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HomeMy WebLinkAboutA20-05Costco reimbursement agmt amend 2SECOND AMENDMENT T O REIMBURSEMENT AGREEMEN T FOR REALIGNMENT OF CALLE JOAQUIN SOUT H THIS SECOND AMENDMENT TO REIMBURSEMENT AGREEMENT FO R REALIGNMENT OF CALLE JOAQUIN SOUTH ("Second Amendment") is made effective a s of ,41) -'.'f7 /',2006, by and between THE CITY OF SAN LUIS OBISPO, a charter cit y and municipal corporation of the State of California (the "City") and COSTCO WHOLESAL E CORPORATION, a Washington corporation ("Costco"). The City and Costco entered into that certain Reimbursement Agreement for Realignment of Calle Joaquin South, dated February 25, 2005, as amended by that certain Firs t Amendment to Reimbursement Agreement for Realignment of Calle Joaquin South, dated Jun e 20, 2006 (collectively, the "Reimbursement Agreement"), pursuant to which the City agreed t o reimburse Costco from collection of fees under the Sub-Area Transportation Impact Fee (TIF ) for costs incurred in connection with the Calle Joaquin Realignment in excess of the Costco Sub - Area TIF . All recitals of the Reimbursement Agreement are incorporated herein by thi s reference . The City proposes to create a financing program within the Los Osos Valley Road sub - area (the "LOVR Sub-Area") that would benefit only newly constructed auto dealerships, or newly constructed additions to existing auto dealerships, located within the LOVR Sub-Are a (collectively, the "Financing Program"). Under the Financing Program, the City would finance up to sixty (60) percent of an y Sub-Area TIF assessed against an auto dealership, as set forth on the program attached hereto a s Exhibit A .The Financing Program may affect the Reimbursement Payment and therefor e requires this Second Amendment . NOW, THEREFORE, in consideration of the mutual covenants herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereb y acknowledged, the City and Costco hereby amend the Reimbursement Agreement as follows : 1.Collection of Sub-Area TIF Fees .The first sentence of Section 3 of the Reimbursement Agreement is revised to read as follows : "At the time the City first issues a building permit or any discretionary permit, approval or license for each Benefited Property afte r the date of this Agreement, the City shall collect the Sub-Area TIF from the owner of suc h Benefited Property, except to the extent that (A) the Sub-Area TIF Credits are applied t o Benefited Properties, or (B) the City accepts in-kind improvements that otherwise would b e funded at some point under the Sub-Area T1F in lieu of Sub-Area TIF fees, or (C) those fees ar e financed pursuant to the Financing Program ." 2.No Modification of Financing Program,The City hereby agrees an d acknowledges that the City is not authorized, without the prior written consent of Costco and it s successors and assigns under the Reimbursement Agreement (A) to modify the terms of th e Financing Program, as set forth on the attached and incorporated Exhibit A,or (B) to alter in an y way, whether by zoning changes, variances or any other process, the area of the Benefite d Properties on which auto dealerships qualified for the Financing Program may be located . 3.Construction of this Second Amendment .Except as expressly modified by th e Second Amendment, the Reimbursement Agreement shall continue in full force and effect . Unless otherwise defined in this Second Amendment, all terms defined in the Reimbursemen t Agreement shall have the same meaning when used in this Second Amendment . 4.Counterpart and Faxed Signatures .This Second Amendment may be execute d in multiple counterparts, each of which shall be deemed a duplicate original, and all of which , taken together, shall constitute one and the same instrument . This Second Amendment may b e executed and delivered by facsimile or email transmission and such facsimile or emai l transmission shall have the same effect as the delivery of original counterparts . THIS SECOND AMENDMENT is executed as of the date and year first above written . ATTEST : CITY OF SAN LUIS OBISP O APPROVED AS TO FORM : Jo n P . Lowell, City Attorney By : %e/20)Jr~4 Mayor David F. Romero COSTCO • Exhibit A LOVR Sub-Area Fee Financing Progra m 1.Limited to Auto Dealers Only .The financing program is limited to the new construction of aut o dealerships (or additions to existing ones) in the LOVR sub-area, in light of the fiscal benefits of thi s type of development and the City's General Plan policy of encouraging auto dealers to locate in thi s area . 2.Financing for 60% of LOVR Sub-Area Fees Only .Only 60% of the LOVR sub-area fees payabl e with respect to any new or expanding auto dealership may be financed under this program ; the balance of the sub-area fee and all other City fees are payable in the full amount due and at the tim e as set forth in the City's standard polices and procedures for assessing and collecting developmen t impact fees . 3.Not a Fee Waiver : Full Amount Due .Sub-area fees are payable in the full amount due under th e City's standard policies and procedures for assessing development impact fees . This is not a waiver of fee amounts, but a program to assist applicants in financing a portion (60%) of their sub-area fees . 4.Ten Year Financing .60% of the LOVR sub-area fees payable with respect to any new or expandin g auto dealership may be financed for up to ten years . At the owner's option, this may be amortize d evenly over the ten year term ; or based on a 25 year amortization schedule, with the remainin g principal balance due and payable at the end of ten years or earlier due date under Sections 6 and 7 below . 5.Interest Rate.The interest rate on any amounts financed under this program during 2006 will be 5%. This represents the City's current yield on its investments . The interest rate will be subject t o adjustment after 2006 for new applicants depending on market conditions at the time, as determine d by the Director of Finance & Information Technology . 6.Payment Due Dates.Debt service payments will be due annually from the date of the loa n agreement . Failure to make payments within thirty days of the due date will constitute a breach o f agreement, and may result, in the City's sole discretion, in calling the note and payment of th e outstanding balance in full . The outstanding principal balance can be paid at any time withou t penalty . 7.Requirement for Early Payment in Full .The outstanding balance on the amount financed will b e due and payable in full within 120 days after approval of plans and specifications, and authorizatio n to solicit bids for LOVR interchange improvements . The City will provide program participants wit h ongoing reports on the status of design and with as much advance notice as reasonable about whe n plans and specifications are likely to be completed and submitted for approval . 8.Security and Appraisal .The amount financed will be secured by a note on the property . The note may in the form of a second trust deed or mortgage, provided that the total amount of debt betwee n the first and second trust deed does not exceed 90% of the property's value, subject to the same valuation basis documentation used by the institutional lender holding the first trust deed, which shal l be made available for review by the City, or other methodology mutually acceptable to the City an d the applicant . 9.Agreement with Property Owner.Agreements will be with the property owner ; however, this deb t may be transferred to new property owners .