HomeMy WebLinkAbout12997*RESOLUTION NO. 12997
A RESOLUTION APPROVING A SUBORDINATION
AGREEMENT MADE BY THE CITY OF PUEBLO FOR THE
BENEFIT OF BIG R PROPERTIES, LLC AND ITS NEW
LENDER, REDSTONE BANK AND AUTHORIZING THE
PRESIDENT OF CITY COUNCIL TO EXECUTE SAME
BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that:
SECTION 1.
The Subordination Agreement made by Pueblo, a Municipal Corporation for the
benefit of Big R Properties, LLC and its new lender, Redstone Bank, a copy of which is
attached hereto ("Subordination Agreement"), having been approved as to form by the
City Attorney, is hereby also approved. The President of the City Council is authorized
to execute and deliver the Subordination Agreement in the name of the City and the City
Clerk is directed to affix the seal of the City thereto and attest same.
SECTION 2.
The officers and staff of the City are directed and authorized to perform any and
all acts consistent with the intent of this Resolution and attached Subordination
Agreement which are necessary or desirable to effectuate the transactions described
therein.
SECTION 3.
This Resolution shall become effective immediately upon final passage.
INTRODUCED: June 23, 2014
BY: Chris Kaufman
COUNCILPERSON
City Clerk’s Office Item # M-11
Background Paper for Proposed Resolution
COUNCIL MEETING DATE: JUNE 23, 2014
TO: President Sandra K. Daff and Members of City Council
CC: Sam Azad, City Manager
VIA: Gina Dutcher, City Clerk
FROM: Law Department
Daniel C. Kogovsek, City Attorney
SUBJECT: A RESOLUTION APPROVING A SUBORDINATION AGREEMENT MADE
BY THE CITY OF PUEBLO FOR THE BENEFIT OF BIG R
PROPERTIES, LLC AND ITS NEW LENDER, REDSTONE BANK AND
AUTHORIZING THE PRESIDENT OF CITY COUNCIL TO EXECUTE
SAME
SUMMARY:
Attached is a Resolution approving a Subordination Agreement authorizing the
President of City Council to execute same for the benefit of Big R Holdings, LL and its
new lender, Redstone Bank.
PREVIOUS COUNCIL ACTION:
On October 1, 2009 and December 23, 2013, the City executed similar subordination
agreements for the benefit of Big R and its previous lender, Wells Fargo Bank.
BACKGROUND:
Pursuant to Employment Agreements dated October 1, 2009 and December 23, 2013,
Big R is the recipient of Half Cent Sales Tax funds. Big R wishes to refinance its debt
obligations through a new lender, Redstone Bank. Big R has requested that the City
subordinate the City’s Deed of Trust on real estate to a new Deed of Trust to be given to
Redstone Bank.
FINANCIAL IMPLICATIONS:
None. The financial obligations of Big R to the City are secured by a $1,164,000
personal guarantee signed by B. David Blain, Big R’s principal owner.
BOARD/COMMISSION RECOMMENDATION:
Not applicable to this Ordinance.
STAKEHOLDER PROCESS:
Not applicable to this Ordinance.
ALTERNATIVES:
If the Resolution is not approved, Big R will not be able to re-finance its debt
obligations..
RECOMMENDATION:
Approval of this Resolution.
Attachments:
None.