Special Notice / Hearing: None__
Vote Required: Majority
To: Honorable Board of Supervisors
From: Michael P. Callagy, County Executive
Subject: Pacifica Resource Center Loan
RECOMMENDATION:
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Adopt a resolution:
A) Authorizing the form of and directing the execution and delivery by the County Executive, or designee, of an agreement under which the County will loan Pacifica Resource Center, a 501(c)(3) non-profit corporation, the principal amount of $1,000,000 to be used to acquire that certain property located at 1809 Palmetto Ave., Pacifica, California 94044, as more particularly described in the loan documents (the “Property”); and
B) Authorizing the form of a Promissory Note evidencing Pacifica Resource Center’s obligation to repay the loan at the rate of 3.75% per annum, for a term of twenty-five years; and
C) Authorizing the form of a Deed of Trust in favor of the County securing the loan, which shall be recorded as a lien against the Property; and
D) Authorizing the form of a Deed Restriction in favor of the County requiring that the property be used solely for charitable purposes consistent with 501(c)(3) nonprofit status for a period of twenty-five years, which shall be recorded as a lien against the Property; and
E) Authorizing and approving the taking of all necessary actions by the County Executive, or designee, in consultation with the County Attorney, to facilitate the closing of the transaction, including to do any and all things and to execute and deliver any and all documents and certificates deemed necessary or advisable by the County Executive, or designee, in order to consummate the execution and delivery of the documents mentioned herein and otherwise to effectuate the purposes of this Resolution and the transaction contemplated hereby.
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BACKGROUND:
Pacifica Resource Center (“PRC”) is a non-profit organization under 501(c)(3) of the Internal Revenue Code whose mission is to support the resilience and well-being of families and individuals in Pacifica and along the San Mateo County coast. PRC’s services in support of its mission include the following services that benefit and serve the public: providing groceries onsite or by delivery to help the community feed their families; emergency financial assistance for past due rent, mortgage, deposit, and utilities to reduce the risk of homelessness; and financial education and coaching, tax preparation, and matched savings programs to help increase families’ economic security.
As one of eight Core Service Agencies in the County, PRC works in close collaboration with the County to provide vulnerable children, adults, and families in San Mateo County.
For decades, PRC has operated and provided services to the community out of that certain property and improvements thereon located at 1809 Palmetto Ave., Pacifica, CA 94044 as more particularly described at Exhibit A to the form of loan agreement (the “Property”) under a lease with the current owner.
The current owner desires to sell the Property, and PRC desires to purchase the Property in order to continue operating and providing services to the community from that location, and has entered into a purchase and sale agreement with the seller to acquire the property for a purchase price of $1,250,000, subject to certain contingencies (“Purchase”).
DISCUSSION:
PRC seeks financing for the Purchase in which it would provide $250,000 toward the Purchase price, with the County loaning the remaining amount of $1,000,000 at closing of the transaction.
Facilitating PRC’s continued delivery of core services to vulnerable County residents in Pacifica and the mid-coast area, including provision of basic emergency and support services, serves a public purpose. In furtherance of the County’s efforts to facilitate the community’s continued access to these public benefits and core services, staff recommends that the County enter into an agreement to loan PRC the principal amount of $1,000,000, with interest accruing on the unpaid principal amount at the fixed rate of 3.75% per annum, for a term of twenty-five years to fund the Purchase, conditional upon PRC providing $250,000 toward the Purchase price and agreeing to restrict the use and operation of the Property to charitable purposes consistent with its status as a 501(c)(3) nonprofit organization, for a period of twenty-five years.
PRC’s obligation to repay the loan would be evidenced by a Promissory Note secured by a Deed of Trust in favor of the County which shall be recorded as a lien against the Property. In addition, as noted, a deed restriction would also be recorded against the Property at closing, requiring that the Property be used for charitable purposes for a period of twenty-five years.
The County Attorney has reviewed the proposed Loan Agreement, Promissory Note, Deed of Trust, Deed Restriction and resolution as to form.
COMMUNITY IMPACT:
Authorizing this loan to PRC will facilitate its continued operations and service delivery to some of the County’s most vulnerable residents. The community’s continued access to the public benefits and core services offered by PRC at this location will provide positive impacts to Pacifica and the County’s coastside communities.
FISCAL IMPACT:
The County’s maximum fiscal obligation under the Agreement shall not exceed $1,000,000.00 and such funds are available in the County’s Non-Departmental Services General Fund. The loan payments from the PRC, including interest at a fixed rate of 3.75% per annum, will total approximately $1,542,393.60 over the twenty-five-year term of the loan, if not repaid earlier. The loan payments will be deposited into the County’s Non-Departmental Services General Fund.