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City of San Leandro <br />Meeting Date: December 17, 2018 <br />Staff Report <br />Agenda Section:File Number:18-645 CONSENT CALENDAR <br />Agenda Number:8.H. <br />TO:City Council <br />FROM:Jeff Kay <br />City Manager <br />BY:City Attorney and <br />Rich Pio Roda <br />City Attorney <br />FINANCE REVIEW:Not Applicable <br />TITLE:Staff Report for a City of San Leandro City Council Resolution to Approve a <br />General Fund Loan of $455,107.36 and Loan Agreement and Promissory Note, <br />Secured by a Deed of Trust on 2539 Grant Avenue, San Leandro between the <br />City and MTLG, LLC <br />SUMMARY AND RECOMMENDATIONS <br />Staff recommends that the City Council approve a General Fund Loan Agreement, at 2% simple <br />interest per annum, evidenced by a Promissory Note, and secured by a recorded Deed of Trust <br />on 2539 Grant Avenue, San Leandro between the City and MTLG, LLC, for $455,107.36. <br />BACKGROUND and ANALYSIS <br />MTLG, LLC, the “Borrower,” owns real property located at 2539 Grant Avenue, San Leandro, CA <br />94579, APN 80G-910-15 (the “Property”). The Property is 204,732 square feet, flag shaped, and <br />is zoned IG. It is improved with a 13,382 square foot building. A broker’s opinion obtained by the <br />City May 2018 provided a value of between $7,800,000 to $8,100,000. The City believes there is <br />more than enough value in the property to insure repayment of the loan if there is a default. The <br />Property is currently used by Halus Power Systems, a renewable energy manufacturing company <br />(Halus). <br />On April 1, 2013, the City approved Halus’ proposed wind energy conversion project and height <br />variance (“Project”) to be located on the Property. On May 8, 2013, interested persons <br />(“Petitioners”) filed a writ of mandate pursuant to the California Environmental Quality Act <br />(“CEQA”) in Alameda County Superior Court, Case No. RG13677840, alleging that the City, in its <br />regulatory capacity, failed to comply with CEQA and CEQA Guidelines in approving the Project <br />(the “Litigation”). On April 14, 2014, the Alameda County Superior Court entered judgment in <br />favor of the Petitioners, and the court issued a writ of mandate to the City. Thereafter, the court <br />awarded Petitioners’ counsel attorneys’ fees. The City and Halus appealed the award of <br />Page 1 City of San Leandro Printed on 12/11/2018