09/27/11 - Laserfiche WebLink

Home

Summary of Development Agreement for the HRA In the Development Agreement, the HRA agrees to make two loans to F & C Ramsey, LLC ("F & C"): 1. Loan No. 1. The HRA agrees to lend F & C up to $1,420,000.00 pursuant to the terms of the Development Agreement, a Loan Agreement to be executed between the HRA and F & C and a note ("Note No. 1"). The form of Loan Agreement and form of Note No. 1 are attached to the Development Agreement. F & C may use the proceeds of Loan No. 1 to pay hard and soft costs associated with the development of the Project. The City is not obligated to disburse the proceeds of Loan No. 1 until F & C has commenced construction of the Project and spent at least $1,000,000.00 of equity on the Project (which includes the $750,000.00 land acquisition cost). Loan No. 1 is an interest free loan, but the HRA is charging F & C a fee of $120,000.00 for making the loan. The $120,000.00 will be deemed disbursed to the HRA contemporaneously with the HRA's first Advance of loan proceeds to F & C. F & C is obligated to make annual payments against the balance of Loan No. 1 to the HRA out of the Project's net cash flow. F & C must repay Loan No. 1 in full on April 1, 2025 or upon a sale of the Development Property. Annual payments are due on April 1 of each year commencing on April 1, 2015 and are in an amount equal to twenty percent (20%) of the net cash flow from the Project. In addition, if F & C refinances it's project mortgage and receives loan proceeds in excess of the amount necessary to pay off the prior project mortgage, F & C must pay twenty percent (20%) of the excess proceeds from the new loan to the HRA. This provision does not apply if F & C is using the excess loan proceeds to complete construction of the Project. Obligation to repay the loan is guaranteed by Flaherty & Collins Construction, Inc. 2. Loan No. 2. The HRA also agrees to lend F & C up to the sum of (i) $6,825,000.00; and (ii) the costs the City incurs to issue the tax increment bonds the proceeds of which will be used to fund this loan ("Loan No. 2") perceived to the terms of the Development Agreement, the Loan Agreement referenced in paragraph 1 above and a note ("Note No. 2"). The form of the Loan Agreement and form of Note No. 2 are attached to the Capital Agreement. F & C may use the proceeds of Loan No. 2 to pay hard and soft costs associated with the development Project. Loan No. 2 is secured by a personal guaranty of David M. Flaherty. The HRA must release the personal guaranty at such time as the loan has been fully advanced and the outstanding balance due under the loan has been paid down to $2,500,000.00 or less. Interest accrues on Loan No. 2 at the rate of 6.27% per annum provided, however, if the Developer does not prepay a total of $3,000,000.00 on or before the date eighteen (18) months after the first disbursement of proceeds of Loan No. 2 the interest rate increases to 8.27% per annum and remains at 8.27% per annum until at least $3,000,000.00 has been prepaid. If the Developer prepays $2,000,000.00 or more of the amount due under Loan No. 2 on or before the date twelve (12) months after the date of the first disbursement of proceeds of Loan No. 2 the City will forgive $250,000.00 of the outstanding principal amount of Loan No. 2. The outstanding principal balance and all accrued, unpaid interest is due under Loan No. 2 on the earlier of June 1, 2015 or upon the sale of the Development Property. The City is not obligated to advance the proceeds of the Loan No. 2 prior to June 1, 2012, is only obligated to advance up to $1,000,000.00 of the proceeds of Loan No. 2 between June 1, 2012 and June 30, 2012 and is only obligated to advance up to an additional $1,000,000.00 of the proceeds of Loan No. 2 3027624v4 09/22/11