AgdaPkt 2012-09-10 - Laserfiche WebLink

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6.4.C. - Page 1 RE PO RT To the Honorable Mayor and City Council From the Cit Mana er September 10, 2012 SUBJECT Fee increase for financing team involved in the 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 Special Tax Bonds, Series 2000A RECOMMENDATION Approve, by resolution, authorization for the increase in fees for additional work required in connection with 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). 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. Professional services agreements for the firms structuring the bond sale were approved by Council on December 12, 2011 and a resolution approving the sale of bonds subject to a maximum interest rate, underwriter's discount and bond size was approved on January 9, 2012. The refunding bonds were sold on January 19, 2012 but shortly before the sale was to close the City's disclosure counsel discovered that Starwood failed to timely disclose that it was unable to refinance the loans on its properties as originally scheduled in early January, and that it was then in default on those loans. In light of this new information investors withdrew their purchase offers and the underwriter exercised its right to cancel the bond sale. The reimplementation of a refunding bond sale was postponed until such time as Starwood could close a new loan on its Pacific Shores properties. Starwood subsequently sold two of its Pacific Shores properties to Informatica Corp. in order to