In this Note, the singular shall include the plural and the masculine
shall include the feminine and neuter gender, and vice versa, ifthe context so requires.
15. Rnforced fiela)', For purposes of any provision ofthis Note, no party, nor any successors
or assign of any party, shall be considered in breach of, or default in, its obligations under
this Note Bs a result of the enforced delay in the performance of such obligations due to
causes beyond such party's reasonable control, including, without limitation, failure of
governmental agencies to act or to issue necessary permits or licenses, acts of God, acts of
the public enemy, acts of the State or Federal governments, acts of any other party
(including, but not limited to, delays in performing such other party's obligations pursuant
to this Note), fires, floods, epidemics, quarantine restrictions, strikes, labor disputes, freight
embargoes, inability to obtain materials or supplies or unusually severe weather or delays ofacontractors and subcontractors due to such causes; it being the purpose and intent of this
5
provision that in the event of the occurrence of any such enforced delay, the time or times
for performance of the obligations of such party shall be extended for the period of the
enforced delay.
16. S~r.lJrity. This Note, including any extensions or amendments hereto, and Borrower's
obligation to pay the indebtedness evidenced by this Note, is secured by the Amended Deed
of Trust.
17. Nonr~collrs~ Ohligation. Notwithstanding anything contained to the contrary in this Note,
this Note shall be payable by Borrower without personal liability of the Borrower, or any
officer, director, agent, attorney, servant or employee of Borrower, and the Note holder shall
have no recourse for such payment with interest except against the Property against which
this Note is secured.
18. Joint V~ntlJr~. The relationship of Borrower and Lender under this Note is solely that of
borrower and lender, and the loan evidence by this Note secured by the Amended Deed of
Trust will in no manner make the Borrower the partner of joint venturer of Borrower.
IN WITNESS WHEREOF, Borrower has executed this Note Bs of the day and year set
forth above.
Attest:
REDEVELOPMENT AGENCY OF THE
CITY OF SANTA MONICA
By:
Maria Stewart
Secretary
Susan E. McCarthy
Executive Director
Approved As To Form:
Marsha Jones Moutrie
City Attorney and Authority and
Agency General Counsel
6
EXHmIT A
*
SCHEDULE OF PAYMENTS
Payment Date Principal Interest
(January 1) Amount Amount Total Payment
2005 $ 2,251,000.00 $ 1,428,700.00 $ 3,679,700.00
2006 2,409,000.00 1,271,130.00 3,680,130.00
2007 958,000.00 1,102,500.00 2,060,500.00
2008 214,000.00 1,035,440.00 1,249,440.00
2009 229,000.00 1,020,460.00 1,249,460.00
2010 245,000.00 1,004,430.00 1,249,430.00
2011 264,000.00 987,280.00 1,251,280.00
2012 284,000.00 968,800.00 1,252,800.00
2013 302,000.00 948,920.00 1,250,920.00
2014 323,000.00 927,780.00 1,250,780.00
2015 347,000.00 905,170.00 1,252,170.00
2016 371,000.00 880,880.00 1,251,880.00
2017 394,000.00 854,910.00 1,248,910.00
2018 422,000.00 827,330.00 1,249,330.00
2019 455,000.00 797,790.00 1,252,790.00
2020 483,000.00 765,940.00 1,248,940.00
2021 522,000.00 732,130.00 1,254,130.00
2022 557,000.00 695,590.00 1,252,590.00
2023 594,000.00 656,600.00 1,250,600.00
2024 637,000.00 615,020.00 1,252,020.00
2025 681,000.00 570,430.00 1,251,430.00
2026 727,000.00 522,760.00 1,249,760.00
2027 777,000.00 471,870.00 1,248,870.00
2028 834,000.00 417,480.00 1,251,480.00
2029 894,000.00 359,100.00 1,253,100.00
2030 957,000.00 296,520.00 1,253,520.00
2031 1,020,000.00 229,530.00 1,249,530.00
2032 1,091,000.00 158,130.00 1,249,130.00
2033 1.168.000.00 81.760.00 1.249.760.00
TOTAL $20,410,000.00 $21,534,380.00 $41,944,380.00
* Preliminary, subject to change.