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File #: 43446    Version: Name: Agreement to fund $800,000 Capital Revolving Fund Loan to Sherman Plaza - RP's Pasta Company
Type: Resolution Status: Filed
File created: 6/20/2016 In control: COMMON COUNCIL
On agenda: 8/2/2016 Final action: 9/6/2016
Enactment date: 7/6/2016 Enactment #: RES-16-00508
Title: SUBSTITUTE - Authorizing the Mayor and City Clerk to execute an agreement to fund a $800,000 Madison Capital Revolving Fund loan to Sherman Plaza, Inc. to assist RP’s Pasta Company in its build-out of 28,000 square feet for commercial food production purposes and the goal of retaining 24 full-time equivalent (FTE) jobs and creating 20 FTE jobs in five years, in the former Kohl’s grocery store located at 2901 North Sherman Avenue and amend the 2016 Adopted Capital Budget to appropriate $800,000 from the Capital Revolving Loan Fund.
Sponsors: Larry Palm
Attachments: 1. MCRF Loan Report - Sherman Plaza Inc and RP's Pasta 6-21-16.pdf, 2. RPs Pasta Memo - Legistar 43446 and 43448 6-27-16.pdf, 3. 43446 ver 1.pdf
Fiscal Note
This resolution would authorize an $800,000 end loan from the Madison Capital Revolving Fund to Sherman Plaza, Inc. to partially fund tenant improvements to the building located at 2901 North Sherman Avenue. End loan proceeds shall be provided upon satisfactory completion of the project in conformance to the terms and conditions of the MCRF Loan, as stated herein. Terms of the MCRF Loan would be a maximum of five (5) years, amortized over ten (10) years at an interest rate of 3% fixed. At maturity, the City shall extend said Note at Tenant’s request by a period not to exceed five years, contingent upon Tenant demonstrating that the MCRF Loan is not in default and that the job creation and retention goals are met.

At closing, Borrower shall then immediately transfer said loan proceeds to Tenant, secured by a Note from Tenant to Borrower (“Second Note”) at the City’s term and rate and assign the Second Note to the City as described in a loan agreement to be executed between the City, Borrower and Tenant (“MCRF Loan Agreement”).

Borrower shall make quarterly principal and interest payments. Borrower shall execute a mortgage in favor of the City on the Mortgaged Property, as indicated by the PINs below. Tenant shall execute a leasehold mortgage in favor of the City (together the “MCRF Mortgage”) securing payment of the MCRF Loan. The City shall agree to execute a subordination of mortgage in a form approved by the City Attorney if necessary. Principals of Borrower, David W. Bruns and Donald B. Bruns, and the principal of the Tenant, Peter A. Robertson, shall each execute a personal guaranty guaranteeing payment of the MCRF Loan.


In addition, a separate authorizing resolution would authorize an $80,000 of MCRF funds (MCRF Loan #2) to fund Borrower’s capital leasehold improvements in HVAC that would facilitate a commercial food production use for its proposed tenant, RP...

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