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HomeMy WebLinkAbout13704 RESOLUTION NO. 13704 A RESOLUTION APPROVING AN AGREEMENT FOR DEED IN SATISFACTION BY AND AMONG THE CITY OF PUEBLO, PUEBLO MAIN STREET GARAGE CORPORATION AND THE PUEBLO URBAN RENEWAL AUTHORITY, RELATING TO THE SATISFACTION OF AN OUTSTANDING LOAN OBLIGATION BETWEEN THE CORPORATION AND THE AUTHORITY, AUTHORIZING THE PRESIDENT OF CITY COUNCIL TO EXECUTE SAID DOCUMENT AND AFFIRMING THE CONTINUED EFFECTIVENESS OF VARIOUS DOCUMENTS RELATED THERETO WHEREAS, the City of Pueblo, Colorado (the “City”), the Pueblo Urban Renewal Authority (the “Authority”) and the Pueblo Main Street Garage Corporation (the Corporation”) previously undertook the financing (the “Financing”) of a public parking garage (the “Garage”) on land owned by the City (the “Ground” and, together with the Garage, the “Leased Property”); and WHEREAS, in furtherance of the Financing, the City and the Corporation entered into that certain Ground Lease Agreement dated as of December 14, 2006 (the “Ground Lease”) by and between the City, as lessor, and the Corporation, as lessee; the Authority and the City entered into that certain Garage Lease Agreement dated as of December 14, 2006 (the “Garage Lease”) by and between the Corporation, as landlord, and the City, as lessee; and the City and the Authority entered into that certain Cooperation Agreement dated as of December 14, 2006 (the “Cooperation Agreement”) between the City and the Authority, in connection with the issuance by the Authority of its Revenue Bonds, Series 2006 (“the “2006 Bonds”) for the purpose of financing a portion of the costs of the construction of the Garage; and WHEREAS, the Corporation also entered into a Loan Agreement dated as of December 14, 2006 (the “2006 Loan Agreement”) with NDC New Markets Investments XIX, L.P. (the “Original Lender”) whereby the Corporation obtained two loans from the Original Lender, one of which remains outstanding in the amount of $6,862,000 (the “Loan”) as evidenced by that certain Promissory Note in the original principal amount of $6,862,000, dated as of December 14, 2006 (the “Note”), which Note has been previously endorsed to the Authority without recourse or warranty; and WHEREAS, the Corporation desires to convey to the Authority all of its right, title and interest in and to the Leased Property under the Leases, thereby resolving the Corporation’s payment and other obligations under the Note and any related documents (the Loan Documents”), in exchange for the City’s agreement not to pursue the Corporation under the Loan Documents (the “Conveyance”), pursuant to the terms of an Agreement for Deed in Satisfaction by and among the Corporation, the City and the Authority (the “Agreement”) and various related documents and agreements; and WHEREAS, the City Council of the City (the “City Council”) has determined it to be in the best interest of the City and its residents, to approve the Conveyance and enter into the Agreement; NOW THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that: SECTION 1. The City Council finds and determines that the Ground Lease, the Garage Lease and the Cooperation Agreement have been duly executed by the respective parties thereto and remain valid and binding obligation of such parties in accordance with their terms, and, in the case of the Cooperation Agreement, with respect to the 2006 Bonds and any bonds issued by the Authority to directly refund or refinance such bonds. SECTION 2. The City Council finds the assignment of the Corporation’s interest in the Ground Lease and the Garage Lease to be in the best interests of the City and its residents and approves the same. SECTION 3. The Agreement for Deed in Satisfaction (the “Agreement”) by and among the Corporation, the City and the Authority, a substantially final copy of which is attached hereto and incorporated herein by this reference, having been approved as to form by the City Attorney, is hereby approved with such changes as are not inconsistent with the intent of this Resolution and are approved by the City Attorney. The President of the City Council is authorized to execute and deliver said 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 4. 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 Agreement which are necessary or desirable to effectuate the transactions described therein. SECTION 5. This Resolution shall become effective immediately upon final passage. INTRODUCED June 26, 2017 BY: Ed Brown City Clerk’s Office Item # M-4 Background Paper for Proposed Resolution COUNCIL MEETING DATE: June 26, 2017 TO: President Stephen G. Nawrocki and Members of City Council CC: Sam Azad, City Manager VIA: Gina Dutcher, City Clerk FROM: Daniel C. Kogovsek, City Attorney SUBJECT: A RESOLUTION APPROVING AN AGREEMENT FOR DEED IN SATISFACTION BY AND AMONG THE CITY OF PUEBLO, PUEBLO MAIN STREET GARAGE CORPORATION AND THE PUEBLO URBAN RENEWAL AUTHORITY, RELATING TO THE SATISFACTION OF AN OUTSTANDING LOAN OBLIGATION BETWEEN THE CORPORATION AND THE AUTHORITY, AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE SAID DOCUMENT AND AFFIRMING THE CONTINUED EFFECTIVENESS OF VARIOUS DOCUMENTS RELATED THERETO SUMMARY: Attached is a Resolution approving an agreement conveying the Pueblo Main Street Garage Corporation’s leasehold interest in the Pueblo Main Street Garage to the Pueblo Urban Renewal Authority in satisfaction of that Promissory Note related to the original financing of the Garage and authorizing the President of City Council to execute said document. PREVIOUS COUNCIL ACTION: None. BACKGROUND: The City, the Pueblo Main Street Garage Corporation and the Pueblo Urban Renewal Authority previously entered into a financing for the Pueblo Main Street Garage involving a New Markets Tax structure partially funded from the proceeds of the Authority’s issuance of revenue bonds. The City is the owner of the land on which the garage is built. As part of the original financing, the City conveyed a leasehold in the land to the Corporation and received a subordinate leasehold interest in the land and the garage in a lease-leaseback arrangement with the Corporation. The Note representing the Corporation’s obligation to repay the Authority’s bond-financed loan into the New Markets Tax Credit structure has come due. In order to satisfy such debt, the Corporation is to convey its leasehold interest in the land and improvements comprising the Garage to the Authority. The Agreement for Deed in Satisfaction effects such conveyance. The City, as a party to the Agreement, is to acknowledge the assignment of the Corporation’s rights under the leases to the Authority. The Resolution authorizes the execution and delivery of the Agreement for Deed in Satisfaction and acknowledges the continuing effectiveness of each of the principal agreements related to the original financing. FINANCIAL IMPLICATIONS: None. BOARD/COMMISSION RECOMMENDATION: Not applicable to this Resolution. STAKEHOLDER PROCESS: Not applicable to this Resolution. ALTERNATIVES: If this Resolution is not approved, the Corporation will default on its obligation under the Note. RECOMMENDATION: Approval of this Resolution is recommended. Attachments: Proposed Resolution