Fiscal Note
The City has made three separate loans totaling $1,062,000 to Genesis based on earlier Council approvals, two for acquisition of 313 West Beltline Highway and one for a series of renovation projects. Two of these loans are were deferred payment, due on sale or change in use of the building; one was structured as an installment loan with payments deferred until January 30, 2007. A Council-adopted December 2004 resolution adopted by the Council allowed for approved the subordination of those original CDBG loans to a New Market Tax Credit refinancing that established new first and second mortgages, and deferred the beginning of the installment loan repayment to the City until 2012. A subsequent resolution adopted by the Council in Council-adopted February 2005 resolution authorized a loan to the Dane Fund equivalent to the proceeds from Genesis 'Genesis' repayment of the three loans, to be used by the Dane Fund for investment in a NMTC qualified entity for a new loan to Genesis to refinance its first mortgage loan with more favorable terms through the New Market Tax Credits. Credit program. This resolution permits the completion of the New Market Tax Credit financing by changing the terms of the City commitment to the Dane Fund to $1,093,100. The terms of the Dane Fund grant loan are intended to trigger a repayment of the grant loan to the City at the end of the a contingent loan in the amount of the appreciated value of the Genesis repayment. That NMTC financing NMTC period, or trigger a reversion to the original City loan terms. This City contingent grant loan to the Dane Fund would also result in a fee to the City CD program valued at $10,000 per year in interest during the period of the NMTC. NMTC. The City contingent grant loan to the Dane Fund would be secured by the Dane Fund's assignment to the City of its security interest in two LLCs serving as the NMTC investment fund and the CDE a promissory note in the amount of $1,093,000 and a Third Priori...
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