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CDA Resolution 88-2COMMUNITY DEVELOPMENT AGENCY
RESOLUTION NO. 88- 2
A RESOLUTION OF THE COMMUNITY DEVELOPMENT AGENCY
OF THE CITY OF GILROY AUTHORIZING THE BORROWING OF
MONIES FROM THE CITY OF GILROY AND THE EXECUTION OF
AN AGREEMENT TO REPAY SUCH LOAN AND REIMBURSE THE
CITY FOR COSTS INCURRED ON BEHALF OF REDEVELOPMENT
EFFORTS
WHEREAS, the Community Development Agency of the City of
Gilroy (the "Agency") has determined that in order to carry
out its redevelopment activities prior to adoption of a
redevelopment plan for the Gilroy Community Redevelopment
Project Area (the "Project Area"), which was established by
City Council Resolution No. 88-6~ adopted on September 19,
1988, and to fund the activities of the Agency until such time
that tax increments are available for the support of the
redevelopment program, it is necessary that the Agency borrow
an amount not to exceed One Hundred Thousand Dollars _
($100,000.00) from the City of Gilroy; and
WHEREAS, it is the understanding of the Agency that such
a loan would be repaid out of tax increment funds, as such
funds become available to the Agency pursuant to certain terms
and conditions as set forth in the Loan and Repayment
Agreement attached hereto as Exhibit A and by this reference
incorporated herein (the "Repayment Agreement"); and
WHEREAS, it is the understanding of the Agency that it
will reimburse the City of Gilroy out of tax increment funds
for all costs incurred for the benefit of the Agency, pursuant
to the terms of the Repayment Agreement.
BE IT NOW THEREFORE RESOLVED THAT:
1. The Agency hereby accepts the loan from the City of
Gilroy in an amount not to exceed One Hundred Thousand Dollars
($100,000.00) pursuant to the terms and conditions set forth
in the Repayment Agreement, and agrees to repay the loan out
of tax increment funds as set forth in the Repayment
Agreement;
RESOLUTION NO. 88-2
2. The Agency agrees to reimburse the City for all costs
incurred by the City on behalf of the Agency, including the
cost of certain public improvements, pursuant to the terms and
conditions set forth in the Repayment Agreement; and
3. That the Agency hereby authorizes the Chairperson of
the Agency to execute the Repayment Agreement on behalf of the
Agency.
Passed and adopted this 19th day of
1988, by the following vote:
September ,
AYES:
NOES:
AGENCYMEMBERS: GAGE, HALE, KLOECKER, MUSSALLEM,
PALMERLEE, VALDEZ and HUGHAN.
AGENCYMEMBERS: None
ABSENT: AGENCYMEMBERS: None
APPROVED:
a~Hughan,
ATTEST:
/Susanne Stein~etz,~gency Secr~y
09/0s/ss
#B009/B49702
RESOLUTION NO. 88-2 -2-
EXHIBIT A
LOAN AND REPAYMENT AGREEMENT
The following is an Agreement, dated September 19, 1988,
by and between the Community Development Agency of the City of
Gilroy, hereinafter called "AGENCY" and the City of Gilroy,
hereinafter called "CITY".
WI TNE S S E TH
WHEREAS, the CITY has determined that it is in the
interest of the CITY to establish the Gilroy Community
Redevelopment Project Area (the "Project Area") in the CITY;
and
WHEREAS, on July 13, 1983 the CITY duly adopted Ordinance
No. 83-10, establishing the Community Development Agency of
the City of Gilroy; and
WHEREAS, the AGENCY is vested with the responsibility for
formulating and carrying out necessary redevelopment projects
within the CITY; and
WHEREAS, concurrent with the execution of this Agreement,
the CITY is appropriating One Hundred Thousand Dollars
($100,000.00) to the AGENCY for the purpose of carrying out
redevelopment activities prior to the adoption of the Gilroy
Community Redevelopment Plan (the "Plan") and to fund the
activities of the AGENCY with regard to the Project Area until
such time that tax increments are available for the support of
the redevelopment function; and
WHEREAS, said One Hundred Thousand Dollars ($100,000.00)
will be used to fund staff time, expenses, overhead costs,
consultants contract costs, use of CITY facilities and other
related expenses in the formulation, coordination,
administration and implementation of the Plan; and
WHEREAS, said One Hundred Thousand Dollars ($100,000.00)
will be loaned by the CITY to the AGENCY in the anticipation
that such costs will be repaid by the AGENCY out of tax
increment funds generated within the Project Area; and
WHEREAS, the CITY and the AGENCY are each ready and
willing to assume the relationship described herein;
NOW, THEREFORE, the AGENCY and the CITY, for and in
consideration of the mutual promises and agreements herein
contained do agree as follows:
1. PURPOSE
The purpose of this Agreement is to provide for the
repayment by the AGENCY of a loan from the CITY in an amount
not to exceed One Hundred Thousand Dollars ($100,000.00). Loan
proceeds are to be used for administrative costs and expenses,
including consultants' costs, incurred by the AGENCY, all of
which are necessary for the formulation, coordination,
administration and implementation of a Plan for the Project
Area.
2. TERM OF AGREEMENT
This Agreement shall be in full force and effect for a
period beginning as of the date first above written and
continuing until all loans hereunder are repaid and no further
CITY loans are required.
LOAN REPAYMENT TERMS
The AGENCY agrees to repay the loan from the CITY in an
amount not to exceed One Hundred Thousand Dollars
($100,000.00) for the AGENCY's costs and expenses in
formulating, coordinating, administering and implementing the
Plan for the Project Area. The loan shall bear interest at
the lesser of twelve percent (12%) per annum, or the maximum
interest rate permitted by law. The loan shall bear interest
from the date that loan funds are drawn by the AGENCY and
shall be repaid solely from tax increment funds generated
within the Project Area. It is understood that in the event
such tax increment revenues fail to yield enough revenue to
repay this obligation, the AGENCY is under no obligation to
the CITY to make such repayment from any further funds or
resources it may acquire.
In the event that the CITY authorizes by appropriate
resolution any future loan(s), such loan(s) shall become a
debt of the AGENCY and shall be reflected as Attachment 1,
which shall be attached to this Agreement and made a part
hereof as if fully set forth herein. Such future loans(s)
shall bear interest at the rate set forth above.
4. REIMBURSEMENT TO CITY BY AGENCY
The AGENCY agrees to reimburse the CITY for all costs
incurred by the CITY in furtherance of the Plan for the
Project Area. These costs include, but are not limited to,
costs to the CITY for consulting services, legal services,
staff time and other related administrative expenses. This
debt shall bear interest at the rate set forth in Section 3
above.
5. REIMBURSEMENT FOR PUBLIC IMPROVEMENTS
If the CITY and the AGENCY so authorize by resolution,
the CITY may incur costs for public improvements on behalf of
2
the AGENCY. These costs shall become a debt of the AGENCY and
shall be reflected as Attachment 2, which shall be attached to
this Agreement and made a'part hereof as if fully set forth
herein. These costs shall bear interest at the rate set forth
above, and shall be paid to the CITY by the AGENCY in the
manner provided in Section 5.1.
5.1. Upon receipt by the AGENCY of a cost certification
statement bearing the signature of a duly authorized agent of
the CITY and describing in detail all or any part of the costs
hereinabove enumerated that have been actually incurred and
paid by the CITY, the AGENCY shall cause to pay the CITY
within ten (10) days the amount set forth in the statement,
provided that sufficient tax increment revenues are available
to pay such amount.
It is>understood by the Agency and the CITY that such
repayment shall be a debt of the AGENCY and shall be repaid
solely from tax increments generated within the Project Area.
6. REPAYMENT SUBORDINATION
It is agreed by the parties hereto that the repayment to
the CITY pursuant to this Agreement is hereby subordinated to
any and all payments necessary to satisfy the AGENCY's
obligations in connection with any existing or future bonded
indebtedness or obligation which may be incurred by the AGENCY
for the benefit of the Plan or to the extent necessary for any
bonded indebtedness for which the AGENCY has pledged as a
security or source of repayment tax increment generated within
the Project Area.
7. VALIDITY OF AGREEMENT
If any provisions of this Agreement, or the application
thereof to any person, party, transaction, or circumstance, is
held invalid, the remainder of this Agreement, or the
application of such provision to other persons, parties,
transactions or circumstances, shall not be affected thereby.
IN WITNESS WHEREOF, the Mayor of the City of Gilroy has
caused the name of the City to be affixed to this Agreement,
and the Chairperson of the Agency as authorized, has caused
the name of the Agency to be affixed to this Agreement on the
above date.
COMMUNITY DEVELOPMENT
AGENCY OF THE CITY OF GILROY
CITY OF GILROY
By By
Roberta Hughan
Mayor
Roberta Hughan
Chairperson
~200/B49702
I hereby certify that the foregoing is a full, true and correct
copy of a resolution duly passed and adopted by the Community Development
Agency of the City of Gilroy, California, at a meeting thereof, held on the
19th day of September, 1988.
Secretary
(Seal)
I hereby certify that the foregoing is a full, true and correct
copy of a resolution duly passed and adopted by the Community Development
Agency of the City of Gilroy, California, at a meeting thereof, held on the
19th day of September, 1988.
(Seal)