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File Number: 12 -311 <br />DISCUSSION AND ANALYSIS <br />Under this Letter of Intent (LOI), the City would loan the District $1,500,000.00,which would be <br />funded by City General Fund reserves. The loan would be subject to a favorable market <br />interest rate as such rates are accessible to the City, a defined pay off term, penalties for late <br />payment, and default provisions for non - payment, all of which would be determined by <br />negotiation, and eventually memorialized in a loan agreement that would be subject to review <br />and approval by the City Council. The District has stated that funds to repay the City loan <br />over the defined term would come primarily from developer impact fees. The City is <br />interested in requiring as a condition of the District's good faith to pay off the loan a $200,000 <br />payment back from the District upon execution of the loan agreement. <br />The parties have also discussed other considerations, including the transfer of a District <br />owned parcel of property near Bancroft School to the City. Such a transaction would include <br />a District appraisal of the property, followed by negotiations for the transfer, which could <br />include buying down the value of the City's loan to the District by the value of the property <br />transferred. <br />If the City Council approves the LOI, and authorizes the City Manager to commence <br />negotiations, the City expects that the San Leandro Unified School District Board of Education <br />will take action in response to the proposed LOI on June 19, 2012. <br />ATTACHMENTS <br />• DRAFT Letter of Intent to Cindy Cathey, Superintendent, San Leandro Unified School <br />District <br />PREPARED BY: Chris Zapata, City Manager; Richard Pio Roda, Assistant City Attorney, City <br />Attorney's Office <br />City of San Leandro Page 2 Printed on 611212012 <br />