Recommendation to authorize City Manager, or designee, to execute all documents necessary to evidence (i) a loan by the City of Long Beach to the Aquarium of the Pacific Corporation of up to $2,154,000, from the Tidelands Operating Fund Group, (ii) the acceptance of the prepayment of an existing 2017 loan by the City to the Aquarium, and (iii) the prefunding of the Challenge Grant by the City to the Aquarium; and, approving related documents.  (District 2)
Okay. Thank you. That concludes the first item on the agenda. So an and an important one. So thank you all. Let's we're going to take a couple of items now. The next one's going to be item 27. Report from financial management. Recommendation to execute all documents necessary to evidence a loan by the City of Long Beach to the Aquarium of the Pacific Corporation of up to 2,154,000 from the Tidelands Operating Fund Group District two. Councilmember Pearce. This is a staff report item. Okay. You cued up. So let me let me turn to staff first. Yeah, I just motioned. Okay. Go ahead, Mr. Modica. Thank you, Mr. Mayor. And, yeah, we would like to give a short staff report from our finance director, John GROSS. You know, the aquarium, which is a city asset, is also not been immune to COVID 19. They've had some significant loss of revenue, and they've come up with a creative solution to be able to continue to work on their on their issues. So I will turn that over to John GROSS, who will give the report. Thank you very much. The as the city manager indicated, the aquarium has been impacted by the COVID 19 and it's been closed. And to help ensure that the aquarium successfully weathers the pandemic, staff and the aquarium have and do recommend approval of three transactions that are for your consideration tonight. The first one pre pays the balance of the challenge grant that council had put forth a few years ago for 15 million and has 6.2 million loans yet to be paid to the aquarium that would be paid immediately in fy20. At the same time, the aquarium would prepay their loan that we made to them for 11 million. So we would pay them the balance of the challenge grant for 6.2. They would give us 11.1. The net transaction is that we would have 4.9 million in cash from the aquarium. Now that money will be needed in the future as part of the funding to pay the debt service on the city's 2017 bonds that would otherwise have been paid through the aquarium loan payments. So these transactions excuse me 1/2. I think we've got an open mic on somebody. If everybody can meet their phones, please. Thank you. The net effect of these transactions is to impact the Titan's cash flow and the appropriation needs, but otherwise have little financial impact. The aquarium, on the other hand, wants these two transactions to give them financial flexibility so that they can use the challenge grant for operating purposes if they need to do so. The third and last transaction is for a potential tidelands loan to the aquarium in case they need to need a loan to pay the 2.154 million that is due to us in October as rent. The aquarium hopes that they'll have enough customers to make that payment, but if not, and I suspect they won't, the aquarium will borrow some amount of money between 012.15 4 million that they need from Tidelands, and they will use that to. Pay the rent. To the city. It's neither in the aquarium's interest nor the city's interest to have the aquarium default on that rent. So that's why this proposal is being recommended. Either way, a loan for an aquarium default. The Tidelands Fund would be paying the same amount of money. Hopefully there is not a need for a loan and hopefully if there is a loan it will be repaid soon. However, there is no assurance that the aquarium will be financially sound enough to repay that loan. I do want to note that in your packet, the promissory note schedule, debt service schedule should have been noted as Exhibit A. It's out of order and it was marked as Attachment A, but it is the correct schedule. We recommend this transaction because it's relatively neutral to the city and it helps give the aquarium a major financial, a major city asset, the financial flexibility to weather the crisis. And that's the end of our report. And we stand available for any questions. Thank you very much, Mr. GROSS. Councilman Pierce, you have a motion? Yes. Thank you, Mayor. I want to say that I support this motion. I know that I talked to Tom about it. This was one of the first things that I did on council. So I have been wondering how the how the aquarium was doing. I believe that, Tom, you said that this would actually give us more cash on hand up front. Is that correct? Correct with the where we front them the loan they pay back the other loan. It does present us cash on hand upfront, provided everything goes according to the aquarium's plan. All right. Thank you. And I know none of us are fortune tellers, but I think that this is the right move the aquarium for the city. And I'm glad that we're in a position to make sure that they don't default on that on that grant. So I hope that my colleagues will support this item. Thank you. I'm sorry. The councilman, Councilmember Pearce. That's a motion. I said councilmembers and De Vos is second at the motion customers and they have to have any additional comments. I fully support this motion. Okay. Thank you, Councilmember Price. Thank you, Mr. Mayer. You know, I support this motion in the sense that it feels like we don't have a whole lot of other options, but we have thus far leverage our pilots operating budget. To support efforts of the Queen Mary and now the aquarium. And I know that perhaps there will be an ask at some point in the future for the convention center, which which are all city assets that we support. And we want to continue to support with the understanding that when we leverage those funds, there's less of those funds available for the districts that rely upon those funds to be able to have operations on a regular basis to be able to continue those operations without disruption. So to the extent that we're trying to support operations happening throughout the city and we're relying upon private funds to help some of those operations continue so that we don't have to tap into the general funds. The Titans operating funds are critical, but I don't really feel that we have much of a choice on this. I'd like to hear from John GROSS. So do you feel like we have much of a choice in regards to this item? Councilwoman Price I think there's always a choice and that's why it's before you. But it is my recommendation and I think you expressed it pretty well, that in order to support the aquarium and to minimize any potential damage, I think this is the best choice we have. There could be some pain here. And you are correct that the Tidelands is ultimately supporting this. And but I don't see a better choice at this point and hopefully it will all work out. I think this best positions us to have it work out. It may not. Well, I appreciate that. I appreciate the honesty and you know that I very much appreciate when staff give us an honest opinion, even without sugarcoating what the realities might be. Because I think that when we think about some of the activities that we have along the coast that are part of the city's fabric, if we don't have Tidelands money to fund those, then we have to start looking at the general fund. So hopefully that doesn't happen. But whether it's District two or District three, there's a lot of relief that comes to the general fund by virtue of us using Tidelands dollars to upgrade bathrooms, run activities, support ongoing operations, including public safety lifeguards and police . And to the extent that we don't have money to support, you know, our critical functions in the tidelands, including police and fire. And lifeguards. I think we'd have to tap into the general fund, so hopefully that doesn't happen. But I know that our police officers and our lifeguards and our firefighters who service the typhoons area look forward to having an operating budget that supports their efforts as well. So thank you very much. Thank you. Thank you, Councilwoman. Next up is Councilman Ringo. Just totally, completely in support of this item. Okay. I don't see anyone else cued up. Why don't we go ahead and do a roll call vote? There's a. And it's a. Council district. What can you do? I. District two. I. District three. I district for. I. District five. II. District six. I. District seven. District eight. Hi. District nine. All right. Motion carries. Thank you. Motion carries on item 26. Let me go through a couple other of these that are shorter ones. And then I know we have another another item as it relates to cannabis that there's going to be some discussion on. So let me let me get into some of these other items or more quicker. Item 26. Madam Clerk.