040 of 2019 - Authorizing a Housing Trust Fund Loan to STH Magnolia LLC R 19-1
R 19-15
RESOLUTION NO. 40 OF 2019
Authorizing a loan from Salt Lake City's Housing Trust Fund
To STH Magnolia LLC
(The Magnolia)
WHEREAS, Salt Lake City Corporation (the "City") has a Housing Trust Fund to
encourage affordable and special needs housing development within the City; and
WHEREAS, STH Magnolia LLC ("Developer") has applied to the City for a loan to
facilitate the development of permanent supportive housing (the "Project") located at 165 South
300 East, Salt Lake City, Utah(the"Property"); and
WHEREAS, when complete,the site is projected to include 65 units, with 100%
considered permanent supportive housing units targeting those at 25% of area median income
and below; and
WHEREAS, in October 2018 the Housing Trust Fund Advisory Board (the "Board")
recommended approval of a loan to Developer in the amount of$1,000,000, which loan was
approved by the City Council in December 2018; and
WHEREAS, due to increases in construction costs and financing changes,the Developer
made another loan application for a loan in the amount of$1,500,000; and
WHEREAS, on October 7, 2019,the Board reviewed and recommended approval of the
loan application for a loan to Developer in the amount of$1,500,000, and other terms and
conditions as set forth on the attached term sheet(the "Term Sheet"); and
WHEREAS, the City recommends the loan described on the attached Term Sheet based
on its underwriting of the Project.
NOW THEREFORE, BE IT RESOLVED by the City Council of Salt Lake City, Utah:
1. That the City Council hereby approves issuing the loan outlined in the Term Sheet
attached hereto, subject to revisions that do not materially adversely affect the rights and
obligations of the City hereunder.
2. That Jacqueline M. Biskupski, Mayor of Salt Lake City, Utah, on behalf of Salt
Lake City Corporation is hereby authorized to negotiate and execute the requisite loan
documents and any other relevant documents consistent with the Term Sheet, and incorporating
such other terms and agreements as recommended by the City Attorney's office, and to act in
accordance with their terms.
Passed by the City Council of Salt Lake City, Utah, this 3rd day of December
2019.
A ;Cl
SALT LAKE CITY COUNCIL
o�pOR C IR - VICE
A ST: Approved As To Form
G Salt Lake City Attorney's Office
TY RECORDER By:
Date:
Q i rly 2�K.thytraus
LOAN TERM SHEET
The Magnolia
Borrower: STH Magnolia LLC
Address: 165 South 300 East, Salt Lake City
Loan Amount: $1,500,000
Interest Rate: 0%
Term: 30 years
Repayment Terms: Payments will be made annually following completion of
Borrower's full annual audit, contingent on surplus cash flow after
operations and supportive services expenses
Balloon payment at maturity
Collateral and Priority: Fourth position Trust Deed on the Property, subordinate to
primary lender (Zions) and two loans from Olene Walker Housing
Loan Fun
Conditions: Standard loan conditions approved by City Attorney's Office
Applicant must receive an allocation of low-income housing tax
credits from Utah Housing Corporation in December 2019
Applicant has requested below market financing terms through a
public process for the ground lease of the City-owned land