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HomeMy WebLinkAbout064-2012RESOLUTION NO. 64-2012 APPROVING AND AUTHORIZING THE TOWN OF DANVILLE TO REENTER INTO THE COOPERATION AGREEMENT WITH THE SUCCESSOR AGENCY TO THE FORMER COMMUNITY DEVELOPMENT AGENCY OF THE TOWN OF DANVILLE WHEREAS, the California state legislature enacted Assembly Bill x1 26 (the "Dissolution Act ") to dissolve redevelopment agencies formed under the Community Redevelopment Law (Health and Safety Code Section 33000 et seg .); and WHEREAS, on January 10, 2012 and pursuant to Health and Safety Code Section 34173, the Town Council of the Town of Danville (the "Town Council ") declared that the Town of Danville, a municipal corporation (the "Town "), would act in a special limited capacity as successor agency (the "Successor Agency ") for the dissolved Community Development Agency of the Town of Danville (the "Dissolved CDA "), effective February 1, 2012; and WHEREAS, on February 1, 2012, the Dissolved CDA was dissolved pursuant to Health and Safety Code Section 34172; and WHEREAS, the Dissolution Act provides for the appointment of an oversight board (the "Oversight Board ") with specific duties to approve certain Successor Agency actions pursuant to Health and Safety Code Section 34180 and. to direct the Successor Agency in certain other actions pursuant to Health and Safety Code Section 34181; and WHEREAS, the Dissolution Act requires that the Successor Agency prepare and the Oversight Board approve a Recognized Obligation Payment Schedule setting forth all "Enforceable Obligations" (as defined in Health & Safety Code Section 34171(d)) of the Dissolved CDA; and WHEREAS, the Dissolution Act generally provides that (with exceptions) agreements between the Dissolved CDA and the Town are not Enforceable Obligations, but Health & Safety Code Sections 34178(a) and 34180(h) authorize the Successor Agency and the Town, with Oversight Board approval, to reenter into such agreements; and WHEREAS, on December 7, 1987, the Town and the Dissolved CDA entered into a Cooperation Agreement, as most recently amended and restated as of May 3, 2011 (as so amended and restated, the "Cooperation Agreement "), whereby the Town has made loans to the Dissolved CDA (collectively the "Town Loan ") in the current outstanding amount (including unpaid principal and accrued interest) of $8,063,813 to facilitate implementation of the redevelopment program for the Downtown Redevelopment Project Area by the Dissolved CDA, and the Dissolved CDA agreed to repay the Town Loan with specified interest to the Town in accordance with the terms of the Cooperation Agreement; and WHEREAS, the Dissolved CDA used the proceeds of the Town Loan to make debt payments related to, and to otherwise pay the costs of, public improvements constructed in and of benefit to the Downtown Redevelopment Project Area to eliminate blight, stimulate private sector investment, and achieve the purposes of the Community Redevelopment Law and the Redevelopment Plan for the Downtown Redevelopment Project Area; and WHEREAS, by action of May 1, 2012, the Town Council, acting as the governing board of the Successor Agency, approved and authorized the Successor Agency to reenter into the Cooperation Agreement pursuant to Health and Safety Code Section 34178(a), subject to approval and authorization of such reentry by the Oversight Board pursuant to Health and Safety Code Section 34180(h); WHEREAS, attached to this Resolution as Exhibit A, is a form of Agreement Reentering Into Cooperation Agreement (the "Reentry Agreement ") that would effectuate the reentry into the Cooperation Agreement by the Successor Agency and the Town, subject to Oversight Board approval; and WHEREAS, the accompanying staff report (the "Staff Report ") provides supporting information upon which the actions set forth in this Resolution are based; now, therefore, be it RESOLVED that the Danville Town Council hereby finds, resolves, and determines that the foregoing recitals are true and correct, and, together with information provided in the Staff Report and by the Town staff and the public, form the basis for the approvals, findings, resolutions, and determinations set forth below; and, be it further RESOLVED that the Danville Town Council finds and declares that, for the reasons more fully set forth in the Staff Report, reentry into the Cooperation Agreement by the Town and the Successor Agency is equitable and appropriate and will benefit the local taxing agencies by enabling the Town to receive the intended Town Loan repayments for municipal purposes that will enhance the physical and economic environment within the Town, thereby stimulating private investment and reinvestment and the resulting generation of property tax and other tax revenues of benefit to the local taxing agencies; and, be it further RESOLVED that, pursuant to Health & Safety Code Sections 34178(a) the Danville Town Council hereby approves entering into the Reentry Agreement, in substantially the form attached to this Resolution as Exhibit A, and to execute such other document(s) as are appropriate to effectuate the reentry into the Cooperation Agreement by the Town and the Successor Agency, as such Cooperation Agreement was in effect as of the date of the dissolution of the Dissolved CDA; and, be it further RESOLVED that the Danville Town Council hereby approves and. authorizes Town staff to take any other action necessary to effectuate and implement the validity of the Reentry Agreement and the reentered Cooperation Agreement, including but not PAGE 2 OF RESOLUTION NO. 64-2012 limited to, seeking approval of the Reentry Agreement by the Oversight Board to the Successor Agency and listing the Reentry Agreement/ reentered Cooperation Agreement in all Recognized Obligation Payment Schedules prepared by the Successor Agency to meet the requirements of the Dissolution Act; and, be it further RESOLVED that the Danville Town Council hereby determines that the Reentry Agreement and the resulting reentered Cooperation Agreement, constitute "enforceable obligations" and "recognized obligations" for all purposes of the Dissolution Act; and, be it further RESOLVED that nothing in this Resol other manner affect the right or ability initiate and prosecute any litigation arrangement between the Town and the any litigation contesting the purported pursuant to the Dissolution Act. ztion shall abrogate, waive, impair or in any of the Town, as a municipal corporation, to with respect to any agreement or other Dissolved CDA, including, without limitation, invalidity of such agreement or arrangement APPROVED by the Danville Town Council at a regular meeting on May 1, 2012, by the following vote: AYES Andersen, Arnerich, Doyle, Stepper, Storer NOES: None ABSTAIN: None ABSENT: None -A MAYOR APPROVED AS TO FORM: &69!� I. ]�r� - CITY ATTORNEY ATTEST: CITY CLERIt 'PAGE 3 OF RESOLUTION NO. 64-2012 Exhibit A REENTRY AGREEMENT A -1 AGREEMENT REENTERING INTO COOPERATION AGREEMENT This Agreement Reentering into Cooperation Agreement ( "Agreement ") is entered into this day of 2012 by and between the Town of Danville, a municipal corporation ( "Town ") and the Town of Danville acting in its capacity as the Successor Agency to the former Community Development Agency of the Town of Danville ( "Successor Agency "). WHEREAS, on December 7, 1987, the Town and the Community Development Agency of the Town of Danville (the "Community Development Agency ") entered into a Cooperation Agreement, as most recently amended and restated as of May 3, 2011 (as so amended and restated, the "Cooperation Agreement "), whereby the Town has made loans to the Community Development Agency (collectively the "Town Loan ") in the current outstanding amount (including unpaid principal and accrued interest) of $8,063,813 to facilitate implementation of the redevelopment program for the Downtown Redevelopment Project Area by the Community Development Agency, and the Community Development Agency agreed to repay the Town Loan with specified interest to the Town in accordance with the terms of the Cooperation Agreement; and WHEREAS, a copy of the Cooperation Agreement is attached to this Agreement as Exhibit A; and is incorporated in this Agreement by this reference; and WHEREAS, the Community Development Agency used the proceeds of the Town Loan to make debt payments related to, and to otherwise pay the costs of, public improvements constructed in and of benefit to the Downtown Redevelopment Project Area to eliminate blight, stimulate private sector investment, and achieve the purposes of the California Community Redevelopment Law and the Redevelopment Plan for the Downtown Redevelopment Project Area; and WHEREAS, on February 1, 2012, pursuant to AB1x 26 (the "Dissolution Act "), the Community Development Agency, along with all redevelopment agencies in the State of California, was dissolved; and WHEREAS, pursuant to Health & Safety Code Section 34173, the Town elected to act as the Successor Agency, and all assets and obligations of the Community Development Agency were transferred by operation of law to the Successor Agency as of February 1, 2012; and WHEREAS, the Dissolution Act creates an oversight board for each Community Development Agency to oversee the wind down of the Community Development Agency ( "Oversight Board "); and WHEREAS, the Dissolution Act requires that the Successor Agency prepare and the Oversight Board approve a Recognized Obligation Payment Schedule setting forth all "Enforceable Obligations" (as defined in Health & Safety Code Section 34171(d)) of 1020\01\1 136968.1 the Community Development Agency. The Dissolution Act generally provides that agreements between the Community Development Agency and the Town are not Enforceable Obligations, but Health & Safety Code Sections 34178(a) and 34180(h) authorize the Successor Agency and the Town, with Oversight Board approval, to reenter into such agreements; and WHEREAS, at its May 7, 2012 meeting, the Oversight Board authorized the Successor Agency to reenter into the Cooperation Agreement with the Town; and WHEREAS, the Town and the Successor Agency have determined that reentering into the Cooperation Agreement is in the best interests of the Town and the Successor Agency. NOW, THEREFORE, IT IS AGREED AS FOLLOWS: 1. The foregoing recitals are true and correct, and are hereby incorporated by reference and made part of this Agreement. 2. The Successor Agency and the Town hereby agree to reenter into the Cooperation Agreement under the terms and conditions set forth in the Cooperation Agreement, such reentry being evidenced by execution of this Agreement by the Successor Agency and the Town; provided, however, all references in the Cooperation Agreement to the "Community Development Agency of the Town of Danville" or "Agency" shall be deemed to refer to the Successor Agency. 3. The Town and the Successor Agency agree that notwithstanding anything set forth in the Cooperation Agreement, with approval of the Oversight Board, the Successor Agency can prepay up to the full amount owed under the Cooperation Agreement at any time without penalty. 4. In executing this Agreement and reentering into the Cooperation Agreement, the Town is acting in its capacity as a municipal corporation, while the Successor Agency is acting in its capacity as the successor to the former Community Development Agency; and both the Town and the Successor Agency are acting pursuant to the specific authority granted by the Oversight Board and by Health & Safety Code Sections 34178(a) and 34180(h) authorizing agreements between the Town and the Successor Agency. In consequence, the parties to this Agreement and the Cooperation Agreement are not merged. 5. Nothing in this Agreement shall be deemed to invalidate or amend the terms of the Cooperation Agreement. The Cooperation Agreement shall remain in full force and effect according to its original terms, notwithstanding those provisions of the Dissolution Act regarding Enforceable Obligations. 2 IO20\01\1 136968.1 6. If any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining portions hereof, shall not in any way be affected or impaired thereby. 7. This Agreement shall take effect from and after the date of execution of this Agreement by the parties; provided, however, that nothing in this Agreement or the execution hereof shall in any way affect the date of execution of the Cooperation Agreement that is reentered between the Successor Agency and the Town pursuant to this Agreement. 8. The parties shall execute any other documents or instruments deemed appropriate to effectuate the reentry by the Successor Agency and the Town into the Cooperation Agreement as contemplated by this Agreement. IN WITNESS WHEREOF, this Agreement has been executed by the parties hereof as of the date first written above. TOWN OF DANVILLE, a municipal corporatio By: Mayor ATTEST: City Clerk APPROVED AS TO FORM: City Attorney 3 1020 \01 \1136968.1 TOWN OF DANVILLE, ACTING IN ITS CAPACITY AS SUCCESSOR AGENCY OF THE COMMUNITY DEVELOPMENT AGENCY OF THE TOWN OF DANVILLE ATTEST: City Clerk APPROVED AS TO FORM: City Attorney Mayor 4 1020 \01 \1136968.1 EXHIBIT A COOPERATION AGREEMENT 1020 \01 \1136968.1 A -1 FOURTH AMENDMENT AND RESTATEMENT OF THE COOPERATION AGREEMENT BETWEEN THE TOWN OF DANVILLE AND THE COMMUNITY DEVELOPMENT AGENCY OF THE TOWN OF DANVILLE This fourth amendment and restatement of the Cooperation Agreement between the Town of Danville (the "Town") and the Community Development Agency of the Town of Danville (the "Agency ") is effective as of May 3, 2011. Recitals A. Acting pursuant to the provisions of the California Community Redevelopment Law (Health and Safety Code Section 33000 et seq.), the Town created the Agency and adopted the Redevelopment Plan for the Downtown Redevelopment Project (the "Redevelopment Plan") in 1986. B. The Redevelopment Plan provides authority for the Town and the Agency to cooperatively take action to eliminate blight within the downtown redevelopment area. C. On December 7, 1987, the Town and the Agency, acting to implement provisions of the Redevelopment Plan, entered into a Cooperation Agreement. The Cooperation Agreement provides, in part, that the Town may advance or expend funds on behalf of the Agency related to implementation of the Redevelopment Plan, including the acquisition of land, construction of public improvements and debt financing. Any such advances by the Town may later be reimbursed by the Agency. D. Since adoption of the Redevelopment Plan, the Town has assisted the Agency by paying for the installation of infrastructure and public improvements within the Project Area that assist in the elimination of blight. E. Prior to 2001, the Town, the Agency, the Danville Civic Improvement Corporation and the Danville Financing Authority participated in several debt financings in order to pay for acquisition of land and construction of public improvements consistent with elimination of blight as set forth in the Redevelopment Plan. All of these financings were structured so that the Agency would ultimately be responsible for all debt service payments out of the Agency's tax increment revenues. The financings also contained provisions that in the event the Agency was unable to make payments, the Town would assume responsibility for such payments, subject to reimbursement by the Agency. Those financings have been defeased or refinanced. F. The Town, the Agency and the Danville Financing Authority are participants in two outstanding debt financings: the 2001 Certificates of Participation for $6,700,000 (Capital Improvement Refinancing Project) and the 2005 Certificates of Participation for $5,600,000 (Capital Improvement Project). Both of these financings are subject to Reimbursement Agreements in which the Agency agreed to reimburse the Town for all lease payments made pursuant to the Certificates of Participation. In addition, the Agency issued and is responsible for payment of the 2001 Taxable Revenue Bonds for $3,570,000 (Downtown Redevelopment Project Housing). The Agency's obligation to pay for all three of these financings have priority over this Cooperation Agreement and are not included within the scope of this Agreement. G. In order to provide the Town with greater certainty in future budgets, the Town and the Agency desire to establish a repayment schedule from the Agency to the Town for monies owed pursuant to this Agreement. H. The total amount of tax increment which the Agency is entitled to receive pursuant to the Redevelopment Plan is capped at a fixed dollar amount. Based on projections of future tax increment to be received, the Agency has determined that increment received may hit this numeric cap prior to repayment the last scheduled debt payments, which extend through 2036. In order to adequately plan for this possibility and protect both the Town and the Agency, the Agency will create a "Debt Stabilization Fund" in an amount sufficient to pay for all debt obligations of the Agency. Now, therefore, in consideration of the mutual covenants contained herein, the parties agree as follows: L The Town agrees to provide for the Agency such staff assistance, supplies, technical services and other services and facilities of the Town as the Agency may require in carrying out its functions under the Community Redevelopment Law and the Agency's Redevelopment Plan. Such assistance and services may include the services of Town officers and employees and special consultants. 2. The Town may, but is not required to, advance necessary funds to the Agency or to expend funds on behalf of the Agency for the implementation of the Redevelopment Plan, including but not limited to the costs of any surveys or studies, the costs of acquisition of property within the project area, demolition and clearance of properties acquired, building and site preparation, public improvements and relocation assistance to displaced residential and nonresidential occupants as required by law. These funds expended may include salary and overhead costs incurred by the Town in rendering these services to the Agency. 3. The Town and the Agency agree that as of the effective date of this Third Restatement and Amendment, the amount owed by the Agency to the Town pursuant to this Cooperation Agreement for all prior expenditures is $7,939,372, including accrued interest. Of this total amount, the parties agree that $5,712,684 represents unpaid principal. The parties further agree that this amount shall continue to accrue interest as provided for in Paragraph 6 below. The Agency agrees to repay this amount to the Town pursuant to the payment schedule attached hereto as Exhibit 1 and incorporated into this Agreement by reference. This repayment schedule includes interest accrued as provided for in Paragraph 6 below. To the extent the Agency is unable to make payments as provided for in Exhibit 1 due to state takeaways or other factors beyond the control of the Town and Agency, those unpaid amounts shall be added to remaining payments. In addition, to the extent funds are available, the Agency, in its discretion, may prepay any of the amount due under this paragraph. 4. At the . end of each fiscal year, the Town shall determine any additional funds subject to reimbursement under this Agreement. For capital improvement projects subject to reimbursement, the Agency's obligation to reimburse the Town shall not arise until the fiscal year in which the Town Council accepts the project as complete. The Agency may reimburse the Town for these expenses from any Agency funds available after the payment of a) annual payments for the 2001 Taxable Revenue Bonds, b) any payments made by the Agency pursuant to the Reimbursement Agreements entered into as part of the 2001 and 2005 Certificate of Participation financings, c) any payments made pursuant to Paragraph 3 above and d) any funds deposited into the Debt Stabilization Fund provided for in Paragraph 5 below. 5. In order to ensure the ability of the Agency to make all future payments required for its existing debt obligations, the Agency shall create a Debt Stabilization Fund (the "Fund "). The Agency shall make deposits into the Fund to the extent any tax increment revenues remain after payment of all outstanding Agency debt payments required by the 2001 Taxable Revenue Bonds, the 2001 and 2005 Certificates of Participation and Paragraph 3 of this Agreement. The total to be placed in this Fund shall be determined by the Agency based upon projections of funds needed to make all future payments. The parties acknowledge that the Town is a direct beneficiary of the Agency's obligation to create and make deposits into the Fund in that such Agency obligation will help to assure that both the Agency's obligations to make future payments required for its other existing debts and to pay the amounts owed to the Town under this Agreement can be satisfied within the limit on the total amount of tax increment the Agency is entitled to receive pursuant to the Redevelopment Plan, as further described in Recital H. 6. Any amounts not reimbursed within the fiscal year due as provided' for in Paragraph 4 and any remaining principal as provided for in Paragraph 3 shall accrue interest for that year at a rate of six percent (6 %). Interest shall not be compounded. 7. As a condition to the purchase of any land for public uses or the installation or construction of any building, facility, structure or other publicly owned improvement which expenditure will be subject to the provisions of this Agreement, both the Agency and the Town must first adopt, in their discretion, the necessary findings required by Health and Safety Code Section 33445. Any Town expenditures will be included in the Town's five -year Capital Improvement Program or be otherwise approved by the Town Council. 8. The obligations of the Agency under this Agreement shall constitute an indebtedness of the Agency incurred in carrying out the Redevelopment Plan and a pledge of property taxes received by the Agency or any successor from the redevelopment project area to repay such indebtedness under the provisions of the Redevelopment Plan, Article XVI, Section 16 of the Constitution of the State of California, and Health and Safety Code Section 33670, or under any applicable constitutional provision, statute, or other provision of law now existing or adopted in the future. 9. This Agreement shall be binding upon and inure to the benefit of the heirs, administrators, executors, successors in interest and assigns of each of the parties to this Agreement, whether by agreement or operation of law. Any reference in this Agreement to a specifically named party shall be deemed to apply to any successor, heir, administrator, executor or assign of such parry who has acquired an interest in compliance with the terms of this Agreement, or under law. 10. If either party breaches any other material provision of this Agreement, the other parry shall first notify the breaching party in writing of the purported breach or failure, giving the breaching party thirty (30) days from receipt of such notice to cure or, if cure cannot be accomplished within thirty (30) days, to commence•to cure such breach, failure, or act. In the event the breaching party does not then so cure within such thirty (30) days, or if the breach or failure is of such a nature that it cannot be cured within thirty (30) days, the breaching party fails to commence to cure within such thirty (30) days and thereafter diligently complete such cure within a reasonable time thereafter but in no event later than one hundred twenty (120) days, then the non - breaching party shall be afforded all of its rights at law or in equity, by taking all or any of the following remedies: (a) terminating in writing this Agreement; and (b) prosecuting an action for damages or specific performance. IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. ATTEST: City Clerk TOWN OF DANVILLE � r ATTEST: Secretary Approved as to Form: COMMUNITY DEVELOPMENT AGENCY OF THE TOWN OF DANVILLE r . ' 7 5. W -4, � .ice /ice /ice' `fie , s . City Attorney EXHIBIT 1 In order to repay the amounts due pursuant to Paragraph 3 of this Agreement, including interest, the Agency agrees to repay the Town pursuant to the following schedule: