Transmittal - 5/10/2022
SALT LAKE CITY CORPORATION
451 SOUTH STATE STREET, ROOM 118 WWW.SLC.GOV · WWW.SLCRDA.COM
P.O. BOX 145518, SALT LAKE CITY, UTAH 84114-5518 TEL 801-535-7240 · FAX 801-535-7245
MAYOR ERIN MENDENHALL
Executive Director
DANNY WALZ
Director
REDEVELOPMENT AGENCY of SALT LAKE CITY
STAFF MEMO
DATE: April 22, 2022
PREPARED BY: Tracy Tran and Kate Werrett, Project Managers
RE: Consideration of an amendment to the existing loan term sheet for West End
LLC for the adaptive reuse of two warehouses located at approximately 740
West 900 South
REQUESTED ACTION: Consider adoption of a resolution approving a first amended term sheet
for a loan to West End LLC for a commercial development project
located at approximately 740 West 900 South.
POLICY ITEM: 9 Line Project Area Development.
BUDGET IMPACTS: An extension of the loan term for a $3,100,000 loan from the revolving
loan fund.
EXECUTIVE SUMMARY: In September 2019, the Redevelopment Agency of Salt Lake City
(“RDA”) Board of Directors (“Board”) approved a resolution that allocated up to $3,100,000 to West
End LLC (“Applicant”) for an adaptive reuse development that converted two existing warehouses
into commercial uses within the 9 Line Community Reinvestment Area (“CRA”). Please see
Attachment A: Resolution (2019): Loan to West End LLC. The Project contains about 10,900 square
feet of rentable commercial space and a midblock connection with pedestrian improvements at about
750 West between Genesee Ave and 900 South. This commercial piece is the first phase of the
overall vision for this site. The second phase for this project will include a multifamily building
located to the east of the subject Project. This was the first 9 Line CRA project to receive RDA
assistance since the Project Area adoption in 2018.
Due to delays in construction and challenges finding tenants during the COVID pandemic, the
Applicant is requesting a five-year term extension to the RDA loan which is in place for the
commercial phase of the Project. Originally when the loan was approved in 2019, the Applicant had
anticipated construction to take approximately nine months and that occupancy and leasing would
begin in January 2021. The pandemic caused construction delays and due to the uncharted economic
climate, leasing the buildings has taken more time than anticipated. The delay in rental income
generation along with a reduction in rental rates prompted this RDA loan term extension request.
The Applicant is requesting to extend their loan through the RDA Loan Program for an additional
five years. RDA Loan Program Policy (“Policy”) allows a standard loan term to be extended up to 10
years through a preauthorized extension. Pursuant to Policy, the Project is eligible to be
preauthorized for an extension provided that the interest rate increases by 2% at the 5-year extension.
Refer to Attachment B: Loan Term Sheet Amendment No. 1 for additional detail on proposed loan
terms and conditions.
As such, an amendment is necessary to preauthorize the 5-year extension of the loan - Attachment C:
Resolution (2022): Term Sheet Amendment No. 1 for Loan to West End LLC has been provided for
the Board’s consideration.
REDEVELOPMENT ADVISORY FINANCE COMMITTEE RECOMMENDATION:
• Amended Loan Terms #1: The Committee is scheduled to review the amended loan terms
regarding the preauthorization of the 5-year term extension. The Committee’s
recommendation will subsequently be presented to the Board.
ANALYSIS & ISSUES:
Project Overview
The first phase of the project includes two adaptively reused buildings with approximately 10,900
square feet of commercial space. Refer to Attachment D for a site plan and photos of the completed
commercial portion of the project.
• Total Project Cost: Approximately $4,200,000
• Location: The Property is located within the 9 Line Community Reinvestment Area.
Amendment to the Loan Term Sheet
RDA policy allows a standard loan term to be extended to allow a term of up to 10 years through a
preauthorized extension. Pursuant to the RDA Loan Program Policy, the Project is eligible to be
preauthorized for an extension provided that the interest rate increases by 2% at the 5-year extension.
PREVIOUS BOARD ACTION:
• October 2016: The Board adopted the RDA Loan Program Policy Resolution R-36-2016.
• October 2019: The Board adopted Resolution R-19-2019, which allocated up to $3,100,000
and approved the preliminary terms of the loan to West End LLC (the “Developer”).
ATTACHMENTS:
A. Resolution (2019): Loan to West End LLC
B. Loan Term Sheet Amendment No. 1
C. Resolution (2022): Term Sheet Amendment No. 1 for Loan to West End LLC
D. Site Plan and Site Photos
ATTACHMENT A
REDEVELOPMENT AGENCY OF SALT LAKE CITY
RESOLUTION NO. R-19-2019
Loan to West End LLC
R 19-2
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 E nd LLC, a Utah limited liability company (the "Dev eloper") 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 dayofOctobe.,2019. ~*
Amy Fo le 1
Approved as to form: ~
s~aketyAttoney's Office
Kimbe~ly. Ch~r us t
Date:!;~~ IC1 ,Wl'7 '
Tra nsmitted to the Executive Director: 10-9-2019
The Executive Director:
/4oes not request reconsideration
__ requests reco nsideration at the next regular Agency meeting.
,,___ rYJ, ~»1~
J a ueline M. Biskupski, Executive Director
LOAN TERM SHEET
APPLICANT
WestEndLLC
ADDRESS
Approximately 740 Wes t 900 South
PROJECT
The West End Development is a commercial deve lopment that will adapt iv ely reuse and conve11
two ex isting warehouses into commercia l uses. The Project will include about 12,500 s quare feet
of commercial space and public space improvements.
PROPOSED LOAN TERMS
• Amount: The loan wi ll be sized to the lower of$3,I00,000 or a maximum of90% of
value as per an as-c ompl eted appraisal.
• Interest Rate: ~---------------------------~ RDA Loan Program B ase Rate (U .S. Treas w-y Yield plus
3%) 4.5 8%
Public Benefit Inte rest Rate Reduction:
• Adaptive Reuse -0.5%
• Public Amenities* -0.5%
• Economic Imp ac t -0.5 %
• Transit Alternatives** -0.5 %
• Architecture and Urban Design *** -0 .5%
• Sustainability**** -0.5%
Final Interest Rate***** 1.5 8%
•ro be eligible for tl,is interest rate reduclio11, the project will be requir ed to provide public space and
improvements along the midblock alley.
**To be eligible for this in terest rate reduction , the project will be required to provide employee sh ower,
locker, and bicycle faci /Wes as part of their overall development.
***To be e ligible/or this interest rate redu ction, !he project must go t hrough and receive approval through
an RDA Design Review process.
****To be eligible/or this illlerest rate reduction, the project will be required to implement sustainability
fea111res as approved by the RDA.
*****The interest rate provided is an estimate. 111ejinal interest rate will be based on the U.S. Treaswy
Yield Curve Rate, as detem1i11ed by the term of the loan, at loan closing.
• Interest Accrnal: Interest sh all accrne during constrnction beginning upon the firs t
disbursement of fund s .
• Te1m : 5 years
• Amo11ization : 20 years
• D isbursement: Loan proceeds shall be disbursed through constmction draws. Any funds
not disbursed 24 months after closing w ill 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 w ill pay all loan expenses and closing costs, including title
insurance.
• Reco urse: The loan shall be fu ll recourse before project stabi li zation, converting to
nonrecourse upon project stabilization.
COLLATERAL AND GUARANTEES
• Personal Guarantee: Person al guarantee from Maximilian Coreth.
• Lien: A deed of tmst lien, recorded in first position, on the Prope11y.
C ONDI TIONS FOR LOAN CLOSING
Prior to loan closing, the Applicant will complete the fo ll owing:
• RDA approves a ll te1ms of the loan.
• Secure sufficient sources of proj ect financing. Sources of financ ing must equa l the tota l
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 pe11aining to title,
legality of the loan, and the legali ty, sufficiency, and the form and substance of all
documents that are deemed reasonably necessary fo r the loan transaction.
• Provide evidence of ins urance in such amounts an d with such coverage as de emed
necessary by the RDA for the Property.
• Such other terms as recommended by the RDA 's legal counse l and staff.
ATTACHMENT B
LOAN TERM SHEET
Amendment No. 1
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%) 3.46%
Public Benefit Interest Rate Reduction:
• Adaptive Reuse
• Public Amenities*
• Economic Impact
• Transit Alternatives**
• Architecture and Urban Design***
• Sustainability****
-0.5%
-0.5%
-0.5%
-0.5%
-0.5%
-0.5%
Final Interest Rate (Years 1-5) 0.46%
Final Interest Rate (Years 6-10) ***** 2.46%
*To be eligible for this interest rate reduction, the project was required to provide public space and
improvements along the midblock alley.
**To be eligible for this interest rate reduction, the project was 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 went through and received approval through an
RDA Design Review process.
****To be eligible for this interest rate reduction, the project was required to implement sustainability
features as approved by the RDA.
***** The option to extend the loan term requires an interest rate increase of 2% at the 5-year extension.
• Interest Accrual: Interest shall accrue during construction beginning upon the first
disbursement of funds.
• Term: 5 years, with preauthorized 5-year extension for a total preauthorized term of 10
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.
• 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.
ATTACHMENT C
REDEVELOPMENT AGENCY OF SALT LAKE CITY
RESOLUTION NO. -------
Term Sheet Amendment No. 1 for Loan to West End LLC
RESOLUTION OF THE BOARD OF DIRECTORS OF THE REDEVELOPMENT AGENCY
OF SALT LAKE CITY A PPROVING A FIRST AMENDED 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
busine ss and exe rcis e the powers provided for in the Utah Community Reinvestment Agency Act
(the "Act").
WHEREAS, on October 10, 2019, in accordance with the RDA Loan Program (the "Program"),
the RDA Board of Directors (the "Board") approved Resolution R-19-2019 allocating the fundin g
a nd approving preliminary terms of a lo an to West End LLC , a Utah limited liability company (the
"Deve loper") in connection with a commercial developm ent called West End Development which
includes the adaptive reuse of two warehouses (the "Proj ect") on approximately one acre of
property located at approximately 740 West 900 South (the "Property").
WHEREAS, the Program permits an extension of the overall loan term from the standard five (5)
year term to a maximum often (10) years through a preauthorized l oan extension, provided that
the interest rate increases by 2% during the extension.
WHEREAS, the Developer h as re quested preauthorization to extend the lo an term to 10 years,
with the requisite 2 % interest rate increase for the final 5 years of th e term, in accordance w ith the
Program.
WHEREAS, on May 5, 2022, the RDA Finance Committee r eviewed a proposed a mendment t o
the lo an terms previo us ly approve d by the Board.
WHEREAS, based on the RDA Finance Committee 's r ecommendations, the RDA staff
recommends the attached set of amended terms (th e "Ame nded Term Sheet ") for the Proj ect loan
to the Developer, as borrower, for the Project.
NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the Redev elopment
Agency of Salt Lake City that it approves the terms outlined in the Amended Term Sheet
attached hereto, subject to revisions that do not materially affe ct the rights and obli gations of the
RDA hereunder. The Board authorizes the Execut ive Director to negotiate and execute the loan
agreement and any other r ele vant do cuments consist ent w ith the Amended T erm Sheet, and
incorporating such other terms and agreements as recommended by the City Attorne y 's office .
Passed by the Board of Directors of the Redevelopment Agency of Salt Lake City, this
__ day of _______ , 2022.
Ana V aldemoros, Chair
Approved as to form: :5tVl.4,, /'J't,;etor
Salt Lake City Attorney's Office
Sara Montoya
Date: Apri l 22, 2022
The Executive Director:
__ does not request reconsideration
__ requests re consideration at the next regular Agency meeting.
Erin Mendenhall, Executive Director
Attest:
City Recorder
LOAN TERM SHEET
Amendment No. 1
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%) 3.46%
Public Benefit Interest Rate Reduction:
• Adaptive Reuse
• Public Amenities*
• Economic Impact
• Transit Alternatives**
• Architecture and Urban Design***
• Sustainability****
-0.5%
-0.5%
-0.5%
-0.5%
-0.5%
-0.5%
Final Interest Rate (Years 1-5) 0.46%
Final Interest Rate (Years 6-10) ***** 2.46%
*To be eligible for this interest rate reduction, the project was required to provide public space and
improvements along the midblock alley.
**To be eligible for this interest rate reduction, the project was 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 went through and received approval through an
RDA Design Review process.
****To be eligible for this interest rate reduction, the project was required to implement sustainability
features as approved by the RDA.
***** The option to extend the loan term requires an interest rate increase of 2% at the 5-year extension.
• Interest Accrual: Interest shall accrue during construction beginning upon the first
disbursement of funds.
• Term: 5 years, with a preauthorized 5-year extension for a total preauthorized term of 10
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.
• 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.
ATTACHMENT D: SITE PLAN AND SITE PHOTOS
Aerial view:
Subject Buildings (before renovations)
GENESEE AVE
FUTURE DEVELOPMENT SITE
BOO SOUTH
Renovated view of the buildings: