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File Number: 12-601 <br />neighborhood-serving medical and dental clinics that will be operated by the District and the <br />County in the property serving not only District students, but also the surrounding <br />neighborhood. <br />Several months ago, the City and District agreed to a Letter of Intent that provided the City <br />would loan the District monies to assist in the District’s efforts to secure the grant funds , and <br />purchase the Girls, Inc. property. The City and District negotiated the terms, and the City <br />drafted a Loan Agreement , evidenced by a promissory note. Staff recommends that the City <br />Council approve the Loan Agreement and form of the promissory note . <br />DISCUSSION AND ANALYSIS <br />Under the loan agreement, evidenced by a promissory note, the City will loan the District <br />$1,250,000 from City General Fund reserves. The loan would be subject to 1.5% interest for <br />the first 3 years, 3% interest for the next 7 years and 5% interest for the final 5 years of the 15 <br />year term; there are strict default provisions that would accelerate all loan monies to come <br />due if a non-payment, late payment or other default by the District occurs. The City will have <br />no maintenance, insurance or upkeep responsibilities for the property to be purchased. <br />ATTACHMENT(S) <br />·Final draft of Loan Agreement and Promissory Note <br />PREPARED BY:Chris Zapata, City Manager; <br />Richard Pio Roda, Assistant City Attorney , City Attorney’s Office <br />Page 2 City of San Leandro Printed on 1/30/2013