04-13-2004 CC RPT 03 - Laserfiche WebLink

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People Serving People Riverside CITY OF RIVERSIDE HONORABLE MAYOR AND AGENCY MEMBERS DATE: APRIL 13, 2004 ITEM NO: 3 SUBJECT: LOAN AGREEMENT BY AND BETWEEN MAINSTREET COMMUNICATIONS, INC. AND THE REDEVELOPMENT AGENCY OF THE CITY OF RIVERSIDE REGARDING THE REDEVELOPMENT OF PROPERTIES LOCATED AT 4093 MARKET STREET AND 3859 11 TH STREET IN THE MERGED DOWNTOWN/AIRPORT INDUSTRIAl PROJECT AREA - ADDITIONAL APPROPRIATION BACKGROUND: In July, 2003, the Tracy Family Trust acquired existing properties located at 4093 Market Street and 3859 11th Street ("Site") for the purposes of renovation and relocation of the existing PIP Printing Center currently located at 4023 Main Street. The existing Market Street property (former Miller's Outpost property), vacant for more than 15 years, has been a symbol of the redevelopment challenges for the west frontage of Market Street, south of the primary Downtown crossroads location at University Ave., Market St., and Mission Inn Ave. The Tracy family (principal shareholders of Mainstreet Communications, Inc.) have been the owners of the PIP Printing business operation since 1968. The business moved toits present Main Street location in 1972. In 2000, in response to sustained business growth and the need for greater floor area for business operations, an additional nearby space was rented on 10th Street between Main and Market. Mainstreet Communications, Inc. proposes the renovation of the existing 7,200 sq. ft. commercial structure for the relocation of the PIP Printing Center commercial business operations, the renovation and occupancy of the adjacent 3,300 sq. ft. 1925 Craftsman residential structure on 11th Street, and the complete reconstruction of the surface parking lot ("Project"). The scale and extent of renovation work across the entirety of the property exceeds what is financially feasible for the business expansion alone, thereby creating a financing "gap". CURRENT ISSUE: Mainstreet Communications has approached the Redevelopment Agency seeking financial assistance with the costs of renovation of the properties. The total cost of the project (including property acquisition) is estimated at $1,892,756. Negotiations have resulted in the following recommended terms of a Loan Agreement: 1) Mainstreet Communications will complete a full renovation and rehabilitation of the properties located at 4093 Market Street and 3859 11th Street. Mainstreet shall be responsible for obtaining all City approvals, including but not limited to building permits, planning and design approvals. 2) Redevelopment Agency will loan to Mainstreet Communications an amount not to exceed $475,000, at terms as included in that certain Loan Agreement by and between Mainstreet Communications and the Redevelopment Agency of the City of Riverside. If at any time within the term of the Loan Agreement the property is sold/transferred to another party, or if the terms of any other financing agreement applicable to the property is re-financed, the notes with the Redevelopment Agency shall become fully due and payable. 3-1