R-010-2019 - Brinshore Development, LLC; 255 South State Street R 19-2
REDEVELOPMENT AGENCY OF SALT LAKE CITY
RESOLUTION NO. R-10-2019
Loans to Brinshore Development, LLC
RESOLUTION OF THE BOARD OF DIRECTORS OF THE REDEVELOPMENT AGENCY
OF SALT LAKE CITY APPROVING THE TERM SHEETS FOR THE LOANS TO
BRINSHORE DEVELOPMENT, LLC FOR ACQUISITION AND REDEVELOPMENT OF
REAL PROPERTY LOCATED AT 255 SOUTH STATE STREET.
WHEREAS, the Redevelopment Agency of Salt Lake City ("RDA") was created to
transact the business and exercise the powers provided for in the Utah Community Reinvestment
Agency Act.
WHEREAS,the RDA and the governing body of Salt Lake City adopted a redevelopment
plan for the Central Business District("CBD").
WHEREAS, Brinshore Development, LLC, or one or more of its affiliate (collectively,
the "Developer") has been selected by the RDA through a Request for Qualifications process to
purchase and redevelop the RDA's property located at 255 South State Street(the "Property").
WHEREAS, the Developer will acquire the Property through one or more transactions,
and will construct a mixed-income, mixed-use project(the"Project").
WHEREAS,the RDA has a revolving loan fund(the"RLF")to provide construction loans
for projects located in its project areas.
WHEREAS,the RDA has funds within the CBD fund for the purpose of commercial and
residential loans (from the CBD Commercial Development Loan Program and CBD Residential
Development Loan Program), collectively the "CBD Loan Program Funds".
WHEREAS, on October 9, 2018 through Resolution R-31-2018, the Board of Directors
of the Redevelopment Agency of Salt Lake City (the "Board") approved a Notice of Funding
Availability (the "NOFA") that approved the funding allocation and preliminary terms of
$2,000,000 for the Project.
WHEREAS, the Developer has applied for loans for the RDA to provide seller financing
for the acquisition of the Property and to assist with the construction costs and permanent financing
of the Project.
WHEREAS, on June 12, 2019, the RDA Finance Committee reviewed the loan
application.
WHEREAS, based on the RDA Finance Committee's recommendations, the RDA staff
recommends the attached sets of terms (the "Term Sheets") for loans to the Developer(s), as
borrower(s), for acquisition of the Property and construction and permanent financing of the
Project. The term sheets provide for seller financing for the acquisition of the Property through
one or more loans, and one or more loans for the construction costs and permanent financing of
the Project funded from the NOFA, CBD Loan Program Funds, and RLF.
NOW,THEREFORE,BE IT RESOLVED by the Board that it approves the loans
outlined in the Term Sheets attached hereto, subject to revisions that do not materially affect the
rights and obligations of the RDA hereunder. The Board authorizes the Executive Director to
negotiate and execute the one or more loan agreements, promissory notes, deeds of trust, and any
other relevant documents consistent with the Term Sheets, and incorporating such other terms
and agreements as recommended by the City Attorney's office.
Passed by the Board of Directors of the Redevelopment Agency of Salt Lake City, this
9th day of July , 2019.
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Approved as to form: f��N� .11
S It a ity A orney's Office
Kimberl K. Chytraus
Date: . u , ZQ 1201
Transmitted to the Executive Director on July 9, 2019
The Executive Director:
v- does not request reconsideration
requests reconsideration at the next regular Agency meeting.
Jacquelf4e M. Biskupski, Executive Director
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Attachment B:
TERM SHEET—RDA Loan
255 S. State Street
FINALIZATION OF LOAN TERMS
The terms described in this Term Sheet represent the terms of the RDA's maximum contribution
to the financing of the Project. Following receipt of the senior lender and tax credit investor final
commitments to the Project, and final proformas for the Project, the RDA and Borrower to verify
and adjust the terms of the loan listed below consistent with the respective requirements of the
RDA.
LOAN TERMS
Borrower: 255 State, LLC (affiliate of Brinshore Development, LLC) or
assignee approved by the RDA
Property: 255 South State Street
Amount: Not to exceed $8,403,480*
Note: Sources of funds for the RDA loan includes$2,000,000 the
RDA Board of Directors set aside for the Project as part of the
Notice of Funding Availability for affordable housing, October 9,
2018.) The terms for the $2,000,000 NOFA funding will match the
terms shown here.
Note: The overall Project consists of three separately owned
components—or sub-projects—for financing purposes (9116, 4%
residential and 4%commercial) and the total loan amount will be
separated into multiple loans made to the three sub projects. This
allocation and assignment will be finalized by Borrower and RDA
staff prior to closing and defined in the loan documents.
Project Description: The overall project consists of the new construction of a mixed-
income, mixed-use project with approximately 190 housing
units, 118 parking spaces, and 24,000 square feet of commercial
space. The estimated total project cost is $70,044,472. Eighty
percent of the 190 units will be deed restricted affordable
housing.
Affordability Restrictions: 152 units of the 190 will be deed restricted for 50 years at 80%
AMI or less. A minimum of 20%of the units will be at 50%AMI
or less.
Term: 30 years from conversion to permanent financing
Amortization: 30 years
Interest Rate: Actual interest rate to be calculated at closing according to the
RDA Loan Program Policy.
The base interest rate shall be fixed at 300 basis points(3%)plus
the current United States Treasury Yield Curve Rate, as
determined by the term of the loan, at loan closing.
The Applicant qualifies for a 3% reduction to the base interest
rate because the Project meets the following public benefit
criteria outlined in the RDA Loan Program: Sustainability,
Public Amenities, Historic Preservation, Economic Impact,
Affordable Housing; AMI Targets, Architecture and Urban
Design,Transit Alternatives.
Example interest rate calculation based on a June 3,2019 United
States Treasury Yield Curve Rate of 2.53%(30 YR):
United States Treasury Yield Curve Rate: 2.53%
Base Interest Rate: 3%
SUBTOTAL: 5.53%
Reduction for achieving 6 public benefits: -3%
TOTAL INTEREST RATE: 2.53%
Interest shall accrue during construction beginning upon the first
disbursement of funds. Accrued interest during construction to
be added to the loan balance.
Repayment: Payments commence at conversion to permanent financing.
Repayment shall be based on available cash flow for the 9%,4%
residential and 4%commercial sub-projects after payment of the
senior lender and any required tax credit investor fees.
To the extent there is a deferred developer fee on a sub-project,
the RDA will receive 50% of available cash flow and the
Developer will receive 50% of available cash flow until the
deferred developer fee is fully repaid. The RDA will have
discretion on how its share of cash flow is allocated towards
repayment of the RDA Loan and Seller's Note, which will be
defined in the loan documents.
To the extent there is no deferred developer fee on a sub-project
or once the deferred developer fee is fully repaid, the RDA will
receive 75% of available cash flow. The RDA will have
discretion on how its share of cash flow is allocated towards
repayment of the RDA Loan and Seller's Note, which will be
defined in the loan documents.
Balloon payment at maturity of any outstanding balance
Collateral: A mortgage lien on the Property that may be subordinated to the
senior lender but will be superior to other subordinate financing
sources.
The RDA's two sources of funding for the Project,the RDA Loan
and Seller's Note, will be in a shared second position.
Guarantors: Corporate guarantee from Brinshore Development, LLC
Deferred Fee: Applicant will maximize deferred developer fee contributed as a
source to fund the Project. Deferred developer fee will be at least
$1,500,000 and General Partner Equity at least$300,000.
Disbursement: Loan proceeds shall be disbursed through construction draws
with the construction lender. Any funds not disbursed 24 months
after closing will be used to pay all outstanding interest and
principal from the loan. To the extent that project sources exceed
project uses at project close-out as documented by the cost
certification, savings would be allocated to the subordinate
financing sources on apro-rata basis.
Fees: Closing costs and legal fees shall be paid by the Borrower
including, but not limited to, the cost of title search and
insurance, credit reports, and attorney fees. Fees will be payable
at loan closing.
CONDITIONS FOR LOAN CLOSING
Prior to loan closing, the Applicant will complete the following:
• RDA approves all terms of the loan.
• Close on the purchase of the Property, meeting all the requirements of the Real Estate
Purchase Agreement.
• Secure sufficient sources of financing for the Project. Borrower will maximize available
conventional financing from senior lender,tax credit equity, and funding from subordinate
lenders.Borrower will provide evidence of seeking and maximizing all available financing
opportunities for the Project,including but not limited to State Olene Walker Housing Trust
Fund, Salt Lake County HOME and Salt Lake City HOME funds.
• RDA approves final schedule of sources and uses and proformas for each sub-project: 4%
residential, 4%commercial, and 9%.
• Execute loan documents (e.g.promissory notes, loan agreements, security documents, and
guarantees) as deemed necessary by the RDA and its legal counsel.
• Record land use restriction agreements for affordable housing in the Project.
• Record easement for public access to the mid-block walkway/paseo connecting State Street
to Floral Street.
• Receive all necessary approvals from the City, as further defined in the loan agreement.
• Receive approval from the RDA and its legal counsel of all matters pertaining to title,
legality of the loan, and the legality, sufficiency, and the form and substance of all
documents that are deemed reasonably necessary for the loan transaction.
• Provide evidence of insurance in such amounts and with such coverage as deemed
necessary by the RDA for the Property.
Such other terms as recommended by the RDA's legal counsel and staff.
Attachment C:
TERM SHEET—RDA Seller's Note
255 S. State Street
LOAN TERMS
Borrower: 255 State, LLC (affiliate of Brinshore Development, LLC) or
assignee approved by the RDA
Property: 255 South State Street
Amount: $5,000,000
- Note: The overall Project consists of three separately owned
components—or sub-projects—for financing purposes (9%, 4%
residential and 4% commercial) and the total loan amount will be
separated into multiple loans made to the three sub projects. This
allocation and assignment will be finalized by Borrower and RDA
staffprior to closing and defined in the loan documents.
Project Description: The overall project consists of the new construction of a mixed-
income, mixed-use project with approximately 190 housing
units, 118 parking spaces, and 24,000 square feet of commercial
space. The estimated total project cost is $70,044,472. The
proposed project will have 80%of the 190 units as deed restricted
affordable housing.
Affordability Restrictions: 152 units of the 190 will be deed restricted for 50 years at 80%
AMI or less. A minimum of 20%of the units will be at 50%AMI
or less.
Term: 30 years
Amortization: 30 years
Interest Rate: 1%fixed rate, accrual commencing on closing date
Repayment: Payments commence at conversion to permanent financing.
Repayment shall be based on available cash flow for the 9%,4%
residential and 4% commercial sub-projects after payment of the
senior lender and any required tax credit investor fees.
To the extent there is a deferred developer fee on a sub-project,
the RDA will receive 50% of available cash flow and the
Developer will receive 50% of available cash flow until the
deferred developer fee is fully repaid. The RDA will have
discretion on how its share of cash flow is allocated towards
repayment of the RDA Loan and Seller's Note, which will be
defined in the loan documents.
To the extent there is no deferred developer fee on a sub-project
or once the deferred developer fee is fully repaid, the RDA will
receive 75% of available cash flow. The RDA will have
discretion on how its share of cash flow is allocated towards
repayment of the RDA Loan and Seller's Note, which will be
defined in the loan documents.
Balloon payment at maturity of any outstanding balance
Collateral: A mortgage lien on the Property that may be subordinated to the
senior lender but will be superior to other subordinate financing
sources. RDA's two sources of funding for the Project,the RDA
Loan and Seller's Note,will be in a shared second position.
Guarantors: Corporate guaranty from Brinshore Development, LLC
Deferred Fee: Applicant will maximize deferred developer fee contributed as a
source to fund the Project. Deferred developer fee will be at least
$1,500,000 and General Partner Equity at least$300,000.
Disbursement: Credit against purchase price at closing
Earnest Money: Refunded to Brinshore at closing
Fees: Closing costs and legal fees shall be paid by the Borrower
including, but not limited to, the cost of title search and
insurance, credit reports, and attorney fees. Fees will be payable
at loan closing.
CONDITIONS FOR LOAN CLOSING:
Prior to loan closing, the Applicant will complete the following:
• RDA approves all terms of the seller's note.
• Secure sufficient sources of financing for the Project. Borrower will maximize available
conventional financing from senior lender,tax credit equity, and funding from subordinate
lenders.Borrower will provide evidence of seeking and maximizing all available financing
opportunities for the Project,including but not limited to State Olene Walker Housing Trust
Fund, Salt Lake County HOME and Salt Lake City HOME funds.
• RDA approves final schedule of sources and uses and proformas for each sub-project: 4%
residential, 4%commercial, and 9%.
• Execute loan documents (e.g. promissory notes, loan agreements, security documents, and
guarantees) and all documents related to the sale of the Property as deemed necessary by
the RDA and its legal counsel (e.g. Development Agreement, Option to Repurchase
Agreement).
• Record land use restriction agreements for affordable housing in the Project.
• Record easement for public access to the mid-block walkway/paseo connecting State Street
to Floral Street.
• Receive all necessary approvals from the City, as further defined in the loan agreement.
• Receive approval from the RDA and its legal counsel of all matters pertaining to title,
legality of the loan, and the legality, sufficiency, and the form and substance of all
documents that are deemed reasonably necessary for the loan transaction.
• Provide evidence of insurance in such amounts and with such coverage as deemed
necessary by the RDA for the Property.
• Such other terms as recommended by the RDA's legal counsel and staff.
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