9-A
TO: Honorable Mayor and Members of the City Council
ATTENTION: Ryan Smoot, City Manager
FROM: Jim DellaLonga, Director of Economic Development
SUBJECT: Consideration and possible action to adopt Resolution No. 24-64 – A Resolution adopted pursuant to Sections II and VII(C) of the Bellflower City Charter finding that a loan issued to acquire real property by a private party seeking to develop a residential project does not constitute a public subsidy requiring payment of prevailing wage in accordance with Labor Code § 1720; and determining that Loan Agreement File No. 1064 is not subject to prevailing wage pursuant to the City Charter and authorizing the City Manager to execute Amendment No. 1 to Loan Agreement File No. 1064, in a form approved by the City Attorney, with California Land Investments, LLC (City Ventures Holdings, LLC) for the purchase of real property located at 9903 Flower Street (APN 7109-013-033).
DATE: December 12, 2024
EXECUTIVE SUMMARY
The approval and execution of the Loan Agreement and associated documents with City Ventures for the acquisition of the former White’s Funeral Home property at 9903 Flower Street (Property) for future development occurred before the City Charter becoming effective (Measure B approved on November 5, 2024). Adopting Resolution No. 24-64 would determine that Loan Agreement 1064 (Loan Agreement) is not subject to prevailing wage pursuant to the City Charter and authorize the City Manager to execute Amendment No. 1 to reflect that determination.
RECOMMENDATION TO CITY COUNCIL
1) Adopt Resolution No. 24-64, determining Loan Agreement File No. 1064 is not subject to prevailing wage and authorizing the City Manager to execute Amendment No.1 to Loan Agreement File No. 1064 with California Land Investments, LLC (City Ventures Holdings, LLC), in forms approved by the City Attorney; or
2) Alternatively, discuss and take other action related to this item.
FISCAL IMPACT
None.
DISCUSSION
On October 14, 2024, the City Council authorized the City Manager to execute the Loan Agreement and associated documents with California Land Investments, LLC (City Ventures) to lend $3,660,000 to City Ventures for the acquisition of the Property. The Loan Agreement was executed before Measure B, the City Charter, became effective.
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Staff Report – Amendment No. 1 to Loan Agreement 1064 with California Land Investments, LLC (City Ventures Holdings, LLC)
December 12, 2024
DISCUSSION – Continued
Following certification of the November 5th election results, the City Council may make findings in accordance with the City Charter that the Loan Agreement is not a “public works project” that is subject to prevailing wage. That determination – reflected in Resolution No. 24-64 – would be memorialized in Amendment No. 1 to the Loan Agreement.
ATTACHMENT
Resolution No. 24-64 .................................................................................................................. 3
CITY OF BELLFLOWER
RESOLUTION NO. 24-64
A RESOLUTION ADOPTED PURSUANT TO SECTIONS II AND VII(C) OF
THE BELLFLOWER CITY CHARTER FINDING THAT A LOAN ISSUED
TO ACQUIRE REAL PROPERTY BY A PRIVATE PARTY SEEKING TO
DEVELOP A RESIDENTIAL PROJECT DOES NOT CONSTITUTE A
PUBLIC SUBSIDY REQUIRING PAYMENT OF PREVAILING WAGE IN
ACCORDANCE WITH LABOR CODE § 1720
THE CITY COUNCIL DOES RESOLVE AS FOLLOWS:
SECTION 1: Findings. The City Council finds as follows:
A. On November 5, 2024, the voters adopted a City Charter via Measure B.
The City Charter will become effective December 22, 2024 in accordance with Elections Code § 9217.
B. Article XI, § 5 empowers the City Council to exercise home rule within the City’s jurisdiction. Section II of the City Charter authorizes the City Council to make and enforce all laws respecting the City’s municipal affairs including, without limitation, the ability to establish criteria to determine whether a project qualifies for payment of prevailing wage (City Charter, § VII(C)).
C. On October 14, 2024, the City Council authorized the City Manager to execute Loan Agreement No. 1064 with California Land Investments, LLC (the “Loan”) to acquire real property in anticipation of constructing a residential development (the “Project”).
D. The terms of the Loan may require the developer to pay prevailing wage for constructing the Project in accordance with Labor Code § 1720 since the Department of Industrial Relations (“DIR”) may consider the Loan a “public subsidy.”
E. The California Supreme Court determined that charter cities are not subject to the Prevailing Wage Law (AFL-CIO v. City of Vista (2012) 54 Cal.4th 547). While Section VII of the Bellflower City Charter requires prevailing wage be paid for “public projects erecting, improving, painting, or repairing public buildings and projects,” it allows the City Council to “establish criteria to determine whether a project qualifies for payment of a minimum wage different than that ordinarily prevailing for work performed on public works projects as defined by California law.”
City of Belflower
Resolution No. 24-64
SECTION 2: City Charter, Section VII Determination. In accordance with Sections II and VII of the City Charter, the City Council determines that the Loan does not constitute a public subsidy for which prevailing wage must be paid when the Project is constructed.
See, Tevis v. City and County of San Francisco (1954) 43 Cal. 2d 190; City of Santa Monica v. Grubb (1966) 245 Cal. App. 2d 718; and AFL-CIO v. City of Vista (2012) 54 Cal.4th 547.
SECTION 3: Authorization. The City Manager is authorized to amend Loan Agreement No. 1064, in a form approved by the City Attorney, to reflect the determinations made by the City Council in this Resolution . Any such amendment must include language requiring the borrower to defend and indemnify the City in any proceeding challenging the determinations made in this Resolution.
SECTION 4: Electronic Signatures. This Resolution may be executed with electronic signatures in accordance with Government Code §16.5. Such electronic signatures will be treated in all respects as having the same effect as an original signature.
SECTION 5: Recordation. The Mayor, or presiding officer, is authorized to sign this Resolution signifying its adoption by the City Council of the City of Bellflower and the City Clerk, or her duly appointed deputy, may attest thereto.
SECTION 6: Effective Date. This Resolution will become effective immediately upon adoption and will remain effective unless repealed or superseded.
PASSED, APPROVED, AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF BELLFLOWER THIS 12TH DAY OF DECEMBER 2024.
______________________________
Mayor
ATTEST:
Mayra Ochiqui, City Clerk
_________________________________
By: Dakota Wallace, Deputy City Clerk
APPROVED AS TO FORM:
_________________________________
Karl H. Berger, City Attorney