AgdaPkt 2012-06-18 Special - Laserfiche WebLink

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6.3. B. - Page 1 RE PO RT To the Honorable Mayor and City Council From the Cit Mana er June 18, 2012 SUBJECT Sale of Bonds pursuant to the Mello-Roos Community Facilities Act of 1982, as Amended (the Act), to Refund the Outstanding City of Redwood City Community Facilities District No. 2000-1 (Pacific Shores Project) Special Tax Bonds, Series 2000A (2000 Bonds) RECOMMENDATION Approve, by resolution, authorization of the issuance of special tax bonds for and on behalf of the City of Redwood City Community Facilities District No. 2000-1 (Pacific Shores Project), and approving other related actions. BACKGROUND The Pacific Shores Project consists of approximately 1.6 million square feet of commercial office space in 10 buildings located on a 106 acre site at the end of Seaport Boulevard. The 2000 Bonds were issued in March 2000 in the amount of $21 million to finance public infrastructure improvements required by the City as a condition to construction of the project. The project is fully developed and is currently approximately 60% owned by a real estate partnership controlled by Starwood Capital Group (Starwood), 20% by a partnership controlled by Shorenstein Properties LLC (Shorenstein) and 20% by a major tenant, Informatica Corp (collectively, the Owners). Starwood and Shorenstein requested that the City undertake a refunding of the Bonds to reduce debt service and realize special tax savings that are passed on to tenants. At the time of the request, Informatica was not an owner of property. Starwood's loans on its Pacific Shores properties came due in January, at which time Starwood was unable to repay the loans as scheduled. Starwood's failure to remain current on its property loans, while not indicative of its ability to make property tax payments, was nonetheless a sufficiently negative credit development that investors were unwilling to purchase refunding bonds. The refunding bond sale was therefore cancelled until such time as Starwood could close a new loan on its Pacific Shores properties. In the intervening time Starwood has sold two of its Pacific Shores properties to Informatica Corp in order to pay down the outstanding principal amount of its loans, has found new lenders, and is scheduled to close on new loans in early June to pay off its existing lenders in full. The refunding for the 2000 Bonds can proceed once Starwood closes its new property loans.