Transmittal - 9/23/2022
MAYOR ERIN MENDENHALL
Executive Director
DANNY WALZ
Director
REDEVELOPMENT AGENCY of SALT LAKE CITY
STAFF MEMO
DATE: September 23, 2022
PREPARED BY: Tracy Tran
RE: Consideration to increase loan up to $2,250,000 and lock in base interest rate for
loan to Bicycle Collective
REQUESTED ACTION: Consider a request from Bicycle Collective to increase loan up to
$2,250,000 and to lock in interest rate to fund construction of the nonprofit
headquarters located at approximately 901 S Gale Street
POLICY ITEM: Granary Project area development.
BUDGET IMPACTS: Up to $2,250,000 from the revolving loan fund.
EXECUTIVE SUMMARY: The Bicycle Collective (“Applicant”), a nonprofit organization, is
requesting to increase their loan amount to $2,250,000 that was approved through the Redevelopment
Agency of Salt Lake City (“RDA”) Loan Program Policy (“Program”) for the construction of a new
building located within the RDA’s Granary District project area at approximately 901 S Gale Street
(“Property”), as illustrated in Attachment A: Site Map. In addition, the Applicant is requesting to lock in
their base interest rate prior to closing, which requires a waiver to the Program. The development will
contain about 15,000 square feet for a multi-use building that will house the retail, programming, and
operations space for the Bicycle Collective (“Project”). The terms are provided in Attachment D: Term
Sheet and Attachment F: Resolution for consideration.
In May 2022, the RDA Board of Directors (“Board”) approved a $1,750,000 primary loan to the Bicycle
Collective. Since then, the Applicant has experienced construction cost increases and supply-chain issues
that have delayed the construction of their development. The Applicant is seeking an additional $500,000
in primary financing, totaling $2,250,000 and is requesting to lock in their base interest rate listed in
Exhibit A: Term Sheet from Resolution R-6-20222 (Attachment E) to help them manage costs.
The RDA currently owns the land. In November 2017, through a request for proposals (“RFP”) process,
the RDA selected the Bicycle Collective with which to negotiate the development of the Property. In
addition, in August 2018, the Board approved a land write-down for the property in exchange for
incorporating public benefits within the development. The project will include public art, high quality
façade materials and will be designed to at least a LEED Silver standard or equivalent level.
RDA FINANCE COMMITTEE RECOMMENDATION: The RDA Finance Committee
(“Committee”) reviewed the request on September 21, 2022 and recommended to approve the proposed
modifications to the loan.
ANALYSIS & ISSUES: An overview of 1) property details, 2) loan request, 3) RDA loan fund policy
alignment, 4) Granary District project area alignment 5) proposed loan terms, 6) capability for loan
repayment, and 7) developer’s experience is as follows:
1.Property Details
The property is currently owned by the RDA and contains approximately .26 acres. Additionally,
the Property is vacant and is zoned D-2 (Downtown Support) District.
2. Loan Request
The Applicant is requesting to increase their primary loan to $2,250,000 and to lock in the base
interest rate prior to closing through the RDA Loan Program for construction of the Project. The
additional request for funds is in line with the approximate $500,000 increase in construction
costs. The increased loan request would also ensure that the project is built all-electric as the all-
electric components chosen for this Project were higher costs than other options. Additionally, the
Applicant is seeking to lock in the base interest rate to help them manage costs.
3.Policy Alignment: RDA Loan Program
This loan request aligns with RDA Loan Program Policy (“Program”), as adopted by the RDA
Board, except for the request to lock in an interest rate prior to closing (which requires a waiver
from the Board) and with a clarification that although the loan amount is technically sized
appropriately (using debt service coverage ratio and/or loan to value calculations) as per the
Program, the projected repayment of the loan is based on the ability for the Applicant to
adequately fundraise to cover the loan balance at the end of the term.
The Program states that “the base interest rate shall be fixed at 300 basis points (3%) plus the US
Treasury Yield Curve Rate, as determined by the term of the loan, at loan closing.” Since the
request would lock in a rate prior to closing, this change would require a waiver from the Board.
Locking in the interest rate now would provide more certainty for the Applicant to understand
their repayment capacity in an environment of continuous rising interest rates.
The reliance on fundraising to cover the loan makes this project riskier than others. The
Applicant anticipates receiving donations from large donors once the project construction is
underway. The projections show that the Applicant should be able to pay off their loan within the
proposed 5-year term. The Applicant has requested an interest rate reduction to acknowledge
four public benefits provided by the Project:
•Public Amenities: The Project is located along 9 Line Corridor that connects the east with
the west side neighborhoods. The Project will also include a public art amenity.
• Transit Alternatives: The mission of the Bicycle Collective is to promote cycling as an
effective and sustainable form of transportation. Additionally, the Project will include
employee shower and lockers.
• Architecture and Urban Design: The Project participated in an RDA design review
process that reviewed the buildings materials, how the project fits in the with surrounding
neighborhood, and how the project will enhance the public realm.
• Sustainability: The Project will be an all-electric building that will include rooftop solar
and the Project has been designed to a LEED-Silver equivalent standard. The Bicycle
Collective was also recently awarded a Blue Sky Grant from Rocky Mountain Power.
4. Policy Alignment: Granary District Redevelopment Project Area Plan
The Project aligns with the RDA’s goals for the neighborhood, as adopted through the Granary
District Redevelopment Project Area Plan, as follows:
• Commercial Objectives:
o Provide a broad mixture of small and medium commercial tenants representing a
variety of uses.
o Promote commercial development on a neighborhood scale with an emphasis on
specialty stores and neighborhood services. Neighborhood Revitalization: Return
underutilized land to a productive use through a reduction in the number of
neglected buildings and vacant lots to reduce crime and improve the physical
environment of the neighborhood.
• Housing Objectives:
o Create attractive neighborhood environments that will reinforce the sense of
community.
o Require active, friendly and public-oriented ground-level uses that contribute to
the pedestrian environment and serve the neighborhood.
• Transportation Objectives:
o Pedestrian and Bicyclist Circulation: Provide access with an emphasis on a
friendly and safe environment for bicycles and pedestrians.
• Urban Design
o Create a pedestrian friendly streetscape that will establish a sense of
neighborhood.
5. Summary of Proposed Loan Terms
• Amount: The loan amount will be sized to the lower of $2,250,000 or a maximum of a
90% of value as per an as-completed appraisal.
• Interest Rate:
RDA Loan Program Base Rate (U.S. Treasury Yield plus 3%) 5.66%*
Public Benefits Interest Rate Reduction**:
• Public Amenities
• Transit Alternatives
-0.5%
-0.5%
• Architecture and Urban Design
• Sustainability
-0.5%
-0.5%
Final Interest Rate*** 3.66%
*Base interest rate shall be locked at this 5.66%, as opposed to the rate at closing. This rate is
based on the U.S. Treasury Yield Curve Rate, as determined by the term of the loan.
**To be eligible for interest rate reductions, the project will be required to meet the criteria
outlined in section 3.
*** The final interest rate will be based on 5.66% base interest rate minus eligible interest rate
reductions.
• Term: 5 years.
• Amortization: 20 years.
• Lien: A deed of trust lien, recorded in first position, on the Property
6. Loan Repayment
The loan repayment for this Project is based on fundraising. The project is projected to pay off the
loan through their capital campaign that will seek donations from individuals, organizations, and
foundations. The Applicant has raised a large portion of funds and anticipates additional
donations once the construction begins. These donations are expected to cover the debt service
for the loan.
7. Developer’s Experience
The development team consists of four members from the Applicant’s Building Committee with a
range of experience in executive, project, and construction management.
PREVIOUS BOARD ACTION:
• May 2022: The RDA approved a $1,750,000 primary loan to the Bicycle Collective for
construction of the Project.
• August 2018: The RDA Board approved a land write-down for the property in exchange for
incorporating public benefits within the development (R-28-2018).
ATTACHMENTS:
A. Site Map
B. Site Photos
C. Project Renderings
D. Term Sheet
E. Original Resolution (R-6-2022)
F. Resolution
ATTACHMENT A: SITE MAP
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ATTACHMENT B: SITE PHOTOS
ATTACHMENT C: PROJECT RENDERINGS & ELEVATIONS
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ATTACHMENT D: TERM SHEET
APPLICANT
Bicycle Collective (“Applicant”), a nonprofit entity
ADDRESS
Property located at approximately 901 S Gale Street
PROPOSED LOAN TERMS
•Amount: $2,250,000
•Eligible Uses: Construction costs
•Interest Rate:
RDA Loan Program Base Rate (U.S. Treasury Yield plus 3%) 5.66%*
Public Benefit Interest Rate Reduction:
•Public Amenities**
•Transit Alternatives***
•Architecture and Urban Design****
•Sustainability*****
-0.5%
-0.5%
-0.5%
-0.5%
Final Interest Rate****** 3.66%
RDA staff will confirm the Project qualifies for the applicable interest rate reductions. Any changes to the
project could result in changes to the interest rate reductions:
*Base interest rate shall be locked at this 5.66%, as opposed to the rate at closing. This rate is based on the
U.S. Treasury Yield Curve Rate, as determined by the term of the loan.
**To be eligible for this interest rate reduction, the project will include a public art amenity
***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.
****The project participated and received approval through an RDA Design Review process.
*****The project will be an all-electric building that will include rooftop solar and the Project has been
designed to a LEED-Silver equivalent standard.
****** The final interest rate will be based on 5.66% base interest rate minus eligible interest rate
reductions.
•Term: 5 years
•Amortization: 20 years
•Payments: Hard repayments with balloon payment due at the end of the term.
•Security: A first position lien on the property.
LOAN TERM SHEET
Bicycle Collective
•Disbursement: Loan proceeds shall be disbursed through construction draws.
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.
OTHER CONDITIONS
•The Project shall operate as the intended use over the term.
•The Project shall remain in good financial and legal standing over the term.
REDEVELOPMENT AGENCY OF SALT LAKE CITY
RESOLUTION NO. 6 of 2022
Loan to Bicycle Collective
RESOLUTION OF THE BOARD OF DIRECTORS OF THE REDEVELOPMENT AGENCY
OF SALT LAKE CITY APPROVING THE TERM SHEET FOR A LOAN TO THE BICYCLE
COLLECTIVE FOR A COMMERCIAL DEVELOPMENT PROJECT LOCATED AT
APPROXIMATELY 901 SOUTH GALE 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 (the "City") adopted the
Granary District Redevelopment Project Area Plan on April 15, 1999.
WHEREAS, the RDA has a revolving loan fund to provide construction loans for projects
located in its project areas.
WHEREAS, Bicycle Collective, a Utah nonprofit entity, (the "Developer") will construct
a commercial development to house its headquarters (the "Project") on the property consisting of
approximately 0.26 acres located at approximately 901 South Gale Street (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 May 5, 2022, 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.
ATTACHMENT E: ORIGINAL RESOLUTION
Passed by the Board of Directors of the Redevelopment Agency of Salt Lake City, this
10 th day of May, 2022.
Ana Va ft;;;;os {May 25, 2022 19 :13 MDT)
Ana Valdemoros, Chair
Approved as to form:S= 7nudo,?2'
Salt Lake City Attorney's Office
Sara Montoya
Date: May 1s, 2022
The Executive Director:
_g]__ does not request reconsideration
D requests reconsideration at the next regular Agency meeting.
Erin Mendenhall, Executive Director
Attest:
c;~202208c29MDT}
City Recorder
EXHIBIT A: LOAN TERM SHEET
RDA LOAN
RDA LOAN PROGRAM
APPLICANT
Bicycle Collective ("Applicant"), a nonprofit entity
ADDRESS
Property located at approximately 901 S Gale Street
PROPOSED LOAN TERMS
• Amount: $1,750,000
• Eligible Uses: Construction costs
• Interest Rate:
LOAN TERM SHEET
Bicycle Collective
RDA Loan Program Base Rate (U.S. Treasury Yield plus 3%) 5.66%
Public Benefit Interest Rate Reduction:
• Public Amenities* -0.5%
• Transit Alternatives** -0.5%
• Architecture and Urban Design*** -0.5%
• Sustainability**** -0.5%
Final Interest Rate***** 3.66%
RDA staff will confirm the Project qualifies for the applicable interest rate reductions. Any changes to the
project could result in changes to the interest rate reductions:
*To be eligible for this interest rate reduction, the project will include a public art amenity
**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.
***The project participated and received approval through an RDA Design Review process.
****The project will be an all-electric building that will include rooftop solar and the Project has been
designed to a LEED-Silver equivalent standard.
*****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.
• Term: 5 years
• Amortization: 20 years
• Payments: Hard repayments with balloon payment due at the end of the term.
• Security: A first position lien on the property.
• Disbursement: Loan proceeds shall be disbursed through construction draws.
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.
OTHER CONDITIONS
• The Project shall operate as the intended use over the term.
• The Project shall remain in good financial and legal standing over the term .
RDA Resolution 6 of 2022 Bicycle Collective
Loan
Final Audit Report 2022-06-13
Created : 2022-05-13
By : Thais Stewart (thais .stewart@slcgov .com)
Status: Signed
Transaction ID : CBJCHBCAABAAzdtp YWSNvSvo6Zkn 10 _uS0yefOGrFWq2
"RDA Resolution 6 of 2022 Bicycle Collective Loan" History
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9 Agreement completed .
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REDEVELOPMENT AGENCY OF SALT LAKE CITY
RESOLUTION NO. _______________
Amending Loan Terms and Approving an Exception to the Loan Policy
for a Loan to Bicycle Collective
RESOLUTION OF THE BOARD OF DIRECTORS OF THE REDEVELOPMENT AGENCY
OF SALT LAKE CITY APPROVING AN AMENDED TERM SHEET AND AN EXCEPTION
TO THE LOAN POLICY FOR A LOAN TO THE BICYCLE COLLECTIVE FOR A
COMMERCIAL DEVELOPMENT PROJECT LOCATED AT APPROXIMATELY 901
SOUTH GALE 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 has a revolving loan fund to provide construction loans for projects
located in its project areas that it manages in accordance with the RDA Loan Program Policy
(“Policy”).
WHEREAS, the Policy provides that the base interest rate for loans will be set at the
closing of the loan.
WHEREAS, on May 10, 2022, in accordance with the Policy, the RDA Board of Directors
(the “Board”) approved resolution R-6-2022 allocating the funding and approving terms of a loan
in the amount of $1,750,000 to Bicycle Collective, a Utah nonprofit entity (the “Developer”), in
connection with the a commercial development to house its headquarters (the “Project”) on the
property consisting of approximately 0.26 acres located at approximately 901 South Gale Street.
WHEREAS, the Developer has requested to increase the loan amount to $2,250,000 and
requested an exception to the Policy to set the base interest rate as the rate of 5.66% as reflected
in Exhibit A: Term Sheet.
WHEREAS, on September 21, 2022, the RDA Finance Committee (“Committee”)
reviewed Developer’s requested changes to the loan terms and interest rate exception.
WHEREAS, based on the Committee’s recommendations, the RDA staff recommends the
Board approve the attached amended set of terms (the “Term Sheet”) for the loan to the Developer,
as borrower, for the Project. Additionally, the RDA staff recommends approving an exception to
the Policy to set the base interest rate at the rate stated in the Term Sheet and such exception shall
be valid for six months from the date of this resolution.
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 waiver of the Policy to set the base interest rate at the
rate stated on the Term Sheet, which waiver shall be valid for six months from the date of this
ATTACHMENT F: RESOLUTION
resolution. 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
____ day of October, 2022.
_________________________________
Ana Valdemoros, Chair
Approved as to form: __________________________________
Salt Lake City Attorney’s Office
Allison Parks
Date:____________________________
The Executive Director:
____ does not request reconsideration
____ requests reconsideration at the next regular Agency meeting.
________________________________
Erin Mendenhall, Executive Director
Attest:
________________________
City Recorder
September 23, 2022
EXHIBIT A: LOAN TERM SHEET
APPLICANT
Bicycle Collective (“Applicant”), a nonprofit entity
ADDRESS
Property located at approximately 901 S Gale Street
PROPOSED LOAN TERMS
• Amount: $2,250,000
• Eligible Uses: Construction costs
• Interest Rate:
RDA Loan Program Base Rate (U.S. Treasury Yield plus 3%) 5.66%*
Public Benefit Interest Rate Reduction:
• Public Amenities**
• Transit Alternatives***
• Architecture and Urban Design****
• Sustainability*****
-0.5%
-0.5%
-0.5%
-0.5%
Final Interest Rate****** 3.66%
RDA staff will confirm the Project qualifies for the applicable interest rate reductions. Any changes to the
project could result in changes to the interest rate reductions:
* Base interest rate shall be locked at this 5.66%, as opposed to the rate at closing. This rate is based on the
U.S. Treasury Yield Curve Rate, as determined by the term of the loan, and shall be valid for 6 months.
**To be eligible for this interest rate reduction, the project will include a public art amenity
***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.
****The project participated and received approval through an RDA Design Review process.
*****The project will be an all-electric building that will include rooftop solar and the Project has been
designed to a LEED-Silver equivalent standard.
******The final interest rate will be based on 5.66% base interest minus eligible interest rate reductions.
• Term: 5 years
• Amortization: 20 years
• Payments: Hard repayments with balloon payment due at the end of the term.
• Security: A first position lien on the property.
• Disbursement: Loan proceeds shall be disbursed through construction draws.
CONDITIONS FOR LOAN CLOSING
Prior to loan closing, the Applicant will complete the following:
• RDA approves all terms of the loan.
LOAN TERM SHEET
Bicycle Collective -RDA LOAN
RDA LOAN PROGRAM
• 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.
OTHER CONDITIONS
• The Project shall operate as the intended use over the term.
• The Project shall remain in good financial and legal standing over the term.