BURBANK REDEVELOPMENT AGENCY
Tuesday, June 21, 2005
AGENDA
CITY COUNCIL CHAMBER - 275 EAST OLIVE AVENUE
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5:00 P.M. CLOSED SESSION IN CITY HALL BASEMENT LUNCH ROOM/ CONFERENCE ROOM.
Conference with Real Property Negotiator:
Pursuant to Govt. Code � 54956.8
Agency Negotiator: Assistant Executive Director/Susan M. Georgino.
Property: Opportunity Site #6B-Bounded by Magnolia Boulevard, First Street, Orange Grove Avenue and Bonnywood Place (I-5 Freeway). Opportunity Site #7 � Bounded by Magnolia Boulevard, railroad tracks and Olive Avenue � adjacent to the Downtown Burbank Metrolink Station.
Party With Whom Agency is Negotiating: Del Rey Properties, 1036 North Lake Street, Burbank, California 91502.
Name of Contact Person: Maribel Leyland.
Terms Under Negotiation: Sale of City and Agency-owned property located on Opportunity Site 6B and Opportunity Site 7.
When the Agency reconvenes in open session, the Agency may make any required disclosures regarding actions taken in Closed Session or adopt any appropriate resolutions concerning this matter.
6:30 P.M.
INVOCATION: Pastor Paul Clairville, Westminster Presbyterian Church.
The Courts have concluded that sectarian prayer as part of City
Council meetings is not permitted under the Constitution.
FLAG SALUTE:
ROLL CALL:
CONSENT CALENDAR: (Item 1)
The following item may be enacted by one motion. There will be no separate discussion on this item unless a Council Member so requests, in which event the item will be removed from the consent calendar and considered in its normal sequence on the agenda. A roll call vote is required for the consent calendar.
1. PROPOSED REVISIONS TO A COMMERCIAL LOAN AGREEMENT WITH PALLISER FURNITURE, LTD. (EQ3):
The former Book City building is located at 308 North San Fernando Boulevard in the Village District of Downtown and has been vacant for over 18 months. The building is approximately 8,725 square feet and is owned by Palm Avenue Associates. On November 8, 2004, staff received a proposal from Maynard Retail Company, Inc., as a franchisee of EQ3 Franchise Holdings (EQ3), requesting financial assistance for building and tenant improvements under the Downtown Tenant Assistance Program. Maynard Retail Company, Inc. was in negotiations with Palm Avenue Associates to lease this building to open an EQ3 furniture and home accessories store. EQ3 markets itself as a modern, trendsetting furniture and home accessories retailer which combines international design with quality service and affordable value. Palliser Furniture, Ltd., EQ3�s parent company, is one of Canada�s largest furniture manufacturers with over 50 years of manufacturing wholesale experience.
On April 26, 2005, the Redevelopment Agency Board (Board) approved a forgivable loan for $257,800 with Palliser Furniture, Ltd. (on behalf of EQ3) for building and tenant improvements under the Downtown Tenant Assistance Program. Under the terms of the loan agreement, Palliser Furniture, Ltd. is the borrowing entity and guarantor for the Redevelopment Agency�s (Agency) loan. The term of the loan is ten years at a fixed interest rate of the then prevailing prime rate plus two percentage points as of the date the loan agreement was approved (about eight percent).
Since the Agency�s loan was approved, Chris Maynard, of Maynard Retail Company, Inc, as a franchisee of EQ3, has accepted a position with another company in Toronto, Canada. In addition, Palliser Furniture, Ltd. has made a corporate decision to expand future EQ3 stores purely as a franchise network, without Palliser as a corporate partner. In order to help facilitate this proposed transition, Palliser Furniture, Ltd. has agreed to remain as the borrowing entity and guarantor for the Agency�s loan until the building and tenant improvements are completed and the EQ3 store is open for business, subject to receiving Agency approval of a future assignment of the loan agreement to Canuck Holdings (or its subsidiary) as the new EQ3 franchisee and substitution of a new guarantor for the Agency�s loan to Tralee Investments. These future actions would be subject to certain conditions precedent being met. Keyser Marston Associates, the Agency�s financial consultant, has reviewed the financial information for Tralee Investments and determined that the financial documents reflect assets in excess of $20 million, which demonstrates more than sufficient financial resources to guarantee the Agency�s loan of $257,800. All other provisions of the Agency�s loan agreement including the loan terms, repayment and participation payments, design review, prevailing wages and fund disbursement would remain unchanged.
It is recommended that the Board adopt a resolution approving: 1) a future assignment of the loan agreement with Palliser Furniture, Ltd. to Canuck Holdings, LLC (or its subsidiary); and, 2) a future substitution of the guarantor to Tralee Investments.
END OF CONSENT CALENDAR
RECESS to conclude the City Council meeting.
ADJOURNMENT.