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
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_ First Reading Page _ of _
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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
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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;
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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.
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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.
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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:
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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:
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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
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