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5:00 P.M. CLOSED SESSION IN CITY HALL BASEMENT LUNCH ROOM/ CONFERENCE ROOM.

a.    Conference with Real Property Negotiator:

Pursuant to Govt. Code �54956.8

Agency Negotiator: Assistant Executive Director/Susan M. Georgino.

Property: Former police block bounded by Olive Avenue, Third Street, Angeleno Avenue and San Fernando Boulevard (except APN 2453-13-010, commonly referred to as the Radio Shack parcel).

Parties With Whom Agency is Negotiating: Mark Buckland of the Olson Company.

Terms Under Negotiation: Possible sale of Agency-owned property.

 

b.    Conference with Real Property Negotiator:

Pursuant to Govt. Code �54956.8

Agency Negotiator: Assistant Executive Director/Susan M. Georgino.

Property: Media City Mall

Parties With Whom Agency is Negotiating: Pan Pacific Properties, Inc.

Terms Under Negotiation: Waiver of Section 6.2 of Site Lease between Pan Pacific Properties, Inc. and the Redevelopment Agency of the City of Burbank.

6:30 P.M.

INVOCATION: Father Chuck Mitchell, St. Jude�s Episcopal Church.

The Courts have concluded that sectarian prayer as part of City Council meetings is not permitted under the Constitution.

FLAG SALUTE:

ROLL CALL:

JOINT PUBLIC HEARING WITH THE CITY COUNCIL AND PUBLIC FINANCING AUTHORITY:

1. ISSUANCE OF UP TO $102.2 MILLION IN BURBANK PUBLIC FINANCING AUTHORITY REVENUE BONDS, 2003 SERIES A (GOLDEN STATE REDEVELOPMENT PROJECT) AND $6 MILLION IN BURBANK PUBLIC FINANCING AUTHORITY REVENUE BONDS, 2003 SERIES B (SOUTH SAN FERNANDO REDEVELOPMENT PROJECT):

Staff requests approval of the proposed resolutions, which authorize the issuance of two Burbank Public Financing Authority Revenue Bonds, 2003 Series A (Redevelopment Agency � Golden State and South San Fernando Projects) to finance redevelopment activities within these project areas, purchase existing 1993 outstanding bonds for the Golden State Project Area, fund debt service reserves, and pay costs of issuance incurred. Staff has identified several projects in relation to both the Golden State and South San Fernando Redevelopment Project Areas. This hearing was originally noticed for December 17, 2002. Due to timing issues and the need for structural considerations, staff requested this hearing be continued to this date.

The proposed financing mechanism is a purchase in lieu of redemption. This mechanism preserves the advantage of maintaining the existing 2024 maturity date related to the 1993 Golden State bonds while the current financial markets offer the advantage of low interest rates. The Authority will call the bonds and continue to hold them as would a bondholder, rather than a traditional defeasance on the December 1, 2003 call date. The collected debt service will be used for debt service for the 2003 revenue bonds. In the case of the Golden State bonds, the savings generated by the Authority will generate additional project funds, anticipated to be up to $4 million, which can be used for any City construction project.

The bonds have been structured so that the first principal payment will be made on December 1, 2003. The average annual gross debt service for the combined Golden State bonds approximate $7 million. The average annual gross debt service for South San Fernando bond approximates $347,000. The Agency�s obligations under the respective Loan Agreements are secured by tax increment of the Golden State Project Area and South San Fernando Project Area.

The current trustee for the 1993 Golden State Tax Allocation Bonds is BNY Western Trust Company. Due to the financial structure of the 2003 bond issuance through the Burbank Public Financing Authority, a determination has been made to remove BNY Western Trust and appoint Wells Fargo Bank as successor trustee.

Recommendation:

Staff recommends that the Financing Authority, Redevelopment Agency and City Council adopt the proposed resolutions related to the Golden State Project Bonds.

1. Adoption of proposed Burbank Public Financing Authority resolution entitled:

A RESOLUTION OF THE BURBANK PUBLIC FINANCING AUTHORITY AUTHORIZING ISSUANCE OF REVENUE BONDS, APPROVING, AND AUTHORIZING AND DIRECTING EXECUTION OF CERTAIN FINANCING DOCUMENTS AND AUTHORIZING AND DIRECTING ACTIONS WITH RESPECT THERETO (GOLDEN STATE PROJECT AREA).

2. Adoption of proposed Redevelopment Agency resolution entitled:

A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF BURBANK APPROVING, AND AUTHORIZING AND DIRECTING EXECUTION OF CERTAIN BOND FINANCING DOCUMENTS RELATING TO THE FINANCING AND REFINANCING OF REDEVELOPMENT ACTIVITIES WITHIN ITS GOLDEN STATE REDEVELOPMENT PROJECT AREA AND AUTHORIZING AND DIRECTING ACTIONS WITH RESPECT THERETO, REMOVING THE TRUSTEE APPOINTED IN CONNECTION WITH THE AGENCY�S GOLDEN STATE REDEVELOPMENT PROJECT TAX ALLOCATION BONDS, 1993 SERIES A, APPOINTING A SUCCESSOR TRUSTEE AND AUTHORIZING AND DIRECTING EXECUTION OF DOCUMENTS NECESSARY IN CONNECTION WITH SUCH REMOVAL AND APPOINTMENT (GOLDEN STATE PROJECT AREA).

3. Adoption of proposed City Council resolution entitled:

A RESOLUTION OF THE COUNCIL OF THE CITY OF BURBANK MAKING FINDINGS WITH RESPECT TO AND APPROVING THE ISSUANCE OF BONDS BY THE BURBANK PUBLIC FINANCING AUTHORITY, APPROVING THE ISSUANCE OF BONDS BY THE REDEVELOPMENT AGENCY OF THE CITY OF BURBANK AND APPROVING THE SALE THEREOF TO THE AUTHORITY (GOLDEN STATE PROJECT AREA).

Staff further recommends that the Financing Authority, Redevelopment Agency and the City Council adopt the proposed resolutions related to the South San Fernando Project Bonds.

4. Adoption of proposed Burbank Public Financing Authority resolution entitled:

A RESOLUTION OF THE BURBANK PUBLIC FINANCING AUTHORITY AUTHORIZING ISSUANCE OF REVENUE BONDS, APPROVING, AND AUTHORIZING AND DIRECTING EXECUTION OF CERTAIN FINANCING DOCUMENTS AND AUTHORIZING AND DIRECTING ACTIONS WITH RESPECT THERETO (SOUTH SAN FERNANDO PROJECT AREA).

5.  Adoption of proposed Redevelopment Agency resolution entitled:

A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF BURBANK APPROVING, AND AUTHORIZING AND DIRECTING EXECUTION OF CERTAIN BOND FINANCING DOCUMENTS RELATING TO THE FINANCING OF REDEVELOPMENT ACTIVITIES WITHIN ITS SOUTH SAN FERNANDO REDEVELOPMENT PROJECT AREA AND AUTHORIZING AND DIRECTING ACTIONS WITH RESPECT THERETO (SOUTH SAN FERNANDO PROJECT AREA).

6. Adoption of proposed City Council resolution entitled:

A RESOLUTION OF THE COUNCIL OF THE CITY OF BURBANK MAKING FINDINGS WITH RESPECT TO AND APPROVING THE ISSUANCE OF BONDS BY THE BURBANK PUBLIC FINANCING AUTHORITY, APPROVING THE ISSUANCE OF BONDS BY THE REDEVELOPMENT AGENCY OF THE CITY OF BURBANK AND APPROVING THE SALE THEREOF TO THE AUTHORITY (SOUTH SAN FERNANDO PROJECT AREA).

2. WAIVER OF LESSOR�S RIGHT OF FIRST REFUSAL PURSUANT TO SECTION 6.2 OF SITE LEASE RELATING TO THE MEDIA CITY MALL:

Pan Pacific Properties, Inc. is in the process of purchasing Center Trusts' assets, which include the Media City Mall project. They are also trying to sell the mall project. As owners, they will also be the Lessee under the Site Lease between the Redevelopment Agency of the City of Burbank (Lessor) and Pan Pacific Retail Properties, Inc. (Lessee) relating to the Media City Mall project.

They have asked that the Agency waive a future right under Section 6.2 of the Site Lease. That section of the Site Lease provides the Agency with a right to refuse a sale of the interest in the site to a prospective purchaser and allows the Agency to then buy the interest. This right does not exist unless the Lessee provides the Agency with written notice of a pending sale. No such notice has been delivered, but the Lessee has requested waiver of this provision to eliminate any potential concerns by prospective buyers.

In November, 1989, the City and Redevelopment Agency entered into a number of transactions with the then developer, Haagen-Burbank Partnership to develop a large commercial/retail/office development. One of those transactions was a ground lease whereby the Agency leased approximately 41.97 acres to the developer for 55 years, with an additional 40 years of possible extensions (to be exercised as four ten-year options). Initially the lease provided for annual base rent payments of $1,000, plus annual payments equal to 50 percent of the project�s Net Operating Income after debt service of the project (the Participating Rent). In October, 1994, the Agency agreed to accept a $10 million payment from the developer in exchange for the termination of the Participating Rent provision. Additionally, the Agency extinguished all approval and consent rights provided to it under the Site Lease.

While the Agency clearly waived any approval rights of potential buyers of the mall, it apparently retained a certain right in Section 6.2 of the lease. That right, referred to as the Right of First Refusal, states that should the Lessee provide the Agency with a notice of a pending sale which includes the purchase price, then the Agency has the right to acquire the property on the same economic terms as those set forth in the sale notice by giving Lessee written notice of its exercise of such rights within 30 days after receipt. When the lease was amended to eliminate any approval rights, it was not clear if the Agency's right to first refusal was eliminated. The genesis of the involvement of the Agency in a sales transaction was to eliminate Agency approval prior to a sale of the interest. The lease provides that no approval is needed if four things are met by the Lessee, one being the provision of this sale notice to the Agency. In any event, once the sale notice is provided to the Agency, then the Right of First Refusal is triggered.

Due to the uncertainty as to whether or not this provision has been eliminated through the 1994 lease amendment, and due to the fact that the Agency could not afford to purchase the mall at this time, staff is recommending that the Right of First Refusal as discussed in the Site Lease, Section 6.2 be waived. Waiver of this possible right in a transaction by Pan Pacific Properties, Inc. provides additionally clarification of an ambiguous lease provision which any cautious purchaser would require.

RECESS to conclude the City Council meeting.

ADJOURNMENT.