Agenda - Council - 12/18/2001 - Laserfiche WebLink

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-30- area. The borrower's management team and ownership provides a positive impression and is respected by the lending community in general. Management has a good educational background to operate the retail center successfully. Mr. Mulrooney recommended approval of the loan subject to the following conditions: 1. Receipt of Personal Financial Statements. The borrower has not yet provided personal financial statements for the principals involved in the project. Based on their reputation, he expected to receive strong balance sheets from the individual borrowers. However, until the information is received and reviewed he could not recommend in good conscience to the Council that the loan be officially approved. 2. Receipt ora Bank Commitment Letter. It is important to understand the terms and conditions of the senior debt as a junior lender. The terms and conditions of the pr/mary lender should be reviewed and found to ~e:~cceptable before a loan commitment is provided by the City. 3. Personal Guarantees of the'?dgcipals. The principals involved in the project have agreed to provide personal guarantees on, the,:::, loan received from the City. Legal Counsel for the City is in the process of d~fting guarantees that will be meaningful to the City as a lender on the project "~ ~! ~ii:~~ 4. Receipt and Acceptance 0f~:h~ Appkai'k~[ for the Project. The borrower has provided the City with a summary of the sources'and uses ::~f funds for the project. The appraisal will provide the City with information~t.6::~alfi~te the !egerage associated with the project. This leverage must be within acceptable limits befo~e(th~: loan is approved· Robert Foster, Principal and Attomeg.foE,:S,~Sh.:Cd~ons, stated that their building is located on a comer in the City that was consid~ed less than appropriate and they made an attempt to purchase the property and move forward with tie Project. ~ey asked for the assistance from the City with the high cost of demolition of the l~di: and sor~:~nvironmental issues that had to be addressed. With a change in TIF laws, TIF w.~ not:~¢ailable 'fOr: this project, which is why the issue of the revolving loan fund was brought up.~'~:~Y ¢i'l~pay t~:san back from the generated cash flow as well as the ownership giving personal guarantb:~s. The~e asking for assistance to make it a slightly better project by decreasing'the amount of equity th~i~ave to put into it. Councilmember Hendriksen inquired as to what level o~::96~tment occurred prior to the demolition of the new facility, v~ Mr. Foster replied that the level of commitment was that there was a possibility of the loan and that staff would bring the issue to a Council meeting. Staff never made a firm commitment. Councilmember Hendr/ksen welcomed them to the City and noted that the building was a benefit to the area. He stated that the only part that concerns him is the sequence of events because it appears that the owners of Sunfish Commons have already made the commitments and typically the City makes the loans before the project proceeds. City Council/November 27, 2001 Page 8 of 22 I I I i I I I I I I I I I I I I I I I