For City Council Meeting [January 8, 2019]
TO: Honorable Mayor and City Council
APPROVAL: Ahmad R. Ansari, Interim City Administrator
Sean Grayson, Interim City Administrator
FROM : Robb R. Steel, Assistant CA/Development Services Director
Title
Request City Council to Receive and File the Statement of Income and Expense for November 2018 related to the Construction Loan Agreement with Ayala@210LLC for On-site Improvements for the Renaissance Plaza Retail Center on Renaissance Parkway.
Body
BACKGROUND:
On March 14, 2017, the City Council approved an Option to Purchase and Develop Site Agreement (“PDS Agreement”) by and between the City of Rialto and Ayala@210LLC (“Developer”) for a commercial development known as the Renaissance Plaza on an 8-acre site situated east of Ayala Avenue and north of Renaissance Parkway/Easton Avenue for the proposed Cracker Barrel, Sonic, and hotel (“Project”).
On April 24, 2018, the City Council approved a Purchase and Sale Agreement that replaced the PDS Agreement and a Construction Loan Agreement (CLA) by and between the City of Rialto and Developer for a maximum loan amount of $3,700,000 (“Approved Budget”). The CLA funds the on-site improvements in the Project that includes contractor and consultant costs for grading, asphalt, curb, gutter, and landscaping using City’s General Fund non-operation reserves (“On-Site Improvements”).
On May 25, 2018, the City deposited $3,700,000 with Banner Bank pursuant to Sections 3.2 and 3.3 of the CLA (“Fund”). The deposit represented contributions from the General Fund’s non-operational reserve. Banner Bank will hold the funding for the project, subject to periodic releases by the City to pay for authorized Project related expenses (“Escrow Activity”).
ANALYSIS/DISCUSSION:
The City did not have any expenditures from this Account during November 2018. The City received $151.80 net investment income during November 2018. A detailed income and expense report showing all activity through the month ending November 30, 2018, is included as Exhibit A. The table below summarizes the Escrow Account activity from inception through November 30, 2018:
Total authorized expenditures are $3,700,000. To date, the City has expended $1,227,358.67 with remaining required expenditures of $2,472,641.33. The latest monthly statement from Banner Bank is attached hereto as Exhibit B.
ENVIRONMENTAL IMPACT:
Pursuant to Section 15378 of the California Environmental Quality Act, a “Project’ means the whole of an action, which has a potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment. A Project does not include the creation of government funding mechanisms or other government fiscal activities, which do not involve any commitment to any specific project that October result in a potentially significant physical impact on the environment.
GENERAL PLAN CONSISTENCY:
The proposed action is consistent with the following Guiding Principle of the General Plan:
“Our City government will lead by example, and will operate in an open, transparent, and responsive manner that meets the needs of the citizens and is a good place to do business.”
LEGAL REVIEW:
The City Attorney has reviewed and approved the staff report.
FINANCIAL IMPACT:
The report summarizes various financial transactions of the Construction Loan Agreement with Ayala@210LLC for on-site improvements in the Renaissance Plaza retail center on Renaissance Parkway, each of Ayala Drives (Project # 180706).
RECOMMENDATION:
Staff recommends that the City Council Receive and File the Statement of Income and Expense related to the Construction Loan Agreement with Ayala@210LLC for on-site improvements for the Renaissance Plaza retail center on Renaissance Parkway for the month ending November 30, 2018.