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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: uuuaa. nYY^^ae finance Director Legal Appraisal: �,_ Passage _First Reaping Page— or-Referral Assigned to raluer lame 26. 2006 µ 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 �. P edc ITY CLePB �j Y n"66 8880 L 48 (eP r! AQpzoving SubGr 3neHnv �emmt: £ fu®m�l� esidenEfel eeneunlrtlm Lnm - ssmom stem£ Cm[ yaxa L.P.