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Ji CITY OF RIVERSIDE REDEVELOPMENT AGENCY MEMORANDUM Honorable Mayor & Agency Members Date: June 19,2001 Item No.: 5 Subject: Authorize the University Village Center Fifth Implementation and Amendment Agreement- University Corridor/Sycamore Canyon Project Area - Agency Participation with Financing of a Parking Garage for University Village Background On July 25, 2000, the University Village Fourth Implementation Agreement was presented to and approved by the Agency Board. The Implementation Agreement authorized the Agency's participation with financing of a parking garage via a Parking Easement Agreement. The Fourth Implementation Agreement was very precise in identifying the phases of development, letter of credit, Deed of Trust, assessment valuations, parking release payments, just to name a few, in order to secure the Agency's ability to pay the debt obligation of the Parking Easement. Recently, the Developer informed staff that the health fitness facility, identified for Building K, is no longer coming to the Site (see attached Site Map). The Developer also informed staff that they have been successful in securing a viable tenant for Building L, the first ofthe planned office buildings. As you may recall, Building L was anticipated to be built in a much later phase ofthe project. In addition, Building E is scheduled to be under construction by the end of July 200 I. With these changes, staff and Developer have worked together in revising the Agreement. More specifically, the Fifth Implementation Agreement attached hereto. (The Fourth Implementation Agreement was terminated on January 26, 2001.) Current Issue The Fifth Implementation Agreement continues to provide security for the Agency. In fact, the new phasing and development schedule for University Village will produce more development value than previously expected, Building K is now identified as a three-story retail commercial building, with 45,000 square feet. The proposed building is a much larger and more expensive development than previously identified. In addition, the developer has been successful in identifying a viable tenant for Building L, the University of California Riverside (UCR) for purposes of administration offices. UCR's occupancy will allow for construction of Building L on an accelerated basis from the phasing schedule otherwise applicable to this office building. These two changes will, over the long-term, strengthen the tax increment valuation of University Village. The changes have not dramatically affected the scope of the project, or the financing methodology of the parking structure easement. It has, however, changed the intricately woven components of the Agreement. The major changes outlined in the proposed Fifth Implementation Agreement focus around I) Redefining Phase II, IIA, and Ill; 2) Agency's Release of Trust Deed; 3) Warranty Regarding Reporting of Development Costs and Rental Income; 4) Adjustments to the Letter of Credit; and 5) Adjustment to Public-Sector Space Occupancy Limits. For clarity purpose, illustrated below are the changes proposed in the new Agreement: 5-1