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HomeMy WebLinkAboutMINUTES - 11011994 - 1.35 - Contra Costa TO.., BOARD OF SUPERVISORS _ County FROM: Phil Batchelor T" �a County Administrator DATE: November 1, 1994 SUBJECT: Subordination of Redevelopment Pass Through for Town of Danville SPECIFIC REQUEST(S) OR RECOMMENDATIONS(S) & BACKGROUND AND JUSTIFICATION RECOMMENDATIONS APPROVE subordination of revenues due to the County, Library, Fire District and Flood Control District to ABAG tax allocation bonds, pursuant to July 8, 1986 agreement with the Danville Redevelopment Agency. FISCAL IMPACT It is expected that pass through of revenues will continue as originally agreed. The subordination agreement merely provides the Redevelopment Agency with added assurances for bond holders that Agency debt will be repaid. BACKGROUND/REASONS FOR RECOMMENDATIONS On July 8, 1986, the County approved a Redevelopment pass through agreement with the Danville Redevelopment Agency. The terms of the agreement were very favorable to County government agencies. CONTINUED ON ATTACHMENT: XX YES SIGNATURE: RECOMMENDATION OF COUNTY ADMINISTRATOR MMEND TION OF BOA COMMITTEE APPROVE OTHER SIGNATURE(S): ACTION OF BOARD ON !- APPROVED AS RECOMMENDED_%—OTHER VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A UNANIMOUS (ABSENT ) TRUE AND CORRECT COPY OF AN AYES: NOES: ACTION TAKEN AND ENTERED ON THE ABSENT: ABSTAIN: MINUTES OF THE BOARD OF SUPERVISORS ON THE DATE SHOWN. Source: Jim Kennedy 646-4076 cc: Community Development ATTESTED NOV E 199 City of Danville PHIL BATCHELOR, CLERK OF File THE BOARD OF SUPERVISORS AND COUNTY ADMINISTRATOR BY � DEPUTY JKAh sral6/danville.bos Included in the agreement is a subordination clause which essentially allows the Agency to put debt owed to the County lower in priority than debt owed to bond holders, as added assurance to bond holders that their investment will be returned. The County agreed to this provision based upon the commitment that the Agency would have on hand sufficient funds to pay back bond holders, thereby minimizing the real risk that subordination would be necessary. The Agency has informed the County that in order to secure an investment grade bond rating or municipal bond assurance on the proposed ABAG issue of tax allocation bonds, it must require the County to subordinate its interest in certain tax increment revenues. The Agency has provided documents to staff which demonstrate that a 120% plus coverage commitment can be met. Therefore, it is appropriate to agree to the subordination as called for in the 1986 agreement. 14035-01 JHHW:CFAgy] 10/25 j94 i SUBORDINATION AGREEMENT This SUBORDINATION AGREEMENT (this "Agreement")-is made and entered into as of the 1.5Sday of November, 1994, by and between the COMMUNITY DEVELOPMENT AGENCY OF THE TOWN OF DANVILLE,a public body corporate and politic duly organized and existing under the laws of the State of California (the "Agency"), and the COUNTY OF CONTRA COSTA, a county duly organized and existing under the laws of the State of California, on behalf of itself and the County Library District (the "County"); WITNESSETH: WHEREAS, the Agency is a public body, corporate and politic, duly established and authorized to transact business and exercise powers under and pursuant to the provisions of Part 1 of Division 24 of the Health and Safety Code of the State of California (the "Redevelopment Law"), and is proceeding to implement a redevelopment plan for the Downtown Redevelopment Project (the "Redevelopment Project") which has been adopted pursuant by ordinance of the Town Council of the Town of Danville (the "Town") in compliance with all requirements of the Redevelopment Law;and WHEREAS, the Agency, the County and the Contra Costa County Flood Control and Water Conservation District (the "Flood Control District') have entered into an agreement dated as of July 8, 1986 (the "Tax Sharing Agreement'), whereby the Agency has agreed that a portion of the tax increment revenues which are allocated and paid to the Agency (the "Tax Revenues")will be paid by the Agency to the County,the County Library District and the Flood Control District to alleviate the financial burden caused by implementation of the Redevelopment Project;and WHEREAS, the Agency is currently proceeding to issue its Downtown Redevelopment Project 1994 Tax Allocation Bonds in the aggregate principal amount of not to exceed $3,000,000 (the "Bonds") pursuant to that certain Indenture of Trust dated as of December 1, 1994 (the 'Bond Indenture"),by and between the Agency and Bank of America National Trust and Savings Association as trustee (the "Bond Trustee"), for the purpose of financing the acquisition and construction of a library, community center and related off-site improvements (the "Project") located in the Redevelopment Project, in accordance with the requirements of Section 4 of the Tax Sharing Agreement;and WHEREAS, in order to enhance the marketability of the Bonds, the Agency has requested the County to subordinate its and the County Library District's rights to receive Tax Revenues under the Tax Sharing Agreement to the payment of debt service on the Bonds,and in accordance with Section 7 of the Tax Sharing Agreement the Agency has demonstrated to the reasonable satisfaction of the County that the Agency will be able to make payments under the Tax Sharing Agreement notwithstanding such subordination; NOW,THEREFORE,in consideration of the premises and the mutual agreements herein contained,the parties hereto do hereby agree as follows: SECTION 1. Subordination. In consideration of the provisions of issuance of the Bonds by the Agency for the purposes set forth in the Bond Indenture,the County hereby subordinates its right and right of the County Library District to receive Tax Revenues pursuant to the Tax Sharing Agreement to (a) the rights of the Bond Trustee and the owners of the Bonds, and (b) the payment of debt service on the Bonds and the deposit and application of the Tax Revenues in accordance with the provisions of the Bond Indenture. Such subordination shall be a subordination both as to payment and lien priority so long as the Bonds shall be outstanding and so long as any amounts shall be due and owing to the Bond Trustee or the owners of the Bonds. Such subordination shall not be affected in any way by reason of the existence of any right of set-off or any right of the County to proceed against the Agency or the Town,and shall not be affected by any insufficiency of Tax Revenues to make payments in full to the County,the County Library District or the Flood Control District when due under the Tax Sharing Agreement. SECTION 2. Agency Cooperation. At the request of the County,the Agency from time to time shall prepare and deliver to the County any and all reports as the shall reasonably be required to demonstrate to the reasonable satisfaction of the County that the Agency will be able to make payments to the County under the Tax Sharing Agreement in the amounts and at the times required thereunder,notwithstanding the subordination made pursuant to Section 1. Neither the failure by the Agency to prepare and file any such report,nor any insufficiency in Tax Revenues,shall affect the subordination made pursuant to Section 1. SECTION 3. Inurement. This Agreement shall inure to the benefit of the Agency, the County and the owners of the Bonds, their respective legal representatives, successors and assigns, and shall be binding upon the Agency and the County, and their respective legal representatives, successors and assigns. SECTION 4. Interpretation. The interpretation, validity and enforcement of this Agreement shall be governed by and construed under the laws of the State of California. Any ambiguities shall be resolved in the manner which affords the owners of the Bonds the greatest protection. The parties hereto agree to execute such additional documents and to take such actions as may be necessary to implement this Agreement. SECTION 5. Entire Agreement. This Agreement contains the sole and entire agreement and understanding between the parties with regard to the subject matter of this Agreement and supersedes any inconsistent provision in any other document or agreement. SECTION 6. Term. The term of this Agreement shall commence on the original issuance of the Bonds and shall remain in full force and effect at all times thereafter until none of the Bonds remain outstanding under the Bond Indenture. This Agreement shall not be amended or modified in any manner which would materially adversely affect the rights of the owners of the Bonds or the Bond Trustee, without the prior written consent of a majority of the owners of the affected Bonds and the Bond Trustee. - 2- IN WITNESS WHEREOF, the COMMUNITY DEVELOPMENT AGENCY OF THE TOWN OF DANVILLE and the COUNTY OF CONTRA COSTA have caused this Agreement to be signed by their respective officers,all as of the day and year first above written. COMMUNITY DEVELOPMENT AGENCY OF THE TOWN OF DANVILLE By: Chairman ATTEST: Secretary CO OF CO TRA C A By. (46 Chairman ATTEST: Clerk of the Board of Supervisors APPROVED AS TO LEGAL FORM: County Counsel - 3 - 14035-01 JHHW:CFA:gyl 10/25/94 7 SUBORDINATION AGREEMENT This SUBORDINATION AGREEMENT (this "Agreement") is made and entered into as of the lstday of November, 1994, by and between the COMMUNITY DEVELOPMENT AGENCY OF THE TOWN OF DANVILLE,a public body corporate and politic duly organized and existing under the laws of the State of California (the "Agency"), and the COUNTY OF CONTRA COSTA, a county duly organized and existing under the laws of the State of California, on behalf of itself and the County Library District (the "County"); WITNESSETH: WHEREAS, the Agency is a public body, corporate and politic, duly established and authorized to transact business and exercise powers under and pursuant to the provisions of Part 1 of Division 24 of the Health and Safety Code of the State of California (the "Redevelopment Law"), and is proceeding to implement a redevelopment plan for the Downtown Redevelopment Project (the "Redevelopment Project") which has been adopted pursuant by ordinance of the Town Council of the Town of Danville (the "Town") in compliance with all requirements of the Redevelopment Law;and WHEREAS, the Agency, the County and the Contra Costa County Flood Control and Water Conservation District (the "Flood Control District") have entered into an agreement dated as of July 8, 1986 (the "Tax Sharing Agreement"), whereby the Agency has agreed that a portion of the tax increment revenues which are allocated and paid to the Agency (the "Tax Revenues")will be paid by the Agency to the County,the County Library District and the Flood Control District to alleviate the financial burden caused by implementation of the Redevelopment Project;and WHEREAS, the Agency is currently proceeding to issue its Downtown Redevelopment Project 1994 Tax Allocation Bonds in the aggregate principal amount of not to exceed $3,000,000 (the "Bonds") pursuant to that certain Indenture of Trust dated as of December 1, 1994 (the "Bond Indenture"),by and between the Agency and Bank of America National Trust and Savings Association as trustee (the "Bond Trustee"), for the purpose of financing the acquisition and construction of a library, community center and related off-site improvements (the "Project") located in the Redevelopment Project, in accordance with the requirements of Section 4 of the Tax Sharing Agreement;and WHEREAS, in order to enhance the marketability of the Bonds, the Agency has requested the County to subordinate its and the County Library District's rights to receive Tax Revenues under the Tax Sharing Agreement to the payment of debt service on the Bonds,and in accordance with Section 7 of the Tax Sharing Agreement the Agency has demonstrated to the reasonable satisfaction of the County that the Agency will be able to make payments under the Tax Sharing Agreement notwithstanding such subordination; NOW,THEREFORE,in consideration of the premises and the mutual agreements herein contained,the parties hereto do hereby agree as follows: SECTION 1. Subordination. In consideration of the provisions of issuance of the Bonds by the Agency for the purposes set forth in the Bond Indenture,the County hereby subordinates its right and right of the County Library District to receive Tax Revenues pursuant to the Tax Sharing Agreement to (a) the rights of the Bond Trustee and the owners of the Bonds, and (b) the payment of debt service on the Bonds and the deposit and application of the Tax Revenues in accordance with the provisions of the Bond Indenture. Such subordination shall be a subordination both as to payment and lien priority so long as the Bonds shall be outstanding and so long as any amounts shall be due and owing to the Bond Trustee or the owners of the Bonds. Such subordination shall not be affected in any way by reason of the existence of any right of set-off or any right of the County to proceed against the Agency or the Town,and shall not be affected by any insufficiency of Tax Revenues to make payments in full to the County,the County Library District or the Flood Control District when due under the Tax Sharing Agreement. SECTION 2. Agency Cooperation. At the request of the County, the Agency from time to time shall prepare and deliver to the County any and all reports as the shall reasonably be required to demonstrate to the reasonable satisfaction of the County that the Agency will be able to make payments to the County under the Tax Sharing Agreement in the amounts and at the times required thereunder, notwithstanding the subordination made pursuant to Section 1. Neither the failure by the Agency to prepare and file any such report, nor any insufficiency in Tax Revenues,shall affect the subordination made pursuant to Section 1. SECTION 3. Inurement. This Agreement shall inure to the benefit of the Agency, the County and the owners of the Bonds, their respective legal representatives, successors and assigns, and shall be binding upon the Agency and the County, and their respective legal representatives, successors and assigns. SECTION 4. Interpretation. The interpretation, validity and enforcement of this Agreement shall be governed by and construed under the laws of the State of California. Any ambiguities shall be resolved in the manner which affords the owners of the Bonds the greatest protection. The parties hereto agree to execute such additional documents and to take such actions as may be necessary to implement this Agreement. SECTION 5. Entire Agreement. This Agreement contains the sole and entire agreement and understanding between the parties with regard to the subject matter of this Agreement and supersedes any inconsistent provision in any other document or agreement. SECTION 6. Term. The term of this Agreement shall commence on the original issuance of the Bonds and shall remain in full force and effect at all times thereafter until none of the Bonds remain outstanding under the Bond Indenture. This Agreement shall not be amended or modified in any manner which would materially adversely affect the rights of the owners of the Bonds or the Bond Trustee, without the prior written consent of a majority of the owners of the affected Bonds and the Bond Trustee. - 2- IN WITNESS WHEREOF, the COMMUNITY DEVELOPMENT AGENCY OF THE TOWN OF DANVILLE and the COUNTY OF CONTRA COSTA have caused this Agreement to be signed by their respective officers,all as of the day and year first above written. COMMUNITY DEVELOPMENT AGENCY OF THE TOWN OF DANVILLE By: Chairman ATTEST: Secretary COUNTY ONTRA COSTA Chairman ATTEST: Clerk of the Board of Supervisors APPROVED AS TO LEGAL FORM: County Counsel - 3 -