Fiscal Note
This resolution authorizes the release of a mortgage on a portion of the University Square condominium as defined in the TIF loan agreement. The City will receive an equity participation payment of $190,000 as a part of this transaction. This amount was budgeted in the 2015 adopted operating budget, but not received. The proceeds will be deposited in the General Fund as a 2016 revenue.
Title
Authorizing the Release of the Mortgage on Unit 6 of the University Square Condominium and Ratifying Prior Action
Body
WHEREAS, on April 28, 2008, the City and University Square, LLC (“Borrower”) entered into a Tax Incremental Financing Loan Agreement dated April 28, 2008 (the “TIF Loan Agreement”) pursuant to which the City provided City financial assistance to Borrower to construct the development known as University Square Condominium; and
WHEREAS, the City’s loan was originally secured by a mortgage executed by Borrower encumbering Unit 1 and Unit 2 of the University Square Condominium; and
WHEREAS, the TIF Loan Agreement requires that a transfer of the property results in payment of the full Equity Participation Payment of Three Million Dollars ($3,000,000), unless with prior Common Council Approval, the transfer is to an entity a majority of which is controlled by Gregory A. Rice; and
WHEREAS, Unit 2 has since been subdivided into new Units 6 and 7 of the University Square Condominium with Unit 7 being sold and the City accepting Two Hundred Thousand Dollars ($200,000) as a release price for the property representing an apportioned payment of the Equity Participation Payment due under the TIF Loan Agreement; and
WHEREAS, Unit 6 was transferred to University Square II, LLC (the “Seller”) an entity a majority of which is controlled by Gregory A. Rice; and
WHEREAS, the City the Borrower and the Seller executed an Assignment and Assumption of Tax Incremental Financing Loan Agreement (the “Assignment Agreement”), executed on March 21, 2014, according to which the City received a new mortgage on Unit 6 from Seller and apportioned the Equity Participation Payment to One Hundred and Ninety Thousand Dollars ($190,000); and
WHEREAS, neither the transfer of Unit 6, nor the apportionment of the Equity Participation Payment for Units 6 and 7 had authorizing resolutions; and
WHEREAS, Seller desires to sell to the University of Wisconsin (the “Buyer”) all of Seller’s right, title, and interest in and to Unit 6 of University Square Condominium in accordance with the Assignment Agreement; and
NOW THEREFORE BE IT RESOLVED, that the City agrees to release the mortgage on Unit 6 of the University Square Condominium for One Hundred and Ninety Thousand Dollars ($190,000) in accordance with the terms of the Assignment Agreement.
BE IT FURTHER RESOLVED, that the Common Council of the City of Madison hereby ratifies the execution of the Assignment Agreement and the release of the mortgage on Unit 7 for Two Hundred Thousand Dollars ($200,000) price for Unit 7.
BE IT FINALLY RESOLVED, that the Mayor and City Clerk are hereby authorized to execute, deliver, accept and record any and all requisite documents and take such other actions as shall be deemed necessary or desirable to accomplish the purpose of this Resolution, in a form approved by the City Attorney.