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City of San Leandro <br />Meeting Date: January 19, 2016 <br />Staff Report <br />Agenda Section:File Number:15-730 CONSENT CALENDAR <br />Agenda Number:8.D. <br />TO:City Council <br />FROM:Chris Zapata <br />City Manager <br />BY:Cynthia Battenberg <br />Community Development Director <br />FINANCE REVIEW:David Baum <br />Finance Director <br />TITLE:Staff Report for Resolutions of the City Council and the Successor Agency to <br />the Redevelopment Agency of the City of San Leandro Re-Entering Into a <br />Loan Agreement for the Plaza Project Loan with the City of San Leandro <br />SUMMARY AND RECOMMENDATIONS <br />Staff recommends that the City Council and the Governing Body of the Successor Agency to <br />the former Redevelopment Agency of the City of San Leandro approve the Resolutions <br />Reinstating the Loan Agreement and Amending and Restating the Promissory Note for the <br />Plaza Project Loan, with an outstanding balance of $2,299,315, plus interest. <br />BACKGROUND <br />In 2002, the City of San Leandro loaned the Redevelopment Agency of the City of San <br />Leandro $2,887,617.44 for the purposes of carrying out redevelopment activities in the Plaza <br />Project Area (“Plaza Project Loan”). On December 5, 2002, a Promissory Note was executed <br />to acknowledge the loan. On June 21, 2004, Resolution 2004-011 RDA confirmed and <br />codified the loan, which had a remaining balance at the time of $2,569,400.00. <br />On March 7, 2011, in response to a proposal by the State Legislature to eliminate all <br />redevelopment agencies state-wide, the Redevelopment Agency passed Resolution No. <br />2011-006 RDA, which authorized full repayment of the Plaza Project Loan in the amount of <br />$2,137,273.49. Earlier that year, the Redevelopment Agency also made a regularly scheduled <br />debt service payment on the loan of $300,000. Total payments made in 2011 were <br />$2,437,273. <br />In June of 2011, the State Legislature adopted Assembly Bill AB x1 26 (“AB 26”), which <br />caused the dissolution of all redevelopment agencies. AB 26 included a “claw back” provision <br />that retroactively invalidated payments made on City-Agency loan agreements after January <br />1, 2011. On December 12, 2013, the Successor Agency initiated litigation challenging the <br />“claw back” of payments made toward Redevelopment Agency loans after January 2011, as <br />Page 1 City of San Leandro Printed on 1/12/2016