Loading...
HomeMy WebLinkAbout2002-04-08 02-172 ORDERItem No. 0t-LJ2 Data: April 8, 2002 Item/Subject: ORDER, Authorization W Subordinate City Mortgage W Mama State Mousing Authority Mortgage -- Bangor Development Associates Responsible Department: Legal We have received a request that the City subordinate its mortgage on 183 Harlow Street with Bangor Development Associates (BDA). This is the second time that we have been requested to do ro, the first in 1993. At Mat time the City approved the suboMivation agreement. The City ofRomgor holds a deferred mortgage on the former Bangor High School building located at 183 Harlow Skeet The mortgage is not related to any loan made by the City, but resulted as part of an agreement related to an Urban Development Action Grant (UDAG) received by the City in 1985 to assist Me developer in converting Me property to apartments and commechd spaces. The City's marriage is subordinate to a first mortgage held by the Maine State Housing Authority. In 1985 the City applied for and received $160,000 in UDAG funds from the U.S. Downtown of Housing and Urban Development to fund the rebuilding and expansion of the Abbott Square parking lot. The UDAG Agreement required BDA to repay the City the cost of the Abbott Square bnprovtments. This repayment obligation is second by the mortgage held by the City. The mortgage requires repaymmt of $160,000, interest free, at the and of 30 years. The present outstanding balance of the loan that Bangor Development Associates has with the Maine State Housing Authority is$2,423,000. BDA wishes to borrow mother $190,000 for the installation of new windows in the apartment house complex. The additional loan will be in a from of a modification of the existing MSHA mortgage. The proposed subordination agreement is in the same form as the am previously app�roYed in 1993. �— YI . Departherd Head Manager's Comments: &{NIS City Manager Associated Information: Subordination Agreement Budget Approval: " Flnance Legal Approval: City Solicitor Iucetl for need _First Reading page? of? Referral 02-122 S-1 A SipN to Councilor Nealley Apti18. 2002 C " c, a CITY OF BANGOR (TITLE.) ORDER, Authorization to Subordinate City Mortgage to Maine State Housing Authority Mortgage -- Bangor Development Associates By the pry Count!/ofthe ply o(&wrgan ORDERED, WHEREAS, bans made to fund the renovation and reuse of the former Bangor High Schol Wilding located at 183 Haim Street in Bangor are secured by a first mortgage on the property given by Bangor Development Asociales to the Maim State Housing Authority; and WHEREAS, Me City of Bangor holds a second mortgage on the property in the amount of $160,000 given by Bangor Development Asatlates an December 9, 1985 to secure payment of funds due the City for improvements made to the Abbott Sguare parking lot loome l opposite the 183 Had" Street Sdroolhouse Project; and WHEREAS, the Maine Stine Housing Authority has agreed to modify Its mortgage with Bangor Development Associates in order to advance Bangor Development Associates $190,000 for the ins allation of new windows In the Schoolhouse Project; and WHEREAS, in order M do so, Bangor Development Associates and the Maine State Housing Authority is repuesMg that the City a ute a Subordination Agreement for the partes to retain their respective mortgage priontles, NOW, THEREFORE, W it ORDERED, THAT the City Manager is hereby authorized to subordinate the mortgage given the City of Bangor by Bangor Devebprnent Associates called! December 9, 1985 to the modified mortgage between Me Maine State Housing Authority and Bangor Development Associates on the properly located at 183 Harlow Street in the City of Bangor. Said Subordinaton Agreement Is atta ted hereto. M CITY COUNCIL April B , 2002 Notion Made and Seconded for Passage Council voted no fwflict for Councilor Nsidacae Passed gIT{ CLBBB # 02-1]N OADER (TITLE,) Autborino Subordinate city Mortgage to Mein State Housing Authority l rtgage - Hangar Development Associates Assigned IeCouncgar OoAkL E� 02-172 For valuable coni dexatioq receipt whereof is hereby sclmowledged, and in considmtion of the loans, advance, discounts, renewals or accessions now or hereafter mode by Maine Seats Housing Authority, a public body, corporate and poll& and an instrumentality of the State of Mune having principal office at 353 Waw Sweet, Augusta, Maine Ch1SHIt j m or foe the account of Bangor Development Associates, a Mame limited partnership having a pdndpal office at 183 Machos, Street, Bangor, Mature (Torroua'), the undersigned agrees wish MSHA as follows 1. ]be undmignel represents to MSHA chat Bereomer now now an the usedmigned One Bun— dzed Sixty Thousand and WIW Dam ({tcn annl aithoutcounreNaim or offset, and that sud indebudness has not been assigned to or subordinated N fr or ofuay other person, your or corporation; and the undersigned further represents that the indebtedness is represented by a promissory note dated Dttwber 4,1985, payable to the order of the undmigned ("Note') seemed by a Mortgage and Sanity Agreement doted December 4,1985 and mcodd in the Penobscot County Registry of Deeds in Book 3766, Page M4 C'Moetgege'). The undersigned fuller agrees that at no tame hernfier sill any pan of add indebtedness be represented by my news we other negotiable ins twnents except the Note. 2 The undersigned hereby subandinatenthe Mortgage and the wdebtedvus of Bouaowa m the undersigned pursuant to the Not and all other present and future indebtedness ofBcnower to the undmigned CSubodinawd[ Indebtedness'), earning under or pursuant to said Not; to my and ao indebrderess now or hereafter owing by Boaxovwer m MSHA, induding, without Induction, any fature advances made by MSHA to Bonmaur, and agrees not to demand, accept or remve my payment of principal on brewer upon account of the Subordinated indebtedness, or my additional coeateul therefor, until all such awamt or Statute mckbe druss ofBotrowec m MSHA has been paid Jar (rill. Norwithsunding the foregoing, Borrower may pay and the undeaugoed may accept and urn for its own accouns paymests of principal and intent as they become due (h dulling my bre chugeemerm on overdue amounts), but not prepayments, pursue to the Note, to the ecu nt n ofDistribusto Boreowu of Surplus Cash fiom the Schoolhouse Apmtmers project located at 183 Hadow Street, Bavgu, Maine (the'Twject'), pursuant to the Mortgage and Security Agreement on the Project green by Borrower to MSHA, but only it I. Borrower is not is default of its obligations to MSMA; and b. Immediatey after making such payment, Bozo uer is not in default of any of its financial covenants with MSFFA. Upon the commence of and during rise emsteuce of my default fir the obligations of Hormwer to MSM, no further payments shall be made by Bonmwer to the undersigned on account of else Now unless and and au indebtedness of Borrower to MSHA has been paid in M. 3. Tw wdemigned busby subordinates its security interest in my property of Bonowu, arising under or pursuant to said Now, to the security interest of MSMA in any property of Bonuses and agrees that at au does, whether before, afnt or dung the pendency of any bauluuptry, reoagmizatw or other inselvency proceeding cracking Borrower and notwithstanding the priorities which would ordicady result Seem the «du of the treating of a security modest or the order of the filing of any financing statement, the security interest of MSFN in my property of Bonowec shall eohntlmte, vn- a vis the underuped, a first priority security contest in such property. Subordination Alpeement — MSHA 1 - PW 1 of 5 (122993) o2—v2 4. Emept as permitted by Section 2 of this Subordination Agement, and ucept a a se forth below, the undetigned wig no; unless ad need m indebtedness of Borrower in MSIIA b Cory paid and satisfied and all Entering unngemmts by and between MSHA and Borrower hive been temdnated: A. Accelerate, request, donsnd,uke, uapt or sooner from or car behalf ofBorower,by setoff ore any matme, any monies representing ace or any pan of rhe Subordinated Indebtdnax; b, Irate or participate with esthete my suit, action or prorating including without Incubation, my bankruptcy, reorgarvzedon m insolvency protecting 'germs t Borrower in collect the Subordinated indebtedoesa: C Repossess, forNou upon oc otherwise rake my action agent; cur current any eemecho web respect to, any collateral unwng A or my pan of the Subordinated Indebtedness, inuring winout Irradiation, notifying account debtors ofBorowa; or d gequee, demand, rbc, accept or receive any security for the Subordnated Indebtedness, other ern such security that b: () m effect on she date hereof; (u) c000nsod to n writing by MSIIA; and (da exprenly cubo dinarM No 1AS14MS security nweac If the undersigned teal] mmmen<e, proseruso or participate in my suit, action or protecting against Borrower n violdan of this Subordination Agreement or thud attempt to muforoe.foreclose upon or unbar upon any collateral reasoning all or any pan of the Suboctnared Indebtedness, Borrower or MSFfA may ntapme as a defense the sans and conditions of thb Subordnation Agremtmt, and 4ASf1A may menvme and ntapose such defenon in time or n the name o(Horouva. 5. As savrity for any and ill obligations ofBoaower 0 MSffA and in order M effectuate due foregong mbodinown, the undersigned hereby transfers and asigoa to MIM, all claims or demands of the undmigued against Borrower, pmmant to the Subordinated Indebtedness, with fug right on the pan of MSIM, n is cum came or in the name of and as etmmey-n-fact feet she undersigned, to collect and enforce the Subordinated Indebtedness, by suit, proof of Blom in banknsprcy, or other Gquidamq ceorgenmtioe cur insolvency proceeding or otherwise. In the event of any saeivenhip, insolvency, bankruptcy, assignmms for she benefit of erediron, wbu ment of indebtedness, composition, amrgnzetioq whether or not pursuant to baelmrpscy, lens, sale of all m subsecddly sU of the start, dbnolution, wndng up, l qui dation, or my other marhaleng of the assets end liabilities of Borronce, then any payment or distribution of assets or other property, which would othewise be payable on or deliverable upon or with respect to the Subordhnod bre btdmas (including without Estimation, payments to provide adequate protection to she undersigned or to reimburse theuMenignd for lost opportunity costs or loss of them value) shall be paid or den acid directly so MSFfA for application on the Indebtedness then and thereafter owing to 145FFA and such indebtedness shag leave hem fully paid and sadsfid MS shaft have the righc to shone, collect and creature every such payment or distribution and give acgedtmnce therefor, and MM is herby irevoorbly, authorized an attorney-n-faef the uaderiged, to more Suboctnatim Agament—MSHA 1^ Page 2 of S (122993) 02-172 and person she Subordinated Indebndnees, and to otherwise protect the marests of the undersigned in any of the abovedurnbed proceedings or in any mating of vediross of Borrower relating dorm, if the undersigned does not do so in a timely man er, providing however, that MSHA shall have no obligation to vour,prove or act with respect w such elders. Shodd any payment or many, be received by the mnderdgned for or on amount of the Subordinated Indebareac a, prior to the satisfaction of A used oblg tiom ofBorrowu w MSHA, then, acept as pemdned by Section 2, the undersigned uill fralevirh deb,cr themes to MSHA,w precisely the fusion aaived(ucept for the vndereiy ti's udaaemm where uvuy) f application on account ofBorsowda obliptionsto MSW[ and, until so delivered, the same shah be held in bust by the undersigned as the propery of MSHA. In the same of the Silva of the undeesignd w mdorre any interment for the payment of money so received by the undersigned, payable to the undersigned's order. MSHA is hereby unstably mentioned and appoiad.bounty-in-fact for the undersigned, wish full pour to make such endmwoent and twits full power of substitution. 6. Notwishamnding anything to the concaryherein, the undersigned herebystipulates and agrus that shouhl a case or proceeding outlets Tide 11 of the United Sams Code, 11 U.S.C. S§ 101 t«w be commenced by or against Burrower, the undersigned, in reference to bid Note, shall have no d=;... (direly or indiacdy, by mems of un sasigoment, submgtion, ivdemnification, contributioq or odbmvise) against Borrower or the bmkruptcy seats of Buttoner, and the undraped further stipulates and agau that, th the event of any sucherm, itis not a creditor or caimt whether directly or indirectly ("It assignment, aubrogesion, indmudfimriom conrributioq or otherwise), of gossamer, provided, howevq that nothing hecdn shall pmltibit the undersigned Sum filing a Proof of Claim or otherwise participating in my l anlnupby proceeding involving Burmese with regard or my debts owed the undersigned oder than postwar to said Noa The undmigned hereby stipulates that to the scene due it would otherwise have chimer or be a adiwr or chimer[ in my such use or proceeding as a trends of said None, itis immtionally and knowingly waiving any sueb[Lima or Sams by the provisions of dna paragraph. Further, the undersigned ignore that in my such ase. it is not a cad err ofBorowu vnshin the meaning of du bankruptq Code vats regard to said Nom y. In order to cart' out the terms and the intent of this Subordination Agreement more effectively, rhe undersigned wild do a am and exmte ag brother matrurnrnts nmuury or mnvmant to obtain or, preserve for MSNA the henefie of this Subordination Agreement 8. No action which MSM, or Burowe+ with the content of , may sake or eefain Som raking wits reaper[ to my indebtedness of Borrower to MSHA, or my note or nares representing the same, many collattal thiefsc. insuring 2 uaivu re reaau thereof, or any agreement or agaemmn (wcading guaranties) in connection thereuidn, shall affect the terns haaeE 9. No waiver shill be deemed to be wide by MSIVtof any of in rights humnder orJus the urns shell be in wtifing and as a waiver, Jany, shall be a waiver only with respell to the specific instance involved and it shall in no way impair MSHA's eigbu or the unduvigna fs ob5ptions to iter my other rupec[ oc or any other time. 10. Notwithstanding anything to the contrary contained hereir, M may, enforce its security intasuts, augummq and/or pledgee, by a ludidal proceeding other proceeding or any other means provided by law, including without limmtioq the labor Uniform Conuuemil Code THE UNDERSIGNED AGREES, AND BORROWER BY SIGNING 1T? ACKNOWLEDGEMENT HERETO (WDHOUT LIMITING THE SCOPE THEREOF) AGREES, AND SCSI" BY ITS Subordination Agreement —66fIA P, Page 3 of 5(1=993) ACCEPTANCE HEREOF, AGREES THAT THEY EACH DO HEREBY WAIVET BY JURY IN ANY AMON. PROCEEDING, COUNTERCLAJK OBJECTION TO A CLAIM IN ABANIIXUPfCY CASE, OR OMER L GATION OF ANY TYPE INVOLVING hEMA ANY WAY ON ANY NATTER WHATSOEVER OR ARISING OUT OF, RELATED TO, OR IN ANY WAY CONNECTED WTTH THIS SUBORDINA]nON AGREEMENT, ME INDEBTEDNESS OF BORROWERTO bMU.THE NOTE,Tf E SUBORDINATED INDEBTEDNESS AND/OR THE TRANSACTIONS AND DOCUM1E+NTS REFERRED TO HEREIN OR CONTEMPLATED HEREBY. it. Noddng in dila Subotdinadon Agement shat be deemed in my announce to naive, mmpromim, subou mate or otheewe affect my dam, lien, tight or remedy the undersigned may now or heamfmc have wiA mpem to ob4gdons of Bosmwer when dam the Suboadmawd Indebtedness. 12. TNS Subordination Agreement shal hind the undersigned and the undeNgned's successosa, vsigns and legs rTmsenndvn and shaS wore m the benefit of MM and iu successors and assigns. M WITNESS WHEREOF, the undenigned hereby exacuw this Subordwadon Agseemmt as of tee_dayofAuil 29oz Mctfl YlHl BF Nasse In: City Mmaget Bonmvethereby acimmdedges nofice of the Emegoiug Submdinavon Agreement and agrees to be bound by ill the teams, prm ions and conlmous thereof BANGOR DEVELOPMENT ASSOCIATES By: Bangor SdsooEouse Associates Its Gmma Paemer Witness: BF Rnbm %Ward, Je. Its: Former Robcrt Badacd,Jr. Its: Farmer Subosdimdoa Agmernmt—MSHA 1+' Page6of 5 (122993) oz—v2 Svte of Maine April )dpp Comtyafpmobscot PaeonAy appeared the aboveoamed Edward A. Barrett GlyMmageofthe City of Bangor end uknowledgcd the foregoing mtminmt to be hb/her free act and deed m his/her said capedty end she free act and deed of add City ofBm .. Before me, Natoc Notisy Public/Atte mey-at-Law Commsswa expires State of Maine April _yp1 C tyofKmnebec Pmm%Uy'eppeesed the above-named Hobert Bddace, Jr., partner of Bangor Schad6ouse Aasooates, gaseml p err of Bangor Devdopmeat Aso tes and aco ledged the foregousg inst t to be bb/ha hee act and deed a his/her sell mpadty and the free as and deed of »sd Develops. Beforcn e Nems. Nonan Public-st-Law Commbewn exxpipire'rcE yM\.nv�&mr.�.vmn\vdvEnueen MSHn In Subosdivedon Agreement—HEXA 1• Page 5 of 5 (IMM)