SR-08-14-1979-11HTO:
FROM:
SUBJECT:
Introduction
Santa Monica, California
Chairman and Parking Authority
City Staff
Authorization of Financial and Legal Consultants for
Additions to Parking Structure Number 4
August 8, 1979
% ME E t
AUG 1 4 1979
This report recommends that the Parking Authority authorize the employment
of legal and financial consultants for the additions to Parking Structure
Number 4. This project is to facilitate the Arizona Plaza project which
has already been conceptually approved by the City Council, the Planning
Commission, and the Coastal Commission. All of the costs of the consultants,
as well as the construction costs, are to be reimbursed by the Developer of
the Arizona Plaza Project.
Background
When the City Council conceptually approved the Arizona Plaza project, one
of the key provisions of the development was that 304 parking spaces be built
atop Parking Structure Number 4.
The construction costs of the addition to the parking structure are estimated
to be approximately 2.6 million dollars. The developer proposes to pay in
cash approximately $800,000 and is requesting that the City issue bonds
to finance the remaining 1.8 million dollars of construction costs. The
amount of the bond issue will necessarily be in excess of this amount in
order to pay for legal and financial fees. The revenues which will be
necessary to pay off the bonds will be generated by a master lease between
the Parking Authority and the City and a sub -lease between the City and the ti ff
AUG 1 4 1979
T0: Chairman and Parking Authority -2- August 8, 1979
developer. These agreements will be submitted to the City Council and the
Parking Authority at a subsequent meeting, probably on September 11. The
amount of money to be generated by the leases will be that necessary to cover
the principal and interest of the bonds plus all maintenance costs. An
escalator clause will be included to cover the inflationary portions of the
expected expenditures.
To finance a portion of the construction by tax exempt Parking Authority
Revenue Bonds, it is necessary to engage legal and financial consultants for
the bond issue. The City staff has contacted the same two firms which served
as legal and financial consultants for the original parking assessment dis-
trict and has requested a proposal from each of the firms. The proposals of
the financial consultant, Stone and Youngberg, and the legal consultant,
O'Melveny & Myers, are attached for reference. The developer, the staff, and
the consultants have had several meetings to discuss many of the details of
this project, and much of the work has been accomplished. In addition, it
should be understood that the developer, in an attempt to implement the
project in a timely manner, has retained the legal consultant for work con-
cerning the feasibility of the issuance of the tax exempt bonds.
It is recommended that all fees which are to be paid to each of the consul-
tants by the City be reimbursible by the developer. Certain deposits are
also recommended to guarantee these costs.
Recommendations
It is recommended that the Parking Authority take the following actions:
1. Approve in concept the financing plan whereby the Parking Authority
will issue Revenue Bonds for construction of an expansion of Parking
Structure Number 4.
T0: Chairman and Parking Authority -3- August 8, 1979
2. Authorize the City Manager to sign agreements engaging Stone and
Youngberg as financial consultants, and O'Melveny & Myers as legal
consultants for the proposed bond issue.
3. Require the developer to pay all costs of consultants for
the bond issue and deposit $10,000 as initial guarantee for these costs.
Prepared by: Stan Scholl
John Jalili
Robert Nash
James Wrenn
Shane Stark
Attachments: Two Proposals
MAYNARD J. TOLL DEAN. F. JOHNSON
JAMES C.04EENE
i
WI LIAM L.COLENAN.JR.
PHILIP F.WESiBROOA
CLYDE E.IRITT
EVERGY B. CLARY
DENN ETI w. PRNST
JAMES E.CROS$
HVON L. NACNEIL
R..."BURY CLARK
RADIO. SEEK
as CHARLES G. SAMLY.JR.
WILLMN W.VAV6XN
EKNAR O E. SNGRKXS
PHILIP D. IRWIN
DONALD V. PETRONI
GOMN B. MIL LEO
DOME R. NO NIN
RICHARD S.vOLPERY
a3JOHN N. RONEY
NUB. Y. "CHAFFSON
NEFF, C. MUMANNJ R.
LAWRENCE J. S EENAN
PAUL O. FANNON
DONALD N. WESSUNG
JOHN B. POWER
RF RICHARD C. WARNER
tt EDWARD J... FF
RICHARD C. KNIFE
SOLOMON M. HALF
STANEON H. EARROW
4tOW OL
EN HN
WILLIAM O. DEBT
WILLIAM N. BBAMER
CHARLES W. BENDER
GIRARD E. BOU"""JR.
DONALD R. SPVEHUR,
GUIDE R.XENRY. JR.
JEFFREY T. PERO
MARTIN OLEMN
a DONALD T. BUSS
LAW OFFICES OF
O'MELVENY & MYERS
6H WEST SIXTH STREET
LOS ANGELES, CALIFORNIA 90017
TELEPHONE 12131 620 -1120
TELEX 67.4122
CABLE ADORE""MOMS "
August
2nd
1 9 7 9
The Parking Authority of the
City of Santa Monica
-Santa Monica City Hall
1685 Main Street
Santa Monica, California 90401
Gentlemen:
1600 CENTURY PARK EAST
LOS ANGELES, CALIFORNIA BOGEY
TELEPHONE 12131 553 -6700
TELEX 67.4097
1600 M STREET. N. W.
WASHINGTON, O. C. 20036
TELEPHONE 12021 457 -5300
TELEX 69 -622
4 PLACE OE LA CONCORDE
PARIS Bay PRANCE
TELEPHONE 265 39 -33
TELEX 642 - 660715
OUR FILE NUMBER
(new)
We have been advised that you may wish to employ
this firm to render legal services in connection with the
proposed issuance and sale by the Authority of $1,000,000
principal amount of lease revenue bonds to finance certain
parking facilities within the City of Santa Monica. We
would be pleased to accept such employment.
Our services would consist of drafting all reso-
lutions, notices and other legal documents required for the
issuance, sale and delivery of the bonds, reviewing all
legal proceedings required therefor and for authorization
of the financing lease, and issuing our opinion on the
validity of the bonds and on the exemption of interest on
the bonds from state and federal income taxation to the
purchaser of the bonds. We would also assist the Authority
staff and consultants in drafting the financing lease and
in reviewing portions of the Official Statement prepared
for the bond issue. It would be understood, however, that
we would not independently verify, or assume responsibility
for, the accuracy, completeness or fairness of the state-
ments contained in the Official Statement, other than the
description of the bonds and of the legal documents which
we have drafted.
#2 - The Parking Authority of the - August 2, 1979
City of Santa Monica
Our services would not include litigation. For
the services described above, our fee would be computed on
an hourly basis at the rate of $130 per hour for all time
of partners, $90 per hour for all time of associate attor-
neys, and $45 per hour for all time of .legal assistants.
Such fee would be billed quarterly. We anticipate that
such fee would not exceed $25,000.
If the issuance and sale were.not consummated
within the next 12 months or if the proceedings were aban-
doned, we would be paid a reasonable fee based upon the
time expended. In the event the bonds were thereafter
issued, the amount of such fee would be credited against
the fee due following such issuance computed under the
foregoing schedule.
Should it become necessary to file any request
for revenue rulings with the Commissioner of Internal
Revenue in order to issue a tax opinion on the bonds, we
would be paid a reasonable fee based upon the time expended
under the fees quoted above.
In addition to the above fees, we would be reim-
bursed on periodic statements for out -of- pocket expenses
(not including overhead) incurred by us in connection with
this employment, such as long distance telephone calls,
outside messenger services, travel at the Authority's
request and the like.
It would be understood that the lease, the reso-
lution providing for the issuance of the bonds, and the
notice inviting bids thereon would be printed for distribu-
tion to prospective bidders. Such printing would be at
your expense and the selection of the printer would be sub-
ject to your prior approval.
We understand that you have employed a financial
consultant to prepare the Official Statement in connection
with the issuance and sale of the bonds and -to give advice
concerning those terms of the bond issue and the sale there-
of which, apart from legality, may affect the marketability
of the bonds at a favorable interest rate.
#3 - The Parking Authority of the - August 2, 1979
City of Santa Monica
It would be recognized that this firm may have
clients which may from time to time have interests adverse
to those of the Authority or the City of Santa Monica, and
this firm reserves the right to represent such clients'in
matters not connected with the authorization, issuance and
sale of the bonds.
The contract created by acceptance of this letter
would be binding upon and inure to the benefit of the firm
of O'Melveny & Myers as presently constituted or as here-
after reorganized, provided that the opinion of the succes-
sor firm upon municipal bonds, whether under the same name
or otherwise, be accepted by bond dealers and bond purchasers
as readily as the opinion of the firm as presently constituted.
If this arrangement is satisfactory
adopt a minute order referring to this letter
us on the terms stated herein and return to us
copy of such order.
Respectfully yours,
to you, please
and employing
a certified
O'MELVENY & MYERS
By .�
tgph J. Stern
STOKE & YOUNGBERG
MUN- ICIPAL FINANCING CONSULTANTS, INC.-
July 26, 1979
Mr. Robert Nash
Finance Director
City of Santa Monica
1685 Main Street
Santa Monica, California
Dear Mr. Nash:
Enclosed is our standard form of agreement to act as the City's financing consultant in
connection with the contemplated off - street parking project.
We are assuming that the Parking Law of 1949 (Parking Authority) will be utilized and
that the approximate amount of financing will be $3 million.. It is also understood that
two seperate bond issues may be necessary. In this light our fee schedule is inclusive
if more than one issue is found to be necessary.
Because we were the financing consultants on the original parking issue, we have been
able to hold our fee to a minimum due to our extensive files on the City of Santa Monica.
Upon the City's acceptance of this proposal will you please return an executed copy for
our files.
Thank you for requesting this proposed agreement from our firm. We are prepared to
begin work immediately upon your direction to do so. I shall be performing the work on
this project and stand ready to answer any questions you may have.'
Very truly yours,
&YOUNGBERG
ltants, Inc.
EJH:ds
Enclosure.
CONTRACT EMPLOYING FINANCING CONSULTANT
THIS AGREEMENT, made this
and between Santa Monica, Los Angeles
day of
County, California, a City
under the laws of the State of California (hereinafter called "City ") ,
first part, and STONE & YOUNGBERG MUNICIPAL FINANCING CONSULTANTS, INC.,
One California Street, San Francisco, California, a corporation. (hereinunder called
"Consultant ") , party of the second part:
WITNESSETH:
WHEREAS, City desires to develop a feasible, economical and equitable plan
of procedure in carrying through to completion the financing of offstreet parking,
facilities utilizing the Parking Law of 1949; and
WHEREAS, the preparation of such a plan and its execution require certain studies,
analyses and recommendations to be made.by persons qualified by training and experi-
ence to do so; and
WHEREAS, City, after due investigation and deliberation, has determined that
Consultant is qualified by training and experience to perform said services;
NOW, THEREFORE, it is mutually agreed as follows, to wit:
City hereby employs Consultant and Consultant hereby accepts such employment
to perform the services, upon the terms, subject to the conditions and in consideration
of payments as hereinafter set forth:
Services to be Performed by Consultant:
Consultant shall perform in a diligent manner the following services:
1. Assemble, review and analyze available financial, engineering, legal
and economic data and information which may have a bearing on a pro-
gram for financing the proposed off - street parking program.
2. Confer with and furnish to City financial information required in con-
nection with the proposed project to include, among other things, the
following:
a. A brief review of the proposed method of financing, including
sources of revenues to be used for debt amortization.
b. Recommendations as to a tentative debt repayment schedule,
bond call and redemption features (if any) , application of
revenues, and other details relating to the debt and its repayment.
C. Estimates as to annual amounts required to meet annual debt
service, and maintenance and operation costs, taking into
consideration estimated 'interest rates, call premiums and other
factors.
d. Advise City and its bond counsel of the required financial
information and provisions.of any lease agreements which may
be entered into.
3. If the issuance of bonds or other evidences of indebtedness to finance all
or a part of the costs of the proposed improvements is authorized, make
recommendations as to exact terms and conditions under which bonds are to be
issued and sold, including timing and method of sale, final amorization or re-
payment schedules, call and redemption features, sinking fund requirements,
application of revenues and other details, and cooperate with City's bond
counsel in drafting the necessary resolution of issuance and notice of sale.
4. Upon approval by City of final financing details, and upon direction to
do so by City, prepare the text and other material for an official state-
ment or bond prospectus describing the improvements, the bonds, their security,
and the economic and financial background of City which may be duplicated or
printed and mailed at City's expense, together with copies of the official notice
of sale, to prospective bond bidders, a comprehensive list of whom shall be
supplied by Consultant. Consultant also shall contact national bond rating agen-
cies and take such other steps as appear advisable to encourage strong competi-
tive bidding for the bonds. Any charges by bond rating agencies shall be borne
by City .
5. During the entire course of employment hereunder, Consultant shall be
available at reasonable times for consultation and advice relating to the
financial aspects of the contemplated improvement program.
Payment for Services:
6. For the services to be rendered hereunder the following fee schedule
shall apply:
a. A fee equal to one percent (106) of the principal amount of the
first $1 million of bonds sold; plus
b. An additional fee equal to one quarter of one percent (; of 1 %)
of the principal amount of the next $2 million of bonds sold; plus
c. An additional fee equal to one eighth of one percent (1/8 of 1 %)
of the principal amount of all bonds sold in excess of the first
$3 million to finance all or a portion of the projects.
It is understood and agreed that the fee schedule outlined above shall
be due and payable only upon, and subject to, receipt of funds from the
sale of the bonds.
It is further understood and agreed that the minimum fee for each sale of
bonds shall be $10 thousand.
Other Considerations:
7. Consultant is employed hereunder to render a professional service within
the scope of its training and experience as a municipal financing consultant
and any payments made to it are compensation solely for such service and
advice. Outside of its normal office overhead and traveling costs to and from
its San Francisco and Los Angeles offices and City to perform the
services contracted for, Consultant is not responsible for and shall not be held
liable for any other expense or expenditure of any kind, including the following:
a. Any and all legal or engineering expense of any kind whatever.
b. Any and all expense in connection with hearings, proceed-
ings and due issuance of bonds.
C. Any printing, advertising, publicity, etc., of such material
or data and City may wish to have prepared in connection
with Consultant's services herein provided for, except those speci-
fically excluded herein.
8. All rights, liabilities and obligations of City set forth in this agreement
may be assigned by City to any Parking Authority formed to accomplish the im-
provement program.
9. Nothing herein contained shall prevent Consultant from carrying on its
usual business activities, including the performance of other additional
services for City, should it so desire such additional services, nor from
performing similar services for other authorities, cities, counties, districts or
public entities.
10. City agrees that its officials and employees will be requested and di-
rected to cooperate with and assist representatives of Consultant in every
reasonable way to the end that Consultant may secure all information and data
required to perform the services herein provided for.,
IN WITNESS WHEREOF, said City, party of the first part, has caused these
presents to be properly executed, and said Consultant, party of the first part, has
caused these presents to be executed by one of its officers as of the date hereinabove
set forth.
City of Santa Monica
STONE & YOUNGBERG MUNICIPAL
FINANF4NG CONSULTANTS, INC_
In
��y
7I
Agenda Item 11 -H: Presented at this time was a recommendation for
approval of contracts for financial and legal consultants for additions
to Parking Structure No. 4 at 13321 Second Street to facilitate the
Arizona Plaza project. Following. discussion, blavor Pro Temoore Reed
moved to request staff to investigate redesign of t e faca e of
Par Ong Structure No. 4. Second by Councilmember Scott.
Council Cote: Unanimously approved 6 -0
Absent: Councilmember Yannatta Gold. <av
Councilmember Scott moved the staff recommendation, i.e., to approve in
concept the financing plan whereby the Parking Authority will issue
revenue bonds for construction of an expansion of Parking Structure No. A,
at 1321 Second Street authorize the City Manager to sign agreemtats en-
gaging Stone and Youngberg as financial consultants and O'Melveny g Meyers
as legal consultants for the proposed bond issue, and require the develop-
er to pay all costs of consultants for the bond issue and deposit
$10,000.00 as an initial guarantee for these costs, subject to IRS code
and ruling regarding the tax exempt status for the bonds. Second by
Councilmember. Rambrick.
Council Vote: Unanimously approved 6 -0
.Absent: Councilmember Yannatta Goldwav
At 3:17 P.L., on motion of Mayor Pro Temp ore Reed, second by Council-
member Swink, the Parking Aut ority meeting was adjourned,
Council Vote: Unanimously approved 6 -0
Absent: Councilmember Yannatta Goldway
CITY COUNCIL MEETING AUGUST 14, 1979
1, P
NOTICE OF SPECIAL MEETING
OF THE PARKING AUTHORITY OF
THE CITY OF SANTA MONICA
Pursuant to the authority vested in me as Chairman, I herewith call a
Special Meeting of the Parking Authority of the City of Santa Monica at
7:30 p.m. on August 14, 1979, in the City Council Chambers, City Hall,
1685 Main Street, Santa Monica, California.
The only item to be discussed is:
Authorization of Financial and Legal Consultants for Additions
to Parking Structure Number 4 at 1321 2nd St.
Dated: August 9, 1979
T&i �gg I
Pieter van den Steenhoven, Chairman
Parking Authority of the City of
S^ Monica
Approved as to form, SSA
Ricchiard L. Kn' 'ckerbocker
City Attorney