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R-019-2019 - Loan to West End LLC; 740 West 900 South R 19-2 REDEVELOPMENT AGENCY OF SALT LAKE CITY RESOLUTION NO. R-19-2019 Loan to West End LLC RESOLUTION OF THE BOARD OF DIRECTORS OF THE REDEVELOPMENT AGENCY OF SALT LAKE CITY APPROVING THE TERM SHEET FOR A LOAN TO WEST END LLC FOR A COMMERCIAL DEVELOPMENT PROJECT LOCATED AT APPROXIMATELY 740 WEST 900 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 the 9 Line Community Reinvestment Plan on October 2, 2018. WHEREAS,the RDA has a revolving loan fund to provide construction loans for projects located in its project areas. WHEREAS, West End LLC, a Utah limited liability company (the "Developer") will construct a commercial development called West End Development which includes the adaptive reuse of two warehouses (the "Project") on approximately one acre of property located at approximately 740 West 900 South(the "Property"). WHEREAS,the Developer has applied for a loan from the RDA to assist with construction costs for development of the Project. WHEREAS, on September 17, 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(the"Term Sheet") for a loan to the Developer, as borrower, for the Project. NOW,THEREFORE, BE IT RESOLVED by the Board of Directors of the Redevelopment Agency of Salt Lake City (the"Board") 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 8th day of October, 2019. Amy Fo le i Approved as to form: -IOAW*Lt�� Sat Lake ty Atto ey's Office Kimberly I . C r us Date: Transmitted to the Executive Director: 10-9-2019 The Executive Director: does not request reconsideration hlyt requests reconsideration at the next regular Agency meeting. Ja uelinre M. Biskupski, Executive Director ee4�p`i' GaRP 0 RgTF �2 City Recorder w SEAL o Z -r7 �N LOAN TERM SHEET APPLICANT West End LLC ADDRESS Approximately 740 West 900 South PROJECT The West End Development is a commercial development that will adaptively reuse and convert two existing warehouses into commercial uses. The Project will include about 12,500 square feet of commercial space and public space improvements. PROPOSED LOAN TERMS • Amount: The loan will be sized to the lower of$3,100,000 or a maximum of 90%of value as per an as-completed appraisal. • Interest Rate: RDA Loan Program Base Rate(U.S. Treasury Yield plus 3%) 4.58% Public Benefit Interest Rate Reduction: • Adaptive Reuse -0.5% • Public Amenities* -0.5% • Economic Impact -0.5% • Transit Alternatives** -0.5% • Architecture and Urban Design*** -0.5% • Sustainability**** -0.5% Final Interest Rate***** 1.58% *To be eligible for this interest rate reduction, the project will be required to provide public space and improvements along the midblock alley. **To be eligible for this interest rate reduction,the project will be required to provide employee shower, locker,and bicycle facilities as part of their overall development. ***To be eligible for this interest rate reduction,the project must go through and receive approval through an RDA Design Review process. ****To be eligible for this interest rate reduction,the project will be required to implement sustainability features as approved by the RDA. *****The interest rate provided is an estimate. The final interest rate will be based on the US. Treasury Yield Curve Rate,as determined by the term of the loan,at loan closing. • Interest Accrual: Interest shall accrue during construction beginning upon the first disbursement of funds. • Term: 5 years • Amortization: 20 years • Disbursement: Loan proceeds shall be disbursed through construction draws. 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. • Expenses: Applicant will pay all loan expenses and closing costs, including title insurance. • Recourse: The loan shall be full recourse before project stabilization, converting to nonrecourse upon project stabilization. COLLATERAL AND GUARANTEES • Personal Guarantee: Personal guarantee from Maximilian Coreth. • Lien: A deed of trust lien,recorded in first position, on the Property. CONDITIONS FOR LOAN CLOSING Prior to loan closing,the Applicant will complete the following: • RDA approves all terms of the loan. • Secure sufficient sources of project financing. Sources of financing must equal the total project cost. • Obtain all required City approvals. • Execute loan documents(e.g. promissory notes, loan agreements, security documents, and guarantees) as deemed necessary by the RDA and its legal counsel. • 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.