Ar Restructure Theater Rehab Loan

Claremont

Redevelopment Agency Agenda Report

TO

JEFFREY C PARKER

FROM

ANTHONY WITT COMMUNITY DEVELOPMENT DIRECTOR

DATE

MAY 9 2006

SUBJECT

RESTRUCTURING OF CANDLELIGHT REHABILITATION LOAN REPAYMENT

EXECUTIVE DIRECTOR

PAVILION

DINNER

THEATER

SUMMARY Ben

Bollinger Productions Inc is requesting a change to the terms of a 160 000 business approved by the Claremont Redevelopment Agency on November 14 2000 The loan calls for repayment of 80 000 of the loan principal five years into the ten year loan term which is March 2006 and of the repayment remaining 80 000 of the original principal at the end of the ten year term which is March 2011 retention loan

The

Bollinger family is requesting a restructuring of the 80 000 due this year by making a payment now and amortizing the remaining 55 000 over the next five years at an interest rate of 6 The Bollingers have offered to pledge theater production sets that own as for the 55 000 portion of the loan they security restructured The City being Manager has detailed documentation describing the contents of these sets in his office 25 000 loan

Staff Recommendation Staff recommends that the Agency Board approve the amended terms for the Agency loan to Ben Bollinger Productions Inc and authorize the executive director to execute an amendment to the

promissory

note

ANALYSIS This business retention loan was made at a time when the owner of the surrounding Claremont Inn complex also owner of the theater and building property was in bankruptcy Uncertainty about the future of the site caused the property owner to defer maintenance and resist requests by the dinner theater operators to make repairs in exchange for a long term lease The had deteriorated to a point where serious consideration was property being to given relocating the theater outside of the City The theater used the loan

proceeds was

property or assets offered to pledge over 20 no

refinanced The

These

Bollingers

dollars The

operators

to make the intended

property

renovation

repairs to their business and remain in the City While there pledged as security to the original loan the Bollingers have theater production sets as security for the 55 000 being

are full production sets that are rented to theaters all over the county estimate the value of these sets to be in the hundreds of thousands of

has since been

Group

purchased

sales related t

FOR CITY COUNCIL AGENDA

and the hotel is currently undergoing bus tours that stay at the inn have been

an

extensive

particularly hard ITEM

0

Claremont

Redevelopment Agency May 9 2006 Page 2 of 2 hit

Construction related

disruptions are expected to continue as the entire inn old school complex Restructuring the loan payments will help the dinner theater weather this temporary drop in revenue house

is renovated

FINANCIAL REVIEW The

Agency

has

adequate funds to amortize repayment of the 55 000 that would have as a lump payment Ben Bollinger Productions Inc has made all

otherwise been received

interest payments in accordance with the payment schedule LEGAL REVIEW

The revised loan agreement

was

reviewed and

approved by

the

Agency counsel

PUBLIC NOTICE PROCESS This item has been noticed

through the regular agenda notification process Copies of this report are available at the City Hall public counter Youth Activity Center Alexander Hughes Community Center Claremont Public Library and the City website ALTERNATIVES TO THE STAFF RECOMMENDATION In addition to the staff recommendation

there

are the

following alternatives

1

Do not approve the loan

2

Continue the item and request additional information

Submitted

fuCru W Anthony

restructuring

by

a

W Witt

Brian Desatnik

Community Development Director

Housing

and

Reviewed

Redevelopment Manager

by

rYt Matthew Hawkesworth Finance Manager c

Michael Mick

Bollinger

Vice President General

Manager Candlelight

Pavilion Dinner Theater