LQ & RDA/Washington St. Land Acquisition 06FINANCING AGREEMENT
THIS FINANCING AGREEMENT ("Agreement") is made and entered into this
,5`4 day of N , 2006, by and between the LA QUINTA REDEVELOPMENT
AGENCY, a public body corporate and politic ("Agency"), and the CITY OF LA QUINTA,
a charter city and municipal corporation ("City").
RECITALS
WHEREAS, Agency is a public body, corporate and politic, organized under the
California Community Redevelopment Law (Health & Safety Code § 33000 et seq.); and
WHEREAS, City is a municipal corporation and a charter city of the State of
California organized and existing under the Constitution of the State of California; and
WHEREAS, Agency and City, pursuant to Health and Safety Code Sections 33449
and 33601, are authorized to enter into an agreement to provide for City's loan to Agency to
facilitate the increase of affordable housing opportunities through the Washington Street
Land acquisition transactions; and
WHEREAS, City and Agency mutually desire to enter into this Agreement to set
forth their respective obligations with respect to City providing Agency with loan financing
in the amount up to One Hundred Forty Thousand Dollars ($140,000) to assist Agency in
meeting certain pre -development costs associated with providing affordable housing
opportunities in Agency's Project Area No. 2, with such loan funds to be used by the
Agency to meet the cost of deposits and due diligence studies for the Washington Street
Land acquisition transactions; and
WHEREAS, City and Agency acknowledge that the Washington Street Land
acquisition transactions involve properties outside the City but which are anticipated to be
annexed to the City and that such annexation is a condition to the Agency's close of escrow
for its acquisition of such properties (the "Annexation"); and
WHEREAS, City and Agency further acknowledge that should such Annexation not
occur that City shall forgive and discharge the loan to Agency evidenced by this Agreement
and City shall thus incur the costs for any nonrefundable deposits and any due diligence
costs expended; and
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and promises
hereinafter contained, Agency and City agree as follows:
Section 1. Recitals Incorporated. The foregoing Recitals are incorporated herein
and made a part hereof.
Section 2. City Loan; Interest; Use of Loan Principal. City hereby loans to
Agency the principal amount of up to One Hundred Forty Thousand Dollars ($140,000)
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("Loan Principal") from City General Fund monies ("Loan"). City shall be permitted to
designate one or more accounts from which the Loan Principal shall be disbursed to Agency.
Interest shall accrue on the outstanding Loan Principal at the rate of seven percent (7%) per
annum compounded annually with principal and any unpaid interest due and payable on, or
before, October 31, 2007. The parties may extend the foregoing due date by mutual
agreement. The Loan Principal shall be used only for the cost of deposits and due diligence
studies for the Washington Street Land acquisition transactions. No portion of the Loan
Principal shall be used for any purpose not permitted by the California Community
Redevelopment Law (Health & Safety Code §§ 33000 et seq. as it exists on the date of this
Agreement
Section 3. Repayment. The Loan Principal and the accrued interest shall be
repaid by Agency on or before the date specified in Section 1. Repayments should be
applied first to interest and second to Loan Principal. Repayments shall be made by Agency
from any legally available source. The Agency shall be entitled to repay all or part of the
Loan Principal and accrued interest at any time, including after annexation of the
Washington Street properties, with no other charges, fees, or penalties. There shall be no
prepayment penalty. All amounts due under this Agreement shall be payable at the offices
of the City. Notwithstanding anything in this Agreement to the contrary, should the
Annexation not occur, City shall forgive and discharge the Loan, including accrued interest
thereon, and City shall incur the costs for any nonrefundable deposits and any due diligence
costs expended by Agency from the Loan Principal.
Section 4. Subordination. The repayment of .the Loan Principal and accrued
interest by Agency shall be junior and subordinate to (i) all Agency tax allocation bonds or
other direct long-term indebtedness of Agency, (ii) all pledges by Agency of tax increments for
tax allocation bonds or other direct long-term indebtedness of Agency, (iii) Agency financial
agreements and other contractual obligations of Agency, (iv) any contingent obligations of
Agency, and (v) all statutorily or judicially required or imposed payments, repayments,
charges, fees, penalties, judgments, and the like, whether any of the foregoing in clauses (i)
through (v) are incurred before or after the date of this Agreement.
Section 5. Indebtedness of Agency. The Loan Principal and accrued interest
described in this Agreement shall constitute an indebtedness of Agency.
Section 6. Non -Recourse Obligation. No officer, official, employee, agent, or
representatives of Agency shall be liable for any amounts due hereunder, and no judgment
or execution thereon entered in any action hereon shall be personally enforced against any
such officer, official, employee, agent, or representative.
Section 7. Entire Agreement; Amendments. This Agreement shall constitute the
entire agreement of the parties. This Agreement may be amended or modified only by an
agreement in writing signed by the parties.
[end — signature page follows]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their authorized representatives, as of the date first above written.
"AGENCY"
LA QUINTA REDEVELOPMENT AGENCY
By:
1>0M.
OSB E, thairman
ATTEST:
�o , . h--
DEBORAH H. POWELL, Interim Agency Secretary
APPROVED AS TO FORM:
M. E E JE SON, Agency Counsel
"CITY"
CITY OF LA QUINTA
By: njkVt&j N-"L
DON ADOLPH, Mayor
ATTEST:
DEBORAH H. POWELL, Interim City Clerk
APPROVED AS TO�ORM:
i
M. ItATHHRINE JENS95Iff, City Attorney
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