TITLE
Recommendation to authorize City Manager to amend the term of the extended 10-Year Key Tenant Loan with Marina Pacifica, LLC, to allow for the elimination of the interest rate. (District 3)
DISCUSSION
On January 24, 2012, the City Council authorized a 10-year extension to amortize a Key Tenant loan (Loan) of $750,000 made to Marina Pacifica, LLC (Attachment A). The Original 15-year Loan, with an interest rate of 10 percent was made in 1997. The Loan extension was contingent upon Marina Pacifica maintaining suitable retail tenants, which generate substantial retail sales tax to the City. Marina Pacifica has since indicated that it is currently spending over $2 million to bring in new tenants that will result in substantial additional sales tax revenue for the City, and in the planning stage to upgrade the southeast end (Pier One side) of the center (Attachment B). As such, Marina Pacifica has requested that the interest rate on the 10-year loan extension be eliminated.
The Key Tenant Loan program is an economic development tool designed to encourage retail development, create jobs, improve sales tax productivity and stimulate private investment in the retail sector of the City’s economy. If approved, except for the elimination of the interest rate, all other terms and conditions of the loan extension will remain the same. Those terms and conditions provide that, in lieu of making monthly loan payments, the borrower will continue to operate the business at a specified location in Long Beach for the term of the loan. If the premises are vacated before the term expires, the borrower owes the entire unamortized Loan balance. If the borrower operates the business for the term of the loan, the loan shall be forgiven. The Loan was funded through Community Development Block Grant (CDBG) Funds. Marina Pacifica is fully compliant with the terms of the loan.
This item was reviewed by Deputy City Attorney Richard F. Anthony on July 16, 2012 and by Budg...
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