CITY COUNCIL AGENDA ITEM NO. 04
Meeting Date: August 13, 2002
Subject/Title: Consideration of a Resolution Approving a Reimbursement Agreement between the Brentwood Redevelopment Agency and the City of Brentwood for Sunset Industrial Complex Improvements Project
(CIP No. 336-3128)
Submitted by: Gina Rozenski, Redevelopment Analyst
Approved by: John Stevenson, City Manager
Approve a Resolution approving a Reimbursement Agreement between the Brentwood Redevelopment Agency and the City of Brentwood for Sunset Industrial Complex Improvements Project (CIP No. 336-3128).
In September 2001, the Brentwood Redevelopment Agency issued Tax Allocation Bonds (TAB) to refinance existing bonds and to pay for certain redevelopment and public improvement projects. One of the top three projects identified by the Agency included funding the infrastructure improvements at the Sunset Industrial Complex with TAB proceeds.
At the same time, the Agency embarked on a redevelopment plan amendment wherein the proposed Sunset Industrial Complex, and surrounding public facilities and park uses, would be added to the North Brentwood Redevelopment Project Area. The Plan Amendment was adopted by ordinance on July 9, 2002.
On June 4, 2002, the Planning Commission certified the Environment Impact Report for the Sunset Industrial Complex, and on June 6 the Notice of Determination was filed with the County.
On July 23, the City Council adopted Ordinance 710 approving the PD Zoning for Sunset Industrial Complex, and also awarded the construction contract for the Sunset Industrial Complex Improvements Project (CIP No. 336-3128) to Teichert Construction.
The City purchased the 40-acre parcel off Sunset Road in 1999 for the expansion of the adjacent sports complex by 16± acres, and to implement an economic development strategy by zoning the remaining acres for industrial land use. The City intends to sell parcels within the Sunset Industrial Complex to end users. The sale revenues to the City will be then used to reimburse the City for its cost of the land and to reimburse the Agency for paying a portion of the cost of improvements. Therefore, both the City and the Agency expect to receive full reimbursement for their out-of-pocket costs associated with developing the Sunset Industrial Complex as parcels are sold. Any excess receipts from the proceeds of the sales beyond the actual costs shall be shared between the City and Agency in amounts equitable to their contributions.
The Reimbursement Agreement between the Brentwood Redevelopment Agency and the City of Brentwood evidences the Agency’s contribution of $3,000,000 from its TAB proceeds to this Capital Improvement Project to fund a portion of the public improvement costs, and evidences the City’s reimbursement back to the Agency as parcels are sold.
The proposed public improvements at the Sunset Industrial Complex are included in the North Brentwood Redevelopment Plan (as part of the Plan Amendment), and provided for in the Five-Year Implementation Plan, specifically:
1. To provide needed improvements to revitalize the Project Area.
2. To encourage expansion of local industrial opportunities to achieve the greatest return on investment and maximize the leveraging of tax increment.
3. To improve transportation and enhance circulation within the Sunset Area.
Furthermore, the improvements are of benefit to the North Brentwood Project Area, as well as the entire community, in that the proposed Sunset Area is the only area within the City’s General Plan to reasonably accommodate new industrial uses and the possible relocation of non-conforming, incompatible businesses from Brentwood Boulevard or from areas within the Agency’s two Redevelopment Project Areas. As such, the payment of funds towards these improvements will assist in the elimination of one or more blighting conditions inside the Project Areas.
Staff has investigated other financing options for the improvements at Sunset Industrial Complex, however, each alternative was eliminated for various restrictive reasons. In addition, there is a lack of sufficient funds in the City’s capital improvement budget to fund these improvements. It was concluded that no other reasonable means of financing such improvements are available to the City, other than from the Redevelopment Agency.
The proceeds from the land sales shall be allocated to the City in the amount of the unimproved value of the land and to the Agency in the amount of its contribution to the infrastructure improvements, and any excess receipts shall between the City and Agency in amounts equitable to their contributions.
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BRENTWOOD APPROVING A REIMBURSEMENT AGREEMENT AMONG THE REDEVELOPMENT AGENCY OF THE CITY OF BRENTWOOD AND THE CITY OF BRENTWOOD
WHEREAS, the City Council of the City of Brentwood ("City") approved and adopted the Redevelopment Plan for the North Brentwood Redevelopment Project ("Project") on July 9, 1991, by Ordinance No. 496, as amended; and
WHEREAS, the Redevelopment Agency of the City of Brentwood ("Agency") is carrying out the Redevelopment Plan and in connection therewith adopted an Implementation Plan for the Project on March 28, 2000, by Resolution No. RA15 in accordance with Health and Safety Code Section 33490; and
WHEREAS, the Agency has prepared a Reimbursement Agreement among the City and the Agency, pursuant to which the Agency proposes to pay the City for certain costs relating to designing, constructing and installing certain public improvements ("Public Improvements") within the Project, and the City proposes to reimburse the Agency as set forth in the Reimbursement Agreement.
NOW, THEREFORE, be it resolved by the City Council of the City of Brentwood as follows:
1. The City Council hereby finds and determines as follows:
a. The Public Improvements will be of benefit to the Project. This finding is based on the fact that the Public Improvements will be located within the Project area and will provide needed infrastructure within the Project.
b. There is no other reasonable means of financing the Public Improvements. This finding is based on the lack of sufficient funds in the capital improvement budget of the City to fund the Public Improvements together with other urgently needed public improvements and facilities and the infeasibility of financing the Public Improvements through an assessment district, community facilities district or other conventional method of financing public facilities.
c. The payment of funds for the Public Improvements will assist in the elimination of one or more blighting conditions inside the Project and is consistent with the Implementation Plan. This finding is based on the following facts:
(1) Reimbursement for the Public Improvements is anticipated to help revitalize other areas of the Project, provide needed infrastructure for and provide area for relocated businesses to move to;
(2) Reimbursement for the Public Improvements will help implement development of underutilized property by the City and the provision of necessary public facilities; and
(3) The Implementation Plan identifies as objectives for the five-year period from Fiscal Year 1999-2000 through Fiscal Year 2003-2004 the following:
Provide needed public improvements: revitalize the redevelopment project areas through installation of public improvements, including streets, curbs, gutters, sidewalks, utility undergrounding, landscaping, sewer, water and storm drain systems, and bring area infrastructure into compliance with all Federal and State laws.
2. The City Council hereby consents to the Agency paying the City for the cost of the Public Improvements, and the City reimbursing the Agency pursuant to the Reimbursement Agreement.
3. The City Council hereby approves the Reimbursement Agreement in the form attached hereto as Exhibit A, together with such minor technical and clarifying revisions as shall be approved by the City Manager and the City Attorney. The City Council hereby authorizes the City Manager to execute the Reimbursement Agreement on behalf of the City and to take all further actions reasonably necessary to carry out the provisions of the Reimbursement Agreement.
NORTH BRENTWOOD REDEVELOPMENT PROJECT
(Sunset Industrial Complex Project)
THIS REIMBURSEMENT AGREEMENT is entered into this day of , 2002, by and between the REDEVELOPMENT AGENCY OF THE CITY OF BRENTWOOD, a public body, corporate and politic (the “Agency”), and the CITY OF BRENTWOOD, a municipal corporation (the “City”).
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 a redevelopment project in the City, in accordance with the redevelopment plan duly adopted by the City Council.
B. By Ordinance No. 496, adopted on July 9, 1991, as amended to date, the City Council of the City of Brentwood adopted, and the Agency is carrying out the Redevelopment Plan for the North Brentwood Redevelopment Project (the “Project”).
C. 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 cost of the installation and construction of any building, facility, structure, or other improvements which are publicly owned either within or without the Project Area, upon a determination by the City Council that such buildings, facilities, structures or other improvements are of benefit to the Project or the immediate area in which the Project is located, that no other reasonable means of financing such buildings, facilities, structures, or other improvements are available to the community, and that the payment of funds for the cost of such buildings, facilities, structures or other improvements will assist in the elimination of one or more blighting conditions inside the project area and is consistent with the Agency’s five-year Implementation Plan. The City Council has heretofore given and made, and the Agency and the City hereby reaffirm and declare, such consents and determinations with respect to the infrastructure improvements within the Sunset Industrial Area and related improvements proposed to be installed and constructed as further defined below in Section 1 (collectively, the “Infrastructure Improvements”). The Agency has agreed to secure the financing for and the City has agreed to undertake the construction and installation of the Infrastructure Improvements for the benefit of the Project and the immediate area in which the Project is located.
D. The Agency is funding a portion of the Infrastructure Improvements through proceeds of the Tax Allocation Bond issued in September of 2001 by the Brentwood Infrastructure Financing Authority.
E. Once Infrastructure Improvements are completed, the City shall diligently market and sell the parcels to third party buyers. The proceeds of such sales shall be used to reimburse the Agency for its contribution of the cost of the Infrastructure Improvements as further set forth herein.
F. The City will reserve approximately six and one-half (6.5) acres of land for use by the Agency to relocate existing businesses from Brentwood Boulevard and from within the Agency’s two Redevelopment Project Areas to the Sunset Industrial Area.
G. In order to enable the City to undertake the construction of the Infrastructure Improvements for the benefit of the Project and the immediate area in which the Project is located and as an inducement to the City to do so, the parties desire to enter into this Agreement providing for the Agency to pay for a portion of the Infrastructure Improvements and the City to reimburse the Agency once the land is sold to third party buyers.
THE AGENCY AND THE CITY HEREBY AGREE AS FOLLOWS:
1. The City shall cause to be designed, constructed and installed within the Sunset Industrial Area, Infrastructure Improvements which include modification of existing Tresch Road, widening and overlaying Sunset Road and the new construction of an entrance road (more commonly referred to as “Elkins Way”) with grading, wet utilities, joint trench, landscaping, irrigation, and planting. A portion of the costs for the construction of the Infrastructure Improvements shall be paid by the Agency to the City from the proceeds of Tax Allocation Revenue Bonds issued through the Brentwood Infrastructure Financing Authority in September of 2001 (the “Bonds”). The City shall cause the Infrastructure Improvements to be commenced as soon as feasible after the execution of this Agreement and shall ensure that the Infrastructure Improvements are completed in a timely manner.
2. In consideration of the undertakings of the City under Section 1 of this Agreement, the Agency shall pay the City a portion of the actual costs incurred by the City for the design, construction and installation of the Infrastructure Improvements.
The estimated total costs to be funded by the Bond proceeds is Three Million Dollars ($3,000,000).
The City shall, immediately upon completion of the construction of the Infrastructure Improvements, begin to market and sell the land. The proceeds of sales of the land shall be allocated to the City in the amount of the unimproved value of the land and to the Agency in the amount of the difference between the unimproved value of the land and the actual sales price up to a maximum of Three Million Dollars ($3,000,000). The City shall pay the Agency as set forth above as funds are available to the City or in such other amounts and times as the parties may agree.
Receipts from the proceeds of the sales exceeding the combined actual amount of the unimproved value of the land and the Infrastructure Improvements shall be shared between the City and Agency in amounts equitable to their contributions, which equals 22% of excess receipts to the City and 78% of excess receipts to the Agency. The City shall pay the Agency its share of the excess receipts as funds are available to the City or in such other amounts and times as the parties may agree.
3. The City shall designate six and one-half acres (6.5) acres for use as relocation sites for existing businesses to be relocated from Brentwood Boulevard and from within the Agency’s two Redevelopment Project Areas. The City has agreed to hold this property for the Agency’s use for eighteen (18) months from the date of this Reimbursement Agreement or until the Agency has reached agreement with those relocated businesses, whichever occurs first. The reserved acreage may be expanded and the time period may be extended as the parties may agree.
4. 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 such default, to recover damages for such default or to obtain any other remedy, including injunctive or declaratory relief, consistent with the purpose of this Agreement.
5. This Agreement constitutes an indebtedness of the Agency incurred in carrying out the Project, and a pledging of Bond proceeds to repay such indebtedness.
6. 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.
7. This Agreement and the obligations of the City and the Agency hereunder shall terminate upon the sale of the land and the Agency’s reimbursement of the Infrastructure Improvements and excess receipts, if any, as set forth in Section 2.
IN WITNESS WHEREOF, the Agency and the City have executed this Agreement as of the date first above written.
REDEVELOPMENT AGENCY OF THE
CITY OF BRENTWOOD
John Stevenson, Executive Director
Karen Diaz, CMC, Secretary
CITY OF BRENTWOOD
John Stevenson, City Manager
Karen Diaz, CMC, City Clerk