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HomeMy WebLinkAboutMinutes 1984-09-26Chairman Mark N. Addiego Board Members: Emanuele N. Damonte Richard A. Haffey Gus Ni col opul os Roberta Cerri Tegl ia MINUTES Industri al Development Authority Municipal Services Building September 26, 1984 NOTICE IS HEREBY GIVEN, pursuant to Section 54956 of the Government Code of the State of California, that the Industrial Development Authority of the City of South San Francisco will hold a Special Meeting on Wednesday, September 26, 1984~ at 7:00 p.m., in the Municipal Services Buildlng~ Community Room, 33 Arroyo Drive, South San Francisco~ California. Purpose of the meeting: 1. Approval of the Minutes of the Special Meeting of June 27~ 1984 and the Adjourned Special Meeting of July 25~ 1984. Public Hearing - On the question of whether the City Council should approve the proposal to issue not more than $7~000j000 aggregate prlncipa! amount of the South San Francisco Industrial Development Authority Indust.rial Development Revenue Bonds . (Mercedes-Benz of North America Project), pursuant to the provl- slons of the California Industrial Development Financing Act, California Government Code SS91500, et seq., as amended, for the purpose of providing the cost of an industrial development project conslstln~ of the acquisition of a s!te. and a building and. the construction of im. provements an.d additions to. such building for use as a vehicle preparation cen~ter facility for receiving, quality control, repair of damages, wholesale prepara- tion, storage and delivery., and related an.d appurtenance struc- tures, facilities and equipment (the "Project"). The Project will be owned and operated by Mercedes-Benz of North America {the "Company"). It is contemplated that a loan agreement will be entered into between the Issuer and the Company, under which the Issuer would provide the proceeds from the sale of the Bonds to the Company in return for loan payments from the Company sufficient to pay the principal of and interest and premium, if any, on the Bonds as the same fall due. The Project is located at 513 Eccles Avenue in the City of South San Francisco, California 94080. Reference is hereby made to the Application ~n file with the Secretary of the Authority for further particulars. Mark ~.,A~d~o, Chairman/~f the Board Industrial ~evelopment Au~ority City of South San Francisco Dated: September 12~ 1984 AGENDA ACTION TAKEN SPECIAL MEETING CALL TO ORDER SPECIAL MEETING 7:10 p.m. Chairman Addiego presiding. 9/26/84 Page 1 A E N D A A C T I 0 N T A K E N '00001., ROLL CALL AGENDA Approval of the Minutes of the Special Meeting of June 27, 1984 and the Adjourned Special Meeting of July 25, 1984. Public Hearing - On the question of whether the City Council should approve the proposal to issue not more than $7,000,000 aggregate prln- clpal amount of the South San Franclsco Industrial Development Authorlty Industrial Development Revenue Bonds (Mercedes-Benz of North America Project), pursuant to the provisions of the California I ndustrl al Development Fi nancl ng Act~ California Government Code S~§1500, et seq., as amended, for the purpos.e of providing the c. ost of an industr~ al development project consisting of the acquisition of a site and a building and the construction of improvements and additions to such building for use as a vehlcle preparation center fa¢ili~t~/ for recelving~ quality control, repalr of damages, whole- sa1 e.. preparatl on ~ storage and del i- veYy, and related and appurtenance structures, facilities and equipment (the "Project"). The Project will be owned and operated by Mercedes-Benz of North America (the "Company"). It is con- templated t~at a loan agreement will be entered ~nto between the Issuer and the Company, under which the Issuer would provide the proceeds from the sale of the Bonds to the Company in return for loan payments from the Company sufficient to pay the principal of and interest and premium, if any, on the Bonds as the same ~all due. The Project is ~ocated at 513 Eccles Avenue in the City of South San Francisco, Boardmembers present: Boardmembers absent: Nicolopulos; Teglia, Damonte, Haffey and Addiego. None. M/S Haffey/Nicolopulos - To approve the as presented. Carried by unanimous voice vote. Mayor Addlego opened the Public Hear{~g. City Manager Birkelo stated that pre- viously Council had adopted a Resolution of Inducement in relation to the Pro, eat and questions had arisen as to whether the Project would meet State Guidellnes. He continued, once that matter reached preliminary clearance at the State ~evel it was noticed for tonight's Hearing.. He stated that Mr. Jorgen Nielsen, Jones, Hall, Hill & White, had prepared the documentation plus two Resolutions to be adopted by the Agency and the City Council if the two Bodies decided to proceed with the Pro~ect. Mr. Jorgen Nielsen , Bond Counsel; stated that the Public Hearing was in regard to the proposed issuance by the Authority o¢ the maximum principal amount of $7,000,000 in industrial revenue bonds which would be issued for a twelve year term and would be paid for by Mercedes Benz by revenues. He continued, the Public Hearing is required under Federal Tax Law and the City Council is required, if they approve the Project, to adopt a Resolution as the applicable elected authority of the Industrial Development Authority. He stated that the procedure after this Public Hearing, if the Project is approved, was that an application will be filed with the California Industrial Commission and if that Body approved the Project on the basis of public benefit, on the basis of fairness in financing, then it would come back to the Authority for the adoption of Resolutions author- 9/26/84 Page 2 A G E N D A A C T I 0 N T A K E Nv~J~J~ AGENDA Public Hearing - Continued. California 94080. Reference is hereby made to the Application on file with the Secretary of the Authority for further particulars. RESOLUTION AUTHORIZING THE ISSUANCE AMOUNT OF NOT TO EXCEED $7~000~000 PRINCIPAL SOUTH SAN FRANCISCO INDUSTRIAL DEVELOPMENT AUTHORITY 1984 INDUSTRIAL REVENUE BONDS (MERCEDES-BENZ OF NORTH AMERICA PROJECT) AGENDA izing execution of financing agreements, loan agreements. He stated that also before the Body was the bond resolution which was required in order to conduct validation proceedings in Court, validate the ~roposed issuance of the bonds. He continued, the bond resolution would need to be supplemented at a future time with specific provisions such as interest, etc. He stated that the appro- val of this Project and the issuance of the bonds would not in any way diminish the cap that the Authority has in regard to the issuance of the industrial revenue bonds in this year. He stated that the inducement resolution for this Project was adopted prior to the effective date of the recent tax law. Councilman Nicolopulos questioned the benefits to the City in issuance of the bonds. Mr. Nielsen stated that he represented the Authority as bond counsel and that the public purpose would be the retaining of jobs at that facility - some 50+ jobs, and the additional of other jobs over the next two years. City Manager Birkelo stated that that the application indicated 52 current jobs would be retained by this action and the addition of eight more jobs as the Project was completed. Anthony LaSpada, Esq.~ representing Mercedes Benz, stated that the job figures were correct and that the firm was cootemplating spending approximately $7,000,000 in the construction of the addition to the facility which would create addiitonal jobs. Councilman Nicolopulos questioned if there were any other benefits to the City from the Project. Anthony LaSpada, Esq. stated that Mercedes Benz currently had a lease for the facility and had looked at ~lternate sites for the expanded preparation faci- 9/26/84 Page 3 AGENDA 2. AGENDA Public Hearing - Continued. ACTION TAKEN OOOO:l AGENDA lity and wanted to stay in the City of South San Francisco on a long term basis as the owner of the property now leased. Councilman Damonte questioned if there would be promotional sales in South San Francisco. Anthony LaSpada, Esq. stated that the business was exclusively wholesale through the facility, Mr. Neilsen stated that commercial acti- vity is not permitted with the industrial financing agreement - only industrial projects. He stated that the purpose of the construction is to accommodate the increased sales that are anticipated, however no dealerships were anticipated in the future. Councilman Nicolopulos questioned what the interest rate would be. Anthony LaSpada, Esq. stated that the firm was currently negotiating with four bond purchasers and the average interest rate was 64% of the prime rate. Mayor Addiego invited those wishing to speak in favor of issuance of the bonds to step to the podium. Mr. Larry Smith. 670 Commercial Avenue; stated that over the years he had seen the City Council criticized often and applauded not often enough. He took the opportunity to thank the Council for doing a good job and supported the action to be taken and looking out for the City. He stated that the Council saw the job potential and the cash flow to the merchants and citizens. Mayor Addiego invited those wishing to speak in opposition to the issuance of the bonds - no one chose to speak. He then closed the Public Hearing. M/S Damonte/Teglia - To adopt the Resolution. 9/26/84 Page 4 AGENDA ACTION TAKEN AGENDA AGENDA Public Hearing - Continued. RESOLUTION NO. IDA 3-84 Carried by unanimous voice vote. M/S Damonte Teglia - To adjourn the meeting. ADJOURNMENT: RESPECTFULLY SUBMITTED, 'Barbara~A. Battaya, Secretar~.~/ Industrl al Development Authority City of South San Francisco Carried by unanimous voice vote. The meeting was adjourned at 7:25 p.m. APPROVED: 4arkt N.. Add~o, ,th~' Industr~ al [Tevel opment Authorl ty City of South San Francisco The entries of this Authority meeting show the action taken by the Board to dispose of an item. Oral communications, arguments, and comments are recorded on tape. The tape and document~ related to the items are on file in the Office of the Secretary and are available for inspection, review and copying. 9/26/84 Page 5