HomeMy WebLinkAbout80A - BOWERS MUSEUM JOINT
REQUEST FOR
COUNCIL/AGENCY
ACTION
MEETING DATE:
~.
~
CLERK OF COUNCIL USE ONLY:
FEBRUARY 6, 2006
TITLE:
APPROVED
o As Recommended
o As Amended
o Ord,nance on 1st Reading
D Ordinance on 2nd Reading
o Implementing Resolution
o Set Public Hearing For
GUARANTY AGREEMENT TO PROVIDE
FINANCIAL ASSISTANCE FOR THE
BOWERS MUSEUM EXPANSION
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CITY MANAGER
?!ieuJuL
EXECUTIVE DIRECTOR
CONTINUED TO
FILE NUMBER
RECOMMENDED ACTION
CITY COUNCIL ACTION/COMMUNITY REDEVELOPMENT AGENCY ACTION
Direct the City Attorney/Agency General Counsel to prepare and authorize
the City Manager and the Executive Director of the Community Redevelopment
Agency to execute and the Clerk of the Council/Agency Secretary to attest
to a Guaranty Agreement between the Community Redevelopment Agency of the
City of Santa Ana, the City of Santa Ana, the Bowers Museum Corporation,
and the East West Bank.
COMMUNITY REDEVELOPMENT AGENCY ACTION
Direct the Agency General Counsel
Director to execute a Repayment
Bowers Museum Corporation.
to prepare and authorize the Executive
Agreement between the Agency and the
DISCUSSION
The Bowers Museum Corporation operates and maintains the City of Santa Ana
owned Charles M. Bowers Museum of Cultural Art pursuant to a 2001 Amended
and Restated Operating Agreement. The Corporation began management of the
Museum on behalf of the City in 1987.
In September 2005, the City Council and the Redevelopment Agency approved
and authorized several actions to facilitate the $14 million expansion of
the Bowers Museum. Commencement of construction of the improvements is
scheduled to begin shortly. Thus far, the Board of Governors of the
80A-1
Guaranty Agreement to Provide Financial
Assistance for the Bowers Museum Expansion
February 6, 2006
Page 2
Bowers Museum Corporation has fundraised over
expansion, but needs additional monies to
construction.
$12 million
completely
toward
fund
the
the
As part of the project financing, East West Bank of San Marino, California
will issue a $4 million stand-by line of credit (LOC) to the Corporation
toward the construction. If the funds are accessed, the Corporation
intends to repay the obligation through continued fundraising. However,
the Bank requires credit enhancement as condition of funding the LOC. The
primary enhancement will come from Bowers Board Chairman Emeritas Donald
Kennedy in the form of a primary $3 million guaranty. The Agency's
assistance will be in the form of an additional $1 million guaranty.
The Agency's asset to secure the funds is the pledgable tax increment
generated by the Merged Redevelopment Project Area. The Agency's guaranty
is subordinate to Mr. Kennedy's guaranty and is necessary to ensure the
expansion and redevelopment of the Museum in that other funds for this
purpose are not reasonably available.
If funds are drawn under the Agency's guaranty, repayment by the
Corporation will be secured by the Corporation's receipts from the City of
Santa Ana under the 2001 Museum Operating Agreement. Up to twenty-five
percent of each year's allocated internal administrative expenses
reimbursed by the City under the operating agreement shall be paid to the
Agency until any guaranty payments are made.
FISCAL IMPACT
There is no immediate
however, the Agency may
payment at some point in
to exceed $1,000,000.
fiscal impact associated with
be required to identify funds
the future to East West Bank in
this action;
and to make
an amount not
etJ
APPROVED AS TO FUNDS AND ACCOUNTS:
patricia C. Whitaker
Executive Director
Community Development Agency
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Francisco Gutierrez f~~
Executive Director ~
Finance and Management Services Agency
PCW/JF/JL/mlr
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