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HomeMy WebLinkAboutMINUTES - 12082015 - C.104RECOMMENDATION(S): APPROVE and AUTHORIZE the Conservation and Development Director, or designee, to execute a subordination agreement under which the Successor Agency will subordinate a deed of trust held by the Successor Agency that secures the performance of Palacek Imports pursuant to an Owner Participation Agreement (OPA) under which Palacek was granted $500,000 by the Redevelopment Agency in 2005. FISCAL IMPACT: No General Fund impact. The OPA was funded in 2005 using redevelopment funds. BACKGROUND: In 2005, Palacek Imports requested assistance from the Redevelopment Agency in order to make financially feasible the construction of improvements and relocation of the business to 601 Parr Blvd., North Richmond. The Redevelopment Agency provided a grant in the amount of $500,000 for construction of improvements in accordance with terms and conditions of the Owner Participation Agreement. The construction of the improvements and relocation of the business generated significant employment opportunities in the North Richmond Project Area, redeveloped approximately 25 acres of underutilized land and vacant manufacturing facility, achieved major goals and objectives of the Redevelopment Plan, generated significant tax increment revenue, and stimulated further private sector reinvestment and redevelopment of the Project Area. APPROVE OTHER RECOMMENDATION OF CNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE Action of Board On: 12/08/2015 APPROVED AS RECOMMENDED OTHER Clerks Notes: VOTE OF SUPERVISORS AYE:John Gioia, District I Supervisor Candace Andersen, District II Supervisor Mary N. Piepho, District III Supervisor Karen Mitchoff, District IV Supervisor Federal D. Glover, District V Supervisor Contact: Maureen Toms, 925-674-7878 I hereby certify that this is a true and correct copy of an action taken and entered on the minutes of the Board of Supervisors on the date shown. ATTESTED: December 8, 2015 David Twa, County Administrator and Clerk of the Board of Supervisors By: Stacey M. Boyd, Deputy cc: C.104 To:Successor to the Contra Costa County Redevelopment Agency From:John Kopchik, Director, Conservation & Development Department Date:December 8, 2015 Contra Costa County Subject:Subordination Agreement - Palacek Manufacturing Facility Owner Participation Agreement BACKGROUND: (CONT'D) The owner's performance of the contingent repayment obligation for the grant was secured by a deed of trust in favor of the Redevelopment Agency. The Agency agreed to subordinate the lien of the Agency Deed of Trust only to the lien of the deed of trust to Wells Fargo Bank. The owners are in the process of refinancing the senior debt on the property, which requires a new subordination agreement to a new senior lender. The subordination agreement also updates the Agency information due to the dissolution of the Redevelopment Agency. CONSEQUENCE OF NEGATIVE ACTION: Without the Board's approval, the business would be unable to refinance their senior debt. ATTACHMENTS Subordination Agreement RECORDING REQUESTED BY OLD REPUBLIC TITLE COMPANY Order No.: 0435018727 APN: 408-082-001 WHEN RECORDED MAIL TO: Contra Costa County Successor Agency 30 Muir Road Martinez, CA 94553 SUBORDINATION AGREEMENT NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENT. THIS AGREEMENT, made this 8th day of December, 2015, by Palecek Imports, Inc. and Richmond Land Group, LLC., owner of the land hereinafter described and hereinafter referred to as “Owner”, and the County of Contra Costa, a political subdivision of the State of California, Successor in interest to the Contra Costa County Redevelopment Agency hereinafter described and hereinafter referred to as “ the Agency”, present owner and holder of the deed of trust and the Owner Participation Agreement dated August 16, 2005 between Owner and the Agency (the “OPA”) first hereinafter described and hereinafter referred to as “Beneficiary”: WITNESSETH THAT WHEREAS, Palecek Imports, Inc. and Richmond Land Group, LLC. did execute a deed of trust, dated October 01, 2005, to Chicago Title Company, as Trustee, covering; See "Exhibit A" attached hereto and made a part hereof to secure the OPA in the sum of $500,000.00, in favor of the Agency, which deed of trust was recorded on August 11, 2006, in Book/Reel N/A, at Page/Image N/A, Series/Instrument 2006- 0254952,Official Records of said county; and WHEREAS, Owner has executed, or is about to execute, a deed of trust and note in the sum of $10,200.00, dated , in favor of Bank of Marin, hereinafter referred to as "Lender", payable with interest and upon the terms and conditions described therein, which deed of trust is to be recorded concurrently herewith; and WHEREAS, it is a condition precedent to obtaining said loan that said deed of trust last above mentioned shall unconditionally be and remain at all times a lien or charge upon the land hereinbefore described, prior and superior to the lien or charge of the deed of trust first above mentioned; and WHEREAS, Lender is willing to make said loan provided the deed of trust securing the same is a lien or charge upon the above described property prior and superior to the lien of charge of the deed of trust first above mentioned and provided that Beneficiary will specifically and unconditionally subordinate the lien or charge of the deed of trust first above mentioned to the lien or charge of the deed of trust in favor of Lender; and WHEREAS, it is to the mutual benefit of the parties hereto that Lender make such loan to Owner; and Beneficiary is willing that the deed of trust securing the same shall, when recorded, constitute a lien or charge upon said land which is unconditionally prior and superior to the lien or charge of the deed of trust first above mentioned. NOW THEREFORE, in consideration of the mutual benefits accruing to the parties hereto and other valuable consideration, the receipt and sufficiency of which consideration is hereby acknowledged, and in order to induce Lender to make the loan above referred to, it is hereby declared, understood and agreed as follows: SUBORDINATION, RECORDED DEED OF TRUST TO DEED OF TRUST TO RECORD. SPACE ABOVE THIS LINE FOR RECORDERS’S USE (1) That said deed of trust securing said note in favor of Lender, and any renewals or extensions thereof, shall unconditionally be and remain at all times a lien or charge on the property therein described, prior and superior to the lien or charge of the deed of trust first above mentioned; (2) That Lender would not make its loan above described without this subordination agreement; (3) That this agreement shall be the whole and only agreement with regard to the subordination of the lien or charge of the deed of trust first above mentioned to the lien or charge of the deed of trust in favor of Lender above referred to and shall supersede and cancel, but only insofar as would affect the priority between the deeds of trust hereinbefore specifically described, any prior agreements as to such subordination, including, but not limited to, those provisions, if any, contained in the deed of trust first above mentioned, which provide for the subordination of the lien or charge thereof to another deed or deeds of trust or to another mortgage or mortgages. Beneficiary declares, agrees and acknowledges that (a) He/She consents to and approves (i) all provisions of the note and deed of trust in favor of Lender above referred to, and (ii) all agreements, Including but not limited to any loan or escrow agreements, between Owner and Lender for the disbursement of the proceeds of Lender's loan; (b) Lender in making disbursements pursuant to any such agreement is under no obligation or duty to, nor has Lender represented that it will, see to the application of such proceeds by the person or persons to whom Lender disburses such proceeds and any application or use of such proceeds for purposes other than those provided for in such agreement or agreements shall not defeat the subordination herein made in whole or in part; (c) He/She intentionally and unconditionally waives, relinquishes and subordinates the lien or charge of the deed of trust first above mentioned In favor of the lien or charge upon said land of the deed of trust in favor of Lender above referred to and understands that In reliance upon, and in consideration of, this waiver, relinquishment and subordination, specific loans and advances are being and will be made and, as part and parcel thereof, specific monetary and other obligations are being and will be entered into which would not be made or entered Into but for said reliance upon this waiver, relinquishment and subordination. NOTICE: THIS SUBORDINATION AGREEMENT CONTAINS A PROVISION WHICH ALLOWS THE PERSON OBLIGATED ON YOUR REAL PROPERTY SECURITY TO OBTAIN A LOAN, A PORTION OF WHICH MAY BE EXPENDED FOR OTHER PURPOSES THAN IMPROVEMENT OF THE LAND. Signature of Beneficiary(s) Signature of Owner(s) The County of Contra Costa, Successor in Interest to the Contra Palecek Imports, Inc. Costa County Redevelopment Agency By: _ Its: _ By: Its: Richmond Land Group, LLC. By: Its: _ A notary public or other officer completing this certificate verifies only the Identity of the Individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of County of On the before me, a Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) Is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the Instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the Instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature: Name: (Typed or Printed) (Seal)