FAIRFIELD — A loan first made by the city redevelopment agency to help finance construction of the Green Valley Executive Center will end, $699,140 in proceeds will be distributed as property taxes and the owner can restructure multiple loans on the three-story office building under a proposal a city panel approved Tuesday.
The Fairfield City Council, meeting as the successor to the redevelopment agency, approved without comment the recommendation involving the Business Center Drive property.
David White, deputy city manager, said about 15 to 20 percent of the $699,140 distributed as property taxes would go to Fairfield. The rest would go to other taxing agencies, including Solano County, the Fairfield-Suisun School District and the Solano Community College District.
If Green Valley Executive Center fails to complete the financial restructuring by June, it’s likely the property would enter foreclosure and the successor agency to city redevelopment would lose its entire investment, according to a city report.
“That’s what’s at stake,” White said Monday.
The former redevelopment agency made a $699,140 loan to help finance the 45,000-square-foot office building constructed in 2006. The loan is in default and the city staff has been negotiating with the property owners over the past two years to resolve the matter, according to the report by White.
A June 2013 appraisal valued the building at $10.7 million but the property has about $13 million in loans – including an $8.2 million construction loan due this June. To obtain permanent financing and prevent foreclosure, the owner proposed the financial restructuring, White wrote in his report.
All creditors, including the successor to city redevelopment, would waive unpaid interest totaling more than $1.5 million. Fairfield is waiving about 10 to 15 percent of $721,858 in unpaid interest.
The executive center opened about when the real estate marked crashed in California. The site along Business Center Drive is now more than 90-percent occupied, White said.
“It’s a Class A property in Fairfield,” White said. “It’s a building that’s been an asset to the community and particularly the Cordelia area.”
With approval Tuesday to end the loan agreement, the matter now goes to the seven-member oversight board – representing agencies that include the city, Solano County, Fairfield-Suisun School District and the Solano College district – and the state Department of Finance.
Reach Ryan McCarthy at 427-6935 or [email protected]