HomeMy WebLinkAboutResolution - OB 15-05 STATE OF CALIFORNIA ) RESOLUTION NO. OB 15-05
F COUNTY OF RIVERSIDE ) ss
CITY OF SAN JACINTO )
A RESOLUTION OF THE OVERSIGHT BOARD OF THE SUCCESSOR
AGENCY TO THE DISSOLVED SAN JACINTO REDEVELOPMENT
AGENCY, APPROVING THE SUCCESSOR AGENCY'S WRITE-OFF OF
A LOAN MADE TO ASSESSMENT DISTRICT 87-1
WHEREAS, pursuant to Health and Safety Code section 34173(d), the City of
San Jacinto ("City") is the successor agency ("Successor Agency") to the dissolved
Redevelopment Agency ("RDA") of the City of San Jacinto, confirmed by Resolution No.
3408 adopted on January 9, 2012; and
WHEREAS, pursuant to Health and Safety Code section 34179(a), the Oversight
Board is the oversight board to the Successor Agency; and
WHEREAS, the RDA loaned certain funds totaling $144,128 to Assessment
District 87-1 (AD 87-1) to make required debt service payments prior to 1994, which
were recorded as an asset to the RDA and a liability to the AD 87-1; and
WHEREAS, AD 87-1 defaulted on its bonded debt issue and became subject to
a foreclosure action by the City in 1995; and
WHEREAS, due to the dissolution of the RDA, the loan is an asset of the
Successor Agency, and any write-off would have to be approved by the Successor
Agency Board, the Oversight Board, and the California Department of Finance; and
WHEREAS, Tower Investments, LLC has entered into a Workout Agreement
with the City to exchange the AD 87-1 bonds held by them for certain parcels located
within AD 87-1, and has submitted a letter dated December 23, 2014 (Exhibit A),
concerning this loan from the RDA; and
WHEREAS, no payments have been received under this loan in over 20 years;
and
WHEREAS, there is no reasonably likelihood that this loan will be repaid as there
are no assets or funding sources for possibly repayment; and
WHEREAS, the Successor Agency Board approved the write-off of this loan at
their meeting on February 3, 2015.
NOW, THEREFORE, BE IT RESOLVED, ordered, and determined by the
Oversight Board to the Successor Agency to the dissolved Redevelopment Agency of
the City of San Jacinto:
1
24438.31000\11155921,2
SECTION 1. Recitals. The Recitals set forth above are true and correct and are
incorporated into this Resolution by this reference.
SECTION 2. CEQA Compliance. The approval of the loan write-off through this
Resolution does not commit the Oversight Board to any action that may have a
significant effect on the environment. As a result, such action does not constitute a
project subject to the requirements of the California Environmental Quality Act.
SECTION 3. Approval of the Loan Write-off. The Oversight Board hereby
approves the write-off of the $144,128 loan to AD 87-1.
SECTION 4. Severability. If any provision of this Resolution or the application of
any such provision to any person or circumstance is held invalid, such invalidity shall
not affect other provisions or applications of this Resolution that can be given effect
without the invalid provision or application, and to this end the provisions of this
Resolution are severable. The Oversight Board declares that the Oversight Board
would have adopted this Resolution irrespective of the invalidity of any particular portion
of this Resolution.
SECTION 5. Certification. The City Clerk of the City of San Jacinto, acting on
behalf of the Oversight Board as its Secretary, shall certify to the adoption of this
Resolution.
SECTION 6. Effective Date. Pursuant to Health and Safety Code Section
34179(h), all actions taken by the Oversight Board may be reviewed by the State of
California Department of Finance, and, therefore, this Resolution shall not be effective
for five (5) business days, pending a request for review by the State of California
Department of Finance.
MOVED, PASSED AND ADOPTED on the 25th day of June, 2015, by the
following vote:
AYES: Elam, Hults, Paisley, Prill, Frontino
NAYS: None
ABSENT: Heeren, Turner
ABSTAIN: None
Fred rontino, Chairperson
ATTEST:
a. I-L' t��
Richard Miller, Oversight Board Secretary
2
24438.310M 11155921.2
EXHIBIT A
LETTER FROM TOWER INVESTMENTS, LLC
[Attached behind this page]
24438.3 1000\1 1155921.2
1 ® Tower Investments,LLC
250 West Main St.,Slide 101
Woodland,CA 95695
Phone:(530)668-1000
Fax: (630)666.5574
www.towerinv-cam
December 23,2014
Thomas Prill, CPA
Finance Director
City of San Jacinto
E-mail: rillLiy�sari acintoca.us
Re: Ci of San Jacinto Assessment District 87-1
Mr. Prill,
It is our understanding that the former Redevelopment Agency of the City of San Jacinto (RDA) paid
certain sums of money totaling $144,128 to cover debt service payments on the City of San Jacinto
AD 87-1 assessment bonds even though there was no obligation to do so. It is also our understanding
that these payments from the RDA ceased in 1994,at which point the bond issue became in default.
The RDA did not attempt to recover the debt service payments they made from the prior/current land
owners because there was never any documentation creating a debt and there was no collateral created
securing the recovery of these payments. Additionally, the bond holders have no obligation to the
RDA concerning these payments.
We are now finalizing a workout to exchange the AD 87-1 bonds Tower owns for certain real estate
parcels that are subject to a judicial foreclosure by the City. The eight real estate parcels that are a
part of the Workout Agreement between the City of San Jacinto (the "City") and Tower Investments,
LLC ("Tower") serve as partial collateral to the bond holders for the repayment of the bonds plus
accrued interest. The amount due on the AD 87-1 bonds with accrued interest is over $6 million
dollars on the eight real estate parcels,which far exceeds the value of the eight real estate parcels.
In the Workout Agreement,Tower,as bond holder,will agree to forgive this debt in exchange for title
to the eight real estate parcels. Since the RDA was under no obligation to loan the $144,128 to make
debt service payments on the AD 87-1 bonds, Tower is under no obligation to repay this loan made
more than 20 years ago, especially since Tower is agreeing to forgive the delinquent principal and
accrued interest that is due on its bonds. Additionally,Tower could not agree to any future repayment
of the amounts paid by the RDA because the property could not be developed with the current
outstanding debt going forward. Accordingly,there will be no provision for repayment to the RDA in
the finalized workout documentation between the City and Tower for money the RDA paid in 1994 to
cover debt service payments on the AD 87-1 bonds.
FcereVI
e
resident