HomeMy WebLinkAboutSA Reso No 2020-006 Summerly TABsRESOLUTION NO. SA 2020-006
A RESOLUTION OF THE SUCCESSOR AGENCY OF THE REDEVELOPMENT
AGENCY OF THE CITY OF LAKE ELSINORE, CALIFORNIA, AUTHORIZING THE
ISSUANCE AND SALE OF THIRD LIEN TAX ALLOCATION BONDS AND
APPROVING THE FORM OF A FIRST SUPPLEMENTAL INDENTURE OF TRUST,
BOND PURCHASE AGREEMENT, CONTINUING DISCLOSURE CERTIFICATE AND
RELATED DOCUMENTS AND AUTHORIZING CERTAIN OTHER ACTIONS IN
CONNECTION THEREWITH
Whereas, the Redevelopment Agency of the City of Lake Elsinore (the “Former Agency”) was a
public body, corporate and politic, duly created, established and authorized to transact business
and exercise its powers under and pursuant to the provisions of the Community Redevelopment
Law (Part 1 of Division 24 (commencing with Section 33000) of the Health and Safety Code of
the State of California) (the “Law”), and the powers of the Former Agency included the power to
issue Bonds for any of its corporate purposes; and
Whereas, a Redevelopment Plan for the Rancho Laguna Redevelopment Project Area No. I (the
“Project Area I”) of the Former Agency was adopted on September 30, 1980, pursuant to
Ordinance No. 607, as subsequently amended in compliance with all requirements of the Law,
and all requirements of law for and precedent to the adoption and approval of the Redevelopment
Plan, as amended, have been duly complied with; and
Whereas, a Redevelopment Plan for the Rancho Laguna Redevelopment Project Area No. II (the
“Project Area II”) of the Former Agency was adopted on July 11, 1983, pursuant to Ordinance
No. 671, as subsequently amended in compliance with all requirements of the Law, and all
requirements of law for and precedent to the adoption and approval of the Redevelopment Plan,
as amended, have been duly complied with; and
Whereas, a Redevelopment Plan for the Rancho Laguna Redevelopment Project Area No. III
(the “Project Area III”; and, together with the Project Area I and Project Area II, the “Project Areas”)
of the Former Agency was adopted on September 8, 1987, pursuant to Ordinance No. 815, as
subsequently amended in compliance with all requirements of the Law, and all requirements of
law for and precedent to the adoption and approval of the Redevelopment Plan, as amended,
have been duly complied with; and
Whereas, pursuant to California Assembly Bill X1 26, which amended provisions of the Law, and
the California Supreme Court’s decision in California Redevelopment Association v. Matosantos,
the Former Agency was dissolved on February 1, 2012 in accordance with California Assembly
Bill X1 26 approved by the Governor of the State of California on June 28, 2011 (as amended,
the “Dissolution Act”), and on February 1, 2012, the Successor Agency of the Redevelopment
Agency of the City of Lake Elsinore (the “Successor Agency”), in accordance with and pursuant
to the Dissolution Act, assumed the duties and obligations of the Former Agency as provided in
the Dissolution Act, including, without limitation, the obligations of the Former Agency under the
Summerly DDA (defined below), the Existing Bonds (as defined in the Indenture, defined below)
and the related documents to which the Former Agency was a party; and
Whereas, the Former Agency previously entered into that certain Amended and Restated
Disposition and Development Agreement by and among the Former Agency, McMillin Summerly
LLC (the “Developer”), and Civic Partners-Elsinore LLC (the “Master Developer”) dated as of
DocuSign Envelope ID: 5FBD91EC-CE43-4A78-BE0B-1C00853F23F4
SA Reso. No. 2020-006
Page 2 of 6
March 8, 2011 (the “Amended and Restated DDA”), and the Successor Agency subsequently
entered into that certain Second Implementation Agreement dated as of January 24, 2017, by
and among the Successor Agency, the Developer and the Master Developer (the “Implementation
Agreement”; and, together with the Amended and Restated DDA, the “Summerly DDA”); and
Whereas, the Summerly DDA, specifically Sections 602.2, 604.2 and 605 of the Amended and
Restated DDA, requires the Successor Agency to make certain payments to the Developer and
the Master Developer, subject to various conditions precedent set forth in the Summerly DDA and
based on calculations described in the Summerly DDA (the “DDA Payment Obligation”); and
Whereas, the DDA Payment Obligation was confirmed by the Successor Agency, the Developer
and the Master Developer in the Implementation Agreement; and
Whereas, the Implementation Agreement also confirms the Successor Agency’s obligation to
issue bonds to finance the DDA Payment Obligation; and
Whereas, the Implementation Agreement was approved by the Oversight Board to the Successor
Agency and by the Department of Finance; and
Whereas, at the request of the Successor Agency, pursuant to Health and Safety Code Section
34177.5(i), the Department of Finance issued a Final and Conclusive Determination dated
November 19, 2017 with respect to the DDA Payment Obligation; and
Whereas, Section 34177.5 of the California Health and Safety Code authorizes the Successor
Agency to undertake proceedings for the issuance of bonds and other indebtedness obligations,
pursuant to Article 11 (commencing with Section 53580) of Chapter 3 of Part 1 of Division 2 of
Title 5 of the Government Code (the “Refunding Law”), subject to the conditions and restrictions
contained in said Section 34177.5; and
Whereas, said Section 34177.5(a)(4) of the California Health and Safety Code expressly
authorizes the Successor Agency to issue bonds to make payments under enforceable
obligations, such as the Summerly DDA, when the enforceable obligations include the irrevocable
pledge of property tax increment and the obligation to issue bonds secured by that pledge; and
Whereas, pursuant to Section 34177.5(a)(4) of the California Health and Safety Code, the
Successor Agency may pledge to the bonds issued to finance an enforceable obligation the
property tax revenues and other funds described in the enforceable obligation, and that pledge,
when made in connection with the issuance of the bonds, shall be valid, binding, and enforceable
in accordance with its terms; and
Whereas, Section 606 of the Amended and Restated DDA sets forth an express pledge of certain
tax increment revenues from the Project Areas to secure the Successor Agency’s DDA Payment
Obligation; and
Whereas, Section 607 of the Amended and Restated DDA requires the Successor Agency to use
reasonable efforts to issue bonds upon the written request of the Developer and/or the Master
Developer to finance the DDA Payment Obligation; and
Whereas, as required by Section 607 of the Amended and Restated DDA, following receipt of
written requests by the Developer and Master Developer, the Successor Agency prepared and
submitted to Developer and Master Developer a proposal to issue bonds to finance the Successor
DocuSign Envelope ID: 5FBD91EC-CE43-4A78-BE0B-1C00853F23F4
SA Reso. No. 2020-006
Page 3 of 6
Agency’s DDA Payment Obligation and the Developer and Master Developer expressly approved
the Successor Agency’s financing proposal in writing; and
Whereas, on March 20, 2018, the Successor Agency issued its Successor Agency of the
Redevelopment Agency of the City of Lake Elsinore (Rancho Laguna Redevelopment Project
Areas No. II and No. III) Third Lien Tax Allocation Bonds, Series 2018A (the “2018A Bonds”) and
the Successor Agency of the Redevelopment Agency of the City of Lake Elsinore (Rancho
Laguna Redevelopment Project Areas No. II and No. III) Third Lien Tax Allocation Bonds, Series
2018B (Federally Taxable) (the “2018B Bonds”; and, together with the 2018A Bonds, the “2018
Bonds”) to finance a portion of the DDA Payment Obligation; and
Whereas, in order to provide moneys to finance an additional portion of the Successor Agency’s
DDA Payment Obligation, the Successor Agency desires to issue its Successor Agency of the
Redevelopment Agency of the City of Lake Elsinore (Rancho Laguna Redevelopment Project
Areas No. II and No. III) Third Lien Tax Allocation Bonds, Series 2020B (the “2020B Bonds”) and
its Successor Agency of the Redevelopment Agency of the City of Lake Elsinore (Rancho Laguna
Redevelopment Project Areas No. II and No. III) Third Lien Tax Allocation Bonds, Series 2020C
(Federally Taxable) (the “2020C Bonds”; and, together with the 2020B Bonds, the “2020 Bonds”);
and
Whereas, the 2020 Bonds will be issued pursuant to and in accordance with the provisions of
Section 34177.5(a)(4) of the California Health and Safety Code, the Law, the Dissolution Act and
the Refunding Law; and
Whereas, the 2020 Bonds, and any additional Parity Debt (defined in the Indenture), will be
payable from Pledged Tax Revenues (as defined in the Indenture) on a parity with the 2018
Bonds, and the pledge of Pledged Tax Revenues to the payment of the principal of and interest
on the 2020 Bonds will, as applicable, be on a basis subordinate to the Successor Agency’s
pledge of specific tax increment revenues to the repayment of the Existing Bonds that remain
outstanding after the issuance of the 2020 Bonds, as well as payments required under the Pass-
Through Agreements and the Statutory Pass-Through Amounts; and
Whereas, the Successor Agency wishes at this time to approve all matters relating to the issuance
and sale of the 2020 Bonds.
NOW, THEREFORE, THE SUCCESSOR AGENCY OF THE REDEVELOPMENT AGENCY OF
THE CITY OF LAKE ELSINORE DOES HEREBY RESOLVE, ORDER AND DETERMINE AS
FOLLOWS:
Section 1. Subject to the provisions of the Indenture (defined in Section 2 hereof), the
issuance of the 2020 Bonds in the aggregate principal amount not to exceed Ten Million Dollars
($10,000,000) on the terms and conditions set forth in, and subject to the limitations specified in,
the Indenture, is hereby authorized and approved. The 2020 Bonds will be dated, will bear interest
at the rates, will mature on the dates, will be issued in the form, will be subject to redemption, and
will be as otherwise provided in the Indenture, as the same will be completed as provided in this
Resolution. The proceeds of the sale of the 2020 Bonds shall be applied as provided in the
Indenture. The 2020 Bonds may be issued from time to time in one or more series, as the
Successor Agency shall determine. The 2020 Bonds shall be issued pursuant to the provisions
of Article 11 of Chapter 3 of Part 1 of Division 2 of Title 5 of the California Government Code (the
“Bond Law”). The approval of the issuance of the 2020 Bonds by the Successor Agency and the
Riverside Countywide Oversight Board shall constitute the approval of each and every separate
DocuSign Envelope ID: 5FBD91EC-CE43-4A78-BE0B-1C00853F23F4
SA Reso. No. 2020-006
Page 4 of 6
series of 2020 Bonds, without the need for any further approval from the Riverside Countywide
Oversight Board. The Authorized Officers (defined below) are hereby authorized to change the
name of the 2020 Bonds to reflect the year in which the 2020 Bonds are issued.
Section 2. The First Supplemental Indenture of Trust in substantially the form submitted at
this meeting and made a part hereof as though set forth in full herein (the “First Supplemental
Indenture;” and, together with that certain Indenture of Trust dated as of March 1, 2018, pursuant
to which the 2018 Bonds were issued, the “Indenture”), is hereby approved. The Chair of the
Successor Agency, the Executive Director of the Successor Agency, the Assistant Executive
Director of the Successor Agency and the Secretary of the Successor Agency are each hereby
authorized and directed to execute and deliver the Indenture in the form presented at this meeting
with such changes, insertions and omissions as may be requested by Bond Counsel and
approved by the Chair, said execution being conclusive evidence of such approval. The
Authorized Officers are expressly authorized to approve revisions to the Indenture to change the
principal payment dates, covenants relating to the recognized obligation payment schedule and
timing of receipt of moneys from the Redevelopment Property Tax Trust Fund.
Section 3. The Successor Agency hereby finds and determines, based on all evidence and
testimony contained in the record, that the Successor Agency has made diligent efforts to ensure
that the lowest long-term cost financing will be obtained for the 2020 Bonds, that the financing
shall not provide for any bullets or spikes and shall not use variable rates, and that the Successor
Agency has retained the Municipal Advisor (defined below) in developing financing proposals and
the Successor Agency shall make the work product of the Municipal Advisor available to the
California Department of Finance at its request under the provisions of Health and Safety Code
Section 34177.5(h).
Section 4. (a) The Bonds may be sold by negotiated sale pursuant to the Bond Purchase
Agreement between the Successor Agency and Stifel, Nicolaus & Company, Incorporated (the
“Underwriter”) with respect to the 2020 Bonds in substantially the form submitted at this meeting
and made a part hereof as though set forth in full herein, and the same is hereby approved. The
Executive Director of the Successor Agency and the Assistant Executive Director of the
Successor Agency are each hereby authorized and directed to execute the Bond Purchase
Agreement in the form presented at this meeting with such changes, insertions and omissions as
may be approved by the Executive Director or the Assistant Executive Director, said execution
being conclusive evidence of such approval; provided, however, that the Bond Purchase
Agreement shall be signed only if the terms of the agreement are consistent with this Resolution
and provide for an Underwriter’s Discount of not to exceed 1.25% of the aggregate principal
amount of the 2020 Bonds. The 2020 Bonds will be sized such that the sum of the portions of
Tax Revenues (defined in the Summerly DDA) that are, or are projected by an independent
financial consultant appointed by the Successor Agency to become, available and that are
pledged for payment to the Developer and Master Developer under the Summerly DDA, will be
sufficient to pay all scheduled debt service on the 2020 Bonds and 2018 Bonds in each year,
through the final maturity thereof.
(b) As an alternative to the sale of the 2020 Bonds through a public offering
authorized in paragraph (a), the 2020 Bonds may be sold on a private placement basis through
Stifel, Nicolaus & Company, Incorporated, acting as private placement agent (the “Private
Placement Agent”), if a private placement of the 2020 Bonds will produce lower interest rates than
are available through a public offering of the 2020 Bonds or is otherwise advisable, in the opinion
of, and upon recommendation of, the Municipal Advisor, which recommendation is agreed to by,
the Executive Director or the Assistant Executive Director, so long as the compensation to the
DocuSign Envelope ID: 5FBD91EC-CE43-4A78-BE0B-1C00853F23F4
SA Reso. No. 2020-006
Page 5 of 6
Private Placement Agent through a private placement of the Bonds does not exceed the
Underwriter’s Discount set forth in Section 4(a) above or such other amount as is approved by
the Executive Director.
Section 5. The Continuing Disclosure Certificate in substantially the form submitted at this
meeting and made a part hereof as though set forth in full herein], and the same is hereby
approved. The Executive Director of the Successor Agency and the Assistant Executive Director
of the Successor Agency are each hereby authorized and directed to execute the Continuing
Disclosure Certificate in the form presented at this meeting with such changes, insertions and
omissions as may be approved by the Executive Director or the Assistant Executive Director, said
execution being conclusive evidence of such approval.
Section 6. The Chair of the Successor Agency, the Executive Director of the Successor
Agency, the Assistant Executive Director of the Successor Agency, the Finance Officer of the
Successor Agency, the Secretary of the Successor Agency, and any other proper officer of the
Successor Agency (the “Authorized Officers”), acting singly, be and each of them hereby is
authorized and directed to execute and deliver any and all documents and instruments, relating
to the 2020 Bonds, and to do and cause to be done any and all acts and things necessary or
proper for carrying out the transactions contemplated by the Indenture, the Bond Purchase
Agreement, this Resolution and any such agreements.
Section 7. Each of the Authorized Officers, acting alone, is hereby authorized to negotiate the
terms of a commitment for a policy of bond insurance and a commitment for a debt service reserve
fund surety bond (each a “Commitment”) from one or more municipal bond insurance companies
(an “Insurer”) and, if such officer determines that the acquisition of an insurance policy and/or a
surety bond from an Insurer will result in net interest rate savings, to pay the insurance premium
for such policy and surety bond from the proceeds of the 2020 Bonds and to approve changes to
the Indenture to the extent necessary to conform to the terms of the Commitments.
Section 8. Wilmington Trust, National Association is hereby appointed as Trustee, Stradling
Yocca Carlson & Rauth, a Professional Corporation is hereby appointed as Bond Counsel and
Disclosure Counsel, Urban Futures, Inc. is appointed as Municipal Advisor, HdL Coren & Cone is
appointed as Fiscal Consultant and Stifel, Nicolaus & Company, Incorporated is hereby appointed
as Underwriter or Private Placement Agent, as applicable.
Section 9. This Resolution shall take effect immediately upon its adoption.
Passed and Adopted on this 14th day of July 2020.
Brian Tisdale, Chair
Attest:
Candice Alvarez, MMC, Secretary
DocuSign Envelope ID: 5FBD91EC-CE43-4A78-BE0B-1C00853F23F4
SA Reso. No. 2020-006
Page 6 of 6
STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE ) ss.
CITY OF LAKE ELSINORE )
I, Candice Alvarez, Secretary of the Successor Agency to the Redevelopment Agency of the
City of Lake Elsinore, California, do hereby certify that Resolution No. SA 2020-6 was adopted
by the Successor Agency of the City of Lake Elsinore, California, at the Regular meeting of
July 14, 2020, and that the same was adopted by the following vote:
AYES: Agency Members Manos, Johnson, and Sheridan; Vice-Chair Magee; and
Chair Tisdale
NOES: None
ABSENT: None
ABSTAIN: None
Candice Alvarez, MMC, Secretary
DocuSign Envelope ID: 5FBD91EC-CE43-4A78-BE0B-1C00853F23F4