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Res 10-018RESOLUTION NO. 10 -018 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF POWAY, CALIFORNIA, APPROVING: (1) THE SALE OF CERTAIN REAL PROPERTY PURSUANT TO AN AGREEMENT FOR PURCHASE AND SALE BETWEEN THE CITY OF POWAY AND HOMETOWN COMMUNITIES LIMITED PARTNERSHIP; (II) THE MAKING OF A PURCHASE MONEY LOAN BY THE CITY IN CONNECTION WITH THE SALE; (III) THE REPAYMENT OF CERTIFICATES OF PARTICIPATION RELATING TO THE REAL PROPERTY FROM PROCEEDS OF THE SALE; AND (IV) THE REPAYMENT BY THE CITY TO THE POWAY REDEVELOPMENT AGENCY OF CERTAIN PROCEEDS OF THE SALE TO REPAY HOUSING FUNDS PREVIOUSLY EXPENDED BY THE AGENCY IN CONNECTION WITH THE REAL PROPERTY WHEREAS, the City desires to enter into an Agreement for Purchase and Sale and Escrow Instruction ( "Agreement ") with Hometown Communities Limited Partnership ( "Buyer ") substantially in the form that has been negotiated by City staff and executed by the Buyer and which is on file in the City Clerk's Office, which Agreement provides for the conveyance by the City to the Buyer of the Poway Royal Estates Mobilehome Park and rights and personal property relating thereto (the "Property "), the making of certain repairs and replacements by Buyer (the "Project "), and the making by the City of a Ten Million and No /100 Dollars ($10,000,000.00) purchase money loan to the Buyer to be secured by a junior deed of trust on the property, all as described in the Agreement and the exhibits thereto; and WHEREAS, the City also desires to use proceeds of the sale to repay certain financing for the Property; specifically, the Poway Redevelopment Agency (the "Agency') has previously assisted the City in the financing and refinancing of various capital facilities through the execution and delivery on September 21, 1995, of $31,770,000 in initial aggregate principal amount of 1995 Refunding Certificates of Participation (City of Poway 1991 Capital Improvement Project — Poway Royal Mobilehome Park) (the "1995 Certificates "), which advance refunded outstanding 1991 Certificates of Participation (Capital Improvement Project — Poway Royal Mobilehome Park) issued on January 15, 1991 in the initial aggregate principal amount of $28,300,000, and to provide for security for the 1995 Certificates, a site lease and lease agreement, each by and between the City and the Agency, and an assignment agreement, by and between the Agency and the trustee for the 1995 Certificates, were duly recorded on the Property; and WHEREAS, $26,720,000 in aggregate principal amount of the 1995 Certificates are currently outstanding; and Resolution No. 10 -018 Page 2 WHEREAS, in connection with the aforementioned sale of the Property, the City desires to use proceeds of such sale to prepay, redeem, and defease all of the outstanding 1995 Certificates in accordance with the Trust Agreement, dated as of September 1, 1995 (the "1995 Certificates Trust Agreement "), by and among the City, the Agency, and U.S. Bank National Association, as successor trustee (the "Trustee ") to U.S. Bank Trust National Association, successor trustee to Bank of America National Trust and Savings Association, with respect to the 1995 Certificates; and WHEREAS, to facilitate such prepayment, redemption, and defeasance of the outstanding 1995 Certificates with a portion of the proceeds of the sale of the Property, the City Council also desires to approve the form of an Escrow Agreement by and among the City, the Agency, and the Trustee, (the "Escrow Agreement ") the form of which has been presented to this City Council at this meeting and the form of which is on file with the City Clerk; and WHEREAS, to the extent there are any net proceeds of the sale of the Property remaining after the deposit into the escrow fund established by the Escrow Agreement of a sufficient amount of monies from such net sale proceeds to accomplish the prepayment, redemption, and defeasance of the outstanding 1995 Certificates pursuant to the 1995 Certificates Trust Agreement, the City desires to use all or a portion of such remaining net sale proceeds to reimburse the Agency for low- and moderate - income housing fund assistance heretofore provided by the Agency for the Property as set forth herein; and WHEREAS, to the extent additional amounts are required in addition to such remaining net sale proceeds to reimburse the Agency for such low- and moderate - income housing fund assistance heretofore provided by the Agency for the Property, the City wishes to authorize the Director of Administrative Services to use monies on deposit in funds of the City relating to its ownership and operation of the mobile home park comprising the Property (Operating Fund and Capital Reserve Fund) to complete the reimbursement to the Agency, as set forth herein; and WHEREAS, the City Council, acting as the City Planning Commission of the City of Poway has determined that the sale and the renovations and repairs contemplated in the Agreement are consistent with the City's general plan; NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Poway as follows: Section 1 : The City Council finds and determines that the consideration for the real property to be conveyed to the Developer by the Agency pursuant to the Agreement is not less than the fair market value thereof. Resolution No. 10 -018 Page 3 Section 2 : The City Council finds that the sale and the renovations and repairs contemplated in the Agreement (the "Project') are exempt from the provisions of the California Environmental Quality Act (CEQA) for the following reasons: a) CEQA Guidelines (14 Cal Code Regs Secs. 15000 et seq.) Section 15301, Class 1, applies to the repair, maintenance, or minor alteration of existing public or private structures or facilities involving negligible or no expansion of an existing use; and b) CEQA Guidelines Section 15302, Class 2, which applies to the replacement or reconstruction of existing structures and facilities where the new structure will be located on the same site and will have substantially the same purpose and capacity as the structure replaced. The Project is exempt from CEQA for the reasons set forth in the staff report, including that the sale of the Property will not result in any change in the use of the property because of the land use limitation imposed through the City's General Plan and Zoning Ordinances; that the improvements required as terms of the sale agreement constitute repair, maintenance and alteration of existing structures with no expansion of the existing use or capacity; and that the mere disposition of the Property has no possibility of causing a significant effect on the environment because no substantial changes in the existing mobile home park comprising the Property will occur as a result of the disposition. Section 3 : The City Council hereby approves the sale of the Property hereinabove to the Buyer pursuant to the terms and provisions of the Agreement, the purchase money loan by the City contemplated therein, and all of the terms and provisions of the Agreement and the exhibits thereto. Section 4 . The City Council hereby authorizes each of the Mayor and the City Manager (together, the "Authorized Officers "), and the City Clerk, as necessary, to execute the Agreement in substantially the form hereby approved, with such additions thereto and changes therein as may be approved by such officer, all documents contemplated by the Agreement, and any other documents necessary or convenient to effectuate the terms of the Agreement and such other documents or to terminate any documents recorded against title to the Property that are required to be terminated in connection with the sale. Approval of such changes to the Agreement by an Authorized Officer shall be conclusively evidenced by the execution and delivery of the Agreement by any one of the Authorized Officers. Section 5 . The authorization of the sale of the Property is subject to the additional limitation and requirement that the cash proceeds of any such sale be sufficient to redeem and defease all outstanding 1995 Certificates pursuant to the terms of the 1995 Certificates Trust Agreement (including but not limited to the provisions in the 1995 Certificates Trust Agreement regarding application of the amounts in the debt service reserve fund for the 1995 Certificates held by the Trustee, currently approximately $2.4 million, toward the redemption and defeasance of the 1995 Certificates). The City Council hereby directs that in coordination with and upon the sale of the Property, a portion of the proceeds of the sale in an amount sufficient to redeem and defease all outstanding 1995 Certificates shall be applied as required pursuant to the 1995 Certificates Trust Agreement and pursuant to the Escrow Agreement in order to accomplish the redemption and defeasance of all outstanding 1995 Certificates. The form of the Escrow Agreement presented at this meeting, and the redemption and defeasance of the 1995 Certificates pursuant thereto are hereby approved, and each Authorized Officer is hereby authorized for and in the name of the City to execute the Escrow Agreement in substantially the form hereby approved, with such additions thereto Resolution No. 10 -018 Page 4 and changes therein as may be approved by such officers in consultation with Richards, Watson & Gershon, bond counsel ( "Bond Counsel "), Approval of such changes shall be conclusively evidenced by the execution and delivery of the Escrow Agreement by any one of the Authorized Officers. The Authorized Officers, and the City Clerk, and the officers and staff of the City responsible for the fiscal affairs of the City are hereby authorized to execute, acknowledge, and deliver any and all documents required to consummate the redemption and defeasance of all outstanding 1995 Certificates and the transactions contemplated by the Escrow Agreement, including but not limited to, any termination agreements with respect to the financing documents heretofore entered into in connection with the 1995 Certificates which Bond Counsel determines are required to be executed in order to accomplish the redemption and defeasance of the outstanding 1995 Certificates. Section 6 . The total amount to be reimbursed by the City to the Agency for low- and moderate- income housing fund assistance heretofore provided by the Agency for the Property is estimated to be $4,151,411 (including accrued interest), based on a reimbursement date to the Agency that is the same as the currently projected closing date for the sale of the Property of July 14, 2010, with a final amount to be determined by the Director of Administrative Services with interest accrued to the actual reimbursement date (i.e., the actual closing date for the Property) and based on the actual interest earnings rate corresponding to such period (the "Housing Fund Reimbursement "). To the extent there are any net proceeds of the sale of the Property remaining after the deposit into the escrow fund established by the Escrow Agreement of a sufficient amount of monies from such net sale proceeds to accomplish the prepayment, redemption, and defeasance of the outstanding 1995 Certificates pursuant to the 1995 Certificates Trust Agreement, the City also hereby approves the payment of all or a portion of such remaining net proceeds of the Property sale to the Agency toward payment of the Housing Fund Reimbursement. To the extent additional amounts are required in addition to such remaining net sale proceeds to complete the Housing Fund Reimbursement to the Agency, the Director of Administrative Services is hereby authorized to use and transfer monies then on deposit in the funds of the City relating to its ownership and operation of the mobilehome park comprising the Property (specifically, the related Operating Fund and Capital Reserve Fund), in an amount sufficient to complete the Housing Fund Reimbursement to the Agency. The City acknowledges that payment of the Housing Fund Reimbursement to the Agency is necessary to facilitate the sale of the Property by the City to the Buyer, including, upon the Agency's receipt of the Housing Fund Reimbursement, termination of recorded documents relating to the Agency's use of low- and moderate- income housing funds for the Property, and the City authorizes each of the Authorized Officers, or any of them, to execute any documents necessary to remove such recorded documents from title to the Property. Resolution No. 10 -018 Page 5 Section 7 . All actions heretofore taken by the officers and agents of the City with respect to the sale of the Property, the prepayment, redemption, and defeasance of the 1995 Certificates, in connection with or related to the Agreement and the Escrow Agreement, or to effectuate the purposes of this Resolution are hereby approved, confirmed, and ratified. Any document authorized herein to be signed by the City Clerk may be signed by a duly appointed deputy clerk. PASSED, ADOPTED AND APPROVED, by the City Council of the City of Poway, at a regular meeting this 4 th day of May 2010. Don Higginson, Mayor n Troyan, MMC, Giry Clerk Resolution No. 10 -018 Page 6 STATE OF CALIFORNIA ) )SS COUNTY OF SAN DIEGO) I, Linda A. Troyan, City Clerk of the City of Poway, do hereby certify under penalty of perjury that the foregoing Resolution No. 10 -017 was duly adopted by the City Council at a meeting of said City Council held on the 4` day of May 2010, and that it was so adopted by the following vote: AYES: Boyack, Cunningham, Rexford, Kruse, Higginson NOES: None ABSENT: None DISQUALIFIED: None n, MMC, City`Cferk Poway