LOAN AND REPAYMENT AGREEMENT BETWEEN THE
REDEVELOPMENT AGENCY OF THE CITY OF SUNNYVALE
AND THE CITY OF SUNNYVALE
This Agreement, dated December 18, 2003, is by and between the Redevelopment Agency of the City of Sunnyvale (the "Agency") and the City of Sunnyvale (the "City").
RECITALS
WHEREAS, the Agency is vested with the responsibility for formulating and carrying out necessary redevelopment projects within the City; and
WHEREAS, the parties desire to formally contract with the City to provide staff services and resources to the Agency; and
WHEREAS, the Agency agrees to compensate the City for providing such services and resources; and
WHEREAS, the City and the Agency are each ready and willing to assume the relationship described herein.
NOW, THEREFORE, the Agency and the City, for and in consideration of the mutual promises and agreements set forth agree as follows:
1. PURPOSE
The purpose of this Agreement is to establish a mechanism for compensation of specified administrative costs incurred by the City in furtherance of the redevelopment program for the Sunnyvale Redevelopment Project Area (the "Project Area"), as more fully set forth in Section 3. Prior to entering into this Agreement, the City and Agency had accounted for the Agency's debt to the City for administrative costs through annual billings and accountings.
2. TERM OF AGREEMENT
This Agreement shall be in full force and effect for a period beginning as of December 18, 2003 and continue until all obligations of the Agency to the City are satisfied in full accordance with the terms of this Agreement.
3. REIMBURSEMENT FOR CITY ADMINISTRATIVE COSTS
The Agency agrees to compensate the City for all administrative costs incurred by the City after the date of this Agreement in furtherance of the redevelopment program for the Project Area (the "City Administrative Costs") and for unpaid City Administrative Costs incurred after 1985 but prior to the execution of this Agreement and accrued interest thereon. City Administrative Costs may include, but are not limited to, costs to the City for consulting services, legal services, City staff time and other related administrative expenses. The City and Agency shall, at the end of each fiscal year, set forth the amount of such City Administrative Costs incurred by the City for the applicable fiscal year. The Agency shall thereupon become indebted to compensate the City for such City Administrative Costs. This debt shall bear interest at the Applicable Interest Rate (defined in Section 6) beginning on July 1 of the following fiscal year, and shall be repayable as provided in Section 6. As of June 30, 2003, the Agency owes a balance of $11,905,178 to the City for prior City Administrative Costs and accrued interest through June 30, 2003.
4. REPAYMENT OF CITY ADVANCE FOR STREET AND OTHER IMPROVEMENTS
The Agency agrees to repay the City for the One Million Five Hundred Thousand Dollars ($1,500,000) the City loaned to the Agency in FY 2001/2002 for the purpose of construction of street and other improvements in the project area. This debt shall bear interest at 6% beginning on July 1, 2001 and shall be repayable as provided in Section 6.
In addition, if the City makes future capital advances to the Agency, those advances may be made subject to repayment pursuant to this agreement if the Agency and City execute a written memorandum indicating the amount and purpose of the advance, the date of the advance, and that the advance is subject to repayment pursuant to this Agreement.
5. REPAYMENT OF CITY ADVANCES FOR TOWN CENTER MALL PARCELS
The Agency and the City are currently considering actions to revitalize the parcels of property that constitute the Town Center mall. In conjunction with that revitalization, the City may advance funds to the Agency to pay for the costs of rebuilding some of the public parking structures within the Town Center and building other public improvements such as streets, sidewalks and utilities. Any amounts so advanced by the City shall bear interest at the Applicable Interest Rate (defined in Section 6) from the date of the advance until repaid and shall be repayable as provided in Section 6. Any such advance shall be evidenced by a written memorandum executed by the City and Agency indicating the amount and purpose of the advance and the date of the advance.
The advances of the City pursuant to this Section 5 are also subject to the provisions of the First Amended Repayment Contract dated as of May 1, 1977 between the Agency and the City in that the First Amended Repayment Contract provides for Agency repayment to the City of all City expenditures for public parking improvements in the Town Center and for other public improvements in the Project Area. The Agency and City intend that advances made pursuant to this Section 5 after execution of this Agreement shall be repaid in accordance with the terms of this Agreement rather than in accordance with the terms of the First Amended Repayment Agreement.
6. REPAYMENT TERMS; SUBORDINATION
Each repayment obligation of the Agency pursuant to this Agreement shall bear interest at the lesser of (a) eight percent (8%) per year, or (b) the maximum rate permitted by law (the "Applicable Interest Rate") unless otherwise stated. Each such repayment or reimbursement obligation and interest thereon shall be repayable solely from tax increment funds, if any, generated within the Project Area. It is understood that if tax increment funds from the Project Area fail to yield sufficient revenue to pay the repayment or reimbursement obligations of the Agency under this Agreement and interest thereon, the Agency is under no obligation to make such repayment or reimbursement to the extent tax increment funds are insufficient.
It is agreed by the parties hereto that all repayments and reimbursements to the City pursuant to this Agreement are hereby subordinated to any and all payments necessary to satisfy the Agency's obligations in connection with any existing or future bonded indebtedness or obligation which may be incurred by the Agency for the benefit of the redevelopment program or to the extent necessary for any bonded indebtedness for which the Agency has pledged as a security or source of repayment tax increment generated within the Project Area.
7. AMENDMENTS
The Agency may, from time to time, request changes in the scope of the services provided by the City or to the terms and conditions of this Agreement. Such changes, which are mutually agreed upon by and between the City and Agency, shall be incorporated in written amendments to this Agreement.
8. TERMINATION OF AGREEMENT
If the City fails to fulfill in a timely and proper manner its obligations under this Agreement, or if the City violates any of the covenants, stipulations, or provisions of this Agreement, the Agency thereupon shall have the right to terminate this Agreement by providing the City written notification and specifying the effective date of the termination. In such event, all finished and unfinished documents, data, studies, and reports prepared by the City under this Agreement shall, at the option of the Agency, become its property and the City shall be entitled to receive just and equitable compensation deemed by the Agency for any work completed on such documents.
If the Agency fails to maintain its obligation to the City, the City thereupon shall have the right to terminate this Agreement by providing the Agency written notification and specifying the effective date of the termination. In such event, all finished and unfinished documents, data, studies, and reports prepared by the City under this Agreement shall, at the option of the Agency, become its property and the City shall be entitled to receive just and equitable compensation deemed by the Agency for any work completed on such documents.
If any provisions of this Agreement, or the application thereof to any person, party, transaction, or circumstance, is held invalid, the remainder of this Agreement, or the application of such provision to other persons, parties, transactions or circumstances, shall not be affected thereby.
IN WITNESS WHEREOF, the Mayor of the City of Sunnyvale, as authorized by motion of the City Council of the City of Sunnyvale, has executed this Agreement on behalf of the City, and the Executive Director of the Redevelopment Agency of the City of Sunnyvale, as authorized by motion of the Agency, has executed this Agreement on behalf of the Agency.
| ATTEST: |
REDEVELOPMENT AGENCY OF THE CITY OF SUNNYVALE |
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By: |
| Agency Secretary |
EXECUTIVE DIRECTOR, Redevelopment Agency |
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| APPROVED AS TO FORM: |
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| Agency Counsel |
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| ATTEST: |
CITY OF SUNNYVALE |
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By: |
| CITY CLERK, City of Sunnyvale |
MAYOR, City of Sunnyvale |
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| APPROVED AS TO FORM: |
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| City Attorney |
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