City Council
MEETING DATE: 5/9/2018
TITLE:
Title
Accept Assignment of Promissory Note from the City Urban Revitalization Corporation
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FROM:
Tami E. Scott, Administrative Services Director
RECOMMENDATION:
Recommendation
Staff recommends the City Council adopt the attached resolution accepting the assignment of a promissory note secured by a deed of trust in the principal amount of $900,000 from the City Urban Revitalization Corporation.
Body
BACKGROUND:
As partial consideration of the sale of the former Desert IMAX/Desert Cinemas building located at 68510 East Palm Canyon to the Coachella Valley Repertory ("CVR"), the City Urban Revitalization Corporation, a public benefit non-profit corporation, (CURC) accepted a 15-year (30-year amortization) promissory note secured by a deed of trust against the property in the principal amount of $900,000. This note accrues interest at the rate of 4.25 % and is for a 15-year term.
DISCUSSION:
CURC's mission is to relieve the burden on local government. In accordance with this mission, CURC has offered to assign this asset, the $900,000 promissory note, to the City of Cathedral City as a donation so that the City might benefit from this income stream. The note is secured by the real property located at 68510 East Palm Canyon, as well as by an assignment of leases and rents, and a Security Agreement and Fixture Filing so in the event of a default, the City as the assignee, would gain ownership of the real estate and its associated assets.
FISCAL IMPACT:
Acceptance of the assignment of the $900,000, 4.25% interest rate, promissory note from CURC, which is currently between CV Rep as the debtor and CURC as the creditor, will provide an on-going revenue stream to the City's General Fund through 2033 unless it is repaid earlier, and in that event, the City will benefit from any early repayment. Under the terms of the note, interest began accruing immediately, but no payments were required the first two...
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