Resolution No. 71491
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RESOLUTION NO. 7149
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
VERNON APPROVING AND AUTHORIZING THE EXECUTION
OF AN ELECTRICAL SERVICE CREDIT AGREEMENT BY AND
BETWEEN THE CITY OF VERNON, THE REDEVELOPMENT
AGENCY OF THE CITY OF VERNON AND CROWN POLY,
INC.
WHEREAS, Crown Poly, Inc. ("Company") is a manufacturer
of high density plastic bags, currently located at 4168 Bandini
Boulevard in the City of Vernon, California; and
WHEREAS, Company has expanded its production facility by
rehabilitating and occupying vacant space in order to add new
production lines and new machinery, thereby increasing the value
of its property and creating new employment opportunities within
the City of Vernon and the Vernon Industrial Redevelopment Project
Area; and
WHEREAS, Company's expansion and investment in new
production machinery has required the installation of new
electrical service facilities to serve said new machinery and said
increase in electrical service facilities will cause Company to
use an increased amount of electricity; and
WHEREAS, Company presented a request to the City in
February, 1997, for financial assistance in meeting the cost of
installing such new electrical service facilities, and since that
time, Company and City have engaged in discussions concerning what
form such assistance might take; and
WHEREAS, City has conducted a due diligence examination
of the expenses incurred by Company in installing the new
electrical service facilities; and
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WHEREAS, the City of Vernon, the Redevelopment Agency of
the City of Vernon ("Agency") and Company intend to enter into an
Electrical Service Credit Agreement to establish the terms and
conditions for Company (i) to receive a credit against future
electric bills during the first twelve (12) months of Company's
operation in order to reimburse the Company for funds spent in the
installation of electrical service facilities which will support
the redevelopment of the Property; and (ii) to purchase
electricity from the City of Vernon; and
WHEREAS, the installation of new electrical service
facilities to serve the machinery at Company's Vernon facility
will contribute to the implementation of the redevelopment program
for the City of Vernon, will contribute to the redevelopment of
the project area, and will benefit the health, safety, and public
welfare of the City of Vernon.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF VERNON AS FOLLOWS:
SECTION 1: The City Council hereby finds and determines
that the recitals contained hereinabove are true and correct.
SECTION 2: The City Council hereby approves the
Electrical Service Credit Agreement, a copy of which has been
presented to the City Council concurrently with this resolution,
and the City Council hereby orders said Agreement to be received
and filed by the City Clerk.
SECTION 3: The City Council hereby authorizes the Mayor
and the City Clerk to execute said Agreement for, and on behalf
of, the City of Vernon.
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1 SECTION 4: 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 25th day of June, 1998.
5 f _
6 EONIS C. MAL URG, MaIyor
7 ATTEST:
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BRUCE V. MALKENHORST, City Clerk
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• S
a. r r L •
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STATE OF CALIFORNIA )
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COUNTY OF LOS ANGELES )
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I, BRUCE V. MALKENHORST, City Clerk of the City Council
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of the City of Vernon, do hereby certify that the foregoing
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Resolution, being Resolution
No. 7149, was duly adopted by the
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City Council of the City of Vernon (hereinafter "City Council") at
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an adjourned regular meeting
of the City Council duly held on
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Thursday, June 25, 1998, and
thereafter was duly signed by the
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Mayor of the City of Vernon.
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BRUCE V. MA KLKENHORST, City Clerk
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(SEAL)
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ELECTRICAL SERVICE CREDIT AGREEMENT
Execution Copy
THIS ELECTRICAL SERVICE CREDIT AGREEMENT is made, entered
into and executed in duplicate originals, either copy of which may
be considered and used as the original hereof for all purposes, as
of this �day of�1998,
BY AND BETWEEN THE CITY OF VERNON, a municipal
corporation (hereinafter
referred to as the "CITY"),
4305 Santa Fe Avenue
Vernon, California, 90058
AND THE REDEVELOPMENT AGENCY OF THE
CITY OF VERNON, a municipal
corporation (hereinafter
referred to as the "AGENCY"),
4305 Santa Fe.Avenue
Vernon, California, 90058
AND CROWN POLY, INC., a California
corporation (hereinafter
referred to as "COMPANY")
4168 Bandini Blvd.
.Vernon CA 90023
RECITALS
AGENCY, CITY and COMPANY enter into this Electrical
,Service Credit Agreement (hereinafter "Agreement") in recognition
of, and concurrence in, the followings
A. COMPANY is a manufacturer of high density plastic
bags, currently located at 4168 Bandini Blvd. in the City of
Vernon, California, which is located within the Vernon Industrial
Redevelopment Project Area.
B. COMPANY has expanded its production facility by
rehabilitating and occupying vacant space in order to add new
production lines, thereby increasing the value of its property and
creating new employment opportunities within the Project Area.
1 C. COMPANY's expansion and investment in new production
2 machinery has required the installation of new electrical service
3 facilities to serve said new machinery.
4 D. COMPANY presented a request to the Agency in
5 February, 1997, for financial assistance in meeting the cost of
6 installing such new electrical service facilities, and since that
7 time, COMPANY and Agency have engaged in discussions concerning
8 what form such assistance might take.
9 E. AGENCY and CITY have conducted a due diligence
10 examination of the expenses incurred by COMPANY in installing the
11 -new electrical service facilities.
12 F. CITY, AGENCY and COMPANY have agreed that the
13 AGENCY will provide a credit not to exceed NINETY THOUSAND DOLLARS
14 AND NO CENTS ($90,000.00) against future electric bills during the
15 first twelve (12) months of operation in order to pay for a
16 portion of the reconstruction and rehabilitation of electrical
17 facilities to serve the new machinery which will be located at the
18 COMPANY facilities.
19 G. CITY is a chartered municipal corporation of the
20 State of California that owns and operates a system for the
21 generation, purchase, transmission, distribution, and sale of
22 electric capacity and energy. CITY serves electricity to
23 consumers at retail from the CITY's distribution system located
24 within its municipal boundaries; and
25 H. The AGENCY was created by the CITY in 1986 in
26 order to assist in the redevelopment of blighted areas and to
27 support the reconstruction and rehabilitation of real property and
28 buildings located in the Project Area; and
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I. COMPANY has agreed to make investments in
additional manufacturing equipment in the CITY and agrees to
purchase electricity (capacity and energy) from CITY for use in
its industrial process to be conducted at the Property for the
next seven (7) years in consideration for the CITY providing said
credit.
NOW, THEREFORE, THE PARTIES HERETO DO MUTUALLY AGREE AS
SET FORTH HEREIN:
1. EFFECTIVE DATE AND OBLIGATIONS.
The Agreement shall be effective on the date of
execution. The obligations of the CITY and COMPANY to purchase
and sell electricity service hereunder will start on July 1, 1998,
hereinafter "Date of Operation." This Agreement and the
obligations hereunder shall expire seven (7) years after the Date
of Operation unless an Event of Default occurs.
A. During the term of this Agreement, CITY will
supply, and COMPANY will purchase, the full requirements of the
COMPANY for electricity at the Property. COMPANY will not itself
generate electricity or otherwise obtain any electricity from any
source other than the CITY.
B. AGENCY shall pay CITY on COMPANY's behalf a
credit not to exceed NINETY THOUSAND DOLLARS AND NO CENTS
($90,000.00) for electrical service used by COMPANY during the
first twelve (12) months only following the Date of Operation.
This credit obligation will terminate after said period and any
unused credit will be canceled. Said credit shall be granted on a
monthly basis equivalent to the demand charge, but not to exceed
fifty percent (50%) of each month's electrical billing. Said
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credit shall be deemed a loanby the AGENCY to the COMPANY and
shall accrue interest at the rate of five and one-half percent (5
1/2%) per year compounded monthly, which loan and interest shall
be forgiven on a proportional basis during the eighty-four (84)
month term of the Agreement upon fulfillment of the terms and
conditions of this Agreement. Any Event of Default as set forth
in Section 4 hereof shall cause AGENCY's credit obligation to
terminate. In such Event of Default, COMPANY will repay to AGENCY
for the amount of any credit previously advanced plus interest on
a proportional basis for the remainder of the eighty-four (84)
month term.
C. Agency shall pay to the City the cost to install
upgraded electrical service facilities to the customer's meter.
This amount to be THIRTY-ONE THOUSAND FIVE HUNDRED DOLLARS AND NO
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CENTS ($31,500.00).
2. CONDITION PRECEDENT TO ELECTRICAL SERVICE CREDIT.
AGENCY's obligation to provide the electrical service
credit is subject to the following conditions:
A. Prior to the Date of Operation, COMPANY shall
have delivered to AGENCY and. CITY, a fully executed copy of this
Agreement.
B. COMPANY shall have installed all of its new
equipment and begun operation of said new equipment.
C. COMPANY shall have obtained and paid for all
necessary local and state licenses and permits for operation of
its manufacturing business including City of Vernon building,
electrical and mechanical permits, health permit, certificate of
occupancy, business license, etc.
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D. COMPANY shall have paid for all electrical
services used during the prior period and shall have paid for the
reconstruction and rehabilitation of the electrical service
facilities.
3. PRESENTATIONS AND WARRANTIES.
COMPANY represents and warrants that:
A. COMPANY is a corporation duly organized and
existing under the laws of the State of California with its
principal place of business at 4168 Bandini Boulevard, Vernon,
California.
B. COMPANY has the power to own property and to
carry on business as it is now being conducted.
C. COMPANY is duly qualified and authorized to do
business and is in good standing in every state, country, or other
jurisdiction in which the nature of its business and properties
makes such qualification necessary.
D. COMPANY has full power and authority (corporate
and other) to execute and deliver this Agreement and to perform
and observe the terms and provisions of this Agreement.
E. All corporate action by COMPANY, its directors or
stockholders, necessary for the authorization, execution,
delivery, and performance of this Agreement has been duly taken.
F. The officers of COMPANY executing this Agreement
are duly and properly in office and fully authorized to execute
said agreement.
G. This Agreement has been duly authorized,
executed, and delivered by COMPANY, and is a legal, valid, and
binding agreement of COMPANY, enforceable against it in accordance
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1 with its terms.
2 H. There is no charter, bylaw, or capital stock
3 provision of COMPANY, and no provision of any indenture or
4 agreement, written or oral, to which COMPANY is a party or under
5 which COMPANY is obligated, nor is there any statute, rule, or
6 regulation, or any judgment, decree, or order of any court or
7 agency binding on COMPANY which would be contravened by the
8 execution and delivery of this Agreement.
.9 I. All financial statements, information, and other
10 data furnished by COMPANY to AGENCY and CITY are complete and
11 correct, have been prepared in accordance with generally accepted
12 accounting principles and practices consistently applied. Such
13 financial statements, information, and data accurately and fairly
14 represent the financial condition and results of operations of
15 COMPANY as of the date shown thereon. Since that date there has
16 been no material adverse change in COMPANY's financial condition
17 or results of operations sufficient to impair COMPANY's ability to
18 perform the terms of this Agreement. COMPANY has no contingent
19 obligations, liabilities for taxes, or other outstanding financial
20 obligations which are material in the aggregate, except as
21 disclosed in such financial statements, information, and data.
22 4. EVENTS OF DEFAULT.
23 The occurrence of any of the events set forth below (an
24 Event of Default) shall be grounds for AGENCY to terminate its
25 obligation to make or continue to provide credit for electric
26 bills during the first twelve (12) months of operation, at the
27 option of AGENCY or to demand repayment of all the credit advanced
28 prior to such default. AGENCY shall give COMPANY ten (10) days
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1 written notice of any Event of Default and request that COMPANY
2 cure said Default. The termination of the credit obligation by
3 AGENCY will not terminate the obligation of COMPANY under Section
4 1.A until COMPANY has repaid AGENCY for any credit amounts
5 previously advanced. Each of the following shall constitute an
6 Event of Default:
7 A. Any representation or warranty by COMPANY in this
8 Agreement proves to be false or misleading in any material respect
9 at the time made.
10 B. If COMPANY relocates outside the City of Vernon.
11 C. If COMPANY ceases taking its full requirement of
12 electric service during the term hereof.
13 D. If COMPANY breaches or defaults under any
14 material term, condition, provision, representation, or warranty
15 in this Agreement, if that breach or default shall continue for
16 ten (10) days after its occurrence, or after notice of the breach
17 or default to COMPANY from AGENCY, whichever is later.
18 5. MISCELLANEOUS PROVISIONS.
19 A. Any communications between the parties or notices
20 provided for in this Agreement may be given by mailing them, first
21 class, postage prepaid, to AGENCY and CITY or to COMPANY at the
22 address first above indicated, or to such other address as any
23 party may indicate to the other in writing after the date of this
24 Agreement.
25 B. This Agreement shall bind and inure to the
26 benefit of the parties and their respective successors and
27 assigns; provided, however, that COMPANY shall not assign this.
28 Agreement or any of its rights, duties, or obligations without the
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1 prior written consent of AGENCY and CITY.
2 C. No delay or omission to exercise any right,
3 power, or remedy accruing to a party on any breach or default of
4 the other party under this Agreement shall impair any such right,
5 power, or remedy, nor shall it be construed to be a waiver of any
6 such breach or default, or an acquiescence in such breach or
7 default, or waiver of or acquiescence in any similar breach or
8 default occurring later; nor shall any waiver of any single breach
9 or default be considered a waiver of any
other prior or subsequent
10 breach or default. Any waiver, permit, consent, or approval of
11 any kind by a party of any breach or default under this Agreement,.
12 or any waiver of any provision or condition of this Agreement,
13 must be in writing and shall be effective only to the extent
14 specifically set forth in that writing. All remedies, either
15 under this Agreement or by law or otherwise afforded to a party,
16 shall be cumulative and not alternative.
17 D. In the event of any legal action or suit in
18 relation to this Agreement or any note or other instrument
19 required under this Agreement, or in the event that a party incurs
20 any legal expense in protecting its rights under this Agreement or
21 under any security agreement in any legal proceeding, the other
22 party, in addition to all other sums which such party may be
23 called on to pay, if the other party prevails in such action, will
24 pay the other party a reasonable sum for attorney's fees and all
25 other legal costs and expenses.
26 6. BINDING EFFECT.
27 This Agreement shall be binding on and inure to the
-28 benefit of and be enforceable by the parties to it and their
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respective successors, assigns, spouses, heirs, and personal and
legal representatives.
7. SEVERABILITY.
If any portion of this Agreement shall be held by a court
of competent jurisdiction to be invalid, void, or otherwise
unenforceable, the remaining provisions shall remain enforceable
to the fullest extent permitted by law. Furthermore, to the
fullest extent possible, the provisions of this Agreement
(including, without limitation, each portion of this Agreement
containing any provision held to be invalid, void or otherwise
unenforceable, that is not itself invalid, void or enforceable)
shall be construed so as to give effect to the intent manifested
by the provision held invalid, void, or unenforceable.
8. GOVERNING LAW.
This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of California.
9. ENTIRE AGREEMENT.
This agreement supersedes any and all other agreements,
either oral or in writing, between the parties hereto with respect
to the subject hereof and contains all of the covenants and
agreements between the parties with respect to said matter. Each
party to this agreement acknowledges that no representations,
inducements, promises, or agreements, orally or otherwise, have
been made by any party, or anyone acting on behalf of any party,
which are not embodied herein, and that no other agreement,
statement, or promise not contained in this agreement, except for
the Commercial Loan Agreement, shall be valid or binding. Any
modification of this agreement will be effective only if it is in
1 writing signed by the party to be charged.
2 IN WITNESS WHEREOF, the parties to this Agreement have
3 executed this Agreement by their duly authorized officers
4 effective as of the day and year first above written.
5 CITY OF VERNON
6 BY: '✓�Z>'
7 .. L ONIS C. MAL URG, M yor
ATTEST:
9 BRUCE V. MALKENHORST, City Clerk
10 APPROVED AS TO FORM:
11 BY:;
12
DAVID B. BREARLEY, City At orney
REDEVELOPMENT AGENCY OF THE
13 CITY OF VERNON
14 BY : s
15 ONIS C. MALBU G, Chair an
.__. "
ATTEST:
17 BRUCE V. MALKENHORST, Secretary
18 APPROVED AS TO FORM:
19 BY: �-- w_�
DAVID B. BREARLEY, Leg 1 Counsel
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CROWN POLY, INC.
21 A California Corporation
22 BY: v A0-47�
2tBRAHAM SINHAEE, President
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�l�R�tlrn ��'✓! HC Secretary
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CITY COUNCIL
LEONIS C. MALBURG
Mayor
THOMAS A. YBARRA
Mayor Pro -Tern
Wm. 'BILL" DAVIS
Councilman
H. "LARRY" GONZALES
Councilman
W. MICHAEL McCORMICK
Councilman
BRUCE V. MALKENHORST
City Administrator/City Clerk
FAX: (213) 581-7924
Mr. Ebrahim Simhaee
President
Crown Poly, Inc.
4168 Bandini Blvd.
Vernon, CA 9 90058
Dear Simhaee:
CITY HALL
4305 SANTA FE AVENUE, VERNON, CALIFORNIA 90058
TELEPHONE (213) 583-8811
August 17, 1998
DAVID B. BREARLEY
City Attorney
FAX: (818) 330-5818
KEVIN WILSON
Director of Community Services & Water
FAX: (213) 588-2761
KENNETH J. DeDARIO
Director of Light & Power
FAX: (213) 583-1983
DAVE TELFORD
Fire Chief
FAX: (213) 581-1385
LOUIS ROSENKRANTZ
Police Chief
FAX: (213) 581-1178
Enclosed herewith is the agreement by and between the City of Vernon and
the Redevelopment Agency of the City of Vernon and Crown Poly, Inc.
which was approved by the City Council and the Redevelopment Agency on
June 23, 1998. If you have any questions please do not hesitate to
contact this office.
Very truly yours,
CITY,; VERNON
' . �'�..��✓ Lei
is J. Or sco
Chief Depu City Clerk
/gjo
:FormLtr
OFFICE OF THE CITY CLERK
INTER -DEPARTMENT MEMORANDUM
DATE: August 4, 1998
TO: Ken DeDario, Director of Utilities
FROM: Gloria J. Oros o hief Deputy City Clerk
RE: Approved Agreement - Crown. Poly Inca & City of Vernon &
The Redevelopment Agency of the City of Vernon
Dear Ken:
Attached hereto a fully executed duplicate original of the above
referenced agreement which was approved by City Council at their
meeting held July 7. At your request I am submitting this to you to
forward directly to Mr. Abraham Simahee at Crown Poly. Duplicate
originals for each agency have been retained in this office.
Thank you.
P.S. For future reference if and when they move on the commercial
loan agreement for Crown Poly it will be handled by Messrs.
Malkenhorst and Brearley. If there are any questions of Mr. Simahee
on that issue you can refer him to this office.
cc: agreement file(s)
/gjo
:SndOkdAgmntMemo
MEMORANDUM
TO: Bruce V. Malkenhorst, Executive Director of the
Redevelopment Agency of the City of Vernon
FROM: Carol Dacey, Cust. Svc. & Info. System Mgr.
DATE: December 14, 1998
SUBJECT: CROWN POLY, INC.
Per section 1.B of the "Electrical Service Credit Agreement"
between Crown Poly, Inc. and the City of Vernon and the
Redevelopment Agency of the City of Vernon, a credit for $2544.47
has been issued to Crown Poly, Inc. for the billing period 11/12/98
11/30/98 and the attached bill is now due and payable from the
Redevelopment Agency.
CC: Martha Valenzuela, Office Manager
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U
Information to be entered when assigning new agreement#
to system.
CATEGORY (circle one only) : L & P, GAS., GENERAL, LICENSE
AGREEMENTS OR REDEVELOPMENT AGENCY
# 1. Approval date:
#2. Title of Agreement/Contract:
# 1 a. Agreement # f- �S%
#3. Effective Date: (if different from approval date)
#4. Expiration Date: (if applicable) oIS' -OR
#5. Expiration Date: NONE
Ag t ata