HomeMy WebLinkAbout2015-08 CC Reso - Approving 1st Amended Funding Agrmt for RBP THE CITY OF UKIAH
RESOLUTION NO. 2015-08
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF UKIAH APPROVING
EXECUTION OF THE FIRST AMENDED FUNDING AGREEMENT FOR PUBLIC
INFRASTRUCTURE IMPROVEMENTS FOR THE REDWOOD BUSINESS PARK, AS
APPROVED AND AUTHORIZED BY THE OVERSIGHT BOARD FOR THE SUCCESSOR
AGENCY IN OB RESOLUTION NO. 2012-08
WHEREAS, in 1989 the City Council of the City of Ukiah ("City") approved and adopted
the Redevelopment Plan for the Ukiah Redevelopment Project ("Redevelopment Plan") covering
certain properties within the City (the "Project Area"); and
WHEREAS, the Community Redevelopment Agency of the City of Ukiah ("RDA") was
engaged in activities to execute and implement the Redeveloprnent Plan pursuant to the
provisions of the California Community Redevelopment Law (Health and Safety Code § 33000,
et seg.) ("CRL"); and
WHEREAS, since the adoption of the Redevelopment Plan, the RDA had undertaken
redevelopment projects in the Project Area to eliminate blight, to improve public facilities and
infrastructure, to renovate and construct affordable housing, and to enter into partnerships with
private businesses to create jobs and expand the local economy; and
WHEREAS, as required by the CRL, the RDA adopted a five-year implementation plan
that included infrastructure improvements to facilitate full development of the Redwood
Business Park ("RBP"); and
WHEREAS, the RDA was involved in the preparation of and approved an Exclusive
Negotiating Agreement ("ENA") with Costco Wholesale Corporation at the RBP in an effort to
assist in the elimination of economic and physical blight through focused and intense efforts by
encouraging new business investment, commercial tenancy and job creation in this only partially
developed commercial area to enhance the community� and
WHEREAS, in furtherance of its effort to eliminate economic and physical blight in the
Project Area, the RDA expended over $3.3 Million to assemble acreage (the "Site") and entered
into other agreements with property owners in the RBP in order to facilitate the development of
the RBP and the elimination of economic and physical blight; and
WHEREAS, under the ENA, the RDA was obligated to negotiate in good faith and enter
a disposition and development agreement with Costco under specified terms, if Costco obtained
the necessary entitlements to construct and open its store on the Site; and
WHEREAS, the RDA entered several contracts and expended in excess of $430,021 for
various studies and engineering services to plan and design the planned infrastructure
improvements for the RBP; and
WHEREAS, on March 8, 2011, the City and the RDA entered into the First Amended
Funding Agreement for public infrastructure improvement projects for the Redwood Business
Park ("Funding Agreement") whereby the City agreed to carry out certain activities described in
1
the RDA's redevelopment plan and its Implementation Plan in exchange for a pledge of assets
from the RDA; and
WHEREAS, pursuant to the Funding Agreement, the RDA pledged an amount not to
exceed Six Million Dollars ($6,000,000) (the "Agency Contribution") to the City to pay for the
completion of the Public lmprovements for the RBP, including, but not limited to, the proceeds
from the Series A 2011 Tax Allocation Bonds (the "Bonds"}, loans, and Tax Increment from the
Project Area; and
WHEREAS, the Bond Indenture for the Bonds represents a contract with third parties
that specifically requires that the bond proceeds be used for redevelopment projects, as
specifically described in the bond documents, including the RBP infrastructure improvements;
and
WHEREAS, as part of the 2011-12 State budget bill, the California Legislature enacted,
and the Governor signed, AB 1X 26 requiring that all redevelopment agencies be dissolved;
and
WHEREAS, a Petition for Writ of Mandate was filed in the Supreme Court of the State of
California on July 18, 2011 (California Redevelopment Association, et al. v. Ana Matosantos, et
a/., Case No. S194861), challenging the constitutionality of AB 1X 26 and requesting a stay of
enforcement; and
WHEREAS, on December 29, 2011, the Supreme Court issued its decision in the
aforesaid litigation, upholding AB 1X 26 and reforming certain dates, with the effect that all
redevelopment agencies were dissolved as of February 1, 2012; and
WHEREAS, on January 8, 2012, the City Council of the City of Ukiah ("Council")
adopted Resolution No. 2012-04 designating the City as the Successor Agency to the RDA
("Successor Agency"); and
WHEREAS, Health and Safety Code Section 34178(a), as enacted by AB 1x 26,
provided that while agreements between a city and its redevelopment agency were invalid and
not binding upon the successor agency, "a successor agency wishing to enter or re-enter into
agreements with the city, county, or city and county that formed the redevelopment agency that
it is succeeding may do so upon obtaining approval of its oversight board;" and
WHEREAS, the Oversight Board for the Successor Agency to the RDA ("Oversight
Board") reviewed the Funding Agreement as presented by Successor Agency staff at the
Oversight Board meeting of June 13, 2012, and reviewed and considered written and oral
comments from the Successor Agency and public relating thereto; and
WHEREAS, the Oversight Board approved Resolution No. 2012-08 on June 13, 2012
which authorized the Successor Agency to re-enter into the Funding Agreement; and
WHEREAS, on June 14, 2012, the Successor Agency emailed a notice of the Ukiah
Oversight Board's agenda, minutes, and actions from the June 13, 2012 meeting to the
Mendocino County Auditor-Controller, the State of California Controller, and the State of
California Department of Finance and posted all of these materials for review on the Oversight
Board/Successor Agency's web-site; and
2
WHEREAS, under Health and Safety Code Section 34179(h), the resolution of the
Oversight Board would not become effective for three business days pending a potential
request for a review by the Department of Finance ("DOF"); and
WHEREAS, the three business day review period expired on June 19, 2012, and the
Successor Agency did not receive any request from the DOF for review of the resolution; and
WHEREAS, the Oversight Board Resolution No. 2012-08 became effective on June 20,
2012, thus authorizing the Successor Agency and City Council to re-enter the Funding
Agreement; and
WHEREAS, on June 20, 2012, the City Council and Successor Agency approved re-
entering the Funding Agreement (the "2012 Agreement") with the only substantive change in
paragraph 4, changing the initial payment by the RDA to the City from $3,306,195 to a payment
of $1,700,138.83 by the Successor Agency; and
WHEREAS, the Successor Agency and the City intended on June 20, 2012, to reenter
the agreement as approved by the Oversight Board in Resolution No. 2012-08; and
WHEREAS, the DOF, in its review of the Successor Agency's Recognized Obligations
Payment Schedule ("ROPS"), determined that the 2012 Agreement was not an enforceable
obligation; and
WHEREAS, the City and Successor Agency challenged that determination in City of
Ukiah et al. v. Michael Cohen, Sacramento County Superior Court Case No. 34-2014-
80001744; and
WHEREAS, the trial court determined that the Successor Agency had satisfied the first
requirement of former Health and Safety Code section 34178(a) by obtaining the Oversight
Board's approval to re-enter into the 2011 Funding Agreement, but had not satisfied the second
step by executing an agreement that was identical to the 2011 Funding Agreement; and
WHEREAS, the City Council desires to execute the Funding Agreement as approved by
the Oversight Board by its Resolution No. 2012-08;
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Ukiah
hereby finds, resolves, and determines as follows:
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 for the City to enter into the Funding
Agreement does not commit the City 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 to Re-enter into Fundinq Aqreement. Pursuant to the
Oversight Board's approval in its Resolution No. 2012-08, the City Council authorizes the
execution of the re-entered First Amended Funding Agreement with the Successor Agency to
the former Redevelopment Agency of the City of Ukiah for public infrastructure improvement
projects for the Redwood Business Park, as approved by the Ukiah Oversight Board by its
3
Resolution No. 2012-08, including Exhibits A and B to that resolution. The Re-entered
Agreement shall be dated June 20, 2012, the date on which the Oversight Board's approval
became effective.
Section 4. Implementation. The City Council directs the City Manager to take all
steps and actions necessary to implement this Resolution and the Funding Agreement on behalf
of the City of Ukiah.
Section 5. Severabilitv. 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 City Council
declares that the City of Ukiah would have adopted this Resolution irrespective of the invalidity
of any particular portion of this Resolution.
Section 6. Certification. The City Clerk of the City of Ukiah shall certify to the
adoption of this Resolution.
Section 7. Effective Date. This Resolution becomes effective upon its adoption.
PASSED, APPROVED AND ADOPTED at a meeting of the City Council of the
City of Ukiah on February 4, 2015, by the following roll call vote:
AYES: Councilmembers Mulheren, Doble, Brown, Scalmanini, and Mayor Crane
NOES: None
ABSENT: None
ABSTAINED: None
F` � �
i' _
ouglas . Crane, Mayor
ATTEST:
.� >�- �
Cathy awadly, Deputy; -ity Clerk
4
EXHIBIT A �
FIRST AMENDED FUNDING AGREEMENT
UKIAH REDEVELOPMENT PROJECT AREA
(Public Improvements- Redwood Business Park projects)
THIS FiTNDING AGREEMENT is entered into as of March 8, 2011, by and between the
REDEVELOPMENT AGENCY OF THE CITY OF UHIAH, a public body, corporate and
politic (Agency), and the CITY OF UKIAH, a municipal corporation(City).
Recitals
A. Pursuant to the Community Redevelopment Law of the State of California (Health
and Safety Code Section 33000 et seq.), the Agency is a duly constituted redevelopment agency
under the laws of the State of California and pursuant to said laws is carrying out the
Redeveloprnent Plan(Redevelopment Plan) for the Ukiah Redevelopment Project(Redevelopment
Project).
B. The major goals and objectives of the Redevelopment Plan include, among others,
the elirnination of blighting influences and the conrection of environmental deficiencies in the
Redevelopment Project Area, improving pedestrian and vehicular circulation in the
Redevelopment Project Area, and the installation of new or replacement of existing public
improvements which are currently inadequate to serve the area. The Redevelopment Plan
authorizes the Agency to pay for, develop, or construct any publicly-owned improvements, either
within or without the Project Area, for itself or for any public body or entity, which improvements
are or would be of benefit to the Project Area. The Five Year Implementation Plan for the Ukiah
Redevelopment Plan also specifically identifies the traffic, drainage and utility improvements as
the public improvements projects to be undertaken by the Agency.
C. The Redwood Business Park is a potential tx�ajor commercial-retail center within
the Redevelopment Project Area which requires the installation certain traffic, drainage and utility
improvements (the"Public Inzprovements") in order to induce private investtnent.
D. In furtherance of an Agreement between the Agency and Costco Wholesale
Corpora#ion, approved by the Agency in January 2011 (the "Agreement"), the Agency desires to
cooperate with the City and provide funding to assist with the costs necessary for the Public
Improvements at the Redwood Business Park, which Public Improvements will serve and be of
primary benefit to the Ukiah Redevelopment Project Area.
E. Pursuant to Health and Safety Code Section 33445, the Agency is authorized, with
the consent of the City Council, to pay all or part of the value of the land for and the cost of the
design, installation and construction of any building, facility, structure, or other improvements
which are publicly owned either within or without the Redevelopment Project Area, upon a
determination by the City Council and Agency that such buildings, facilities, structures or other
improvements are of benefit to the Redevelopment Project by helping to eliminate blight within
the Redevelopment Project Area, that no other reasonable means of financing such buildings,
facilities, structures, or other improvennents are available to the community, and that the payment
1
Ukiah FA
8266].00001158613 57.1
of funds for the cost of such buildings, facilities, structures or other improvements is consistent
with the Agency's five-year Implementation Plan for the Redevelopment Project.
F. Section 33678 of the Community Redevelopment Law provides that the portion of
taxes allocated to the Agency pursuant to Section 33670(b) of the Community Redevelopment
Law (Tax Increments) will not be deemed the receipt or appropriation of proceeds of taxes for the
purposes of Article XIII.B. of the California Constitution so long as such Tax Increments are used
for redevelopment activity which primarily benefits the Redevelopment Project Area.
G. In order to enable the City to continue its efforts to construct the Improvements for
the benefit of the Redevelopment Project Area, and as an inducement to the City to do so, the
parties desire to enter into this Agreement providing for the Agency to contribute to the City a
portion of the costs relating to the development and construction of the Improvements.
AQreerner�t
THE AGENCY AND THE CITY HEREBY AGREE AS FOLLOWS:
1. The City shall be responsible for all of the design and construction of the Public
Improvements identified by the City in the Redwood Business Park and that will serve the
Redevelopment Project Area.
2. The City shall be responsible for conducting environmental review prior to its
approval of the Improvements, final design and construction and as a prerequisitE for use of any of
the Agency Contribution(as defined below) for final design and construction. It is understood and
agreed that the Agency Contribution provided in this Agreement may be used to conduct such
environmental review. The City shall cause the environmental review to bc undertaken as soon as
feasible.
3. The City shall cause such developmant and construction work to be undertaken as
soon as feasible and continue in order to ensure that the Improvements are completed in a timely
manner.
4. In consideration of the undertakings of the City under Sections 1 through 3 of this
Agreement, the Agency shall: (1) by no later than March 9, 2011, pay to the City for the design,
environmental review and construction of the Improvements $3,306,195 and (2) pay to the City
(or pay to a third party on behalf of the City} a portion of the actual costs incurred by the City as
necessary for the design, environmental review and construction of the Improvements, in a total
amount not to exceed SIX MILLION_DOLLARS ($6,000,000) (Agency Contribution).
The Agency shall make such Agency Contribution to (or on behalf o� the City from any
funds available to the Agency for such purpose, including the proceeds of any bonds issued by the
Agency, loans and Tax Increments from the Redevelopment Project Area, at the Agency's sole
discretion.
5. Failure by either party to perform its obligations hereunder shall constitute a default
under this Agreement, and the other party may institute legal action to cure, correct or remedy
2
Ukiah EA
82661.0000 115 8 6 1 3 5 7.1
such default, to recover damages for such default or to obtain any other remedy, including
injunctive ox declaratory relief, consistent with the purpose of this Agreement.
6. This Agreement constitutes an indebtedness of the Agency incurred in ca.rrying out
the Redevelopment Project, and a pledge of Tazc Increments from the Redevelopment Project to
repay such indebtedness, under the provisions of Section 16 of Article XVI of the California
Constitution and Section 33670 et seq. of the Health and Safety Code; provided, however, that
such pledge of Ta�c Increments shall always be subordinate and subject to the right of the Agency
to pledge or commit Tax Increments frorn the Redevelopment Project Area to repay bonds or other
indebtedness incu.rred by the Agency in carrying out the Redevelopment Project.
7. Pursuant to Section 895.4 of the Government Code,the Agency and City agree that
each will assume the full liability imposed upon it or any of its officers, agents or employees for
injury caused by a negligent or wrongful act or omission occurring in the performance of this
Agreement and each party agrees to indemnify and hold harmless the other party for any loss,
costs or expense that may be imposed upon such other party by virtue of Sections 895.2 and 895.6
of the Government Code.
8. This Agreement and the obligations of the City and the Agency hereunder shall
terminate upon the completion of the construction of the Improvements by the City and the
payment of the Agency Contribution as set forth in Section 4.
9. Within 30 calendar days of the end of each fiscal year,the City shall prepaxe and
deliver to the Agency a report of activities and accomplishments with regard to the Improvements,
together with 1) any environmental documentation or notice required as a result of any activity
undertaken in compliance with this Agreement that is a project under CEQA and/or NEPA, 2)
evidence of the costs incurred by the City to provide the Public Irnprovements provided for under
this Agreement, and 3) any other information reasonably requested by the Agency relating to this
Agreement or the Public Improvements (City's Report). Such information,provided in a timely
manner, shall assist the Agency to fulfill its reporting requireznents regarding construction of
capital improvements under California Health and Safety Code Section 33080 et seq.
IN WITNF,SS WHEREOF, the Agency and the City have executed this Agreement as of
the date first above written.
REDEVELOPMENT AGENCY OF THE
CITY OF UHIAH
�... �� �
.'
gy. L.,--;. ��,..�� �...����-
;��ff Executive Director
Atle`��
�� � `L';,•�� �'�. _,
By. _Tk
cretary
3
Ukieh FA
8266].00001\5861357.1
Approved as to Form
,
��. -
Agency ounsel
CITY OF UKIAH
•, ,-,�
` , �
`� ,,��� �..- _- --
By: -r
,�,� City Manager
Att�st:
`1 '! /� -�
$y: \ � —lT t��� ��
r City Clerk
Approved as to Form:
By: -
C.ity A torney
4
Ukiah FA
82661.00001\5861357.1
Exhibit B
Public Infrastructure Improvements for the Redwood Business Park
(Verbatly dictated to Oversight Board at June 13,2012 meeting and as previously transmitted)
Listing of improvements:
• Talmage Southbound Off-Ramp Interchange
• Talmage Road Widening and Signal Modification
• Airport Park Boulevard Reconstruction"Ovei•lay"
• Commerce Road Inte►-section Signal
• Hasting Avenue Widening and Signal Modification