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Disposition and Development of 4 October 1, 2001 <br /> Marina]Boulevard Properties <br /> approximately $3.3 million. In order to provide the funding for this cost, and to raise a small <br /> amount of additional redevelopment funds for other project area activities, staff proposes the sale <br /> of approximately $4.3 million of bonds to be repaid from project area tax increment. Over the <br /> next twenty years the Joint Project Area is expected, conservatively, to generate over$20 million <br /> of tax increment revenues after payment of all outstanding DDA obligations. However, due to <br /> the Project Area's financial obligations over the next seven years resulting from DDAs <br /> (including the new agreements with Batarse and Dailey) and the detrimental effect of a <br /> significant downward reassessment of Bayfair Mall, the project area's credit is not currently <br /> strong enough to attract municipal bond investors on a stand-alone basis. t <br /> In order to sell the Agency's bonds at an acceptable rate of interest it will be necessary to back h <br /> the project area's credit with the City's General Fund. This can only be accomplished through <br /> use of a municipal lease in an amount equal to the total project area borrowing. The proposed <br /> subject for the municipal lease is the City's Corporation Yard. The combination of General Fund <br /> lease credit backed by an Agency Reimbursement Agreement may qualify for municipal bond <br /> insurance and the resulting "AAA" credit rating. If not, a stand-alone credit rating of "A-" is <br /> likely. Under either scenario, a bond interest rate of around 5% is likely. <br /> Staff has commenced the process of developing documentation for the financing program and <br /> expects to bring the financing package to the Agency Board/City Council at the October 15 <br /> meeting. The actual bond sale is projected for late October or early November with funds to be <br /> delivered before Thanksgiving. Since the projected closing date for the Yokota Nursery sale is <br /> mid-to-late October, it will be necessary to advance the funds temporarily from City reserves <br /> with reimbursement to occur immediately upon closing the bond sale. <br /> BACKGROUND <br /> Current City Council/Redevelopment Agency Policy <br /> r� <br /> On February 5, 2001, the Council/Agency adopted a resolution stating that eminent <br /> domain would not be used to acquire the Yokota Nursery property. On March 5, 2001, <br /> the Council/Agency extended the policy to the entire auto mall area on Marina <br /> Boulevard. The proposed purchase transaction was negotiated voluntarily. On July 17, <br /> 2001, the Agency Board approved a Purchase and Sale Agreement for the Yokota <br /> property with a 90-day escrow period. <br /> City Council Committee Review and Action <br /> N/A --- <br /> Applicable General Plan Policy <br /> A Finding of Conformance with the General Plan was reviewed and approved by the <br /> Planning Commission on August 9, 2001 (minutes attached). The proposed <br /> redevelopment uses are consistent with the retail/auto mall use allowed in the IG district, <br /> and encouraged by the S-overlay zoning and draft General Plan. <br /> �1 <br />