HomeMy WebLinkAbout2008-01-28 08-066 RESOLVECOUNCIL AMON
Date: January 28, 2008 Item Nos. �18 066
Item/Subjer h RESOLVE, Approving Subordination Agreement of a Community Development
Residential Rehabilitation Loan—Hammond Street Courtyard L.P.
Responsible Department: Community & Economic Development
Commentary:
The City of Bangoes adopted policy regarding loan subordination requests is that such requests will be
considered only when the proposed new finandug or refinanding will not diminish the City's secured
interest. The City may agree to a new proposed mortgage In excess of the outstanding principle balance
of the current mortgage(s) the CM secured posion is subordinate to, but only if the excess amount
financed will be used to make further needed improvements to the property securing due City's loan.
Hammond Street Courtyard has requested that we subordinate the Co's existing third mortgage to a
new first mortgage by Bangor Savings Bank Bangor Savings Bank currently holds the first and secant
mortgages. This new mortgage Is not only less than th total of the original loan amount, there is a
lower interest rate, and it will give Hammond Street Courtyard funds to make some necessary
improvements.
The Business & Economic Development Committee has reviewed this request and determined that the
City's security for its loan continues to be adequate, the request is In compliance with the Residential
Rehabilitation Loan Program Policies and Procedures, and recommends approval.
Department Head
Recommend approvaionn d U,
City Manager
Assodatetl Information:
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finance Director
Legal Appraisal:
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_First Reaping Page—
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Assigned to raluer lame 26. 2006
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CITY OF BANGOR
(TITLE.) Resolve, Approving Subordination Agreement of a Community Development
Residential Rehabilitation Loan — Hammond Street Courtyard L. P.
WHEREAS, by City Council Order 98-253 on lune 8, 1998, the City faunal of the City of Bangor
approved a Loan under the CAy of Bangoes Community Development Residential
Rehabilitation Loan Program to Hammond Street Courtyard. L.P. for finanang the
rehabilitation of the property kratetl at 8 120 Hammond Street In the amount of
$150,000, suhotliiwte to a first mortgage held by Bangor Savings Bank in the amount of
$1,000,000; and
WHEREAS, on ORober 16, 20al the Business and Economic Development Cammi approved a
request by Hammond Street Courtyard, L.P. to subordinate the City loan to a new second
mortgage from Bangor Savings Bank for improvements to the property in the amount of
$200,000; and
WHEREAS, Hammond Sweet Courtyard, L.P. would like as secure a new mortgage combining their
first and wood mortgages with Bangor Savings Bank in the amount of $1,100,000 to
reduce the interest rate and to cover the cost of additional rehabilitation to Me property
beyond the snipe of work originally speelfletl in the Residential Rebabilitation Loan
construction agreement; and
WHEREAS, Bangor Savings Bank has requested that the City subordinate its mortgage to the new
Bangor Savings Bank mortgage; and
WHEREAS, Me Business and Economic Development Committee has reviewed the request and
determined that the Cli security for its loan continues to be adequate and the request
Is in compliance with the Residential Rehabilitation Loan Program Niles and Procedures;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CM OF UNGOR
That the Director of Community and Economic Development is hereby authonzerd to enter into a
subordination of mortgage agreement M subordinate Me current balance of the City's Residential
Rehabliltalbn Loan M a new first mortgage loan W be made by Bangor SavDgs Bank in an amount not
to exceed $1,100,000.00.
IH CITY COOflCIL
Sen / 28, 2008 �.
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