REPORT TO COUNCIL AND THE REDEVELOPMENT SUCCESSOR AGENCY
SUBJECT
Title
Adopt a Resolution Approving and Authorizing the Execution of Documents in Connection with the Removal of Property Under the 1998 Facility Lease between the City and the Former Redevelopment Agency of the City of Sunnyvale
Report
BACKGROUND
In March 1998, the City issued its 1998 Parking Facility Certificates of Participation (1998 COPs) to refund the existing debt issued for the Town Center parking facility. The 1998 COPs were secured by a lease of the Town Center parking facility with the Redevelopment Agency (RDA) acting as lessor and the City acting as lessee. The City's lease payments are equal to the debt payments on the 1998 COPS. The lease under the 1998 COPs allows for the removal of the asset and/or substitution of a different asset in its place. The COP documents require that the fair rental value of the new (remaining) leased asset(s) be at least equal to the maximum annual debt service on the 1998 COPs. Generally, municipal borrowers can make this determination if the value of the leased assets is equal to or higher than the amount of debt the assets secure.
On April 6, 1999, Council authorized the removal of what are now parking garages located at 325 and 225 South Taaffe Street (garages across from Macy's and Target) as a leased asset for the 1998 COPs and the substitution of two parcels the City acquired from American Mall Properties (AMP). The two parcels that were substituted consisted of the Macy's surface lot and Penney's surface lot. Upon the substitution, the new assets under the 1998 Facility Lease were the remaining portions of the Town Center parking facility and the Macy's and Penney's parcels. In late 2002, a four-story parking garage was built on the Penney's parcel.
On August 17, 2004, the RDA approved a Disposition and Development and Owner Participation Agreement with Fourth Quarter Properties XLVIII, LLC for redevelopment of the Town Center Mall site (i.e.,...
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