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R-013-2019 - Loan to CW Urban for The Olive; 378 West 300 South R 19-2 REDEVELOPMENT AGENCY OF SALT LAKE CITY RESOLUTION NO. R-13-2019 Loan to CW Urban for The Olive RESOLUTION OF THE BOARD OF DIRECTORS OF THE REDEVELOPMENT AGENCY OF SALT LAKE CITY APPROVING THE TERM SHEET FOR A LOAN TO CW URBAN FOR A RESIDENTIAL CONDOMINIUM DEVELOPMENT PROJECT LOCATED AT 378 WEST 300 SOUTH. 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 (the "City") adopted a redevelopment plan for the Central Business District project area. WHEREAS,the RDA has a revolving loan fund to provide construction loans for projects located in its project areas. WHEREAS, one or more affiliates of CW Urban (the "Developer"") will construct a residential condominium development ("Project") on 0.69 acres of property located at 378 West 300 South ("Property"). WHEREAS,the Developer has requested a loan from the RDA to assist with construction costs for development of the Project. WHEREAS, on August 1, 2019, the RDA Finance Committee reviewed the loan application. WHEREAS, based on the RDA Finance Committee's recommendations, the RDA staff recommends the attached set of terms for a loan to the Developer, as borrower, for the Project ("Term Sheet"). NOW, THEREFORE,BE IT RESOLVED by the Board of Directors of the Redevelopment Agency of Salt Lake City that it approves the loan outlined in the Term Sheet 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 loan agreement 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. Passed by the Board of Directors of the Redevelopment Agency of Salt Lake City, this 24th day of September , 2019. Amy Fowler, h Approved as to form: Salt Lake City Attorney's Office Katherine Lrs—( is Date: gt19 Transmitted to the Executive Director on 9-25-2019 The Executive Director: does not request reconsideration requests reconsideration at the next regular Agency meeting. Jacqueline M. Biskupski, Executive Director `�form yw- est: 6 � pP M EN/77 N,1�p� PORgpe �20�Z i y Recorder w SEAL 0 O e �.orr LOAN TERM SHEET APPLICANT • Applicant: A single-purpose or limited partnership entity to be formed by CW Urban. PROPERTY • Acreage: 0.69 • Address: 378 West 300 South PROPOSED LOAN TERMS • Amount: The loan amount will be based on actual gap financing needs and will be sized to the lower of$3,300,000 or a maximum of a 95% loan to value per the value determined by the as-complete appraisal. • Interest Rate: RDA Loan Program Base Rate (U.S. Treasury Yield plus 3%) 4.82% Public Benefit Interest Rate Reduction: Economic Impact -0.5% Final Interest Rate" 4.32% "The interest rate provided is an estimate. The final interest rate will be based on the U.S. Treasury Yield Curve Rate, as determined by the term of the loan,at loan closing. The rate shown is the 5-year Treasury Yield Curve Rate on July 24, 2019. • Interest Accrual: Interest shall accrue during construction beginning upon the first disbursement of funds. • Term: 36 months • Repayment: The RDA shall be paid an amount equal to one hundred percent(100%) of the net sales proceeds for each unit after the payout to the primary lender has been accounted for. Any outstanding balance of the loan shall be payable in full at the end of the loan term. • Disbursement: Loan proceeds shall be disbursed through construction draws to begin once developer equity is fully drawn down, and on a pro rata basis with funds from the senior 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, savings would be allocated to pay down the RDA loan. • Expenses: Applicant will pay all loan expenses and closing costs, including title insurance. • Assumption: The loan is not assumable. • Recourse: The loan shall be full recourse. COLLATERAL AND GUARANTEES • A mortgage lien, that may be subordinated to the senior lender on properties located at 378 West 300 South. • Personal guarantees from persons maintaining 20% or more ownership in the ownership entity. DESIGN REQUIREMENTS To be eligible for financing, the Project shall receive design approval from the RDA. CONDITIONS FOR LOAN CLOSING Prior to loan closing, the Applicant will complete the following: • RDA approves all terms of the loan. • Obtain approval through the RDA design review process. • Secure sufficient sources of project financing. • Execute loan documents (e.g. promissory notes, loan agreements, security documents, and guarantees) as deemed necessary by the RDA and its legal counsel. • 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.