HomeMy WebLinkAboutAGENDA REPORT 2000 0301 CC REG ITEM 10BTTEM��• J3. ,�
CITY OF - 40ORPARK, CALIFORNIA
Cif C:iuncil r4eeting
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MOORPARK CITY COUNCIL
AGENDA REPORT
BY: _ _....,._..
TO: Honorable City Council
FROM: John E. Nowak, Assistant City Manager <1�
DATE: 20 February 2000 (Council Meeting of 03/01/00)
SUBJECT: Consider Request for a Subordination Agreement
for Assessment District 92 -1 Loan for Westgate
Plaza (DeeWayne Jones).
BACKGROUND: Dr. DeeWayne Jones has requested that City
subordinate its Deed of Trust for payments related to
Assessment District 92 -1 to assist in refinancing of the
property located on Los Angeles Avenue.
DISCUSSION: Dr. DeeWayne Jones, owner of commercial
property on Los Angeles Avenue, has requested the City
approve subordinating its Deed of Trust related to
repayment of costs associated with Assessment District 92-
1. The assessment was for construction of storm drain
related improvements. The City prepaid the assessment for
properties benefiting from the improvement with the
requirement that the amount paid, plus interest at the LAIF
rate be repaid when a building permit is pulled on the
property. The Westgate Plaza property owes approximately
$275,000 at this time.
Based on the City Attorney's review of the matter, under a
subordination agreement the City's position to recover the
payment is diminished since it would be placed in a second
position. If the property were foreclosed the City would
effectively loose its ability to recover any funds since
the City's Deed of Trust would be eliminated as part of the
foreclosure. The option would be for the City to spend $1.2
million to redeem the loan in order to protect its
$275,000. The option of a personal guarantee was also
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Request for Subordination Agreement
Meeting of 01 March 2000
Page 02
reviewed. It does not appear that the City can be
sufficiently protected in the event of the aforementioned
foreclosure because there is no guarantee against personal
bankruptcy or that sufficient assets are available to cover
the payment amount.
STAFF RECOMMENDATION: Deny the request for a
subordination agreement.
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