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HomeMy WebLinkAbout2011-06-13 11-189 ORDERCOUNCIL AMON Item No, 1.1 189 Date: lune 13. 2010 Item/Subject ORDER, Authorizing Execution of an Amendment to Intercreditor Agreement with Volunteers of America NNE (VOA) Bangor Senior Housing, L.P., Bangor Savings Bank, the United States of America and the Maine State Housing Authonty— 315 Harlow Street Responsible Oepad aerd: Legal In November 2009, the Volunteers of America (VOANNE), obtained loans to construct and develop real estate on Harlow Street for senior low-income rental housing. At that time the lenders had entered into an Intercreditor Agreement that set out the lenders rights in relation to each other. The City of Bangor has previously committed to make an $18,228 loan to VOANNE under the Community Development Block Gram Program. Construction has been completed and VOANNE wants to procectl on the closing for the City loan and m get permanent financing in place with various lenders. The parties to the Intercreditor Agreement, VOANNE Bangor Senior Housing, L.P., Bangor Savings Bank, the United States of America and the Maine State Housing Authority, are seeking W amend it and include the City of Bangor. The amended agreement includes a provision that the City loan is junior to all other loans and requires that all parties notify the others in the event that any have to take any action on their respective mortgages. This Order wilt authorize the qty Manager to execute the amended Intercredimr Agreement. Department Head City Manager Associated Information: Order, AGREEMENT Budget Approval: name Director �' V cAy 5plkj[pr x Passage _ First Reading Page _ of _ Referral Asaigaed to coweiD, wzsm,i June 13, 2011 CITY OF BANGOR (=E.) ORDER, Authorizing Execution of an Amendment to Intercreditor Agreement with VOANNE Bangor Senior Housing, L.P., Bangor Savings Bank, the United States of America and the Maine State Housing Authority — 315 Harlow Street 6y the Oty Council of the City of &ngoor ORDERED, THAT Catherine M. Conlow, City Manager of the City of Bangor, is hereby authorized, on behalf of the City of Bangor, to execute an Amendment to Intercreditor Agreement by and between the City of Bangor, VOANNE Bangor Senior Housing, L.P., Bangor Savings Bank, the United States of America and the Maine State Housing Authority. Said Agreement shall be substantially the same form as attached hereto and in a final form as approved by the City Solicitor or Assistant City Solicitor. I9 CITY COOPCIL Jme 13. 2011 P"Sm -✓ /'a� # 11�I P9 V ) OBIUie (TiRE.tAuthoriune euuutiw of m Ameodmeot [o j Intereredltor Agremeot Hth W9HN8 S+oyoi Smi 9ooa1u¢. L.P.. Bmgtir-S"in h , the Bnited Stites of A Xe aw the tlafse Bomiu Autharlty 315 h#rlae Street A Ip WtounWor )JLK�n OA64 11 1.89 AMENDMENT TO INTECREDITOR AGREEMENT This Amendment is entered into by VOANNE Bangor Senior Housing, L. P., a Mane limited partnership having a place of business in Brunswick, Maine (hereinafter referred to as "Borrower" or "Limited Partnership"), Bangor Savings Banka Mane banking corporation havnlace of business in Bangor, Maine C'Bank), the United States of America acting by and though the Secretary of Housing and Urban Development, an agency of the United States ("HUD"), Maine State Housing Authority, a public body, corporate and politic and instrumentality of the State of Maine ("Malnetioue'ne'), and the City of Bangor. a municipal corporation located in Bangor, County of Penobscot, State of Mane with a mailing address of 73 Harlow Sheet, Bangor, Maine 04401 RECITALS WHEREAS, on November 19, 2009, Borrower obtained the following loans to commuct and develop upon certain real estate ofBortower, lasered at 315 Harlow Smart, Bangor, Mane, a fifty-four (54) unit senior low-income, tax credit -financed rental housing project. containing an additional unit for a residential manager ("PtoiceY")t (1) a construction loan in the amount of $2,000,000 firm the Bank ("Conswerion Loan') m accordance with a certain Commitment Letter dated September 17, 2009, as may he amended, extended or replaced; (2) a direct subsidy through the Affordable Housing Program of the Federal Home Loan Bank of Boston from Lender in the amours of $400,000.00 ("AHP Direct Suitable'); a capital advance from HUD in the amount of $5,138,300D0 ("HUD Capital Advance') iuccorda ce with a Firm Commitment Por Capital Advance financing dated September 17, 2009; and (3) a loan under the 2009 Tax Credit Exchange Program from MaineHousing in the amount of $4,400,078.00 ("MalneHousine Exchm Lom'); WHEREAS, MaineHousing has committed to make a permanent loan m the Borrower in the amount of $750,000 upon completion of construction of the Project ("MaineHousing Permanent Loan''); WHEREAS, the City of Bangor has committed to make a loan to the Borrower under its Community Development Block Grant Progav in the amount of $18,228.00 ("City CD8G >odn"); WHEREAS, the Borrower, Bak, HUD and MaineHousing are parties to an Intewreditor Agreement dated November 19, 2009,. pursuant to which HUD, Bank and MaineHousing have agreed to share a that lien priority as to each party's mortgage and security interest in the Project during construction of the Project; WHEREAS, upon satisfaction of the Construction Loan, the HUD Capital Advance shall have first priority with respect to its mortgage and savrity interest in the Project to the extent thereof, the MaineHousing Permanent Loan shall have second priority with respect to its mortgage and security interest in the Pmject to the extent thereof, the MaineHousing Exubange Loan shall have third Priority with respect to its mortgage and security interest in the Project to the extent thereof, and the ARP Direct Subsidy mortgage on the property shall bejum or to all of the foregoing; 11 189 WHEREAS, tM1e City shall require a mortgage and security interest in the Project far the City CDBG Loan ("Ctv CDBGMonate'), and the patties desire to establish the priority of the City CDBG Loan in accordance with the Intercreditor Agreement and to conf that the tents and conditions of the Intermeditor Agreement shall apply to the liens of each party in the Project. NOW WHEREFORE, for good and valuable consideration, the receipt and adequacy is acknowledged, the parties hereby agree as follows: 1. Each of the foregoing recitals hereby is ratified and confirmed by the parties as being accurate and complete. 2. For purposes of this Amendment, mdess otherwise defined herein, all capitalized terms used herew shall have the meaning given to them in the Inancreditor Agreement. 3. The City hereby acknowledges, confirms and agrees that all obligations, liabilities and indebtedness owing by the Limited Partnership to the City arising under or in connection with the City CDBG Loan are committal in the City CDBG Loan Documents (defined below), and shall be subject to the terms mid conditions of the Intercreditor Agreement. 4. The Inteneditor Agreement shall be modified as follows: a. The following section shall bs added to the Intercrelitor Agreement as Section 5A: "City CDBG Loan. The City hereby represents and warmans, as the lender of funds provided under the Community Development Block Grant Program, that the obligation of the parties therein is evidenced by a Development Agreement between the City and the Limited Partnership dated of even data herewith, a Promissory Note and Agreement between the City and the Limited Partnership dated of even data herewith, and a Mortgage Deed between the City and the Limited Partnership dared of even date herewith ("City CDBG Loos Doeumenta'9.^ 5. Section 8 of the Imercreditor Agreement shall be deleted and the following substituted therefor: "8. Priority of Loans. poring the conshnction of the Project, the parties agree that (a) the indebtedness evidenced by the Bank Construction Wan, the Main dfourong Exchange Loos and the HUD Capital Advance shall equally share first priority as to collateral in which they each have a security imerest, except that the principal amount of any protective advances, of which the other patties were notified in accordance with this Agreement, by Bank, MaineHousing or HUD under said loans (such as advances to pay property nates or insurance premiums or other advances to protect their security interest under said loans) shall have priority over all other indebtedness under said loans, and (b) the indebtedness evidenced by the AHP D'veet Subsidy shall have a second priority in collateral, and (c) the MaineHousing Exchange Mortgage, the Bank Mortgage and the IND Mortgage shall each constitute a first lien mortgage and security interest 11 189 of equal priority in the Project and shall be deeme3 to be delivered, recorded and filed simultaneously, notwithstanding the actual time and date of delivery, recording and filing of the respective instruments securing the same, and (d) the AHP Mortgage shall have a second lien and priority interest in the Project, and (e) the City CDBG Mortgage shall be junior to all of the foregoing. Upon completion ofconstruction, origination of the Mainellousing Permanent Loan and satisfaction of the Bank Construction Loan, the parties agree that (a) the indebtedness evidenced by the HUD Loan Documents shall have a first priority as to the collateral in which it has a security interest, except that any protective advance, of which the other parties were notified in accordance with the Agreement, made by Mainefluming and= the MaineHmaing Exchange Loan or the MameHousing Permanent Loan (such as advances to pay property, taxes or immune premiums or other advances to protect their security interest in the collateral soundly said loans) shall have priority over the indebtedness evidenced by the HUD Loan Docmmons, and (b) the indebtedness evidenced by the Mainellousing Exchange Loan Documents shall have a second priority as on collateral in which MaineHousing has, but HUD does not have, a security interest, and (c) the indebtedness evidenced by the MameHousing Permanent Loan Documents shall base a third priority interest as to collateral in which Mamellousing has, but HUD does not have, a security interest, and (d) the AHP Direct Subsidy and AHP Mortgage shall be subordinated and junior in priority to the Book Construction Loan, ManwHousmg Exchange Loan, MameHousing Perm rent Loan and the HUD Capital Advance; and (e) the City CDBG Loan and City CDBG Mortgage shall be subordinated and junior to all of the foregoing." 6. Section 9 of the Intercreditor Agreement is hereby deleted and the following substituted therefor: 119. Subordination to Reuulatory Aureements. The parties to this Agreement hereby agree that their respective loans, liens and encumbrances on the Project, including the Bank Construction Loan Documents, Maine lousing Exchange Loan Documents, HUD Loan Documents, the Maineflousing Permanent Loan Documents, the AHP Direct Subsidy Documents, and the City CDBG Loan Documents, shall be and hereby are subordinated to the HUD Use Agreement, the HUD Regulatory Agreement and the Extended Use Agreement, including all amendments thereto from tthre to time." 7. Sections lass) and (b) of the Intercteditor Agreement are hereby deleted and dm following substitmed therefor: "a. During the construction of the Project, the relative priorities of the liens and encumbrances of the parties with respect to the Project shall be: HUD Regulatory Agreement First Pdorlty HUD Use Agreement Second Priority Extended Use Agreement Third Priority it '89 ManwHousing Declaration Fourth Priority Bank Construction Loan Documents, Shared Fifth Priority and Fist Lien HUD Loan Documents and MaiuHousing Exchange Documents AHP Direct Subsidy Documents Sixth Priority anal Second Lien City CUM Loan Documents Junior to all of the foregoing b. Upon completion of construction of the Project, origination of the MaiuHousing Permanent Loan add satisfaction of the Bank Construction Loan, the relative priorities of the liens and encumbrances of the parties with respect to the Project shall be: HUD Regulatory Agreement First Priority HUD Use Agreement Second Priority Extended Use Agreement Third Priority HUD Loan Documents Fouts Priority and Fist Lien MaineHousing Fifth Priority and Second Lien Exchange Documents MaineHousing Declaration Sixth Priority MaineHousing Permaunt Loan Documents Seventh Priority and Third Lien AHP Direct Subsidy Documents Eighth Priority and Fourth Lien City CDBG Loan Documents Junior to all of the foregoing 6. Section 11 of the Interceeditor Agreement is hereby deleted and the following substituted therefor: "I1. Notice ofDefaule Ondorturity to Cure. Bank, HUD, MainsHousing and City agree to give written notice ofany default under their respective loan documents described herein and all other instnmrents and documents executed in connection with their respective loans to each other. Bank, HUD, MaineHmoing and City shall have sixty (60) days after receipt of my such notice of default, which receipt shall be deemed to have occurred no later than three (J) days after such notice is sem in accordance with this Agreement, to cure all defaults identified in the notice. Bank.HUD, MaineHousing anal City agree to accept all curative ams of each other. Yn 1 t' t69 If MaineHousing, HAM, City or the Limited Partnership do not core any default of the Bank Construction Loan within the above cure period, then so long as such default has not been fully cued, the Bank may elect in its discretion to exercise any or all of its remedies against the Limited Partnership and the Project subject to the provisions of this Agreement and the Construction Loan Agreement by and hemeen the Bank and the Limited Pam�erslilp of even date herewith and related documents, unless Mainellousing agrees in writing to advance the remaining proceeds of the Mainellowing Exchange Loan (or so much thereof as does not exceed 85% of the credit equivalent of the qualified basis of the Project pursuant to a cost certification to be provided upon completion of construction of the Project) and to make the MaireHousing Pememeud Loan and the Bank receives reasonable assurances that funds will be forthcoming in an amount, which together with the MaineHousing Permanent Loan proceeds are sufficient to repay the Construction Loan in fail at de permanent loan closing, and that such assurances will continue to be binding notwithstanding any defaults or delays in the Limited Partnership's obligations to MaineHousing. Agreement by MaineHousing to advance the remaining proceeds of the Maineliousing Exchange Loan (or so much thereof m does rat exceed 85% of the credit equivalent of dre qualified basis ofthe Project pursuant to a cost certification to be provided upon completion of construction of the Project) and to make the MaineHousing Permanent Loan shall not waive the Limited Partnership's defaults. Should the Bank not receive reasonable assurances that there will be sufficient funds to repay the Bank Construction Loan in full at permanent Into closing or otherwise decides to pursue its default rights and remedies, including without Initiation foreclosure of the Project, Bank agrees that Maineflousing shall have the right, but not the obfigatun, to purchase the Bank Construction Loan firm Bank for an soared not to exceed the outstanding balance, plus all named and charges, owed to Bank under the Bank Construction Loan. In such event. Berk agrees a assign all instruments and documents executed in connection with Bank Construction Loan be MaineHousing and coke all other actions as me reasonable and necessary in effectuate the assignment said transfer of the Bank Construction Loan to MaineHousing. MaineHousing's purchase of the Bank Construction Loan shall not waive the Limited Partnership's defaults." 9. Section 12 of the humnediter Agreement is hereby deleted and the fallowing substituted therefor: `12. DeLigh ofMainelbousin¢ Permanent Commitment Once MaineHostang becomes aware of any default of the Limited Parhtership in complying with the terms and conditions of the MaineHousing Permanent Commitment, MaineHousing agrees to give the Bank, HUD, City and the Limited Partnership prompt written notice of such default The Bank. HUD, City and the Limited Partnership will have sixty (60) days after receipt of any such notice of default, which receipt shall be deemed to have occurred no later than three (3) days after Maineflousmg gives notice by certified or registered mail, posmge prepaid, or in the event such default cannot reasonably be cured within such sixty (60) day period and the Bank, HUD, City or the Limited Partnership we diligently pursuing a core, such additional time as may be reasonably necessary as set forth in said notice, to cure all defaults, except that no such period for care will extend 11 189 the closing data for the Maine lousing Permanent Loan as described in the Mainellousing Permanent Commitment without the prior written consent of MaineHousing. If all defaults are not cured within such sixty (60) day period, than MaineHousing may, m its sole option, and by prompt written notice to the Baulk, HUD, City and the Limited Partnership: (a) [entente the MaineHousing Permanent CornmitmentaM itsobligationto make the MaineHousing Permanent Loan set forth in this Agreement; or (b) waivethedefaulsthathavenotyetbeencured,inwlrichcasethe MaineHoming Permanent Commitment will remain in full force and effect; or (c) extend the time period to cure those defaults, in which case the Mamefloming Permanent Commitment shall remain in Pill force and effect until the end of such extended care period." 10. Section 13 of the haemrediv r Agreement is hereby deleted and the following substituted therefor: "13. Administration of Loans. Bank, HUD, City and MaineHousing agree to give prior written notice to each other concerning any decision or action proposed to be taken in connection with their respective loans which may impact the administration of their respective loans, including without limitation, any extemion, renewal, modification or substitution of their respective loans; amortization or re-anympartion of the indebtedness owed under their respective loans; advancing amounts for the purpose of protecting their respective security interests in the Project (refened to herein as protective advances); accepting my security or callateral for their respective loans described herein other they the security that is in effect on the data of this Agreement, as described in their respective loan documents (provided HUD agrees that Maine musing shall have provided the required notice hereunder when ManwHousing provides a copy of h/aineHousing's Loan Documents on HUD at the time the Maineflousing Exchange Wan or MaineHousing Permanent Loan is made); refinancing of their respective loans; and modification, assignment or subordination of their respective loans and man documents." 11. Section 14 of the Intercreditu Agreement is hereby deleted and the following substituted therefor: "14. D'smositionof Collateral. During Ne constmctionofthe Pmjecq the exercise of rights and remedies of default by Bank, HUD, City and MaineHousing shall be for the shared benefit of such parties. Any proceeds from a sale, foreclosure proccedivg or sawed party sale of the Project, less reasonable costs and expenses associated therewith, shall first he applied to pay the principal amount of my protective advances, of which the other parties were notified in accordance with this Agreement, by Bank under the Bank Construction Wan, Ak ineHousiog under the MaiueHousing Exchange Um. City under the City CDBG Loan or HUD under the HUD Capital Advance (such as advances to pay property taxes or insurance premiums or other advances to protect their smunty interest under said loans), and Nen be divided pro rota among Bank, HUD, City it tss and MaineHousing on the basis of the Nen outstanding principal balance of the MairreHousing &clu nge Loan, the HUD Capital Advance, the City CDBG Loan and the Bank Construction Loan on aparipassu basis, including arty future advances approved by the other parties in accordance with this Agreement. As to any non -shared collateral among MaineHousing, HUD, City and the Bank, such party holding any non -shared collateral shall not be required to insisted and proceed as to such non -shared collateral print to proceeding against shared collateral. The proceeds of the sale or disposition of collateral in which more than one, but not all, of the lenders have a security interest shall be fast he applied to pay the principal mnount of my protective advances, of which the other parties were notified in accordance with this Agreement by a leader with a security interest in said collateral, and then divided pro are between the lenders with a security interest in the collateral on Ne basis of the outstanding principal amount of the mspecfive loans of said lenders on a pasi passu basis, including approved future advances." 12. Section 15 of the himacreditor Agreement is hereby deleted and the following substituted therefor. "15. DisnositionofGther Proceeds. During the construction of the Project MaineHousing, HUD, City and the Bank agree that any payments and proceeds from insurance or bonds relating m the Project any proceeds, awards or damages fora partial or tool taking under the power of eminent domain or by condemnation, and any other awards, sentiments, damages or proceeds with respect to the Project shall be for the shared benefit of MaineHousing, BUD, City and the Bank and any act recovery shall first be applied no pay the principal amount of any protective advances, of which the other parties were notified in accordance with this Agreement by Bank under the Bank Construction Loan, MarteHousing under the MairaHoustng Exchange Loan, the City under the City CDBG Loan or BUD order the BUD Capital Advance (such as advances to pay property axes or insurance Premiums or other advances to protect their security interest under said loans), and than divided pro -rata among MaineHousing, HUD, City and the Bank on the basis of the then outstanding principal balance of the MaineHousing Exchange Loan, the HUD Capitol Advance, the City CDBG Loan and the Bonk Construction Loan on aporipassu basis, including approved future advances, to be applied to reduce the indebtedness thereof." 13. The parties acknowledge that Us AmaWmeat is subject to the approval of the Federal Home Loan Barr of Boston, Maine Som Housing Authority and the United Stoma of America, Deparhnent of Housing and Urban Developmw. 14. Except as explicitly provided in this Amendment all of the renes of the hatereredimr Agreement remain unchanged goal in fail force and effect. To the extent of conflict between the tenors of this AmeMment and the Intercredlmr Agreement the terms of this Amendment shall control. The Intercredimr Agreement and this Amendment skirl be read as one agreement. 15. All of the provisions of this Amendment are b take effect as of the date of this Amendment. 11 189 16. This Amendment shall be binding upon and inure to the benefit of the respective parties hereto, their legal representatives, successors, heirs and assigns. This Amendment supersbees all agreements thin my have been previously more between the parties totaling to the subject matter and there are no other understandings or agreements between the parries thereon This Amendment shall be command in accordance with and governed by the laws of the State of Maine, without regard to conflicts of law principles. 17. None of the terms or provisions of this Amendment may be changed, waived, modified, discharged, or terminated except by an instrument in writing exeeuted by the party against whom such change, waiver, modification, discharge or temanatiop is asserted. None of the terns in provisions of this Amendment shall be deemed to have been abrogated or waived by reazon of my fat to enforce the same. 18. This Amendment may be executed in multiple identical connections, each of which when duly executed shall be deemed an original, and all of which shall be constmed together m one agreement. In witness whereof the paries hmeto Nave caused this Amendment to be signed and sealed as of Nis_ day of 2011. fremainder ojpage left blink continue on wxtpage] 11 189 WITNESS BANGOR SAVINGS HANK By: John F. Hermessey, its Vice President 3 .Tv:[iTakmi .IP SS. 2011 Personally appeared the above-named John F. Hennessey, Vice President of Bangor Savings Bank, and gave oath to the foregoing and acknowledged before me the foregoing ur be his free act and deed in his said capacity and the free act and deed of Bangor Savings Bank. Print Name: Notary Public/Attorney-at-Law My Commission Expires: fremaiMer ofpage lefr blank inrennonallyaignatures emuinue on narlp ge] 11 189 UNITED STATES OF AMERICA, acting by and thmugh the SECRETARY OF HOUSING AND URBAN DEVELOPMENT By: Name: Title: STATE OF NEW HAMPSHIRE ,SS _ 2011 Personally appeared before me the above-named duly authorized represemative of United States of America, acting through Ne Secretary of Housing and Urban Development, and acknowledged the foregoing instrument to be bis free act and deed in his said capacity and the free act and deed ofsaid United States of America, acting through the Secretary of Housing and Urban Development- Print evelopment Print Name: Notary Public/Attorney-at-Lew My Commission Expires: [remainder ojpage left blank continue on next page] 11 189 MAINE STATE HOUSING AUTHORITY By: Rick Churchill, its Multifamily Wan Officer STATE OF MAINE SS. 2011 Personally appeared before me the above-named Rick Churchill, Multifamily Loan Officer of Maim State Housing Authority, and acknowledged the foregoing instrument to be his free act and deo] in his said capacity and the free act and deed of Maine State Housing Authority. Print Name. Notary Public/ARomey-at-Law My Commission Expires: [remainder ofpage left Norsk hmnriormll- ignaNres continue on natnage] CITY OF BANGOR By: izvoiremmP 11 189 ss. ,2011 Personally appeared before me the above-named of the City of Bangor, and acknowledged the foregoing ims ent to be his/her fine act and deed in hisdrer said capacity and Ne free act and deed of the City of Bangor. Print Name: Notary Publi&Amor y -at -Law My Commission Expires: emmnde. fp V loft clank inrenoonany�sigrmtnnes continue on nva page] 12 VOANNE BANGOR SENIOR HOUSING, L.P. BY: Bangor VOANNE Senior Housing, Inc., its General partner By: June A. Koegel, its President STATE OF MA WE -_ ,SS. ,2011 Personally appeared before are the above caned Jane A. Koegel, in her capacity as President of Bangor VOANNE Senior Housin& Inc., General Partner of VOANNE Bangor Senior Housing, L.P., and acknowledged the foregoing instrument to be her free act and deed in said capacity and the free act and deed of said entities. Prim Name: Notary Public/Attorney-at-Law My Commission Expires: OAMAA93&4 VOAoa Bmgyltia&Bfflw b M1 lWrvnJ la [me &w Ag CM ft 13