PURPOSE

The purpose of this report is to request Redevelopment Agency approval for a Financing Team as it relates to the potential remarketing of existing Golden State tax allocation bonded indebtedness and purchase in-lieu of redemption of the remaining 1993 Golden State Project Area tax allocation bonds.

BACKGROUND

At the Budget Study Session on May 22, 2003, staff presented three options related to the Golden State Redevelopment Project Area Subordinated Taxable Tax Allocation Bonds which were issued in 1993 in the amount of $25 million.  Staff was directed to proceed with a remarketing of the subordinated debt.

The Golden State Project Area was adopted in October 1970 and includes the Burbank-Glendale-Pasadena Airport and surrounding area adjacent to the Golden State Freeway.  Parcels within this area are comprised of an industrial and commercial nature.  Tax Allocation bonds were most recently issued in 2003 in the amount of $87.265 million.  The 2003 tax allocation bonds were in part issued to purchase in-lieu of redemption $50.24 million of the 1993 tax allocation bonds.  For tax reasons $8.53 million remain outstanding and are eligible to be purchased in-lieu of redemption no earlier than September 1, 2003.  In addition, Golden State Redevelopment Project Area Subordinated Taxable Tax Allocation Bonds were also issued in 1993 in the amount of $25 million.  The subordinated bonds include provisions to remarket the debt.  The potential remarketing of the 1993 subordinated bonds will help to complete needed capital projects such as the Development and Community Services Building.

Due to financing and remarketing issues related to the Golden State Project Area�s outstanding bonded indebtedness it is to the Agency�s benefit to appoint a Financing Team with experience in the issuance of Tax Allocation bonds, as well as familiarity with the Project Area.  Preliminary bond analysis has been undertaken and will assist in resolving the financing challenges which should result in the successful financing of the remaining 1993 tax allocation bonds and the remarketing of the 1993 subordinated bonds. The Financing Team is recommended as follows:

            Peter Ross, Ross Financial                                            Financial Advisor

            Rich DeProspo, E.J. De La Rosa & Co., Inc.               Underwriter

            Brian Quint � Quint & Thimmig, LLP                              Bond Counsel

The Financing Team will also review Golden State�s capacity to issue new bonded indebtedness due to the growth in tax increment before the expiration of Golden State�s ability to issue debt on January 1, 2004.

FISCAL IMPACT

Compensation for the Financing Team will be paid as part of the bond issuance and/or remarketing costs, if bonds are issued and/or remarketed.

RECOMMENDATION

It is recommended that the Agency proceed with the potential remarketing of the 1993 subordinated debt as well as the purchase in-lieu of redemption of the remaining 1993 tax allocation bonds other costs associated with issuance of these bonds and authorize the Financing Team to review the capacity for bonded indebtedness and potential new issuance for the Golden State Project Area.

Adoption of a Resolution authorizing proceedings as it relates to the Golden State Redevelopment Project Area and appointment of the financing team