Fiscal Note
The City made a loan of $150,000 in CDBG funds to Madison Community Health Center (doing business as Access Community Health Center). The Council adopted a resolution to permit the City to assign, transfer, and subordinate the current loan to new first and second mortgage loans that involve New Market Tax Credits. This current resolution would permit City subordination to the entire NMTC amount and the Dane Fund. The overall transaction moves the City position from a total loan to value ratio of 75% from 67.5%.
Title
Authorizing the subordination of a previously approved loan to Access Community Health Center to a new non-profit subsidiary and authorizing the Mayor and the City Clerk to sign agreements to effect such a change.
Body
WHEREAS the City Council approved a loan to Madison Community Health Center to help them purchase the former Dean Medical Clinic on East Washington Avenue to better serve their target population and expand their dental services,
WHEREAS those efforts have been very successful, enabling the organization to increase its services to serve more than 1,500 new clients,
WHEREAS the organization formed a non-profit subsidiary (ACHC Facilities) to handle its real estate responsibilities, and has obtained New Market Tax Credits (NMTC) to help them lower their base facility costs, and the Dane Fund provided a second mortgage loan of $200,000 to help secure the NMTC,
WHEREAS the Council approved a resolution in October 2005 to permit the transfer of the original CDBG loans from MCHC to ACHC Facilities, Inc, and the subordination of the City's mortgage lien to the Dane Fund in the amount of $200,000 and to US Bank in the amount of $1,400,000,
WHEREAS the CDBG staff and Commission have reviewed the proposal for the revised subordination and recommend Council adoption as a way to assure advantageous financing for the City's prior CDBG investment, and increase the chances for greater operational security for the Access...
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