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HomeMy WebLinkAboutMakar Properties LLC - 2006-03-20O eS &4 t-(- L�I T2 L= 23 ��l Pt r- F- 0 2006 FEAR -7 P11 I cLEP,r<, Li Y OF dTlr`�TON SEA( Council/Agency Meeting Held 3 ..O Q�? Deferred/Continued to Approved ❑ Conditionally Approved ❑ Denied EiUP �u.T - City CI k s ignatu Council Meeting Date 3/20/2006 Department ID umber ED 06-09 CITY OF HUNTINGTON BEACH REQUEST FOR COUNCIL ACTION SUBMITTED TO HONORABL MAYOR AND CITY CB/ "f `IL MEMBERS' SUBMITTED BY PENELO E CULBtR�TH-GRAFT R CITY ADMINISTRATO PREPARED BY STANLEY SMALEWITZ DIRECTOR OF ECONOMIC S-4 DEVELOPMENT SUBJECT Approve the Advance/Reimbursement Ageement between the City of Huntington Beach and Makar Properties LLC for Costs Incurred in the Formation of a Community Facilities District for Pacific City Statement of Issue Funding Source Recommended Action Alternative Action(s) Analysis Environmental Status Attachment(s) Statement of Issue Makar Properties LLC (Makar) has requested that the City assist in the formation of a Community Facilities District (CFD) for Pacific City An Advances/Reimbursement Agreement between the City of Huntington Beach and Makar Properties LLC (Attachment #1) needs to be approved by City Council to facilitate payment of the professional service contracts and other expenses relating to the CFD formation Funding Sources General Fund Unappropriated Fund Balance An equal amount of revenue will be paid from Makar to the City In essence there will not be an impact on the General Fund Recommended Action Motion to 1 Approve the Advances/Reimbursement Agreement between the City of Huntington Beach and Makar Properties LLC for the expenses relating to the formation of a Community Facilities District for Pacific City 2 Authorize the deposit of $95 595 from Makar Properties LLC into the City s General Fund with an equal offsetting appropriation Any unspent deposit funds to be refunded to Makar Properties LLC after the termination of the consultant s contracts REQUEST FOR COUNCIL ACTION MEETING DATE 3/20/2006 DEPARTMENT ID NUMBER ED 06-09 Alternative Action(s) 1 Do not approve the Advances/Reimbursement Agreement between the City of Huntington Beach and Makar Properties LLC or accept the advance payment from Makar Properties LLC Analysis The Economic Development Department and the City Attorneys Office of the City of Huntington Beach are assisting Makar Properties LLC in creating a Community Facilities District (CFD) for the Pacific City Project The proposed CFD is to fund public improvements and certain eligible fees through a tax-exempt bond issue In order to create a CFD several professional services are needed and other City costs are incurred Although these services are eligible costs payable from bond proceeds the formation of the CFD is performed prior to the issuance of the bond Makar has agreed to advance the necessary funds to pay for these services City Council is requested to approve the Advance/Reimbursement Agreement that will allow for the payment of all costs associated with the formation of the CFD If the bond issue is sold and closed then Makar will be reimbursed from the bond proceeds If the bond is not issued then those costs that were contingent upon the sale of the bonds will not be due There will be no cost to the City Approving the Advance/Reimbursement Agreement and appropriating the funds will allow the Department of Economic Development to make payments for the professional services necessary to form the CFD Environmental Status Not applicable Attachment(s) G \Caro1\Administrabon\RCA\ED06 09 doc 2 3/6/2006 10 09 AM ATTACHMENT #1 Quint & Thimnug LLP ADVANCES/REIMBURSEMENT AGREEMENT City of Huntington Beach Community Facilities District No 2006-1 (Pacific City) 1 / 2-4/ 06 2/13/06 2/27/06 3/2/06 THIS ADVANCES/REIMBURSEMENT AGREEMENT (the Agreement ) is by and between the City of Huntington Beach California (the City ) for itself and on behalf of the proposed City of Huntington Beach Community Facilities District No 2006 1 (Pacific City) (the CFD ) and Makallon Atlanta Huntington Beach LLC (the Developer ) RECITALS WHEREAS the Developer has requested that the City consider the formation of the CFD and the issuance of bonds for the CFD (the Bonds ) under the provisions of Sections 53311 et seq of the California Government Code (the Law ) and WHEREAS the Developei is willing to advance funds to the City and/or its consultants as necessary to ensue e payment of any and all costs of the City in forming the CFD and otherwise in connection with the issuance of the Bonds and the proposed expenditure of the proceeds thereof provided that any funds so advanced are reimbursed to the Developer from the proceeds of any Bonds issued by the City for the CFD to the extent provided herein and WHEREAS the City and the Developer now desire to specify the terms of such advances and reimbursement AGREEMENT NOW THEREFORE in consideration of the foregoing and the mutual covenants set forth herein and for other consideration the receipt and sufficiency of which hereby are acknowledged the parties hereto agree as follows Section 1 The Advances The Developer hereby agrees to advance any amounts (collectively the Advances ) as necessary to pay any Initial Costs (as described below) incurred or reasonably expected to be incurred by the City within five (5) business days of receipt by the , Developer of a written demand from the Director of Economic Development of the City such Advances to be made to the City (by advancing the amounts requested to the City Treasurer at the following address City Treasurer City of Huntington Beach P O Box 711 Huntington Beach California 92648 0711 who shall deposit any such amounts to an appropriate account) or directly to the City s consultants as specified by the Director of Economic Development in such written demand In the event that the Developer shall fail or refuse to remit any such amounts to or at the direction of the Directoi of Economic Development of the City all processing by the City of the proceedings for the CFD at the discretion of the City Admirustrator shall cease until such time as the amounts so requested are paid by the Developer 0800310 J8614 The Initial Costs include but are not limited to (i) the fees and expenses of any consultants to the City employed in connection with the formation of the CFD (such as engineering legal counsel financial advisory and special tax consultant) (n) the costs of appraisals absorption studies and othei reports necessary or deemed advisable by City staff in forming the CFD and issuing bonds for the CFD (iii) costs of publication of notices preparation and mailing of ballots and other costs related to any election with respect to the CFD any special tax to be levied therein of any bonded indebtedness thereof (iv) the costs of any action prosecuted in the superior court to validate the formation of the CFD such special tax and/or such bonded indebtedness (v) a reasonable charge as determined by the Director of Economic Development in his discretion for an allocable shale of administrative expense with respect to City staff engaged in analyzing and participating in the CFD formation special tax formulation facilities acquisition and bond issuance proceedings (currently estimated to be $20 000 00) and (vi) any and all other actual costs and expenses incurred by the City related to the CFD Section 2 Use of Funds The Deposits shall be administered as follows (a) The Director of Economic Development of the City is authorized to and may process requisitions against the proceeds of any Advances made to the City from time to time to pay the Initial Costs not otherwise paid directly by the Developer and the City Treasurer will release funds as so requisitioned (b) If the Bonds are issued under the Law by the City secured by special taxes levied upon the land within the CFD the City shall provide for reimbursement to the Developer without interest of all Advances theretofore made by the Developer such reimbursement to be made solely from the pi oceeds of the Bonds and only to the extent otherwise permitted under the Law On or within thirty (30) days after the date of issuance and delivery of the Bonds the Director of Economic Development of the City shall process a requisition to allow for the return to the Developer of the proceeds of any then unexpended Advances held by the City without interest less an amount equal to any Initial Costs incurred or that the City is otherwise committed to pay and the City Treasurer will release the funds so requisitioned to the Developer (c) If the Bonds are not issued or if the Developer requests in writing that the City terminate proceedings with respect to the formation of the CFD or the issuance of the Bonds the Director of Economic Development of the City shall within thirty (30) days after receipt of such written request or (if no such written request has been received) after adoption of the resolution stating the intent of the City to terminate proceedings under the Law with respect to the issuance of the Bonds process a requisition to allow for the return to the Developer of the proceeds of any then unexpended Advances held by the City without interest less an amount equal to any Initial Costs incurred or that the City is otherwise committed to pay and the City Treasurer will release the funds so requisitioned to the Developer Section 3 Reimbursement of Other Developer Costs Nothing contained herein shall prohibit reimbursement of other costs and expenses of the Developer incurred in connection with the CFD from the proceeds of the Bonds including but not limited to fees and expenses of legal counsel to the Developer Any such reimbursement shall be made solely from the proceeds of the Bonds and only to the extent otherwise permitted under the Law and otherwise provided for at the reasonable discretion of the City in the proceedings for the formation of the CFD and the issuance of the Bonds 2 Section 4 Agreement Not Debt or Liability of the City It is hereby acknowledged and agreed that this Agreement is not a debt or liability of the City as provided in Section 53314 9(b) of the Law The City shall not in any event be liable hereunder other than to return the unexpended and uncommitted portions of any Advances held by the City as provided in Section 2 above and pi ovide an accounting under Section 7 below The City shall not be obligated to advance any of its own funds with respect to the CFD or for any of the other purposes listed in Section 1 hereof No member of the City Council or officer employee or agent of the City shall to any extent be personally liable hereunder Section 5 No Obligation to Issue Bonds The provisions of this Agreement shall in no way obligate the City to form the CFD to issue any bonds or to expend any of its own funds in connection with the CFD , Section 6 Notices Any notice required or permitted by this Agreement to be given or delivered to either party shall be deemed to have been received when personally delivered or transmitted by telecopy of facsimile transmission (which shall be immediately confirmed by telephone and shall be followed by mailing an of iginal of the same within twenty four hours after such transmission) or seventy two hours following deposit of the same in any United States Post Office registered or certified mail postage prepaid addressed as follows City or CFD City of Huntington Beach P O Box 190 2000 Main Street Huntington Beach California 92648 Attention Director of Economic Development with a copy to City of Huntington Beach P O Box 190 2000 Main Street Huntington Beach California 92648 Attention City Attorney Developer Makallon Atlanta Huntington Beach LLC c/o Makai Properties LLC 4100 Macarthur Boulevard Suite 200 Newpoi t Beach California 92660 Attention Samuel H Weissbard and Makallon Atlanta Huntington Beach LLC c/o Makar Properties LLC 4100 Macarthur Boulevard Suite 200 Newport Beach California 92660 Attention Ethen Thatcher Each party may change its address or addresses for delivery of notice by delivering written notice of such change of adds ess to the other party 3 Section 7 Severability If any part of this Agreement is held to be illegal or unenforceable by a court of competent jurisdiction the remainder of this Agreement shall be given effect to the fullest extent reasonably possible Section 8 Accounting The Finance Director of the City (working with the Director of Economic Development of the City) shall provide the Developer with a written accounting of any Advances made to the City under this Agreement within ten (10) business days of receipt by the Finance Director of the City of a written request therefore submitted by an authorized officer of the Developer and in any event promptly following the issuance of the Bonds No more than one accounting will be provided in any calendar month and the cost of providing the accounting shall be considered to be an Initial Cost as referenced in Section 1 above Section 9 Successors and Assigns This Agreement shall be binding upon and inure to the benefit of the successors and assigns of the parties hereto Section 10 Counterparts This Agreement may be executed in counterparts each of which shall be deemed an of iginal 4 IN WITNESS THEREOF the parties hereto have executed this Agreement as of the day and year written alongside their signature line below Executed on DEVELOPER , 2006 MAKALLON ATLANTA HUNTINGTON BEACH LLC By Makallon LLC a Delaware limited liability company its Managing Member By Makar Properties LLC a Delaware limited liability company Managing Member By _ PrintNa e Vkttc-q*.t'L GQ(=A T Its P nt Name SAMUEL H/WEISSBARD Its AL COUNSEL Executed on CITY 2006 CITY OF HUNTINGTON BEACH a municipal corporation of the State of California for itself and on behalf of the proposed City of Huntington Beach Community Facilities District 2006-1 (Pacific City) Initiated and Approved Mayor — 3/ ,41o} City Clerk Directoi o conomic Development Approved as to Form YA:t--� V-V� e jFj-+,D& City Attorney PrM 311 I� Reviewed and Approved ,4�--aelz 6��V—k City Administrat ATTACHMENT #2 CITY OF HUNTINGTON BEACH INTERDEPARTMENTAL COMMUNICATION TO PENELOPE CULBRETH GRAFT, DPA, CITY ADMINISTRATOR FROM DAN T VILLELLA, CPA, FINANCE OFFICER SUBJECT FIS 2005 06 14 - APPROVE THE ADVANCES/REIMBURSEMENT AGREEMENT BETWEEN THE CITY AND MAKAR PROPERTIES, LLC DATE MARCH 6, 2006 As required by Resolution 4832, thus Fiscal Impact Statement has been prepared for Approve the Ads ances/RelmbLlrsernent Agreement between the City and Makar Properties, LLC If the City Council approves this action (total appropriation $95,595) - there will be no effect on any fund's unappropriated fund balance because the amount of this contract will be paid from an advance from the developer Dan Villella, Finance Office- RCA ROUTING SHEET INITIATING DEPARTMENT Economic Development SUBJECT Approve the Advances/Reimbursement Agreement between the City and Makar Properties, LLC COUNCIL MEETING DATE March 20 2006 RCA ATTACHMENTS STATUS Ordinance (w/exhibits & legislative draft if applicable) Attached ❑ Not Applicable Resolution (w/exhibits & legislative draft if applicable) Attached ❑ Not Applicable Tract Map Location Map and/or other Exhibits Attached ❑ Not Applicable Contract/Agreement (w/exhibits if applicable) Attached Not Applicable ❑ (Signed in full by the City Attorney) Subleases Third Party Agreements etc Attached ❑ (Approved as to form by City Attorney) Not Applicable Certificates of Insurance (Approved by the City Attorney) Attached ❑ Not Applicable Fiscal Impact Statement (Unbudget over $5 000) Attached Not Applicable ❑ Bonds (If applicable) Attached ❑ Not Applicable Staff Report (If applicable) Attached ❑ Not Applicable Commission Board or Committee Report (If applicable) Attached ❑ Not Applicable Findings/Conditions for Approval and/or Denial L Attached ❑ Not Applicable EXPLANATION FOR MISSING ATTACHMENTS REVIEWED b RETURNED FORWARDED Administrative Staff ( ) ( ) Assistant City Administrator Initial City Administrator Initial City Clerk ( ) I EXPLANATION FOR RETURN OF ITEM I RCA Author Runzel/Punongbayan ;, „& CITY OF HUNTINGTON BEACH 2000 MAIN STREET CALIFORNIA 92648 OFFICE OF THE CITY CLERK JOAN L FLYNN CITY CLERK March 23 2006 Makallon Atlanta Huntington Beach LLC C/O Makar Properties LLC 4100 Macarthur Boulevard Suite 200 Newport Beach CA 92660-2064 To Whom It May Concern Enclosed for your records is a copy of the Advances/Reimbursement Agreement by and between the City of Huntington Beach for itself and on behalf of the proposed City of Huntington Beach Community Facilities District (CFD) No 2006-1 (Pacific City) and Makallon Atlanta Huntington Beach LLC Sincerely 0� jjg4) Joan L Flynn City Clerk JF pe Enclosure Agreement G followup agrmtltr (Telephone 714-536-5227)