Fiscal Note
Fiscal Note:
The original terms of the CDA's loan to Lake Point Madison, LLC required full repayment by November 1, 2007. The actual balance outstanding is approximately $2,000,000, the full amount authorized. The project is nearing completion of construction, and 33 of the 50 total units are currently available for sale.
If this extension of the repayment term is not granted, Lake Point Madison, LLC would be in default and the CDA would be in the position of forclosing on the project in an attempt to recover the outstanding principal.
Under the terms of the proposed extension, the developer would be responsible for continuing to make interest payments on the remaining outstanding balance. Interest received from the developer is intended to cover the cost of interest being paid by the CDA to Fannie Mae for the associated line of credit. If the developer and, consequently, the CDA are unable to meet the obligations under this line of credit, the City will be responsible for repayment to Fannie Mae pursuant to the general obligation pledge made by the City at the time this line of credit was originally established.
Title
Authorizing an Extension of the Maturity Date of the Loan Made by the CDA to Lake Point Madison, LLC
Body
Preamble
The Community Development Authority of the City of Madison has secured a revolving line of credit from Fannie Mae in the amount of $4,100,000 (the “Credit Facility”). The repayment of the Credit Facility by the CDA to Fannie Mae is secured by a general obligation pledge of the City. In approving the pledge, the Common Council required that any CDA loans of the Credit Facility to developers for specific projects must first be approved by the Council. By Enactment Number RES-06-00090, File Number 02725, the Council authorized the CDA’s loan of $2,000,000 to Lake Point Madison, LLC (“Developer”) for the development of fifty owner-occupied residential condominium units. The Council’s authorization specified that the D...
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