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HomeMy WebLinkAboutRES 94-059 RESOLUTION NO. 9' WHEREAS, on November 3, 1993 the City Council of the City of Beaumont authorized a $450,000 loan commitment for building improvements at the Beaumont Retirement Hotel; and, WHEREAS, the Urban Group III, as borrower, submitted suggested amendments to the commitment; and, WHEREAS, the City Council agrees to accept the proposed amendments with the exception of the paragraph providing for recourse against the collateral as opposed to full personal recourse as an obligation of the borrower; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF BEAUMONT: THAT the City Manager be and he is hereby authorized to execute the loan commitment containing the amendments suggested by the Urban Group III with the exception of the paragraph following paragraph 15(b) providing for a recourse first against the collateral then the borrower in the event of default. A copy of the amendments including the unacceptable provision are attached hereto as Exhibit "A". BE IT FURTHER RESOLVED, that the borrower shall have until March 31, 1994 to accept or reject the accepted proposal as amended. PASSED BY THE CITY COUNCIL of the City of Beaumont this the day of , 1994. - Mayor - c _r� r `� a 1 Inter-Office Memorandum City of Beaumont, Texas Office of the City Manager Date: March 4, 1994 To: Ray A. Riley, City Manager From: Sterling R. Pruitt, Assistant City Manager Subject: Beaumont Retirement Hotel Loan Commitment Council consideration of a resolution to approve amendments requested by the Urban Group III to the $450,000 loan commitment authorized by City Council on November 3, 1993 for building improvements at the Beaumont Retirement Hotel is requested. Major amendments proposed by the Urban Group III are listed below. 4. The date of the Note is hereinafter called "date of the Loan". You must initially close the Loan (that is, execute the Loan documents, provide required items and begin the construction period) not later than feFty five (45) day PROPOSED CHANGE: ninety (90) days after your acceptance of this commitment. PROPOSED ADDITION: Construction shall commence on or before the expiration of ninety (90) days after the date of the loan; provided, however, that in the event upon the expiration of ninety (90) days construction has not commenced and Borrower is diligently proceeding with commencement of construction, the City agrees that such delay will not constitute a default by the Borrower hereunder. 8. The Note to be executed by Borrower at closing shall be full rte urne nete. PROPOSED CHANGE: will contain the following payment provisions: iRteFest en the date that is six fiel-Ith (a) i iea . PROPOSED CHANGE: The note shall provide for the payment of one installment of accrued interest only on the date that is six (6) months after completion of construction. Thereafter, beginning three (3) months after the date that the accrued interest installment is payable, the principal and interest of the Note shall be payable in fifty-nine (59) quarter-annual installments of $9,346.18 each, and sixtieth (60th) quarter- annual installment equal to the entire unpaid principal balance and unpaid accrued interest. EXHIBIT "A" b. "Operating Expenses" shall mean, for each calendar month during the Note term, the total normal expenses actually paid or escrowed with the Lender for operation of the Property, including (i) costs of maintenance and repairs excluding capital expenditures PROPOSED ADDITION: ("Capital Expenditures" being defined for purposes of this commitment letter as any amount paid out for new buildings or for permanent improvements or betterments made to preserve or enhance the value of the new Beaumont Hotel project and improvements or any amount expended in restoring the new Beaumont Hotel project and improvements which qualifies as a capital expenditure under section 263 of the Internal Revenue Code, as amended); (ii) costs of supplies and of utility services; (x) interest and principal paid on PROPOSED ADDITION: any and all indebtedness arising from loans, the proceeds of which are used for purchase money improvements or taxes related to the operation of the property, including without limitation the First Lien Note to the City of Beaumont; 15. The loan documents creating and evidencing the Loan shall, without limitation, include: (a) a Promissory Note PROPOSED ADDITION: secured by the lien created by the deed of trust described in (b) below from the Borrower to the City in the principal amount of the Loan containing the provisions above set forth and such other provisions as the City may reasonably require. PROPOSED ADDITION: the promissory note will be a full recourse obligation of the Borrower for a period of one (1) year from and after the closing of the loan; thereafter, in the event the Borrower is in substantial compliance with all of the terms of the loan documents, including without limitation payment of the promissory note, for the second year of the loan, the promissory note will be a seventy- five (75%) percent recourse obligation of the Borrower (based on the face amount of the note rather than the then unpaid balance thereof), with the recourse obligation being decreased by twenty-five (25%) percent per annum thereafter until upon the expiration of four (4) years after the date of the loan, the promissory note will become a non- recourse obligation of the Borrower. (b) The Deed of Trust shall provide that during the term of the Loan, the Borrower will comply with a mutually acceptable, written OefeFFed Maintenance Schedule, PROPOSED CHANGE: written Maintenance Schedule which DefeFFed M iRteRa PROPOSED CHANGE: which Maintenance Schedule will be furnished to the City at least thirty (30) days prior to closing. On an annual basis during the first through four years of the loan, the Borrower will provide to the City a list of the items on the maintenance schedule and a time schedule for completion thereof which will be undertaken by the Borrower for the following one-year period. NEWLY PROPOSED ADDITION: Notwithstanding anything to the contrary contained herein, in the event of a default under the loan documents which is not cured by the Borrower in a timely manner after notice in accordance with the loan documents, the City will proceed first against the collateral for satisfaction of all amounts then due and owing by the Borrower to the City under the loan documents. If after selling the collateral and applying the proceeds therefrom to the Borrower's obligations under the loan documents there remains any deficiency, the City will then be entitled to pursue any then remaining recourse obligations of the borrower.