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Resolution No. 7063 1 RESOLUTION NO. 7063 2 3 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VERNON APPROVING THE LOAN APPLICATION SUBMITTED BY KRONFLI SPUNDALE MILLS, INC. PURSUANT TO THE 95-EDBG-390 VERNON INFRASTRUCTURE LOAN PROGRAM 4 5 6 WHEREAS, Kronfli Spundale Mills, Inc. submitted an 7 application for funding of offsite improvements in the amount of 8 One Hundred Forty-three Thousand Two Hundred Thirty-two Dollars 9 and No Cents ($143,232.00); and 10 WHEREAS, said applicant and project are eligible to 11 participate in the 95-EDBG-390 Vernon Infrastructure Loan Program 12 (lithe Program") in accordance with the Grant Guidelines as 13 submitted to and approved by the State; and 14 WHEREAS, the city Council recognizes the importance of 15 the Public Benefit that is to be accomplished by approving this 16 loan; and 17 WHEREAS, the City Council has reviewed the Credit Memo 18 and Loan Recommendations thereto; and 19 WHEREAS, the Director of Community Services has 20 recommended that the City Council find that this project is 21 Categorically Exempt under the California Environmental Quality 22 Act (Class 1--Minor Alterations to Land) and Categorically 23 Excluded under the National Environmental Policy Act (24 C.F.R. 24 Part 58.34(a) (12)--Replacement of utility Lines and Curb and 25 Gutter); and 26 WHEREAS, the City Administrator, acting on the advice of 27 the City's Loan Advisory Committee, has recommended approval of 28 the application. 1 NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF 2 THE CITY OF VERNON AS FOLLOWS: 3 SECTION 1: The City council of the City of Vernon 4 hereby finds and determines that the recitals contained 5 hereinabove are true and correct. 6 SECTION 2: The City Council finds and determines that 7 this project is Categorically Exempt under the California 8 Environmental Quality Act (Class l--Minor Alterations to Land) and 9 categorically Excluded under the National Environmental Policy Act 10 (24 C.F.R. Part 58.34(a) (12)--Replacement of utility Lines and 11 Curb and Gutter). 12 SECTION 3: The loan application submitted by Kronfli 13 Spundale Mills, Inc. is hereby approved, a copy of which has been 14 presented to the City Council concurrently with this resolution. 15 SECTION 4: The City Clerk shall send a copy of the 16 application and a certified copy of this resolution to the state 17 Department of Housing and community Development addressed as 18 follows: Bill Andrews, Business, Transportation & Housing Agency, 19 Department of Housing & Community Development, State Community 20 Development Block Grant Program, P. O. Box 952054, Room 390, 21 Sacramento, CA 94252-2054. Funding of the loan is subject to 22 prior approval by the Department of Housing and Community 23 Development. 24 SECTION 5: The city Council of the City of Vernon 25 hereby authorizes the Mayor and the City Clerk to execute any and 26 all documents necessary to complete the funding of this loan. 27 III 28 III -2- 1 SECTION 6: The city Clerk of the City of Vernon shall 2 certify to the passage of this resolution, and thereupon and 3 thereafter the same shall be in full force and effect. 4 APPROVED AND ADOPTED this 16th day of December, 1997. 5 6 ~ . , c . ,n.~ . ~ ~ LEONIs~~or /~ 7 8 ATT;? 9 BRUCE v. 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 "' MALKENHORST, city Clerk ., -3- 1 STATE OF CALIFORNIA ) )ss 2 COUNTY OF LOS ANGELES ) 3 I, BRUCE V. MALKENHORST, City Clerk of the City of 4 Vernon, do hereby certify that the foregoing Resolution, being 5 Resolution No. 7063 was duly adopted by the City Council of the 6 City of Vernon at a regular meeting of the City Council duly held 7 on Tuesday, December 16, 1997, and thereafter was duly signed by 8 the Mayor of the City of Vernon. /f /~ 9 10 11 (SEAL) 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 BRUCE V. MALKENHORST, City Clerk -4- 10/05/98 13:52 FAX 310 246 6622 TUCKER & BAUM 141 002/002 M1CHABL c. 8A.UIoI ATTOIlNIlY AT LAW LAW OFFICES Tucker & Baum 228 SOUTH BeVERLY ORNE BEVERLY HILLS. CAUFORNIA 90212-3880 TELEPHONi (3 I 0) :M6-6600 TELECOPIER. (310) 246-6622 October 5 t 1998 VIA TELECOPIER (626) 33~-5818 ONLY David B. Brearley. City Attorney CITY OF VERNON 4305 Santa Fe Avenue Vemon, California 90058 Re: Commercial Loan - 4440 East 26th Street. Vemon, California - Kronfli Spundale Millst Inc. and ColorAmerica Textile Processingt Inc. Dear Mr. Brearley: I am in receipt of your letter dated September 28t 1998- Please be advised that the conditions set forth therein are acceptable inclUding your client's present refusal to modify Section I-B(4). Please proceed to obtain approval and prepare final documentation for the transaction. Michael C. Bawn of TUCKER & BAUM MCB:llo cc: Bruce V. Malkenhorst Jack Cline d[\m\kr~Dqi'l:6tll.tree(\br..rly.lfr.l002ll8."pcI f' ; ~ ....." , , CITY COUNCIL :,EONIS c. MALBURG Mayor Wm. "BILL" DAVIS Councilman DAVID B. BREARLEY City Attorney FAX: (626) 330-5818 THOMAS A. YBARRA Mayor Pro-Tern KEVIN WILSON Director of Community Services & Water FAX: (323) 588-2761 H. "LARRY" GONZALES Councilman KENNETH J. DeDARIO Director of Municipal Utilities FAX: (323) 583-1983 W. MICHAEL McCORMICK Councilman DAVE TELFORD Fire Chief FAX: (323) 581-1385 BRUCE V. MALKENHORST City Administrator I City Clerk FAX (323) 581-7924 CITY HALL BRUCE W. OLSON Police Chief FAX: (323) 583-5236 4305 SANTA FE AVENUE, VERNON, CALIFORNIA 90058 TELEPHONE (323) 583-8811 September 28, 1998 VIA FACSIMILE AND MAIL (c~fPY MiChael C. Baum, Esq. Law Offices of Tucker & Baum 228 South Beverly Drive Beverly Hills, CA 90212-3880 Facsimile No. 310-246-6622 Re: Commitment to Make Commercial Loan - 4440 East 26th street, Vernon, California - Kronfli Spundale Mills, Inc. and ColorAmerica Textile Processing, Inc. Dear Mr. Baum: I have received your letter of September 25, 1998, by fax wherein you indicated that your client is prepared to agree to the terms previously proposed in writing by the City of Vernon without any change in paragraph 2-D. Your letter fails to mention my letter to you of August 26, 1998, where I indicated to you that the City Administrator is unable to recommend at this time that the city change the obligation of Kronfli to purchase electricity from the City of Vernon for seven years. Therefore, the Agency's staff position at this time is reflected in Section 1-B(4) of the draft agreement which was transmitted to.Jack Cline on May 20, 1997 for comment. In order to avoid any confusion on this point, the Executive Director of the Agency is unwilling at this time to recommend the modification of 1-B(4) contained in my letter to you of July 11, 1997. Therefore, if the original section 1-B(4) is acceptable to your client, then I will make changes to the May 20 draft agreement consistent with my letter of July 11, 1997, except for 1-B(4), and transmit said agreement to you for your approval and then submit said agreement to the Agency for its consideration. - j .. ... Michael C. Baum, Esq. Page 2 September 28, 1998 As I indicated to you in my previous letter of September 23, 1998, "Ultimately, however, the Board of Directors of the Redevelopment Agency has final discretion in approving any recommendations made by staff." If I do not hear from you on or before October 6, 1998, I will assume that your client has no further interest in any arrangement with the Vernon Redevelopment Agency. DBB:jl Very truly yours, D~~ ~. \S~ly David B. Brearley City Attorney cc: Mr. Bruce V. Malkenhorst LAW OFFICES TUCKER & BAU M 22B SOUTH BEVERLY DRIVE BEVERLY HILLS, CA\,;IF'ORNIA 90212-3BBO TELEPHONE (3101 246-6600 TELECOPIER (3101 246-6622 MICHAEL C. BAUM ATTORNEY AT LAW WRITER'S DIRECT DIAL NO. September 25, 1998 VIA TELECOPIER (626) 330-5818 AND FIRST CLASS MAIL David B. Brearley, City Attorney CITY OF VERNON 4305 Santa Fe Avenue Vernon, California 90058 Re: Commercial Loan - 4440 East 26th Street, Vernon, California - Kronfli Spundale Mills, Inc. and ColorAmerica Textile Processing, Inc. Dear Mr. Brearley: I am in receipt of your letter dated September 23, 1998. At this point, I do not think it serves either party to further discuss the details of our negotiations and agreements in principle regarding the commitment of the City ofVemon to make a commercial loan to my client. In order to bring this matter to a conclusion, we are prepared to agree to the terms previously proposed in writing by the City of Vernon without any change in paragraph 2-D. Please confirm that this is acceptable with the City.and let us know when we can expect final documentation. Michael C. Baum of TUCKER & BAUM MCB:llo V<c: Bruce V. Malkenhorst (w/encl) Jack Cline (w/encl) d :\m\kronfli\26tbstreet\brearly .Itr .092598. wpd Wm. "BILL" DAVIS Councilman DAVID B. BREARLEY ctty Attorney FAX: (626) 330-5818 . . CITY; COUNCIL LEO~[S C. MALBURG Mayor mOMAS A. YBARRA Mayor Pro-Tern KEVIN WILSON Director of Community Services &: Water FAX: (323) 588-2761 H. HLARRY" GONZALES Councilman KENNETH J. DeDARIO Director 01 Municipal Utilities FAX: (323) 583-1983 W. MICHAEL McCORMICK Councilman DAVE TELFORD Fire Chief FAX: (323) 581-1385 BRUCE V. MALI<ENHORST CIty Administrator I City Clerk PAX (323) 581-7924 CITY HALL 430S SANTA FE AVENUE. VERNON. CALIFORNIA 90058 TELEPHONE (323) 583-8811 September 23, 1998 BRUCE W. OLSON Police Chief FAX: (323) 583-5236 VIA FACSIMILE AND MAIL Michael C. Baum, Esq. Law Offices of Tucker & Baum 228 South Beverly Orive Beverly Hills, CA 90212-3880 Facsimile No. 310-246-6622 Re: Commitment to Make commercial. Loan - 4440 East 26th street, Vernon, California - J(ronfli Spundale Mills, Inc. and ColorAmerica Textile Processing, Inc. Dear Mr. Saum: I have received your letter of September 16, 1998, and am very concerned with the tone, tenor and content of your letter. In July of 1997, I had informed you that the city was unhappy with your attempt to renegotiate an agreement that was developed between your client and Mr. Halkenhorst, city Administrator and the Executive Director of the Redevelopment Agency. After our telephone calls in July of 1997, my office did not receive any indication from you that your client had abandoned his attempt to change paragraph 2-D. I did not receive any letter, note or telephone call from you until May of 1998 wherein I received telephone calls from both your office and Jack Cline, the realtor involved in the project. At that time, I had informed you that since your client had not accepted the City'S staff revisions that the staff closed the file. After I reopened the file, I responded to you by letter dated August 17, 1998, indicating to you the status of the file. . ~ Michael C. Baum, Esq. Page 2 September 23, 1998 Thereafter, I discussed the matter wi th the ci ty Administrator/Executive Director of the Redevelopment Agency who is unwilling at this time to make any recommendations inconsistent with my letter to you of August 26, 1998. From July of 1997 until the end of May 1998, no activity occurred on this file. Again, in your recent letter of September 16, 1998, you are still raising the same issue you raised in your letter of July 29, 1997, namely, a modification of paragraph 2-D. The City's staff was willing to recommend the arrangements that were negotiated between your client and City staff during January through June of 1997 and had your client accepted those conditions that proposal would have been presented to the Board of Directors of the Redevelopment Agency for its approval. Ultimately, however, the Redevelopment Agency has final recommendations made by staff. Board of discretion Directors of in approving the any Your client's attempts to renegotiate the arrangement through your office and in essence initiate negotiations anew is not a tactic acceptable to the City staff as I clearly informed you at that time. In any event, if your client wishes to have any kind of an arrangement with the Agency, the Executive Director of the Agency has indicated his current views. If you have an interest in an arrangement at this time., please let me know, and I will communicate your desire to the Executive Director of the Agency. If I do not hear from you on or before October 1, 1998, I will assume that your client has no further interest in any arrangement with the Vernon Redevelopment Agency. Very truly yours, D~ \), \)~ David B. Brearley City Attorney DBB:jl cc: ~r. Bruce V. Malkenhorst z I LAW OFFICES TU.G..KER & BAUM 228 SOUTH BEVERLY DRIVE ,..,BEY E-R LY HLLLS, ;CALI F..ORn;lA90212-3880 TELEPHONE (310) 246-6600 TELECOPIER (310) 246-6622 MICHAEL C. BAUM ~ WRITERS DIRECT DIAL NO; ATTORNEY AT LAW .September 16, 1998 David B. Brearley, Esq. CI'I`Y ATTORNEY'S OFFICE CITY OF V ERNON 2440 S. Hacienda Blvd., Suite 223 Hacienda Heights, CA 91745-4770 Re: Commitment to Make Commercial Loan - 4440 E. 26('' Street, Vernon, California Kronfli Spundale Mills, Inc. and ColorAmerica Textile Processing, Ina Dear Mr. Brearley: I a.m in receipt of your correspondence dated August.l7, 1998 and August 26, 1998. I do not understand the conclusions contained in your letters. My last correspondence to you, dated July 29, 1997, accepted all of the terms set forth in your July 11, 1997 proposal, seeking, however, clarification of paragraph 2-D. You never responded to the July 29, 1997 letter. I left repeated telephone messages for you periodically after sending you that letter and you never returned any of my calls. In fact, almost one year went by before you returned any of my calis. During our most a-ecent cc,nv'e-rsation, you stated that you believe my client had rejected the City's proposal I told you .that was not correct .and reminded you of my last correspondence. We have tried diligently to bring this matter to a conclusion based on the agreement in principal reached through our exchange of correspondence in 1997. For you to state that Kronfli has been reviewing this arrangement for 17 months is not correct, we responded to your July 11, 1997 letter promptly and, for reasons unknown to us, the City has not responded. D:\KRONFLI\4440\LETTF. RS\D REA RLEY.09 l 0/C David B. Brearley, Esq. September 16, 1998 Page Two Please be advised that we areprepared to proceed with the agreement, including the proposal you made in your July 11, 1997 letter for the revision of paragraph 1-B(4). We would suggest a modification to paragraph 2-D along the lines set forth in our July 29, 1997 letter. However, we would not make that a condition to acceptance of the proposal; we do however believe it is a reasonable modification and would respectfully request the City's consideration of same. Thank you for your anticipated attention to this matter so it can be concluded to the mutual benefit of our respective clients. Very truly yours, Michael C. Baum of TUCKER & BAUM MCB az cc: Bruce V. Malkenhorst, City Administrator (with copy of July 29, 19971etter to David Brearley) Jack Cline (via telecopier only - w/o encl) D:\KRONf Ll\4440\LETTL-RS\BREARLEY.0910 C Q~ LAW OFFICES TUCKER & BAUM 22B SOUTH BEVERLY DRIVE ®EVERLY HILLS, CALIFO-~€d'!A 90212-3$80 TELEPHONE 1310) 246-.6600 - TELECOPIER f310) 246-6622 MICHAEL C. ®AUM WRITER'S DIRECT DIAL NO. ATTORNEY AT LAW July 29, 1997 VIA FACSI11~iILE (2131 581-7924 AND VIA U.S. MAIL David B. Brearley, Esq. THE ~I)EVELOP1vIENT AGENCY OF THE CITY OF VER.~tON 4305 Santa Fe Avenue Vernon, California 900$ Re: Commitment to Make Commercial Loan - 4440 E. 26`~ Street, Vernon, California - Kronfli Spundale Mills, Inc. and ColorAmerica Textile Processing, Inc. Dear Mr. Brearley: I am writing in response to your letter dated July 11, 1997. The changes you suggest therein are acceptable subject to the clarification of one area. As to paragraph 2.D, you propose that the specified documents be deposited into escrt~w ~~ithin 6Q days of tb.~ sc~aeduled closing. I see no reason that the purchaser's down payment need be in escrow on a date prior to that required by the seller. Usually, the balance of the down payment (unless the Purchase Agreement specifies otherwise) will be deposited shortly before the close of escrow. Additionally, there. are certain documents which are not in the control of the purchaser and which may not necessarily be ready within 60 days of the close of escrow. The First Trust Deed and Promissory Notes will be prepared by the lender. In my experience it is rare that these documents are available 60 days prior to the close of escrow. Similazly, the Grant Deed is prepared by the seller and is generally not submitted by the seller until shortly before the close of escrow. Finally, the Title Report may,not be available or in satisfactory condition. to permit closing until a date much closer to the close of escrow. Accordingly, I would suggest that your requirement regarding the down payment be eliminated entirely and that as to the remaining documentatiozn that they be presented to the city within 14 days of the date of closing. . liavid B. Brearley, Esq. The Redevelopment Agency of the City of Vernon July 29, 1997 ~ ' Page-2- Please let me know if this presents any difficulties. Thank you for your time and attention to this matter to date. Very truly yours, Michael C. Baum of TLJCI~ER & BAUM MCB:nsj ~._....e..___ 4,~ a fps _ CITY COUNCIL DAVID B. BREARLEY LEONIS C. MALBURG ~ City Attorney Mayor FAX: (818) 330-5818 THOMAS A. YBARRA WILSON Mayor Pro-Tern Director of Community Services & Water FAX: (213) 588-2761 Wm. "BILL" DAMS Councilman KENNETH J. DeDARIO Director of Light & Power H. "LARRY" GONZALES - FAX: (213) 583-1983 Councilman W. MICHAEL McCORMICK i l DAVE TELFORD Fire Chief Councilman FAX: (213) 581-1385 BRUCE V. MALKENHORST CITY HALL LOUIS RosENKRANTz City Administrator/City Clerk 4305 SANTA FE AVENUE, VERNON, CALIFORNIA 90058 Potice Chief FAX: (213) 581-7924 TELEPHONE (213) 583-8811 FAX: (213) 581-1178 January 28, 1998 Department of Housing & Community Development c/o Mr. Bill Andrews Business, Transportation & Housing State Community Development Block Grant Program P.O. Box 952054, Room 390 Sacramento, CA 94252-2054 RE: Loan Application Submitted by Kronfli Spundale Mills, Inc. Pursuant to the 95-EDBG-390 Vernon Infrastructure Loan Program Dear Mr. Andrews: Transmitted herewith is a copy of the application submitted by Kronfli Spundale Mills, Inc. and a certified copy of Resolution No. 7063 which was approved and adopted December 16, 1997, by the City Council of the City of Vernon. Thank you for your assistance in this matter. Very truly yo s, 2.~c.) ~ or a J. r~sco Chief Dep y City Clerk GJO/mm enclosures cc: Kevin Wilson Director of Community Services & Water Chris Romero, Administrative Aide INTER-OFFICE MEMORANDUM DATE: January 13, 1998 T0: Chris Romero, Administrative Aide FROM: Gloria J. Orosco, Chief Deputy City Cle~ SUBJECT: Economic Development Block Grant - No. 95-EDBG-390 Transmitted herewith is Loan Agreement 95-EDBG-390. Please ascertain that it has been signed where necessary by Vernon City officials. If so, I will then forward to the appropriate administrator as dictated in the resolution. You will receive a copy of the letter that is sent out. cc: S. Kevin Wilson GJO/mm attachment . CITY COUNCIL q~ ~ U V DAVID B. BREARLEY LEONIS C. MALBURG City Attorney Mayor FAX: (818) 330-5818 THOMAS A. YBARRA KEVIN WILSON Mayor Pro-Tem Director of Community Services & Water Wm. "BILL" DAMS FAX: (213) 588-2761 Councilman KENNETH J. DeDARIO H. "LARRY" GONZALES Director of Light & Power Councilman FAX: (213) 583-1983 W. MICHAEL McCORMICK DAVE TELFORD Councilman Fire Chief ~l l i FAX: (213) 581-1385 BRUCE V. MALKENHORST 1 LOUIS ROSENKRANTZ City Administrator/City Clerk 4305 SANTA FE AVENUE, VERNON, CALIFORNIA 90058 Police Chief FAX: (213) 581-7924 TELEPHONE (213) 583-8811 FAX: (213) 581-1178 December il, 1997 City Council City of Vernon Honorable Members: Kronfli Spundale Mills, Inc. has applied for Community Develop- . ment Block Grant (CDBG) Project funding. Staff and project consultants (The Holt Group) have- reviewed the application and agree. that the documents are acceptable and in conformance with the guidelines. In addition, the review has concluded that the project is categorically exempt to the California.Environmental Quality Act. Kronfli has applied for $143,232 to be used for various off-site improvements, i.e., street sewer, .curbs, gutters, sidewalk and street trees. The Director of Community Services has reviewed the application and recommends that the CDBG grant be approved for Kronfli, and that the City Council find that the project is categorically exempt from the California Environmental Quality Act. Very truly yours, V f ruce V. M en o Cit Clerk Y BVM/mm enclosures January 15, 1998 TO: Gloria Orosco, Chief Deputy City Clerk FROM: Chris Romero, Administrative Aide ~E'~~-"" SUBJECT: STATE LOAN PACKAGE FOR KRONFLI SPUNDALE MILLS After review of the State Loan Package, all-documents have. been properly signed and are ready to be sent to the State. Original documentation should be kept on file with the exception of the Cash Request (please return to me). The Loan Agreement and the Personal Guaranty do not need to be sent to the State at this time, these items can be held in my files. If you need additional information, please let me know. December 10, 1997 . TO: Bruce V. Malkenhorst, City Administrator FROM: Kevin Wilson D rector of Community Services & Water SUBJECT: KRONFLI APPLICATION/CDBG PROJECT Kronfli Spundale Mills, Inc. has applied for funding through the Vernon Infrastructure Loan Program. Staff and project consultants (The Holt Group) have reviewed the. application and have agreed' that the documents are acceptable and in conformance with the guidelines. In addition, .the review has concluded that. the project is categorically exempt to the California Environmental Quality Act. Kronfli has applied for $143,232.00 to be used for various off-site improvements. The improvements include: street sewer, curbs, gutters, sidewalk and street trees. Attached for your review is the application. It is my recommendation that the Community Development Block Grant be approved for Kronfl. If you agree, the application should be submitted to City Council for. approval and found that the project is Categorical exempt from the California Environmental Quality Act and Categorically Excluded from NEPA. cc: City Attorney SKW/cmr The 1. James G. Holt, P.E. rUU:p Robert K. Holt; P.E. :Engineering Kenneth G. Skillman, III, P.E., t.S. Planning .Surveying:" - MEMO DATE: 12-09-97 TO: Chris Romero FROM: Justina Gamboa Arce RE:: State Loan Package for Kronfli Spundale -Mills Attached to this memo is a complete .package that should go out #o Bill `Andrews once the proper officials have igned where indicated and once the Loan committee/council. has approved the loan. Alf original documentation should be kept on file :with. the exception of the Cash Request. Cover letter to Mr. Andrews should request a prompt review of the enclosed documents` 1': Document Checklist for Drawdown Approval 2. Credit Memo and Loan Report - 3. Financial Analysis and Loan Recommendation 4. NEPA/CEQA Environmental Review 5. Sources and Uses Forme 6. Draw Down Request 7, Davis Bacon Certification..-Test .Contact me if you have any questions. 1561 South 4th Street ¦ EI Centro, CA 92243 ¦ 760-337-3883 ¦ -Fax-760-337-5997 321 W. Hobsonway ¦ Suite A ¦ Blythe, CA 92225 ¦ 760-922-4658. ¦ Fax 760-922-4660 The I~ - James G. Holt, P:E. ~ ~ Robert K. Holt, P.E. Engineering Kenneth G. Skillman, III, P.E., L.S. Planning Surveying MEMO DATE: 12-09-97 TO: Chris Romero FROM: Justina Gamboa Arce - ~ - RE: Davis Bacon Compliance As you may already be well aware, this ;projecf needs to comply with the Davis Bacon Act.. You will need to comply .with the following procedures: 1:: Designate yourself or -another .staff member as a labor standards coordinator. 2. Determine and document wage decisions prior to project start date. 3. Verify contractor .eligibility and make sure proper. contract language. is -incorporated info the contract and :award documents between Kronfli and the contractor. 4. Hold and document a- preconstruction conference in which you notify contractor and all employees of the prevailing wage°decisions. 5. During construction .interview: employees on site using the form in the CDBG manual to ensure proper wages- are being paid: 6. Request and keep on file copies of certified payroll If .you have any questions please do not hesitate to contact me. 1561 South 4th Street ¦ EI Centro, CA 92243 ¦ 760-337-3883 ¦-Fax 760-337-5997 32T W. Hobsonway ¦ Suite A ¦-.Blythe, CA 92225 ¦ .760-922-.4658 ¦ Fax 760-922-4660 G-n-1-GftPiVili`. rNl\I~! DO~~ENT CHECKLIST FOR DRAWDOWN APPROVA~ "'tY~ntY of _CITY OF VERNON Date ^ - ~ 2=09-97 CHRIS RONJERO Grants 95-IDBG-39 4305 SANTA FE .AVENUE ~ Telephone ~ (213) 583-8811 VE'RNON, CA 90058 Fu ~ (213) 585, 4661 ) Business: PAiTf. F. KRCN~FT.T 4440 EAST 26TH STREET Addross: VERNON, CA 90040 I.oAN AMOUNT =114, 585.60 For a loan of 550,000 or less all of the following must be rooeived by the Department beforo its inRial Cash roquest roport can be approved: Date Date • Reed Requested 1. Final bpl approval b the form of a oornrnftrnent letter from grantee b borrower OR letter from grantee to Department advising of pending approval. and oontahthrg same fnfomtadon u a oornmltmeM letter 2. Name of business and borrowers name 3. Location and addross of busineu 4. CDBG loan amount 5. Documentation of canpkte and final environmerrtal roview by the grantee 6. FONSUNEG DEC: State comment period expiros 7. Designation of project u job croation or retention 8. Number of FULL TIME jobs being seated or rotained For a loan over 550,000 the following must be rooeived by the Department for roview and approval prior ib its instal cash request roport being approved: 1. Credit memo or roport and rooommendation submfttnd to loan oorrurrittee addrossing at a minknum: ban feints, au aspects of the appropriate . dabennhtation, proposed use of CDBG frrrtds, consistency with bcal program guidebnes, number of jobs being croated or retained, number of T1G jobs, etc. 2-09-97 2. Documentation of bcal approval or commRrrtent letter from jurisdiction to borrower ETERMINAT: 3. Name of business and borrowers narrtr; 2-08-97 4. Location and address for business 2-08-97 5. CDBG ban amount 6. Documerttatan of complete and final environmenm! roview by the grantee 2-09-97 7. FONSUNEG DEC: State comment period expiros ~ ' ' N/A 8. Designation of project as job croation _ _ 9. Number of FULL TIME jobs being croated 2-08-97 10. Proposed uses of all project funds; CDBG Sounxs and Uses Form 2_ 8_97 martts: RwNwr+d~Approwd Cuh Request Processed on ` Dats Oats The 11. _ James G. Holt,. P.E. n Robert K. Holt, P.E. Engineering Kenneth G.,Skillman, IJI, P.E., L.S. Planning - Surveying December 2, 1997 THE CITY OF VERNON The Honorable City- Council ...4305 Santa Fe Avenue Vernon, California 90058 (213)583-8811 FAX(213)585-4661 Re: Grant #95-EDBG-390 Kronfli Spundale Mills, lnc. Paul E. Konfli 4440 E. 26th Street Vernon, CA 90040.., (213)780-7700. The..Honorable City Council: This summary is presented ..for-.your review of the above referenced Economic Block . Grant applicant. SUMMARY- The Kronfli Spundale Mills, Inc. is a "Textile Manufacturing"..firm that is part of the fastest growing industry`in the.. Southern California area ranking .only second behind thee-"Entertainment" industry. This firm has had twenty years of successful and profitable .business with steady growth in sales volume, size, and the number'ofi employees. Their financials .indicate that they are in an exploding business and have shown asteady.-growth in revenue. The business credit. "report, reports no unusual. derogatory data,other han a released .State tax lien, and 2 small judgments filed with, no release date. The report also indicates this firm runs high lines of credit but pays each account in a timely manner: Kronfli. Spundale Mills, Inc. financials and current balance sheet indicate. that they are in a position o take on additional obligations: it is recommended thaf Kronfli .Spundale Mills, Inc. be granted their regtaest for a infrastructure loan. in the requested amount of $1:14,585:60 @ 7% interest for 15 years'with an approximate payment of $1030.12 per month... This: funding is being blended with the owner's equity of .$28,.646.40. It is further recommended that this payment be deferred for a period of 24 1 156.1 South 4th Street ¦ EI Centro, CA 92243 ¦ 760-337-3883 ¦ Fax- 760-337-5997 .321 W. Hobsonway ¦ -Suite A ¦ Blythe, CA 92225 ¦ 760-922-4658 ¦ Fax 760-922-4660 . .months... If at the end of the predetermined period the State requirements for the hiring of the required number of "Target Income Group" have been met or exceeded then the loan will be reconveyed and_this funding disbursement will be addressed as a "Grant." However, if these requirements are not rnet, then the original terms of the loan will prevail with interest accumulating from the first date of disbursement and the loan becomes immediately due and payable. It is further recommended that Personal Guaranties be incorporated .into .the loanrequirements. Since the firm is presently leasing with a 5 year option to purchase, cross coilateralizing of real .estate holdings. may be a consideration as the knitting .machines and other equipment have UCC #ilings against them by the present lenders. There is no other financing.. available through the private: sector, as .commercial lenders will not.-place themselves in a Junior liven position. highly recommend City Council approval of this loan request. w. nAVIO Date. S`FIl~TA G. Date FINANCIAL. ANALYST CD~iG ~LVSUL 2 CREDIT MEMO AND RECOMMENDATION TO LOAN COMMITTEE NAME OF BUSINESS: KRONFLI SPUNDALE MILLS DATE: 12-08-97 APPLICANTS NAME` PAUL E KRONF'LI ~ GRANT #95-EDBG-390 ADDRESS: 4440E 26TH STREET PHONE: (213) 780-7700 VERNON, CA 90040 PROPOSED USE OF CDBG FUNDS: INFRASTRUCTCTRE IlKPROVII~7ENTS (OFFSITE) : UTILTTY LINES AND CURB AND PROJECT Ta RESULT IN THE CREATION OF AT-LEAST SIX NEW JOBS. EVALUATION CRITERIA: GOOD CREDIT STANDING & REPAYMENT CAPABILITIES: YES ADEQUATE LOAN COLLATERAL SECURITY: YES CREATION OF AT LEAST ONE JOB PER $20,000 LOANED: YES AVAILABILITY OF 51% OF JOBS CREATED FOR TIG: YES CONFIRMATION OF EXISTING FINANCIAL GAP: YES FUNDING INFORMATION FOR INFRASTRUCTURE IMPROVEMENTS: TOTAL PROJECT COST: $2, 343, 232.00 (OFFSITE IMPROVEMIIV7.'S COST: $143,232.00) PROGRAM FUNDS: ~1-14.585.6~- CITY LEVERAGE: PRIVATE MATCH: 28, 646 •_40 or 10% EQUITY: OTHER: - RECOMMENDED LOAN TERMS AND AGREEMENTS: RECOMMENDED LOAN AMOUNT: $114,585.60 RECOMMENDED INTEREST RATE: 7~ RECOMMENDED DEFERRMENT: 24M0. REQUIRED NUMBER OF JOBS: 6 -CREATED CDBG administrator attesting all supporting documentation is on file and that recommendations are consistent with the City of Vernon Business Loan Program Guidelines as approved by the City and the State. Date Printed Name: BASED ON THE INFORMATION AVAILABLE THE LOAN COMMITTEE, OR CITY COUNCIL HAS APPROVED THE REFERENCED LOAN. .Approved on ~ l`1 , 199 by a vote of s ~ , at a regular scheduled meeting of the Vernon City Council ATTE ~ AS.' . , ate: / / , ~ ~ `11'3'. Ti le: CITY CLERK , F3RUCE V. MALKENHORST ~7 , ~ _ d;~~ ,~A;;;.~,,, _ . The Holt James G. Holt, P.E. G ~'"O u ~ Robert K. Holt, P.E. Engineering Kenneth G. Skillman, III,'P.E., L.S. i?lanning Surveying MEMO DATE: 12-09-97 TO: Chris Romero FROM: Justina Gamboa Arce~ RE: Necessary Documentation and. Agreements from Borrower. As your consultant we recommend that the following items on the attached checklist are - documented and in .your fifes prior to-fund. disbursement.- We are providing you with the following.; 1. Letter of assurance to be Executed 2. TIG Assistance Agreemenf to be Executed 3. Loan Agreement to be Executed- 4. Personal Guaranty for Repayment to be Executed Please note that cross collaterizing on real-estate holdings may be necessary and a Deed of Trust will need to be executed. Your attorney can advise you better.. You may also-wish to have him review the referenced documents prior to execution. Please :note that this project needs to comply. with the Davis' Bacon :Act, refer to a separate memo on this subject. 1561 South 4th' Street ¦ EI Centro, CA 92243 ¦ 760-337-3883 ¦ Fax 760-337-5997 -321 W. Hobsonway ¦ SuiteA_¦ Blythe; CA 92225 ¦ 760-922-4658 ¦ Fax 760-922-4660 FINDING OF NEPA EXEMPTION It is the finding of the City of Vernon that the following activity proposed in its State Community Development Block Grant #95-EDBG-390 are exempt from environmental review requirements under NEPA because they are defined as exempt activities in 24 CFR Part 58.34 consisting solely of: List of Activities Citation 1. Replacement of Utility Lines and Curb 24 CFR Part 58.34 (a).(12) and Gutter. The activities judged exempt consist of: 1. The reconstruction or installation of CDBG eligible public works and improvements in which the facilities and improvements are in place and will be retained in the same use without change in size or capacity of more than 20 percent. In accordance with 24 CFR Part 58.34 (a) (12), these activities are deemed to be exempt since there are no circumstances which require compliance with any other federal laws and authorities cited in 24 CFR Part 58.5. A Statutory Worksheet was required, all findings were at the Primary Compliance Level and a copy is attached. 'n Date /2-1~5'~ ' son, Dir ` o of Community Services , City of Vernon 4305 Santa Fe Avenue Vernon, CA 90058 STATUTORY WORKSHEET Worksheet for projects which are Categorically .Excluded, Per Section 58.35, except for minor housing rehabilitation projects that meet the criteria of Sections 58.35(a)(4)(i). For such rehabilitation projects, the use of the Rehabilitation Environmental Review and Appendix A forms is recommended. STATUTES EXECUTIVE ORDERS REGULATIONS Project Name and Description: KRONFLI UTILITY & PUBLIC WORKS IMPROVEMENTS-Improvements consist of the restoration/replacement of a public pipeline as well as curb and gutter. The facilities and improvements will not substantially change the use, capacity, or character of the site to be served. It will not change the character of the street (primarily industrial to remain industrial), and site is located in a fully developed industrial area where no undeveloped land will be developed as a result of said improvements. The project status "A" will refer to projects that by their nature, cannot affect the resources under consideration; a "B" status will refer to projects that require formal consultation procedures with oversight agencies. Source documentation must be credible, traceable, and supportive of the finding made. Compliance Factors: Status Supporting Documentation (24 CFR 58.5) Historic Preservation A CONTACT: The National Historic Preservation Registrar and the UCLA Historic Registrar have identified no potential historic value on project site. Floodplain Management A CONTACT: Vernon Community Service Department; the project does not involve improvements within a 100 year floodplain (FEMA). Wetlands Protection A CONTACT: US Fish and Wildlife Service; the project does not involve new construction within or adjacent to a wetland. Coastal Zone A CONTACT: Long Beach Coastal Commission; the project is not within a coastal jurisdiction. Sole Source Aquifers A CONTACT: City of Vernon Engineering Department. Project can not directly or indirectly affect existing wells. Endangered Species A CONTACT: Ecological Serv. Div. of Endangered Species; project is in an industrial developed area & will not affect any listed endangered species. Wild and Scenic Rivers A CONTACT: Vernon Community Service Department; project is not located within a mile of a listed wild and scenic river.. Air Quality A CONTACT: SCAG; project is located in a nonattainment area but RTIP and SIP are approved by EPA. Farmland Protection A FIELD: project is located in a fully developed industrial area and will not affect any prime or unique farmland. Environmental Justice A CONTACT: This project does not involve housing acquisition or housing construction. Noise Abatement & Control A CONTACT: Vernon Community Service Department; project located in (HUD 24 CFR 51 B) an industrially developed area and not noise sensitive. Explosive & Flammable Operations A CONTACT: Vernon Environmental Health Department; the project will (HUD 24 CFR 51 C) not expose neither people nor buildings to such hazards. Toxic Chemicals/Radioactive Mat. A CONTACT: Vernon Environmental Health Department; the project does (HUD Notice 79-33) not involve new development for habitation. Airport Clear Zones & Accident A PRINTED: Vernon General Plan; project is not located within any airport Potential Zones (24 CFR 51 D) clear zones or accident potential zones. This project converts to Exempt, per Section 58.34 (a)(10), because it will not result in a violation of any statutes or authorities, nor require a permit or license (all the statutes listed above have the letter "A" marked in the column). Funds may be drawn down for this (now) exempt activity. Preparer Signature Date l 01- . 9 ~q Preparer Name: Justin Gamboa Ar .Tanning Consultant Notice of CEQA Categorical Exemption To: County Clerk From: City of Vernon County of Los Angeles 4305 Santa Fe Avenue 12400 East Imperial Highway Vernon, CA. 90058 Norwalk, CA 90650 Project Title: Kronfli Spundale Mills, Offsite Improvements Project Location-SpeCIfIC: 4440 East 26th Street, Vernon, California Project Location-City: City of Vernon Project Location-County: Los Angeles County Description of Project: Repair and minor alteration of offsite improvements consisting of replacing existing pipelines and curb and gutter repair. Name of Public Agency Approving Project: City of Vernon Name of Person or Agency Carrying Out Project: City of Vernon Exempt Status: Categorical Exemption Type and Section: Section 15301, Class 1, Existing Facilities Reasons why project is exempt: The facilities and/or improvements will not substantially change the use, capacity, or character of the street (primarily industrial to remain industrial) or of the site. Subject to Section 15300.2, no cumulative impact is anticipated as the site is located in a fully developed industrial area and no undeveloped land will be developed as a result of said improvements. Lead Agency Contact Person: vin Wilson;; Telephone No. (213) 583-8811 Signature: ~ Date: ~2-/f-~ r' Kevin Wilson, ity Administrator Signed by Lead Agency ..~t~ .G:< O O O • . k" "f'~ O O O O O w ~ `>%:tis O N O O N M1 4:;'r,~~; O M O O M O ~N -O ~ O d' M1' 00 ~ N N M ti4 b4 ~.•••r`• ~ O CO O O 00 ~I.1?. O N O O N ff} d4 O O O O ;Ei~~~d Eo-~~E? 6 p ?al_ O O ~ ~ ~ ~ r 3E::~~rE<:?~:: p4'. , Q#> ::::0::::v:;; Fli:::::::.: A V O <::;~s::»:~<:: ~ . 0 0 `fl ~ w pa `n Q ~ ~ U.. ~r ~ ~ a ~ b,oo ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ Q ~ Q ° ° ~ Lij a a ~ tG ~ ° Q Q ~ ~ ~ U U U 'v COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM CASH REQUEST Grantee: City of Vernon Contact Person Chris Romero Grant 95-EDBG-390 Address: 4305 Santa Fe Ave. Title: Administrative Aide Request Date: December 10, 1997 Vernon, CA 90058 Phone No. 213-583-8811 Grant Expiration Date: Dec 01.1998 Phone No. 213-583-8811 Organization: Request 3 ADVANCE: X LUMP SUM: REIMBURSEMENT: A. CASH REQUEST 1. Total CDBG cash received as of request date $ 21,000 2. Program Income received and available for this grant activity as of request date 3. CDBG cash disbursed as of request date $ 20,874 4. Program Income disbursed for this grant activity as of request date 5. CDBG cash on hand as of request date. (1+2-3-4) (if>$5,000 explain) $ 126 6. Total CDBG funds previously requested (not including line 7) $ 41,000 7. Amount of this CDBG Cash Request $ 120,000 8. Cash Request by contract activity (must equal amount on line 7) 1. Business Loans $ 114,585 3. General Administration $ 2,915 2. Activity Delivery $ 2,500 9. If Escrow Account -Current Balance $ Will balance be expended within 22 working days of deposit? Yes No. If no explain 10. Comments: Loan to Kronfli Spundale Mills. B. CERTIFICATION I certify that to the best of my knowledge this report is true in all respects and that all disbursements have been made for the purpose and conditions of this grant. ~ Chris Romero Administrative Aide ~L' NAME TITLE SIGN TURF DATE STATE USE ONLY 15-day environmental review comment period applicable Yes NO CDBG Fiscal Representative Date CDBG Program Representative Date CDBG Manager Date Index PCA Amount Index PCA Amount Grant Balance Revised: Sep. 11, 1997 DAVIS BACON CERTIFICATION TEST Project Title I.Q~ONFT,T SPTTIVi~AT.F. MTT,T,S~ nF'FSTTF. TMPR(~VF:MF'NTS PRCITFY*P 1. Will CDBG funds be used for purchase of equipment, construction, installation, rehabilitation or demolition. es no o stop here and proceed to Exempt Certification 2. If CDBG funds are used for construction, installation, rehabilitation or demolition is the contract with the Prime, General or Sub Contractors less than $2,000. If the contract or contracts funded by CDBG are under $2,000 stop here and proceed to Exempt Certification. 3. Total number of units on project property (residential projects) If the total number of units on the property is less than eight stop here and proceed to Exempt Certification 4. If project includes only the installation of equipment: a) Cost of Equipment $ b) Cost of Installation $ c) Percent of Equipment Cost If total cost of installation is less than 13% of the cost of the equipment installed stop here and proceed to Exempt Certification. 5. Will the construction, rehab, repair or demolition be carried out by city or county emplo es (Force Account)? yes no~ If yes proceed with Exempt Certification. CERTIFICATION: ove tests it is determined that the project identified above IS EXEMPT .NOT EX~~ E}~ MP~from the application of the Davis-Bacon and related acts: Date: ~C~--~~1 G- N me Title BUSINESS LOAN PROGRAM PROTECT CHECKLIST PROVIDE: 3 Turndown letters from Bank Preliminary Loan Application 1. Business information: Business Plan Resumes of Principal(s)(normally those with 20% ownership or more) Articles of Incorporation/By-Laws N~A Partnership Agreement/Franchise Agreement (if applicable) Fictitious Name Statement Corporate Resolution to Borrow (if applicable) 2. Project Information: N A Purchase Agreement (Deposit Receipt) N~A Preliminary Title Report on Property to be Acquired Preliminary Plans and Specifications for Construction Projects Cost Estimates (Construction, Machinery & Equipment) N A Lease Agreement N/A Project Appraisal, Including Land Applicable Permits and Licenses N/A Copy of Equity Capital/Buy-Out Agreement, if Applicable Summary of Collateral 3. Financiallnformation: A. Business X Income Statement (past three years plus current) X Balance Sheet (past three years plus current) Aging Schedules of Accounts Receivable/Payable (current) x Schedule of Existing Debt (current) Business Federal Tax Returns- (past three (3) years) Income arid Cash Flow Projections (next two (2) years) Performa Balance Sheet B. Personal X Personal Financial Statements of Principal Owner(s) X Individual Federal Tax Returns of Principal(s) ATjA~~ Personal Guaranty#or Repayment 4. Other Information: (Provided by Loan Officer) ATTA(~)(» Letter of Assurance from Business as to Hiring Policy, Training Agreements, ATTACHpD Location Use of Proceeds, etc. A~c~3) TIG Assistance Agreement ATTAC~i® Loan Agreement f PROJECT ASSURANCES The Borrower hereby assures that it will comply with all regulations, policies, guidelines, and requirements as they relate to the loan. Also the Borrower assures and certifies to the City of Vernon that the Borrower: A. Will comply with Title VI of the Civil Rights Act of 1964 (P.L 88-352) whereby no person in the United States shall on the grounds of race, color, or national origin, be excluded from participation in, be denied the benefits of, or otherwise be subjected to discrimination by the Borrower under which the Borrower receives Federal financial assistance, and Borrower will immediately take any measures necessary to effectuate this agreement. The phrase "Federal financial assistance" includes any form of loan, grant, or any other form of direct or indirect Federal assistance. B. Will comply with Title VI of the Civil Rights Act of 1964 (42-USC 20004) prohibiting employment discrimination where: 1) the primary purpose of the financial assistance is to provide employment, or 2) discriminatory employment practices will result in unequal treatment of persons who are or should be benefiting from the CDBG loan-aided activities. C. Will comply with Section 112 of the Public Law 92-65 and Title III of Public Law 94-135 whereby the Borrower assures that no person in the United States shall, on the grounds of sex or of age, be excluded from participating in, be denied the benefits of, or otherwise be subject to discrimination in connection with CDBG loan-aided activities. D. Will comply with the flood insurance purchase requirements of Section 102(a) of the. Flood Disaster Protection Act of 1973, Public Law 93234, 87 Stat. 975, approved December 31, 1976. Section 102(a) requires, on and after March 2, 1975, the purchase of flood insurance in communities where such insurance is available as a condition for the receipt of any federal funds in any area that has been identified by the Secretary of the Department of Housing and Urban Development as an area having special flood hazards. The phrase "Federal. financial assistance" includes any form of loan, grant, or any other form of direct or indirect federal assistance. E. Will comply with Section 106 of the National Historic Preservation Act of 1966 as amended (16 USC 47 0), Executive Order 1 1593, and the Archeological and Historic Preservation Act of 1966 (16 USC 469a-/ et. seq.) by: a) consulting with the State's Historic Preservation Officer on the conduct of investigation, as necessary to identify properties listed on or eligible for inclusion in the National Historic Register (see 36 CFR Part 880.8) by the activity, and noticing of existence of any such properties; and b) complying with all requirements established by the State to avoid or mitigate adverse effects on historic structures. F. Will comply with Section 2 of the Public Works and Economic Development Act which states that under the provisions of this Act, new employment opportunities should be created by developing and expanding new and existing facilities and resources rather than by merely transferring jobs from one labor area to another. G. Will assure that any building or facility financed in whole or in part by any funds provided under the Loan will be designed, constructed or altered so as to assure ready access to and use of such building or facility by the physically handicapped. This provision applies only to firms which deal directly with the general public in the normal and usual course of their business, and to facilities in which business is customarily transacted by and with members of the general public. 1 - _ H. Will ensure that the facilities under its ownership, lease or supervision which shall be utilized in the accomplishment of the project are not listed on the Environmental Protection Agency's (EPA) list of Violating Facilities and that it will notify the City of Vernon of the receipt of any communication from the Director of the EPA Office of Federal Activities indicating that a facility to be used in the project is under consideration for listing by the EPA as a violating facility. I. Will comply with all requirements imposed by the Federal sponsoring agency concerning special requirements of law, program and other administrative requirements. J. Will comply with the Davis Bacon Act, as amended (40 USC 276a-5), as this Act may apply to the project of the Borrower. BORROWER DATE BORROWER DATE 2 TIG BENEFIT NON-FINANCIAL EMPLOYMENT PLAN AGREEMENT This Agreement, between the City of Vernon ("Lender") and Kronfli Spundale Mills, Inc. ("Borrower") will 6e used to assure continuing employment opportunities to economically disadvantage (Target Income Group) and unemployed residents of the City. Under this Non-Financial Employment Plan Agreement, the Employer will use the Job Training Agency ("The Private Industry Council") as its initial resource for recruitment, referral and placement in positions covered herein, but is not restricted to PIC resources. This Agreement is not a loan agreement. 1. General Terms: a) The Lender provides Community Development Block Grant (CDBG) funded low interest loans for infrastructure improvements. By virtue of this loan, the Lender expects to realize additional employment opportunities for lower income and unemployed persons. The Lender has negotiated a loan with the Employer as follows and as additionally described in the Loan Agreement (attached): i. Loan Amount $114,585.60 ii. Interest Rate 7% iii. Term 24 months deferred/15 years iv. Job Requirement Six (6) jobs created @ 51%TIG b) In consideration for the loan described above, the Employer agrees to enter into this Agreement and agrees to use the PIC as its initial resource for recruitment, referral and placement services, but understands he/she is not restricted to PIC resources. c) The Employer agrees to create at least one permanent full-time employee (minimum of 1,750 work hours per year) per $19,097.60 in CDBG loan funds received. The jobs shall be provided within 24 months after loan funding. The Employer also agrees that at least 51 % of all jobs, created as a result of the CDBG loan, will be filled by members of the Targeted Income Group. d) It is the Employer's declaration that the business loan described in Section 1.a) above and in the Loan Agreement will result in additional employment opportunities (of a non- managerial., non-technical, and/or non-professional variety), as follows, and as shall be further described in a Job Order Form provided by the PIC (attach additional sheets as necessary): Number Anticipated Expected of Jobs Positions (type) Hiring Date e) The PIC will provide employment, recruitment, referral, and placement services to the Employer subject to the limitations set out in this Agreement, upon Employer request. 1 of 4 f) The Lender's employment and training responsibilities under this Agreement, unless otherwise assigned, will be carried out by the Job Training .Agency. g) This Agreement shall take effect when signed by the parties below. Fulfillment of all specified job requirements shall be by the 24th month after funding. 2. Employment/Recruitment a) The Employer agrees "covered positions" for the purposes of this Agreement shall include all Employer's job openings in the City of Vernon created as a result of internal promotions, termination's; and expansion of the Employer's work force, within the positions listed under Section 1 (d), with the exception of those classified as "non- covered", as defined in Section 2 (c) below. b) At least ten working days prior to anticipated hiring dates, the Employer will notify the PIC of its needs for new employees in the covered positions; or, if Employer is hiring on his own behalf, he must provide proof of TIG benefit to the City (Proof of employee's house- hold income per tax statements.) Notification shall be by Job Order Form provided by the PIC, and shall include, but not necessarily be limited to: i. Number of employees requested by job title. ii. Job description, including minimum qualifications stated in quantifiable and objective terms. iii. Work to be performed. iv. Hiring dates. v. Rates of pay. vi. Hours of work. vii. Anticipated duration of employment. c) The following types of positions created by the Employer during the term of this Agree- ment shall also be regarded as covered by this Agreement: non-managerial, non- professional; and those not highly technical d) The following types of positions are considered non-covered positions: those of a supervisory nature requiring two or more years of formal training; and those filled by internal promotion from the Employer's existing work force, and family members of the borrower/owner. 3. Referral a) The PIC will refer job applicants eligible pursuant to the Job Training Partnership Act (JTPA) and the Community Development Block Grant (CDBG) regulations to the Employer in response to the notification of need for new employees described in Section I (D). The PIC will maintain the documentation of applicant/employee household income required by the CDBG program, and provide such information to the City of Vernon. b) The PIC will screen applicants according to the qualifications agreed upon with the Employer. If the Employer is hiring on his own behalf, he must provide TIG eligibility documentation to the City. c) The PIC will notify the Employer of the number of applicants it will refer and begin making 2of4 referrals no later than five working days prior to the anticipated hiring date. The PIC will make every reasonable effort to refer at least one qualified person(s) for each job opening. d) In the event that the PIC is unable to refer any or all of the qualified personnel request, the Employer will be notified by the PIC. The Employer will then be free to directly fill remaining positions. In this event, the Employer will make a good faith effort to hire economically disadvantaged City individuals through additional recruitment techniques in conformance with the terms of the loan and approved by the Lender. Employer in conjunction with the City's CDBG Administrator will then be responsible for verifying Targeted Income Group status. 4. Placement a) If Employer is using PIC for job placement, all decisions on hiring new employees will be made by the Employer. The Employer agrees to provide priority consideration to prospective employees for covered positions from the qualified persons referred by the PIC. If the Employer does not find any of the persons so referred to qualifyfor the opening(s), the PIC and City will be notified. b) The PIC and the City's CDBG Consultant will monitor job retention and employment performance of employees placed under the Agreement. The employer agrees to cooperate full in these follow-up efforts, and to provide two times annually hiring summaries for five years after funding, in a form acceptable to the Lender and the State. This may include, but not be limited to, copies of employee rosters and payroll and tax information submitted to the State of California and to the federal government. c) If the Employer has selected employees from referrals by the PIC, the Council will not be responsible for the employee's actions and the Employer hereby releases the PIC of liability. 5. Training a) The PIC and the Employer may agree to develop additional job training programs. The training specifications and the cost for such training will be mutually agreed upon by the Employer and the PIC and covered under a separate training agreement(s). 6. Controlling Regulations and Laws a) If this Agreement conflicts with any labor laws or other governmental regulations, those laws or regulations shall prevail. b) If this Agreement conflicts with a collective bargaining agreement to which the Employer is a party, the bargaining agreement shall prevail. c) The Employer shall not discriminate against any applicant for employment due to race, religion, age, color, sex, national origin, .physical handicap, sexual preference, or political affiliation. 7. Indemnification. Assignment. Modification and Renewal a) The Employer and Lender shall defend and indemnify the PIC and its officers, agents and 3of4 , employees against and hold the same free and harmless from any and all claims, demands, losses, costs, and/or expenses of liability due to or arising out of, either in whole or in part, whether directly or indirectly, the organization, development, construction, operation, or maintenance of the Employer's project except for liability arising-out of the concurrent or sole negligence of the PIC, its officers, agents or employees. b) If, during the term of this Agreement, the Employer should transfer possession of all or a portion of its business concerns to any other party by lease, sale, assignment or otherwise, the Employer as a condition of transfer shall require the party taking possession to agree, in writing, to the terms of this Agreement and to obtain approval of the Lender. Anew, Non-Financial Employment Plan Agreement shall be executed with the new party prior to the effective date of the transaction. c) This Agreement may, upon mutual agreement, be modified in order to improve the working relationship described .herein. d) The Lender may terminate this Agreement at any time by written notification if federal, state or local. grants are suspended or terminated before or during the contract period. 8. Acceptance The Undersigned hereby agrees to terms and conditions listed herein. EMPLOYER/BORROWER LENDER - ~1 Title: Mayor Title:----------------- Date:--l-/~~ c/ `3J---------- -1 Date: ATTEST "l%f,~ -----------------~-G----------- City Clerk Date:---/1 / ?~~cY PRIVATE INDUSTRY COUNCIL By~---------------- Title: Date: 4of4 l.J (3) .Have enough borrowing ability, or equity to operate, with the CDBG loan, on a sound financial basis; (4) Show the proposed loan is of sound value or reasonably secure to assure repayment; (5) Show that the past earning record, and future prospects of the firm, .indicate ability to repay the loan and other fixed debt, if any, out of the profits; and (6) For start-up businesses, present a 5-year business plan, which justifies the profitability of the business at year 2 and beyond. 4.1 Project Eligibili~ Projects must be business oriented and cannot be residential in nature. Projects are not eligible if they create a conflict of interest pursuant to California Government Code Section 871000 et seq.,. for any current City employee or elected official Project eligibility is based on the project satisfying the CDBG Program's national objectives of aiding in the prevention or elimination of blight OR principally benefiting TIG persons through job creation, as previously described (Section 2 of these Guidelines). Additionally, the eligibility of a project is dependent on the necessary and appropriate determination being made to justify the provision and extent of CDBG assistance 5.0 LOAN APPLICATION PROCESS AND REVIEW The City will accept preliminary applications submitted within 45 days from the ublication of the NOFA for initial review of eligibility under the Vernon Infrastructure Loan Program criteria. Potential projects, meeting the underwriting policies (Exhibit 1), will be invited to an application conference with City staff. .Applications that fail to meet the program criteria will be provided with a written explanation of the denial 5.1 Loan A lication Submittal and Re view ~r~cess A Loan -Advisory Committee will perform the initial project evaluation and enter appropriate information into an evaluation form. Th`e Loan Advisory Committee will consist of the Dl rector of Community Services and the City Administrator's representatives who, shall be responsible for reviewing loan applications and making recommendations to the City Administrator. Based on the business viability, urgency of need, potential public benefit, project costs, availability of funds and other criteria, the Loan Advisory Committee will make recommendations to the City Administrator for I funding., who in turn will deny the application or make recommendations to the City Council. The Council will have final approval authority for all loans. The Loan Advisory Committee will have a credit memo, project evaluation form, and loan funding recommendation prepared for consideration by City staff prior fo any funding. decisions by the City. The project evaluation. criteria to be considered include the following: 1 f 5 City of Vernon 4305 Santa Fe Avenue, Vernon, California 90058 (213) 583-8811 n-~ INFRASTR UCTURE OAN PRO... L GRAM I~ .h ~ ~I ~ ~ 3~ _4~, ~i ~~F / Yy~~. _ j. - i.. (f i State of California CDBG Economic Development Block Grant, 1996 December 10, 1997 T0: Bruce V. Malkenhorst, City Administrator FROM: Kevin Wilson, Director of Community Services & Water SUBJECT: KRONFLI APPLICATION/CDBG, PROJECT Kronfli Spundale Mills, Inc. has applied for funding through the Vernon Infrastructure -Loan Program. `Staff and project consultants (The Holt Group) have reviewed -the application and have agreed that the documents are acceptable and in conformance with the guidelines. In .:...addition, the review. has concluded that the project is categorically exempt to the California Environmental Quality Act. Kronfli has. applied for $143,232.00 to be used for various off-site improvements. The improvements include.: street-sewer, curbs, gutters, sidewalk and street trees. Attached~for your review is the application. ;It is my recommendation that the CommunityDevelopment:Block Grant be approved for Kronfli. If you agree, the application should. be submitted to City Council for approval and found that the project. is categorically exempt from the.Califomia Environmental Quality. Act. cc: City Attorney sS SKW/cmr ~~a~~Ar f~P'~/in ~~"r.,~'(,,~I r~ ~ ~a~ s ~ ~'S a y '1 ~ d 0.1/1} c+5 ~i~,a.3~ F.1.1 8;26 3a~i ;g1.9 - - D.~~~ID~B BFtE~kLEY<~-~a-, CITI' (:LERTC ~lOg1~00Y~ FR~h} KF?ONF'~I ~~Vh'DAL:E i`11LL5 F~N;jNE N0. ~ 21~ ~'B©908 Tarn. 1<5 19`.sF3 I~'7:4c~~•11`1 Fes] ~C1F V'~RNON Gt~AP1T Ai3P!`ICATION I. Cotr~ tntorrnatian PVame_ iCRON~LT SFyUNDAL$ MILLS, Z[VC. ,Address: a 4 a 0 ~ . 21?'Tii S?BEET , v>~~NON , CP? ~ p v a ~ T~slephone Na,c i ~ 1 78t)~770~ ConG3C! PerS4n: PAUL.. E . KRO>Q~'LT Project'AQdt~ss: 4`4 4 Q E . 2 6T~i STREET , 'VERNt7N; CA ~ O p 4 t] TYPe of 8u~iness; TEXTILE MAN>;7FACTURING Prvjpct Assessor P~~CBI Number(s):. Current Numbef of ~mplvyees: 4 t]0 - - - - Prc~e~cted Number cif Employecs After Campletlvn of Qroj~Gt: ~ ~ 0 Number of Empiayeea to be Hired During Year Onc: 1 d {Alas inQicBte which month{s) j+~bs begin) Number of !"rnptoyees tv D~ Nirod During Year YwC+: ~ ~ ` (Alba indicate which mvnth(s}jobs ty@gin) LY _ Total Number Of New Employees: 20 Tvtai Number of ~mptoyees Two Years From Completion of PrajeCt: ~ 20 _ - a Ogle ~ 0 0~ DdQ98 F~N-o a,era ~-~y~y~, ~ TO fy / From ' Phone i i ti0tJ zLZ'ON 685 0E£ 9i:9 NON~f1 ~0 ,I.LI~ ~.'b~0~ 8Ex%VTrt0 CITY COUNCIL DAVID B. BREARLEY City Attorney LEONIS C. MALBURG FAX: (626) 330-5818 Mayor ' KEVIN WILSON THOMAS A. YBARRA Director of Community Services & Water Mayor Pro-Tem FAX: (323) 588-2761 Wm. "BILL" DAVIS {a~~t " KENNETH J. DeDARIO , Councilman ` - Director of Municipal Utilities H. "LARRY" GONZALES ' ; - FAX: (323) 583-1983 f Councilman ' DAVE TELFORD W. MICHAEL McCORMICK ~ Fire Chief Councilman FAX: (323) 581-1385 BRUCE V. MALKENHORST BRUCE W. OLSON 4305 SANTA FE CITY HALLLIFORNIA 90058 City Administrator /City Clerk Police Chief FAX (323) 581-7924 TELEPHONE (323) 583-8811 FAX: (323) 583-5236 August 26, 1998 _ 915 K ~ ~ / ~ { ~ VIA FACSIMILE AND MAIL " ~ ~ ~ ~ ~ ~ ~ ~ Michael C. Baum, Esq. Law Offices. of Tucker & Baum 228 South Beverly Drive Beverly Hills, CA 90212-3880. Facsimile No. 310-246-6622 Re; Commitment to Make Commercial Loan - 4440 East 26th Street, Vernon, California -Kronfli Spundale Mills, Inc. and ColorAmerica Textile Processing,.. Inc. Dear Mr. Baum: Since my previous communication. to you dated August 17, 1998, I have discussed this agreement with the City Administrator. The City Administrator is unable to recommend at this time that the City change the obligation ofKronfli to purchase electricity from the City of Vernon for seven years. The City Administrator believes that since Kronfli has been reviewing. this arrangement for 17 months, they should recognize at this time that the City of Vernon's cost of electric power is the best available to them at this time. Consequently, he is unwilling and unable to recommend to the City Council that this provision be changed or altered in any way. If you have any questions concerning this letter, please call. Very truly yours, V~ ~ ~v David B. Brearley City Attorney DBB:jl cc. +~Ir. .Bruce V. Malkenhorst OFFICE OF THE CITY ADMINISTRATOR/CITY CLERK INTER-DEPARTMENT MEMORANDUM DATE: August 19, 1998 T0: David Brearley, City Attorney C~,$R~M: Bruce V. Malkenhorst, City Administrator RE: Your Kronfli Spundale Mills, Inc. Communication dated August 17, 1998 Dear David: I feel it is appropriate for us to hold them to the seven (7) year provision in which they would buy electricity from the City of Vernon for that amount of time. I assume that after reviewing this for seventeen months they recognize that this is the best deal and consequently we should hold them to that purchase of power for that period of time. /g7 0 :CACCmemo 4 uF vE~ L tylFOpN GR, ~ ~qa i /I i_ _ ~ ~ M~ I v ~j 0 OFO 1 f UM 1g 05 / ~,V, C 5~ Gs~VELY ll'~0~ THE REDEVELOPMENTAGENCY OF THE CITY OF VERNON 4305 Santa Fe Avenue, Vernon, California 90058 (213)583-8811 FAX.• (213) 581-7924 August 17, 1998 VIA FACSIMILE AND MAIL Mr. Bruce V. Malkenhorst Executive Director 4305 Santa Fe Avenue Vernon, CA 90058-0805 Re: Kronfli Spundale Mills, Inc./Purchase of 4440 East 26th Street Dear Bruce: At the request of Michael C. Baum, attorney for Kronfli, and Jack Cline of Lee & Associates, the real estate agent for Kronfli, I have reviewed the Kronfli file and determined that on July 29, 1997, Kronfli had still objected to a provision of the agreement, even though we had made substantial changes to the agreement which were contained in my letter to Mr. Baum of July 11, 1997. The remaining issue was the number of days the Agency would have before it would deposit its funds into escrow upon receiving notice from Kronfli that it intended to use the funds required pursuant to the loan commitment agreement. The reason we had insisted upon 60 days was to permit the Agency and the Agency staff enough time to review all of the documentation and to satisfy itself that the security and all other matters and conditions precedent to the loan commitment agreement were satisfied to the Agency's satisfaction prior to the Agency having to deposit a sum not to exceed $1.5 million into Kronfli's escrow to assist the purchase and acquisition of the property. With the recent phone calls, I assume that Kronfli has now decided that they wish to go forward with the loan commitment agreement, and that they are willing to accept the provision permitting the Agency 60 days to review all of these matters prior to the Agency having to deposit its funds into escrow. This negotiation started in January of 1997, over 17 months ago, and you may wish to consider whether the Agency's position remains the same. BOARD MEMBERS: Leonis C. Malburg, Chairman, Thomas A. Ybarra, Vice Chairman, Wm. "Bill" Davis, Director, H. "Larry" Gonzales, Director, W. Michael McCormick, Director. EXECUTIVEDIRECTOR/SECRETARY .Bruce V. Malkenhorst LEGAL COUNSEL David B. Brearley 1 Mr. Bruce V. Malkenhorst Page 2 August 17, 1998 The Agency .offered to enter into this loan commitment as an inducement to Kronfli to move into the City. Included as part of the loan commitment is the obligation that Kronfli would have to take electricity from the City of Vernon for seven years. However, Kronfli had insisted upon modifying that provision so that if Kronfli decided to no longer take electricity from the City of Vernon, it could do so provided that it released the Agency from its .commitment and/or discharged the loan agreement if the Agency had already made the loan. I believe Kronfli has now moved into the City and has remodeled the facility and is now in operation. Whether you wish to recommend to the Agency a different policy recommendation for this transaction at this time is within your discretion. If you have any questions concerning this matter, please call. Very truly yours, .David B. Brearley Legal Counsel DBB:jl T \ CITY COUNCIL DAVID B. BREARLEY City Attorney LEONIS C. MALBURG FAX: (626) 330-5818 Mayor KEVIN WILSON THOMAS A. YBARRA Director of Community Services & Water Mayor Pro-Tem FAX: (323) 588-2761 Wm. "BILL" DAMS - ~ KENNETH J. DeDARI0 Councilman Director of Municipal Utilities I-I. "LARRY" GONZALES FAX: (323) 583-1983 Councilman DAVE TELFORD W. MICHAEL McCORMICK Fire Chief Councilman FAX: (323) 581-1385 CITY HALL BRUCE V. IvIAI.KENHORST 4305 SANTA FE AVENUE,. VERNON, CALIFORNIA 90058 BRUCE W. OLSON City Administrator /City Clerk Police Chief FAX (323) 581-7924 TELEPHONE (323) 583-8811 FAX: (323) 583-5236 August 17 1998 ~"~4~_,~~>,~'~~ ~ ~ E VIA FACSIMILE AND MAIL ~ ~ n ~ Michael C. Baum, Esq. Law Offices of Tucker & Baum 228 South Beverly Drive Beverly Hills, CA 90212-3880 Facsimile No. 310-246-6622 Re: Commitment to Make Commercial Loan - 4440 East 26th Street, Vernon, California - Kronfli Spundale Mills, Inc. and ColorAmerica Textile Processing, Inc. Dear Mr. Baum: In response to your recent telephone call, I have reviewed the file relating to the Commitment to Make a Commercial Loan at the above-referenced property which was communicated to your client in several meetings during Spring of 1997. The Redevelopment Agency staff's negotiations with your client started approximately January of 1997 and reached an impasse with your last letter of July 29, 1997. I have reviewed your letter dated July 29, 1997, where you objected to your client having. to provide in escrow all the necessary documentation 60 days prior to when. the Agency would deposit funds required pursuant to the loan commitment. As I understand our telephone conversation, your. client is no longer concerned with having to deposit in escrow all the necessary documentation and down payment 60 days prior to the Agency having to deposit its funds. If that is in error, please iet me know.., Michael C. Baum, Esq. Page 2 August 17, 1998 Since-your client appeared to reject the proposed Commitment to Make a .Commercial Loan as modified by my letter to you of July il, 1997, the file on this matter had been closed. If your client is now interested in pursuing the loan commitment consistent with my letter of July 11, 1997, I will communicate that to Mr. Malkenhorst, the City Administrator and Executive Director of the Redevelopment Agency. If you have any questions concerning this letter, please call. Very truly yours, David B. Brearley City Attorney DBB:jl cc: Mr. Bruce V. Malkenhorst