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Home My WebLink AboutRequest from Cal State University San Bernardino PALM DESERT REDEVELOPMENT AGENCY STAFF REPORT REQUEST: REQUEST FROM CALIFORNIA STATE UNIVERSITY, SAN BERNARDINO (CSUSB) APPLICANT: CALIFORNIA STATE UNIVERSITY, SAN BERNARDINO 43-500 MONTEREY AVENUE PALM DESERT, CA 92260 DATE: MAY 10, 2001 CONTENTS: 1) LETTER FROM PETER WILSON DATED DEC. 20, 1999 2) LETTER FROM CSUSB DATED APRIL 30, 2001 3) CSU BOARD OF TRUSTEES AGENDA ITEM Recommendation: By Minute Motion, authorize Staff to discuss the request for loan from the California State University, San Bernardino in the amount of$1,200,000. Executive Summarv: California State University, San Bernardino has requested that the City provide a low interest loan in the amount of$1,200,000 for the completion of the first phase of their facility. Background: At its meeting of October 14, 1999, the Agency Board approved a Disposition and Development Agreement (DDA) to provide CSUSB with land sufficient to build its first phase campus, reserving enough land for a future expansion to a full California State facility. At its meeting of May 7, 1999, the Council discussed concerns from California State University regarding their difficulty in achieving the goal to construct their first phase. This was prior to the DDA approval and concerns from California State University that control of the land was inhibiting their funding campaign. At that time, the Council considered a loan to California 5�tate University to assist in the construction of the first phase. G:IRDA\Maria Hunt\WPDATA\YRIGOYEN\STFRPTS\51001.csu.wpd Staff Report REQUEST FROM CALIFORNIA STATE UNIVERSITY, SAN BERNARDINO (CSUSB) May 10, 2001 Page 2 In a December 20, 1999 correspondence, Peter Wilson announced that California State University had received sufficient pledges to achieve the $9 million target to begin their first phase and that construction would begin immediately. As you can see from the project cost estimate submitted by Peter Wilson on April 30, 2001, the total project cost is now estimated at $10,145,000. California State University currently has $9,159,720 available. The $1,185,230 short fall consists of$985,230 to achieve the estimated $10,145,000 figure plus $200,000 in added enhancements. If the Agency Board authorizes Staff's recommendation, Staff will begin to discuss avenues of funding and terms to memorialize in an eventual agreement. Such agreement will be presented to the Agency Board for approval. Submitted by: ,-��—�'/ Dave Yrig en Director Redevelopment mh Approval: � BY RDA ON �� -�3 i ------._.. �� VERIFIED BY_� , Original on file with City C�rk's OffiCe Executive Director G:\RDA1Maria Hunt\WPDATA\YRIGOYEN\STFRPTS\51001.csu.wpd � . - . � � -�/��_� . -� � The California State Universitv 43-500 Monterey Avenue, Palm Desert CA 92360 (760) 341 2883 • (909) 880 5450 Fax COACHELLA VALLEY CAMPUS ' December 20, 1999 RECEI4/E� Mr. Carlos L. Ortega DEC � '� 1999 Executive Director, Redevelopment Agency PALM DESERT' City of Palm Desert REDEVELOPMEi��kGEMCY 73-510 Fred Waring Drive Palm Desert, CA 92260 Dear Carlos: Friday, December lOth, was quite a day for the Coachella Valley and the future Palm Desert Campus of California State University, San Bernardino. Those that joined us at the Desert Springs Marriott to celebrate the City of Palm Desert's gift of 40 acres upon which to begin a university had no reason to suspect that we were going to complete the capital campaign for the first building at the same time. What a magnificent moment it _ was when President Karnig announced Florence Rigdon's gift of$1 million followed by the Berger Foundation's $4.5 million commitment. These two donations, along with the original pledges of$3 million by the Mary Stuart Rogers Foundation and$500,000 by the Hubbard Foundation, took us to the $9 million target. A groundbreaking date is now being planned. Thank you from all of us at California State University, San Bernardino`s Coachella Valley Campus for being a partner in the future of higher education in the Coachella Valley. Your participation and support means that future generations of students will _ have increased access to Bachelor's and Master's degrees as well as Teaching Credentials right here in the Valley. Carol Adney, Director of Development for the Coachella Valley Campus Campaign, and I look forward to working with you as we raise the money for the second and third buildings. From all of us at the Coachella Valley Campus, have a happy and safe holiday season. We will see you at the beginning of the new millennium. Sincerely, �.Gt� Dr. Peter Wilson Dean Coachella Valley Campus /� CALIFORNIA STATE UNIVERSITY SAN BERNARDINO The Opportunity far the Future � CALIFORNI� STATE UNIVERSITY 43-500 Monterey Avenue, Palm Desert, CA 92260 SeNiflg�12 DLS2ft C�I71fT1Uflltl25 (760) 341 2883 • (909) 880 5450 Fax �.�ve,�� ,, �� Apri130, zooi APR 3 0 20D1 PAl.M DES��T ClT►�HALL CITY�EANAGER Mr. Carlos L. Ortega City Manager City of Palm Desert 73-510 Fred Waring Drive Palm Desert, CA 92260 Dear Carlos: Please accept this letter as a formal request to the City of Palm Desert to provide a loan to the CSUSB Foundation in the amount of$1.2 million. The funds would be used to complete construction of the Phase I building and initial site infrastructure at the Coachella Valley Off- Campus Center located at the property provided to the California State University at Cook Street. Attached is a draft agenda item which has been prepared for the CSU Board of Trustees. The Board requires such finance arrangements be presented to them as an information item. 'The draft includes the project cost estimate, desired terms of the loan, potential sources of funds to service the debt, and a contingency plan for the CSUSB Foundation to repay the loan, should none of the development sources come to fruition. It is our desire to take this item to the Board at its May meeting which occurs on the 15th and 16�'. Should these funds become available to the University, Phase I construction would then likely be completed by the end of this year. The project is already under construction and progressing well. A topping off ceremony has been scheduled for May 9 at 8:30 a.m. I will gladly provide any additional information that you may need. Sincerely, ��/��t.d,�,�.s' Peter Wilson Dean Coachella Valley Campus Cc: President Karnig Vice President DeMauro Vice President Hankin Established by California State University,San Bernardino COMMITTEE ON FINANCE Financing transaction to provide construction funds for the Permanent Coachella Valley Off-Campus Center(CVC) in the City of Palm Desert. Presentation by: Summary This item provides information to the Board of Trustees regarding a construction loan to be entered into by the CSUSB Foundation. The purpose of the loan is to provide a portion of the construction funds needed to complete Phase I of the Permanent Coachella Valley Off-Campus Center. Background The CSU Board of Trustees approved at the May 9-10, 2000 meeting, the Initial Master Plan, Amendment to the Non-State Funded Capital Outlay Program, Schematic Plans for Phase I, and the Final Environmental Impact Report for the initial development at the Coachella Valley Off-Campus Center in the City of Palm Desert. Since that time, the City oFPalm Desert has transfened title of 55 acres of land to the CSU on which the Center is being constructed. The campus has completed the working drawings and has issued a contract to construct site infrastructure and building number 1. The scope of the contract was limited to the amount of cash cunently available from a capital fundraising campaign. In order to complete all of the scope of work identified in the Phase I Project Cost Estimate, additional cash in the amount of$1,185,230 is needed. A financial plan has been devised to produce this cash which consists of a low interest loan from the City of Palm Desert, identified prospects of funds, and a method to repay the loan if none of the prospects were to develop. The City of Palm Desert has indicated that it is willing to provide a loan for$1.2 million to be used for construction funds for this project. The terms of the loan include an interest rate equivalent to LAIF rate(appro�mately 5%), for a period of up to 3 years, no payments required during the 3-year period, no pre-payment penalty, and principal and interest due at the end of 3 years. Several sources of funds have been identified to service the loan. The campaign has produced tlu�ee irrevocable unitrusts currently valued at $1.5 million. These funds will be available to the University once the trusts have matured. The campaign has also produced a number of proposals to private individuals,the Federal government, and foundations. It is recognized that the trusts may not mature within 3 years and that none of the proposals may come to fruition. The CSUSB Foundation Board of Directors have passed a resolution committing revenues from Foundation cash operations to service debt for a loan to repay the City of Palm Desert in 3 years in the event that none of the sources of funds listed above become available. A local bank which has previously provided loans to the University has provided terms and conditions for a loan which are acceptable to the Foundation Board. The Foundation Executive Director has consulted with an attorney about this plan and the attorney has indicated that the plan is legal, contingent upon the approval of the City of Palm Desert City Council and the CSUSB Foundation Board of Directors. ' Project Cost Estimate—Califu.�.ia Construction Cost Indez 3847 Building Cost($178 per gross square foot) $6,511,000 Systems Breakdown (,8'per GSF) a. Substructure(Foundation) $ 7.04 b. Shell(Stiucture and Enclosure) $71.56 c. Interiors(Partitions and Finishes) $2836 d. Services(HVAC,Plumbing,Electrical,Fire Protect) $71.04 Site Development(includes landscaping) $ 1,540,000 Group I Equipment 299,000 Construction Cost $8,350,000 Fees&Contingency 1.795.000 Total Project Cost($277 per gross square foot) 10.145.000 Funds Available Campaign Contributions in Cash $8,014,770 From Pazking Program 500,000 Fmm Student Union Program 322 500 , From CSUSB Foundation(Bookstore) 322,500 Total Cash Available $9,159,770 Balance needed for Phase I 985,230 Highly desirable enhancements 200,000 Additional cash needed $ 1,185,230 Sowce of Funds Interim loan from City of Palm Desert $ 1,200,000 Terms of Loan Period: Up to 3 years Interest: At equivalent of LAIF rate(estimate 5%) Payment: Interest and principal due at end of 3 years. No payments required prior to 3 years. No pre-payment penalty. Estimated principal and interest due at end of 3 years: $1,389,150 Sources of Funds to Service Debt Irrevocable Unitrust(3). Current value: $ 1.5 million Outstanding proposals private in excess of $ 1.5 million Outstanding proposals Federal government $ 1.5 million Contingency Plan Should none of the identified sources of funds develop within the 3-year period of the loan from the City of Palm Desert,the CSUSB Foundation Board has passed a resolution committing the Foundation to acquire a loan to repay Palm Desert. The Foundation would service the loan from cash proceeds earned from commercial operaUons. �05/10/Ol, THU 08:29 FAX 760 776 8255 Ferguson & Bernheimer (�002 -----Original Message----- From: Peter A. Wilson [mailto:pwilson�csusb.edu] Sent: Wednesday, May 09, 2001 11:36 AM To: Jahn CoOk Subject: R�: Indian Wells Advance Dear John, Yesterday I saw George at the Purple Gang breakfast and told him what follows. Juat in case he hasn't spoken wa.th you I'l1 repeat it. While it's possible we'11 continue to pursue my reguest to Indian Wells, right now we're exploring another option. For a variety of reasons that I won't go in to here, the City of Palm Desert has indicated its willingnesa to consider a loan request similar to the one I proposed to your city. Because of our need to move rapidly i have put a formal propasal before the Palm Desert CounciZ. My propoea3. i.s on its agenda for tontorrow, Thursday, May lOth. If the prpposal is approved I'1Z get back to George and you quickly. Pleaee let me know if you have any questions. peter . 1