HomeMy WebLinkAboutR-2012-115 Work Out Agreement Resolving and Retiring Indebtedness to the City by TrailWagons, Inc. From HUD Section 108 LoanA RESOLUTION
RESOLUTION NO. R-2012-115
authorizing the execution of a Work Out Agreement to resolve and
retire indebtedness to the City resulting from certain HUD Section
108 Loans the City previously provided to TrailWagons, Inc., said
loans being secured by certain real property owned by Chinook
Business Park, LLC and by the personal guarantee of Gary and
Mary Lukehart.
WHEREAS, the City of Yakima, Washington made two loans in 2003 to
TrailWagons, Inc., a Washington corporation, with its principal place of business in
Yakima, Washington. The first loan was made in July, 2003 in the amount of $2,395,000
to assist TrailWagons in putting in a new manufacturing line at its Yakima, Washington
manufacturing facility. The second loan was made in December, 2003 in the amount of
$475,000 to pay off bridge loans, acquire vehicle chassis and retool for two new motor
home models. The loans were made with funds provided through the HUD Section 108
program; and
WHEREAS, TrailWagons, Inc. was owned by Gary Lukehart. The loans were
secured by multiple parcels of real property owned primarily by another business entity
owned by Gary Lukehart, Chinook Business Park, LLC, and by the personal guaranty of
Gary and Mary Lukehart; and
WHEREAS, TrailWagons, Inc. closed its business operations in 2005 and
thereafter has had difficulty timely paying its debt obligations on the two City loans; and
WHEREAS, Gary Lukehart and Chinook Business Park, LLC have sold real
property security the City loans since 2005, ultimately leaving three parcels of real
property that continue to secure the City loans; and
WHEREAS, the current balance owed by TrailWagons, Inc on the City loans is
$1,455,918 00 The City is holding net proceeds paid by Gary Lukehart of about
$138,000 from the prior sale of Chinook Business Park, LLC property. Additionally, the
City purchased residential Collateral from Chinook Business Park, LLC using funds from
other programs and sale of those parcels at the price paid by the City would provide
approximately $300,000 00 of additional funds Reduction of these amounts from the
current payoff balance owed on the two loans leaves a balance of approximately
$1,018,000.00 currently due, and
WHEREAS, Chinook Business Park, LLC has a pending offer to purchase one of
the parcels of real property (commonly referred to as Lot 4 — Tax Parcel 191307-34407)
securing the City loans and Gary Lukehart has proposed paying the City $717,520.35 in
net proceeds from said sale to apply to the balance of the two loans, and
WHEREAS, Gary Lukehart has further proposed, after payment of the funds from
the sale of Lot 4, to deliver a quit claim deed in lieu of foreclosure for the two remaining
parcels of real property that secure the City loans (Tract A - Parcel 191307-34405 less a
small section for placement of a sign commonly known as the "Welcome to Yakima Sign"
and the Kern Parcel - Parcel 181315-43013) in full satisfaction of the two loans. The
assessed value of Tract A is $190,300.00. The assessed value of the Kern Parcel is
$86,500.00; and
WHEREAS, Gary Lukehart has agreed to undertake all work and pay all costs and
fees attendant in obtaining and completing a short subdivision of Tract A necessary to
segregate a section for placement of the Welcome to Yakima Sign by obtaining final
approval for the segregation by December 31, 2012 and further agrees that the
segregation shall not detrimentally affect the use or zoning of the Tract A parcel as legally
allowed as of the date of the Agreement for Loan Satisfaction is executed Gary Lukehart
and Chinook Business Park, LLC further agree that in the event final approval for the
segregation is not obtained by December 31, 2012, Chinook Business Park, LLC agrees
that it shall promptly deliver a quit claim deed in lieu of foreclosure to the City for the
whole of Tract A; and
WHEREAS, the specific terms and conditions of the satisfaction of the HUD
Section 108 Loan debt to the City are set forth in the Agreement For Loan Satisfaction,
attached hereto and incorporated herein by this reference, and
WHEREAS, the personal financial statement of Gary Lukehart dated May 2010
does not show significant value in equity in non-exempt assets; Now, Therefore,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA:
The City Manager of the City of Yakima is hereby authorized and directed to
execute the attached and incorporated:
1 Agreement For Loan Satisfaction;
2 Request for Reconveyance of Deed of Trust on Lot 4, Parcel 191307-
34407; and
3 all documents necessary and appropriate for full performance of the
Agreement for Loan Satisfaction.
ADOPTED BY THE CITY COUNCIL this 4th day of September, 2012.
Micah CawlgS,, Mayor
AGREEMENT FOR SATISFACTION OF LOANS
PARTIES:
LUKEHART - Gary Lukehart and Mary Lukehart, husband and
Wife;
CBP- Chinook Business Park, LLC, a Washington limited
liability company;
CITY - The City of Yakima, a Washington municipal
corporation.
RECITALS:
1.1 In 2003, the City of Yakima, Washington made two loans to TrailWagons,
Inc., a Washington corporation, with its principal place of business in Yakima,
Washington. The first loan was made in July, 2003 in the amount of $2,395,000 to
assist TrailWagons in putting in a new manufacturing line at its Yakima, Washington
manufacturing facility. The second loan was made in December, 2003 for $475,000 to
pay off bridge loans, acquire vehicle chassis and retool for two new motor home models.
The loans were made with funds provided through the HUD Section 108 program.
1.2 TrailWagons, Inc. was owned by Gary Lukehart. The two loans were
secured by multiple parcels of real property owned primarily by another business
entity owned by Gary Lukehart, Chinook Business Park, LLC, and by the personal
guaranty of Gary and Mary Lukehart.
1.3 TrailWagons; Inc. closed its business operations in 2005 and thereafter
has had difficulty timely paying its debt obligations on the two City loans.
1.4 Gary Lukehart and Chinook Business Park, LLC have sold certain real
property securing the City loans since 2005, ultimately leaving three parcels of real
property that continue to secure the City loans.
1.5 The current balance owed by TrailWagons, Inc. on the City loans is
approximately $1,455,918.00. The City is holding net proceeds paid by Gary Lukehart
to the City of about $138,000 from the prior sale of Chinook Business Park, LLC
AGREEMENT FOR LOAN
SATISFACTION 1
property. Additionally, the City purchased residential Collateral from Chinook
Business Park, LLC using funds from other programs and sale of those parcels at the
price paid by the City would provide approximately $300,000.00 of additional funds.
Reduction of these amounts from the current payoff balance owed on the two loans
leaves a balance of approximately $1,018,000.00 currently due.
1.6 Chinook Business Park, LLC has a pending offer to purchase one of the
parcels of real property (commonly referred to as Lot 4 — Tax Parcel 191307-34407)
securing the City loans and Gary Lukehart has proposed paying the City $717,520.35
in net proceeds from such sale to apply to the balance of the two loans; and
1.7 Gary Lukehart has further proposed after payment of the funds from
the sale of Lot 4 to deliver a quit claim deed in lieu of foreclosure for the two
remaining parcels of real property that secure the City loans (Tract A - Parcel
191307-34405 less a small section for placement of a sign commonly known as the
"Welcome to Yakima Sign" and the Kern Parcel -Parcel 181315-43013) in full
satisfaction of the two loans. The assessed value of Tract A is $190,300.00. The
assessed value of the Kern Parcel is $86,500.00; and,
1.8 Gary Lukehart has agreed to undertake all work and cost attendant in obtaining
a short subdivision of Tract A necessary to segregate a section for placement of the Welcome
to Yakima Sign by no later than December 31, 2012.
1.9 The personal financial statement of Gary Lukehart dated May 2010 does not
show significant value in non-exempt assets.
1.10 The parties wish to document their agreement for the satisfaction of
the two loans and debt evidenced thereby owed by TrailWagons, Inc. and Lukehart
to the City on the terms and conditions set forth below.
AGREEMENT:
NOW, THEREFORE, in consideration of the foregoing Recitals, the mutual
covenants and agreements hereinafter set forth and other valuable consideration,
AGREEMENT FOR LOAN
SATISFACTION 2
the receipt and sufficiency of which is hereby acknowledged, the parties hereby
agree as follows:
1. Recitals.
The Recitals set forth above are hereby incorporated into and made a
part of this Agreement, and are true and correct as of the date of execution of this
Agreement.
2. Acknowledgement of Indebtedness - Warrantees.
TrailWagons, Inc. and Lukehart hereby admit and acknowledge that
they are indebted to the City as stated in Recital 1.5, above, and that there are no
claims, offsets or counterclaims in favor of them, any of their business entities or
the community which would reduce that amount.
Gary Lukehart and Mary Lukehart specifically warrant and represent
to the City that their personal financial statement of May 2010 fully and properly
represents their current financial condition and there has been no significant
change in their financial condition that would allow the City of Yakima to recover
significantly greater recovery under their Personal Guarantee to the City of
Yakima.
3. Satisfaction of Debt.
By this Agreement, the parties agree as follows:
3.1 The City will agree to execute and deliver to the title company of
Lukehart's choosing a Request for Reconveyance of the City Deed of Trust
encumbering Lot 4 — Tax Parcel 191307-34407 in exchange for delivery to the City
of funds from the sale of Lot 4 in the net amount of $717,520.35, provided that the
City Request for Reconveyance shall state that the debt owed by TrailWagons, Inc. .
AGREEMENT FOR LOAN
SATISFACTION 3
and Lukehart is only partially satisfied and that the Promissory Notes evidencing
the debt shall not be delivered to TrailWagons, Inc. and Lukehart;
3.2 Gary Lukehart and Chinook Business Park, LLC agree that
they will deliver to the City of Yakima a quit claim deed in lieu of foreclosure
covering the Kern Parcel -Parcel 181315-43013 no later than September 30, 2012;
3.3 Gary Lukehart and Chinook Business Park, LLC agree that
they will deliver to the City of Yakima a quit claim deed in lieu of foreclosure
covering the Tract A property - Parcel 191307-34405, less as small a section of
Tract A as is legally necessary for placement of the sign commonly known as the
"Welcome to Yakima Sign" on such segregated area of Tract A. Gary Lukehart
agrees to obtain final approval for the segregation from the appropriate
governmental agencies involved no later than December 31, 2012. Gary Lukehart
further agrees to undertake all work and pay all costs and fees attendant in
obtaining a short subdivision of Tract A and further agrees that the segregation
shall not detrimentally affect the use or zoning of the remainder of the Tract A
parcel as legally allowed as of the date hereof. In the event final approval for the
segregation is not obtained from all interested parties by December 31, 2012,
Chinook Business Park, LLC agrees that it shall promptly deliver a quit claim deed
in lieu of foreclosure to the City for the whole of Tract A.
3.4 Upon delivery by Gary Lukehart and Chinook Business Park,
LLC of the quit claim deed in lieu of foreclosure covering the restructured Tract A
property - Parcel 191307-34405. and completion of all other duties and obligations of
Gary Lukehart, Chinook Business Park, LLC and TrailWagons, Inc. hereunder the
City of Yakima will declare that the two loans owed by TrailWagons, Inc. to the
City of Yakima are satisfied and the City of Yakima will cancel the debt obligations
AGREEMENT FOR LOAN
SATISFACTION 4
owed thereunder and deliver to Gary Lukehart, Chinook Business Park, LLC and
TrailWagons, Inc. such original documents that evidence the loans upon receipt of
the original documents from the United States Department of Housing and Urban
Development (HUD) after full and final payment of the underlying obligations to
HUD.
4. Severability.
In case any one or more of the provisions contained in this Agreement
should be declared invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall not in
any way be effected or impaired thereby.
5. Modifications.
No modification, amendment, waiver or change of this Agreement, or
any terms hereof, shall be valid unless the same is in writing and signed by the
party against which the enforcement of such modification, waiver, amendment,
discharge or change is sought.
6. Binding Effect.
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors, assigns, and legal representatives.
7. Notices.
All notices to be given under the terms of this Agreement shall be in
writing and shall be served by certified or registered mail or by personal service.
Notices served by mail shall be deemed to have been given on the third (3) day
following deposit in the U.S. Mail as certified or registered mail, return receipt
requested, postage paid, to the appropriate party at its address set forth below or to
AGREEMENT FOR LOAN
SATISFACTION 5
such other address as may be designated in a written notice sent to the other party
in accordance with this section:
City of Yakima
129 N. 2nd Street
Yakima, Washington 98901
Attn: City Manager
Lukehart / Chinook Business Park, LLC /
TrailWagons, Inc.
137 North Fair Avenue
Yakima, Washington 98901
8. Lukehart and Chinook Business Park, LLC, TrailWagons,
Inc. Release.
GARY LUKEHART, MARY LUKEHART, CHINOOK BUSINESS PARK, LLC
AND TRAILWAGONS, INC., FOR THEMSELVES AND THEIR LEGAL
REPRESENTATIVES, SUCCESSORS AND ASSIGNS, HEREBY
UNCONDITIONALLY RELEASE, WAIVE, AND FOREVER DISCHARGE THE
CITY OF YAKIMA AND ITS EMPLOYEES, AGENTS, SUCCESSORS, LEGAL
REPRESENTATIVES AND ASSIGNS, OF AND FROM ALL CLAIMS,
DEMANDS, CAUSES OF ACTION AND DAMAGES WHATSOEVER, IN LAW
OR IN EQUITY, INCLUDING ANY DEFENSES WHICH ANY OF THEM NOW
HAVE OR WHICH THEY MAY SUBSEQUENTLY HAVE AGAINST THE CITY
OF YAKIMA, ARISING OUT OF OR CONNECTED WITH, DIRECTLY OR
INDIRECTLY, THE LENDING TRANSACTIONS AND RELATED DEALINGS
WHICH HAVE TRANSPIRED BETWEEN THE CITY OF YAKIMA AND GARY
LUKEHART, MARY LUKEHART, CHINOOK BUSINESS PARK, LLC AND
TRAILWAGONS, INC., OR ANY OF THEM, PRIOR TO OR AS OF THE DATE
OF THIS AGREEMENT.
9. Attorney Fees; Expenses.
In the event of any action to enforce the terms of this Agreement, the
breaching party shall pay to the non -breaching party all costs of enforcement
including all reasonable attorney fees and related costs, whether or not a suit is
filed, an appeal is sought or the matter is referred to arbitration.
AGREEMENT FOR LOAN
SATISFACTION 6
10. Governing Law.
All acts and transactions hereunder and the rights and obligations of
the parties hereto shall be governed, construed and interpreted in accordance with
the laws of the state of Washington. Venue for any action shall be in Yakima
County, Washington.
11. Headings.
The paragraph headings appearing in this Agreement have been
inserted for the purpose of convenience and ready reference. They do not purport to,
and shall not be deemed to, define, limit or extend the scope or intent of the
paragraphs to which they appertain.
12. Construction.
A. Unless the context of this Agreement clearly requires otherwise,
the plural includes the singular, the singular includes the plural, the part includes
the whole, "including" is not limiting, and "or" has the inclusive meaning of the
phrase "and/or." The words "hereof," "herein," "hereby," "hereunder," and other
similar terms in this Modification and Restatement refer to this Agreement as a
whole and not exclusively to any particular provision of this Agreement.
B. Neither this Agreement nor any uncertainty or ambiguity
herein shall be construed or resolved against any of the parties, whether under any
rule of construction or otherwise. On the contrary, this Agreement has been
reviewed by each of the parties and its legal counsel and shall be construed and
interpreted according to the ordinary meaning of the words used so as to accomplish
the purposes and intentions of all parties hereto fairly.
AGREEMENT FOR LOAN
SATISFACTION 7
13. Statute of Frauds Disclosure.
ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN
MONEY, EXTEND CREDIT, OR TO FORBEAR FROM ENFORCING
REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON
LAW.
DATED this day of
CITY OF YAKIMA
Tony O'Ro rke, City Manager
TRAIL WAGONS, INC., a
Washington corporation
B
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Wa
By.
Titl
--,,„,,,e. A lit.. 71111k , 1 A 4 Mara --- .... 4 Y 4
y►`Lukeha , Presiden
IN OK BUSINESS PARK, LLC, a
gton limited li fbility o pany:
_ Auld.,
Luke art
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10 414.11...—
Gary ehart
, 2012.
Ma
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ehart
x:\city of yakima-20009\trailwagons-2003015\2012\agreement for satisfaction of loans - 082112 - city final.doc
CITY CONTRAC f NO del
RESOLUTION NO (2-0-9,11:111-
AGREEMENT FOR LOAN
SATISFACTION
8
•
BUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
AGENDA STATEMENT
Item No. 7
For Meeting of: September 4, 2012
ITEM TITLE:
SUBMITTED BY:
Resolution authorizing the execution of a Work Out
Agreement to resolve and retire indebtedness to the City
resulting from certain HUD Section 108 Loans provided to
TrailWagons, Inc., said loans secured by certain real
property owned by Chinook Business Park, LLC and by the
personal guarantee of Gary and Mary Lukehart.
Jeff Cutter, City Attorney
CONTACT Jeff Cutter/575-6030
PERSON/TELEPHONE:
SUMMARY EXPLANATION:
The City of Yakima made two loans in 2003 to TrailWagons, Inc. The first loan was made in
July, 2003 in the amount of $2,395,000, and the second loan was made in December, 2003
in the amount of $475,000. The loans were made with funds provided through the HUD
Section 108 program and the loans were secured by multiple parcels of real property owned
primarily by another business entity owned by Gary Lukehart, Chinook Business Park, LLC,
and by the personal guaranty of Gary and Mary Lukehart. TrailWagons, Inc. closed its
business operations in 2005 and thereafter has had difficulty timely paying its debt
obligations on the two City loans. Gary and Mary Lukehart have requested to enter into the
attached Work Out Agreement to resolve and retire indebtedness to the City resulting from
the HUD Section 108 Loans the City previously provided to TrailWagons, Inc , said loans
being secured by certain real property owned by Chinook Business Park, LLC and by the
personal guarantee of Gary and Mary Lukehart.
Resolution X Ordinance
Contract: X
Contract Term:
Agreement for
Satisfaction of
Loans; Request
Other for
(specify) Reconveyance of
Deed of Trust on
Lot 4, Parcel
191307-34407
Mail to: One Original Agreement to Don Boyd of Carlson
Boyd PLLC, 230 So. 2nd St., Ste. 202, Yakima, WA 98901
Amount: Expiration Date:
Insurance Required? No
Funding
Source:
APPROVED FOR
SUBMITTAL:
Phone:
City Manager
STAFF RECOMMENDATION:
Adopt Resolution.
BOARD/COMMISSION RECOMMENDATION:
ATTACHMENTS:
Click to download
❑ Resolution-Lukehart-Trail Wagons HUD Section 108 Loan Workout Aug 2012
❑ Correspondence re City of Yakima & TrailWagons
❑ Agreement for Satisfaction of Loans re City of Yakima & TrailWagons (Gary & Mary Lukehartl
•
•
LAW OFFICES OF
CARLSON BOYD PLLC
230 S. 2" STREET, stint 202
YAKIMA, WASHINOTON
98901
TELEPHONE,
509-834-6611
FACsum.E
509-834-6610
1111 Carlson Boyd r'u c 1111 —
Attorneys at Law
August 9, 2012
Mr. Mark Kunkler
Assistant City Attorney
City of Yakima
RECEIVED
AUG G 1 4. 2.0.12
CITY LEGAL DEPT.
DONALD A. BOYD
dboyd@cbblawfirm.com
Via E-mail and First Class Mail
Re: City of Yakima loans to TrailWagons, Inc.
Dear Mark:
The following is brief summary of the current status of the two loans
the City made to TrailWagons, Inc. in 2003. The first loan was made in July
2003 for $2,395,000 to assist TrailWagons in putting in a new manufacturing
line at its Yakima facility. The second loan was made in December 2003 for
$475,000 to pay off bridge loans, acquire vehicle chassis and retool for two
new motor home models. The loans were made with funds provided through
the HUD Section 108 program.
The two loans to TrailWagons were secured by multiple parcels of real
property owned primarily by Chinook Business Park, LLC and by Gary and
Mary Lukehart's personal guaranty. The loans are cross -collateralized so all
collateral serves for both loans. All collateral was assigned to HUD under the
City — HUD loan that was the source of the loan funds. No City funds are at
stake in a default, however, future SIED funds could be at stake in the event
of a default and less than full payment of the underlying obligations to HUD.
When these loans were first in default in 2006, The City had all of the parcels
appraised by Tim Vining. Between 2006 and 2009, Gary Lukehart was able
to sell three of the parcels to keep the loans current until 2009. In October
2009, Mr. Lukehart had not funds available to keep the loan payments
current and the City started using loan loss reserve funds to make the semi-
annual payments to HUD. Sporadically from 2009 through 2011, Mr.
Lukehart was able to sell additional properties to fund loan payments. A
spreadsheet attached as Attachment 1 shows the list of original Collateral
Mr. Mark Kunkler
August 9, 2012
Page 1 2
and the properties that were sold with the funds then applied to the loan
payments.
HUD was promptly contacted about the defaults on these loans and the
various options and issues for getting these loans paid in full, which included
possible use of Loan Reserve Funds (LLR), possible purchase of residential
real property Collateral through federal / state stimulus moneys and outright
title ownership through deeds in lieu of foreclosure.
Loan Debt Amount and Future Payments Due:
The total current debt on the two loans is about $ 1,455,918.00. The City is
holding net proceeds paid by Gary Lukehart of about $138,000 from the sale
of property. Additionally, the City purchased residential Collateral using
funds from other programs and sale of those parcels at the price paid by the
City would provide approximately $300,000.00 of additional funds.
Reduction of these amounts from the current payoff amount leaves a balance
of approximately $1,018,000.00. This figure consists of LLR funds used to
make payments to HUD and the two remaining loan payments to HUD in
August 2012 and February 2013 (listed below).
The payment due to HUD on August 1, 2012 is $349,407 and can be covered
by existing LLR funds. That payment will leave LLR funds of about
$110,00.00. The final payment to HUD due April 2013 of $184,056 will not
be fully covered by remaining LLR funds by about $74,000. A spreadsheet
showing the payment history from January 2008 is attached as Attachment
2.
Collateral Remaining to Pay Loans:
Attached as Attachment 3 is a spreadsheet summarizing the real property
collateral that remains as security for the City Loans including the Yakima
County Assessor parcel mapping information of each parcel.
There are three (3) parcels of Collateral that remain unsold: Lot 4, Tract A
(Parcel 191307-34405) and the Kern Parcel (Parcel 181315-43013).
Lot 4 is the largest property and is vacant land located South of the Tacoma
Screw facility and North of the Boise -Cascade Property. It is 6.54 acres in
size and is zoned as Residential — undeveloped property. The assessed value
of Lot 4 is $854,200.00.
•
•
Mr. Mark Kunkler
August 9, 2012
Page 13
Tract A is a narrow roadway area that runs North and East of the Coca-Cola
bottling plant property and the Tacoma Screw property and is East of
Highway I-82. The assessed value of Tract A is $190,300.00.
The Kern Parcel is located at the Southwest intersection of 40th Avenue and
Kern Road. It is 1/3 of an acre is size and is zoned as Residential —
undeveloped property. The assessed value of the Kern Parcel is $86,500.00.
The other security for the City loans is the personal guaranty of Gary and
Mary Lukehart. The last Financial Statement obtained from the Lukeharts
is for May 2010. A copy is attached as Attachment 4.
Lukehart Proposal for Satisfaction of Loans:
Over the past year, Gary Lukehart has sought to sell these properties and
made several proposals to The City to satisfy the City loans. Attached as
Attachments 5 and 6 are my July 9, 2012 and July 31, 2012 correspondence
with Morrie Shore, attorney for the Lukeharts, regarding the proposals.
The summary of the proposal is as follows:
1. Sale of Lot 4 and payment to the City of $717,520.35.
2. Chinook Business Park, LLC deeds to The City the other two
parcels that serve as collateral for the two loans; Parcel 191307-
34405 and Parcel 181315-43013.
3. Gary Lukehart wishes to carve a small area out of Tract A that
he will retain ownership of. He then will move the "Welcome To
Yakima" sign from its current location on Lot 4 onto the
segregated part of Tract A.
4. Upon completion of items 1 through 3, the City would release
the personal guarantees it holds against Gary and Mary
Lukehart.
Michael Morales agreed to this proposal, subject to final approval of the City
Council.
I was notified this week that Mr. Lukehart has a sale pending on Lot 4. A
copy of the e-mail from Barbara Carr, Mr. Lukehart's assistant dated August
7, 2012 is attached as Attachment 7. Ms. Carr states the sale is pending in
Mr. Mark Kunkler
August 9, 2012
Page 14
the gross sale price of $ 849,420.00. Closing is ready at this time and Gary
Lukehart has requested approval for this transaction as soon as possible.
In order to complete the resolution of this matter, the City will need to agree
to the terms of this proposal and appoint an agent to sign a Request for
Reconveyance of Deed of Trust against the Lot 4 property. A Resolution
from the City Council should be prepared to deliver to the title company
closing the transaction.
If the City Council approves this proposal I recommend that an Agreement
stating the terms of the proposal be prepared and approved. The Agreement
will need to state the City will receive clear title to both Tract A Parcel (less
the segregated area for the "Welcome to Yakima" sign) and the Kern Parcel.
Please let me know if you have any questions regarding this summary or if
you need any further information regarding this matter.
Very Truly Yours,
onald A. B
Encl.
y
cc. Tony O'Rourke (Yakima City Manager) w/encl.
x:\city ofyakima-20009\trailwagons-2003015\2012\correspondence\kunkler 080912 (ltr re trailwagons loan - workout
summary).docx
•
Loan No. 1
$2,395,000
July, 2003
N/O
J
parcel number
location
owner
SUMMARY OF C '_LATERAL
FOR TRAILW, LOANS
2006 Vining
Appraisal
Sr Liens
191318-43003 1005 E. Lincoln Chinook Business Park, LLC $ 810,000.00 $ 296,000.00
First Savings Bank
191307 33023 401 E S. St.
A 191307-33441
B 191307-33442
C 191307-33439
D 191307-33438
E 191307-33014
F 191307-33018
Vacant
Vacant
Residence
Vacant
Residence
Vacant
191307-34007 Lot 4
G 191307-34405 Tract A
Loan No. 2 -
$475,000
Dec. 24, 2003
191307-34007
1 91 31 8-21 001
Chinook Businc..4 Park, LLC
$4-,420;-000,80 $ 652,000.00
Wheatland Bank
$ 50,000.00
Central Valley Bank
Chinook Business Park, LLC $ 275,000.00 $
$ 275,000.00 $
Chinook Business Park LLC $ 724,000.00 $
Chinook Business Park LLC $ 246,000.00 $
Lot 4 Chinook Business Park LLC
181315-43013 40th Ave. - Kern Rd.
Kern Property
ALL PROPERTY EQUITY
1N3WHOVIIV
See above
$122,000 $
2009 Vining Equity - Sale or
Appraisal Sale Value Vining Appraisal
$ 810,000 00
$---17085;00049
8
$ 601,000.00
$ 1,142,00000
$ 246, 000.00
$122,000.00
$ 30,000.00
$ 17,500.00
$ 40,000.00
$ 30,000:00
$ 110,000 00
$ 74,100.00
$ 301,600.00
•
$ - City obtained thru Dee(
$ 1,142,000.00
$ 246,000.00
$122,000.00
$3,572,000.00 $ 998,000.00 $ 4,006,000.00 $ 301,60000 $ 1,510,000.00
Foreclosed by Wheatla
City purchased in 2010
City purchased in 2010
City purchased in 2011
City purchased in 2010
City purchased in 2011
City purchased in 2010
Trailwagons 2003 and 2004
Funds received 1/8/2008 - $302,000.00
City Loan HUD
Due Date Due Date
1/15/2008 1/23/2008
4/15/2008 7/22/2008
10/15/2008 1/22/2009
4/15/2009 7/22/2009
Funds received 7/1/2008 -
4/15/2009 7/22/2009
10/15/2009 1/22/20010
HUD 108 Loan Payment
HUD 108 Loan Payment
HUD 108 Loan Payment
HUD 108 Loan Payment (Partial)
TOTAL PRORATION
$150,000.00
HUD 108 Loan Payment
HUD 108 Loan Payment
Trailwagons
2003 Loan
28,114.95
28,114.95
127, 614.95
15,519.59
199,364.44
112,095.36
$ 7,538.59 $
119,633.95
Payment due by 10/15/2009 (to HUD by 2/1/10)
Principal
Interest
Less Payment received 7/1/2008
TOTAL 10/15/2009 PAYMENT
Trailwagons
2004 Loan Balance
$ 302,000.00
32,836.70
32,836.70
32,836.70
4,125.46
241,048.35
180,096.70
19, 645.05
102,635.56 $ 302,000.00
$ 150,000.00
28,711.24 $
1,654.81 $
30,366.05
9,193.40
150,000.00
$ 126,000.00 $ 27,000.00 $ 153,000.00
$ 24,314.05 $ 5,713.50 $ 30,027.55
$ 150,314.05 $ 32,713.50 $ 183,027.55
$ (9,193.40)
$ 173,834.15 Paid with Loan Loss Reserve
Payment due by 4/15/2010 (to HUD by 8/1/10)
Principal
Interest
$ 126,000.00 $ 27,000.00 $ 153,000.00
$ 24,314.05 $
5,713.50 $ 30,027.55
`'t
•
ATTACHMENT
•
TOTAL 4/15/2010 PAYMENT $ 150,314.05 $ 32,713.50 $ 183,027.55 Paid with Loan Loss Reserve
Payment due by 10/15/2010 (to HUD by 2/1/11)
Principal
Interest
$ 131,000.00 $ 28,000.00
$ 19,085.05 $ 4,479.60
159,000.00
23,564.65
TOTAL 10/15/2010 PAYMENT $ 150,085.05 $ 32,479.60 $ 182,564.65 Paid with Loan Loss Reserve
TOTAL PAYMENTS PAST DUE AS OF 12/31/2010 $ 539,426.35
Payment due by 4/15/2011 (to HUD by 8/1/11)
Principal
Interest
$ 131,000.00 $ 28,000.00 $ 159,000.00
$ 19,085.05 $ 4,479.60 $ 23,564.65
TOTAL 4/15/2011 PAYMENT $ 150,085.05 $ 32,479.60 $ 182,564.65 Paid with Loan Loss Reserve
Payment due by 10/15/2011 (to HUD by 2/1/12)
Principal
Interest
$ 13,268.65 $ 3,138.40 $ 16,407.05
TOTAL 10/15/2011 PAYMENT $ 13,268.65 $ 3,138.40
16,407.05 Paid with Loan Loss Reserve
TOTAL PAYMENTS PAST DUE AS OF 12/31/2011
738,398.05
Less balance in COY Fund 123 Custodial Acct as of 6/26/12
(138,989.69)
TOTAL OWING AS OF 6/30/2012
$ 599,408.36
Remaining Payments Due
• to HUD: Payment due by 4/15/2012 (to HUD by 8/1/12)
Principal $ 272,000.00 $ 61,000.00 $ 333,000.00
Interest $ 13,268.65 $ 3,138.40 $ 16,407.05
All paid with Loan Loss Reserves
$ 423,789.65 Loan Loss ReservE
TOTAL 4/15/2011 PAYMENT $ 285,268.65 $ 64,138.40 $ 349,407.05 $ (349,407.05) 5/31/12 Balance F
Before paying 8/1
Future Payments: Payment due by 10/15/2012 (to HUD by 2/1/13)
Principal $ 143,500.00 $ 32,000.00 $ 175,500.00
Interest $ 6,931.05 $ 1,625.60 $ 8,556.65
TOTAL 10/1512011 PAYMENT $ 150,431.05 $ 33,625.60
Payment due by 4/15/2013
$ - 184,056.65 $ (184,056.65)
Principal $ 143,500.00 $ 32,000.00 $ 175,500.00
Interest $ 6,931.05 $ 1,625.60 $ 8,556.65
TOTAL 10/15/2011 PAYMENT $ 150,431.05 $ 33,625.60 $ 184,056.65 $ (184,056.65)
Total Remaining Payments Due to HUD: $ 717,520.35 $ (293,730.70) Loan Loss ReservE
•
TRAILWAGON r SUMMARY
1005 PROPERTY INCLL AS COLLATERAL
•
parcel number location owner Vining Senior Remaining Equity
Loan No. 1 Appraisal Liens Vining Appraisal
$2,395,000
July, 2003
191307-34007 Lot 4 Chinook Business Park LLC $ 1,142,000.00 $ - $ 1,142,000.00
G 191307-34405 Tract A
Loan No. 2 -
$475,000
Dec. 24, 2003
Chinook Business Park LLC
191307-34007 Lot 4 (above) Chinook Business Park LLC
181315-43013 40th Ave. - Kern Rd.
ALL PROPERTY EQUITY
$ 246,000.00 $ - $ 246,000.00
$122,000.00 $ - $122,000.00
$ 1,510,000.00 $ - $ 1,510,000.00
ALL PROPERTY EQUITY (Appraised Value) $ 1,510,000.00
Loan Debt after Frisbee Vacant Property / 1005 Banner Bank Loan Transactions $ 1,456,000.00
LESS:
Funds held by City from Lukehart property sales $ (138,000.00)
Value of property purchased by City from Lukehart from other program funds $ (300,000.00)
Loan Debt after deductions: $ 1,018,000.00
80% Loan to Value Threshold $ 1,208,000.00
City Cushion on Loan to Value Ratio $ 190,000.00
ATTACHMENT 3
Yakima County GIS Page 1 of 2
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PROPERTY PHOTOS. 11 —1 PROPERTY INFORMATION AS OF 8/812012 1208:33 AM
PRINTING
RD
!Parcel Address:
607 E R ST, YAKIMA ,WA 98901
Printer -
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Yakima
Not in floodplain (X PROTECTED BY
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Future Landuse Designation:
FIRM Panel Number.
!Parcel Owner(s):
CHINO CHINOOK BUSINESS PARK LLC
;Parcel Number.
19130734007 Parcel Size:f6.54 Acre(s)
Detailed
Report
Narrative Description: Section 07 Township 13 Range 19 Quarter SW: BEG 1689.01 FT S 88" 31' 26" E OF SW COR SW114, N 32"51'58"0 167.36 FT, TH N
12"59'43"W 111 FT, TH S 57"08'02"E 71.59 FT, TH CURV TDELTA 34"38'49" CHORD119.11 FT, TH CURV TO RT RAD200 FT DELTA 21"18'13
CHRD73.94 FT, TH N 21" 23' 00" E 186.27 FT, TH N 52" 48' 00" E 109 FT, TH S 32"34'E 520 FT, TH S 35045' 194 F00" W 178 FT, TH N 880 00' 00" W 127
FT, TH N 68" 15' 00" W 116 FT, TH N 88" 00' 00" W 298.48 FT, TH N 174.30 FT, 7H S 88"31'26"W 144.06 FT TO POB ( CONTAINING 285,606 SQ FT )
DISCLAIMER
Property Use:
91 Residential land Undeveloped
•� E n s y"+i;
I TAX
ANO ASSESSMENT INFORMATION
ist, c""t''j'� rysCf–'•
iTaxCode Area (TCA):
333
Tax Year:
2012
Print Detailed
MAP
{♦rr�Z�� Yl) c�� � F .e' r �� �
'Improvement Value:
SO
Land Value:
9854200
,r h Z xn e1ICurrentUse
r h t FyZ 1� a.Ft
s;+<as
•r-; , ..rt 7 _
Value:
New Construction:
$0
$0
CurrentUse Improvement:
—_--
Total Assessed Value:
$0
$854200
RESIDENTIAL INFORMATION
SECTION MAPS
Quality
i
Year Built (Stories (Main SqFt
fff 1
Upper SqFt
Bsmt Sq -F
Bedrooms
m
Bathroo(fuill3/4s1/2)
(bsmtlaGaragetf/bltin)
Carport
Section Map
1in=400ft
No Residence Information Found.
SALE INFORMATION
Qtr SECTION
NW -Qtr
1"=200ft
MAPS
NE -Qtr
1"=20011
Excise Sale Date ISale Price IGrantor 1Porlion
No Sales information Found.
DISCLAIMER
SW -Qtr
1 "=2001t
I SE -Qtr
I 1 "=200ft
While the Infomration is intended to be accurate, any manifest errors are unintentional and subject to correction. Please let us know
about any errors you discover and we will correct them. To contact us call either (509)574-1100 or (800) 572-7354 or email us.
_....1__
OVERLAY INFORMATION
Zoning:
RD
. Jurisdiction:
Yakima (Urban Area Zoning Ordinance)
Urban Growth
Area:
FEMA 100 Year:
Yakima
Not in floodplain (X PROTECTED BY
LEVEE)
Future Landuse Designation:
FIRM Panel Number.
(IND) Industrial (Yakima
Urban Area Plan)
Download
I Map
53077C10510
LOCATION INFORMATION
1 Latitude:46°37' 19.370" I. Longitude: -120° 30' 02.478' Range:19 Township:13 Section:07
Narrative Description: Section 07 Township 13 Range 19 Quarter SW: BEG 1689.01 FT S 88" 31' 26" E OF SW COR SW114, N 32"51'58"0 167.36 FT, TH N
12"59'43"W 111 FT, TH S 57"08'02"E 71.59 FT, TH CURV TDELTA 34"38'49" CHORD119.11 FT, TH CURV TO RT RAD200 FT DELTA 21"18'13
CHRD73.94 FT, TH N 21" 23' 00" E 186.27 FT, TH N 52" 48' 00" E 109 FT, TH S 32"34'E 520 FT, TH S 35045' 194 F00" W 178 FT, TH N 880 00' 00" W 127
FT, TH N 68" 15' 00" W 116 FT, TH N 88" 00' 00" W 298.48 FT, TH N 174.30 FT, 7H S 88"31'26"W 144.06 FT TO POB ( CONTAINING 285,606 SQ FT )
DISCLAIMER
MAP AND PARCEL DATA ARE BELIEVED TO BE ACCURATE, BUT ACCURACY IS NOT GUARANTEED; THIS IS NOT A LEGAL DOCUMENT AND SHOULD
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Parcel Address:
N 40TH AVE/KERN RD, YAKIMA ,WA 98902
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di Pa
Future Landuse Designation:
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Parcel _Owner(s _GARY
Parcel Number.)
MPrintor-
D & MARY _ LUKEHART __
18131543013 Y 1 -Parcel Si 0.33 Acres) —
Detailed i
Report
In floodplain (X) 40
" ,:�: :: `;'.: '''• ',v'
Property Use:
91 Residential land Undeveloped
° ?v.
F
TAX
AND ASSESSMENT INFORMATION
e r
�^..••� .r• i„
1`
Tax Code Area (TCA):
333
Tax Year:1—�2012
•...a) ,,. - �'"'A rr •`%' ;
improvement Value:
60
Land Valuey$BG500
Print Detailed
MAP
dti
,.. '
CurrentUse Value:
$0
CurrentUse improvement: $0
New Construction:
$0
Total Assessed Value:
686500
RESIDENTIAL INFORMATION
SECTION MAPS
Quality
Year Built
Stories
Main SgFt
upper SgFI
Bsmt SgFt
Bedrooms
Bathrooms
(full/3/4,1/2)
Garage
(bsmUatl/bilin)
Carport
Section Mn
!inion Ma
No Residence information Found.
SALE INFORMATION
Qtr SECTION MAPS
Excise (Sale Date !Sate Price Grantor [Portion
NWQtr
1"=20011
NE•Qa
1"=200!1
No Sales Information Found.
DISCLAIMER
".200!SW-Qtr
1 =200!1
ltr
1 280
1 "=200_1
While the information is intended to be accurate, any manifest errors are unintentional and subject to correction. Please let us know
about any errors you discover and we will correct them. To contact us call either (509) 574-1100 or (800) 572-7354, or email us.
OVERLAY INFORMATION
Zoning:
B-1
Jurisdiction:
Yakima (Urban Area Zoning Ordinance)
Urban Growth Area:
Yakima
Future Landuse Designation:
(PO) Professional Office
(Yakima Urban
Download
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FEMA 100 YearNot
In floodplain (X) 40
FIRM Panel Number:
53077C1031D
LOCATION INFORMATION
1 Latitude:46°36' 37.336" f+Longitude: Longitude: -120° 33' 42.787" Range:18 Township:13 Section:15
Narrative Description: PTN NW1/4 SW1/4 SEI/4 LY W'LY OF NORTH40TH AVE
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PROPERTY INFORMATION AS OF 010/2012 12:08:33 AM
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Jurisdiction:IYaklma (Urban Area Zoning Ordinance)
a • e-A•s••
.
Parcel Address:
R ST/0 OF NACHES AVE, YAKIMA ,WA 98901
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Parcel Owner(s):
CHINO CHINOOK BUSINESS PARK LIG
.1. Latitude:463T 26,432 __ELongitude:-120° 30' 13.328" IRange:19 Township:13 Section:07
• '?•t. 'r ' • ''
Parcel Number
19130734405 jParcel SizeAcre(s)
Detailed
Report
Property Use:
63 Service Business
.
4 ,%-: .
' "-• .:,',. —
TAX
AND ASSESSMENT INFORMATION
Tax Code Area (TCA):
333
Tax Year:
2012
Print Detailed
MAP
Improvement Value:
50
Lend Value:
$190300
CurreetUse Value:
SO
CurrentUse Improvement
50
xe .P.- V • •• — .t -''A
. - ',N9 • ;-••• •.' • .... .....4g,
New Construction'
-
50
Total Assessed Value:
$190300
R ESID EN TIA L INFORMATION
SECTION MAPS
Quality
Year Built
Stories
Main SqFt
tipper SqFt
Bsmt SqFt
Bedrooms
Bathrooms !Garage
(h.111/314,1/2)1(bsmtrattfialtin
CarParl
Section Map
11n=40011
No Residence Information Found.
SALE INFORMATION
Orr SECTION MAPS
Excise 'Sale Date "Sale Price i,12L 'Portion
NVV-Qtr
1"-....200ft
NE -Qtr
1"=200fr
No Sates Information Found.
DISCLAIMER
SW -Qtr
1"..200ft
SE -Qtr
1200R
—
While the information is intended to be accurate, any manifest errors are unintentional and subject to correction, Please let us know
about any errors you discover and we will correct them. To contact us call either (509) 574-1100 or (800) 572-7354 or email us.
OVERLAI INFORMATION
Zoning:
RD
Jurisdiction:IYaklma (Urban Area Zoning Ordinance)
Urban Growth
Area:
FEMA 100 Year.
Yakima
Not in floodplain (X PROTECTED BY
LEVEE) tt)
Future Landuse Designationd(IND) Industrial (Yakima
FIRM Panel Numbed53077C1032D
.I
Urban Area Plan)
Download
Map
LOCATION INFORMATION
.1. Latitude:463T 26,432 __ELongitude:-120° 30' 13.328" IRange:19 Township:13 Section:07
Narrative Description: BSP AF 7204253; TRACT A
DISCLAIMER
MAP AND PARCEL DATA ARE BELIEVED TO BE ACCURATE, BUT ACCURACY IS NOT GUARANTEED; TI -US IS NOT A LEGAL DOCUMENT AND SHOULD
NOT BE SUBSTITUTED FOR A TITLE SEARCH, APPRAISAL, SURVEY, FLOODPLAIN OR ZONING VERIFICATION
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•
GARY D. AND MARY M. LUKEHART
STATEMENT OF FINANCIAL CONDITION
May, 2010
ASSETS
Real Estate Investments
Chinook Business Park, LLC 3,037,032
Madeline Properties, LLC 300,000
Gary and Mary Lukehart 142,000
Yakima Hotel LLC 4,860,000
Personal Effects
Total Assets
LIABILITIES
Mortgages and Contracts
Other Commitments and Obligations
Total Liabilities
NET WORTH
75.000
$ 8,414,032
$ 5,801,525
1,247, 500
7,049,025
$1,365,132
ATTACHMENT
GARY D. AND MARY M. LUKEHART
NOTES TO FINANCIAL STATEMENT
May, 2010
Note 1 — Trusts:
•
Gary D, and Mary M. Lukehart's personal residence and land are owned by the
Running Springs Irrevocable Trust. The beneficiaries are their children. These
assets/liabilities have not been included in the personal financial statement.
Note 2 — Limited Liability Company Interests:
Chinook Business Park, LLC, Yakima Hotel, LLC, and Madeline Properties,
LLC. The Limited Liability Companies own commercial real estate
properties.
A summary of the unaudited assets, liabilities and results of operations follows.
Note 3 — Commitments and Contingencies
H.U.D
Note 4 — Gary and Mary Lukehart Properties
1
•
GARY D. AND MARY M. LUKEHART
NOTES TO FINANCIAL STATEMENT
May, 2010
Note 2 — Limited Liability Company Interests — cont'd
Yakima Hotel LLC
Assets:
Commercial real estate property located at 137 North
Fair Avenue
Vacant lot at 141 North Fair Avenue
Total Assets
Liabilities:
Note A, to Berkadia Bank at 6.142%; monthly payment
of $67,640; payment includes seasonal reserves;
collateralized by Fairfield Inn & Suites Hotel by Marriott
Note B to Wachovia Bank, at 12.95%A; monthly payment
of $7,760.14, collateralized by Faird Inn & Suites Hotel
by Marriott •
4,500,000
360,000
4;860,000
4,770,563
351,255
Note payable to Brian Sims, interest only payments at 9.818%;
$600/monthly; due August, 2010. Collateralized by land at
141 North Fair Avenue 60,000
Note payable to Tower Capital Management 200,000
(This note is also collateralized with the 5 acre vineyard)
Total Liabilities 5,381,818
The Fairfield Inn & Suites by Marriott is owned by Yakima Hotel LLC. Gary Lukehart
Is the managing member and Mary Lukehart is the member. The Hotel is
managed by Intermountain Management LLC located in Monroe, Louisiana.
All aspects of the Hotel are operated by this Marriott approved firm. Due to the down turn in
not only our local market but nationally as well, our hotel has been going through
financially challenging times. Because of this trend, the Lukeharts have not and
will not be receiving any income from the hotel this year.
GARY D. AND MARY M. LUKEHART
NOTES TO FINANCIAL STATEMENT
May, 2010
•
Note 2 — Limited Liability Company Interests — (continued)
CHINOOK BUSINESS PARK
Assets:
Cash 125
Equipment 5,000
Various vacant lots and rental houses held for investment at North 3id, 4th,
and 5th Streets at East "Q", "R", and "S" Streets 2,221,907
Building located at 1005 East Lincoln based on recent appraisal 810,000
Total Assets 3,037,032
Liabilities:
Note payable to Banner Bank of WA due in monthly payments of
$2,899 including interest at 8 5%; collateralized by 1005 East Lincoln and
assignment of all related rents; balance due July 30, 2010 292,000
Note payable to Yakima National Bank, monthly payments of $1,115 including
interest at 4% collateralized by properties at North 4th and East "S" Streets.
Originally constructed as additional parking for HouseValues formerly
located at 1700 North 6th Street 127,707
Total Liabilities $419,707
3
GARY D. AND MARY M. LUKEHART
NOTES TO FINANCIAL STATEMENT
May, 2010
Note 2 — Limited Liability Company Interests-cont'd
Madeline Properties, LLC
Gary and Mary Lukehart are the managing members of the LLC which owns
some open pasture land and a producing five acre vineyard. A summary of the
unaudited assets, liabilities and results of operations of Madeline Properties, LLC
at May, 2010 are as follows:
Assets
Cash
Land on South Naches Road, 27.46 acres pasture; 5 acres grapes based on
FMV 300,000
Total Assets 300,000
Liabilities
Note Payable Tower Capital Management
(this note is also collateralized with property at
141 North Fair Avenue)
(200,000)
Total liabilities ($200,000)
4
•
GARY D. AND MARY M. LUKEHART
NOTES TO FINANCIAL STATEMENT
May, 2010
Note 4 - Gary and Mary Lukehart Properties
Two pieces of property are held in the names of Gary D. and Mary M.
Lukehart. Both properties are open Tots; one is located off 1/82 and
Spruce Street and one is at 40th Kern Road. Values are based on a
recent appraisai.
Assets $142,000
•
GARY D. AND MARY M. LUKEHART
NOTES TO FINANCIAL STATEMENT
May, 2010
Note 3 — Commitments and Contingencies
Section 108 HUD Loan through the City of Yakima. 1,434,220.00
Total Commitments and Contingencies
6
•
Lnw OIVICEs Or
C,uusox four PLLC
230 S. 2"° Sm cr, sum; 202
YAMIMA, WAST IINGTON
98901
TELEPHONE,
509.8344611
PAcsus¢e,
509.8346610
till Carlson Boyd PLLC 1111
Attorneys at Law
July 9, 2012
Mr. Morrie Shore
Stokes Lawrence Velikanje, Moore & Shore
1433 Lakeside Court, Suite 100
Yakima, Washington 98902
DONALD A. BOYD
dboycl@cbblawf➢nn.com
Via AMS and e-mail
Re: City of Yakima Section 108 Loan to Trail Wagons, Inc.
Dear Morrie:
Michael Morales has reviewed the latest proposal from Gary Lukehart
regarding resolution of the two debts owed by TrailWagons, Inc. to The City of
Yakima. The current balance of the future payments owed. to HUD under these
loans is $717,520.35. This includes the interest payments due in August, 2012,
February 2013 and August 2013.
Michael Morales will recommend to the City Council that they accept a work-
out of this matter on the following terms:
1. The City receives the full net proceeds of any sale from the sale of
the Lot "4" property (Parcel 191307-34007) up to the amount the
City must still pay to HUD which amounts to $717,520.35.
However, the City would not agree to any sale of that property
that provided less than a net payment to the City of less than
$600,000.00; and,
2. Chinook Business Park, LLC deeds to The City the other two
parcels that serve as collateral for the two loans; Parcel 191307-
34405 and Parcel 181315-43013.
In such event, The City would have the debt to HUD satisfied and would
release the Lukeharts' personal guarantee. I attach with this letter a
spreadsheet that shows the amount of the debt owed if fully collected from
liquidation of The City collateral. This proposal provides The City with cash
ATTACHMENT) (`�P"9eJ
•
Mr. Morrie Shore
July 9, 2012
Page 2 of 2
and with property that will serve City purposes at a value that the City
believes equates to the full value of the debt owed.
The City would use the cash payment to make the payments on the two loans
to HUD as those come due in the future. As such, no bond defeasance is
required and those costs would not be incurred.
With regard. to Gary Lukehart's request that the "Welcome To Yakima" sign be
kept on the Lot A ("roadway") parcel, the City cannot agree to that condition.
The reason being that the property's use for the future cannot be known and
any limitation on the future use of the property by having the sign in place may
impair the value and usefulness of the property. Further, the City believes
that the Washington State Department of Transportation will not allow the
City to keep the sign up under "free speech", which is the .only reason that Mr.
Lukehart is allowed to keep it on private property. Since the City is a public
entity, it will likely be ordered to remove the sign. In addition, the City cannot
assume any liability for anything that could happen if the sign were to fall.
The City would agree that Gary can take the sign prior to any sale or the City
would agree to donate the sign to the Yakima Museum or other charity.
I ask that you review this proposal with the Lukeharts and let me know their
response by Friday, July 13, 2012.
Very Truly Yours,
Zonald/A4yd
cc. Michael Morales
x:\city of yaldma-20009\traiiwagons•2003016\2012\correspondence\shore 070212 - 3 (ltr re city • trailwagons workout proposal).docx
L e wOlticts OP
CAR SON Born PLLC
230 S.1'"' Srn[Er, SUITE 202
YAlei4.t, WASHINGTON
98901
[L'LGYII011e;
509834.6611
FACSIMILE;
509.8346610
July 31, 2012
Mr. Morrie Shore
Stokes Lawrence Velikanje, Moore & Shore
1433 Lakeside Court, Suite 100
Yakima, Washington 98902
Via AIVIS and e-mail
Re: City of Yakima Section 108 Loan to Trail Wagons, Inc.
Dear Morrie:
ej (7 U4y
DONALD A. BOYD
dboyd@chblawfirm.com
The City of Yakima has reviewed the proposal from Gary Lukehart regarding the
Welcome to Yakima sign and placement of that sign from its existing location at the
Southeast corner of Lot 4 to the triangular portion of Lot A (the roadway parcel) as
shown on. the attached map that was submitted by Mr. Lukehart.
The City will not foreclose this proposal, but reserves its decision on this proposal
pending a showing this proposal is legally and practically feasible. The City requires
that all work to arrange for the transfer of the sign location be done and paid for by
Mr. Lukehart prior to the City making a final decision on this issue. This includes all
work necessary to obtain a segregation of the area legally necessary to place the sign
on the area and a showing that the remaining roadway area on this parcel is legally
sufficient for use of the roadway.
Any final decision on a resolution of the City loans to TrailWagons also requires that a
sale of Lot 4 be completed that will provide The City with funds in accordance with my
prior letters. I ask that you review this proposal with the Lukeharts and let me know
their response by Friday, August 10, 2012.
Very Truly Yours,
4
Donald A. Boy
Encl.
cc. Jeff Cutter w/encl.
Tony O'Rourke w/encl.
x:\city of Yakima-20009\trailwagons-2008015\20 [2\correspondence\shore 073112 (ltr re city - trailwagons workout proposa1).docx
ATTACHMENT
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Don Boyd
To: Barbara Carr; Morrie Shore
Cc: Jeff Cutter Ocutter@ci.yakima.wa.us); Davenport, Joan (jdavenpo@ci.yakima.wa.us), Price,
Cally (cprice@ci.yakima.wa.us)
Subject: RE: Gary Lukehart - HUD loan payoff
Barbara,
I forwarded your email to The City. Jeff Cutter, the City Attorney, who I have been communicating with after Michael
Morales left the City appears to be out of the office for a few days. I forwarded the message to others at the City as well
and will reply to you as soon as I receive a reply. Can you tell me what the anticipated closing date is to be so I can
forward that to the City.
Don
From: Barbara Carr fmailto:tcmbarb(yvn.com]
Sent: Tuesday, August 07, 2012 11:19 AM
To: Don Boyd
Subject: Gary Lukehart - HUD loan payoff
Hi, Don —
We are currently in escrow with Valley Title. The Dolson Company has agreed to purchase lot
4 of the Chinook Business Park for $849,420.00. We will need a release on this lot for the
$717,520.35 the City will be receiving. The other two lots 191307-34405 and 181315-43013
will still remain as security. I'm working with Huibregtse, Louman on breaking off the parcel
for the sign. They told me this would take a couple of weeks. Mary & I will release those
parcels as soon as we accomplish this.
Kristy Perrault at Valley Title is the one handling the transaction.
Barb
For Gary Lukehart
1
ATTACHMENT
•
REQUEST FOR FULL RECONVEYANCE
The undersigned beneficiary, The City of Yakima, a Washington municipal
corporation, is the legal owner and holder of promissory notes, as follows:
1. Variable/Fixed Rate Promissory Note dated July 23, 2003 in the
original sum of $2,395,000.00, and amended by First Amended
Variable/Fixed Rate Promissory Note dated January 5, 2004; and,
2. Variable/Fixed Rate Promissory Note dated December 24, 2003 in the
original sum of $475,722.00, and amended by First Amended
Variable/Fixed Rate Promissory Note dated January 5, 2004 in the
original sum of $475,000.00.
The Promissory Notes are secured by multiple Deeds of Trust, including the
following Deeds of Trust:
1. Deed of Trust dated July 23, 2003, in which Chinook Business Park,
LLC, a Washington limited liability company, is grantor and Fidelity
Title Company is Trustee, filed for record on August 8, 2003 as
Auditor's File No. 7351307, and recorded in the Official Records of
Yakima County, Washington; and,
2. Deed of Trust dated December 30, 2003, in which Chinook Business
Park, LLC, a Washington limited liability company, is grantor and
Fidelity Title Company is Trustee, filed for record on January 21, 2004
as Auditor's File No. 7381476, and recorded in the Official Records of
Yakima County, Washington; and,
The indebtedness secured by said Deeds of Trust having been partially
satisfied by payment of $717,520.35 pursuant to the terms of the Agreement For
Satisfaction of Loans dated September 5, 2012, the above -referenced Deeds of Trust
are herewith surrendered to you for reconveyance BUT the Notes are NOT
surrendered for cancellation at this time. You are therefore requested to reconvey
without warranty, to the person(s) entitled thereto, the right, title and interest now
held by the City of Yakima and by you as Trustee thereunder.
CITY OF Y
DATED this 1Lf
day of September, 2012.
ourke, City Manager
ATTEST
City of Yakima
129 North Second Street
Yakima, WA 98901
Sonya Claa
Tee, City Clerk ''•,1gHIN.:\\`\\
STATE OF WASHINGTON
:ss.
County of Yakima/
V_
On this - U day of September, 2012, before me the undersigned, a notary public in
and for the State of Washington, duly commissioned and sworn, personally
appeared Tony O'Rourke and Sonya Claar Tee, to me known to be the City Manager
and City Clerk, respectively, of the City of Yakima, and that they executed the
within and foregoing instrument, and acknowledged the said instrument to be the
free and voluntary act and deed of said municipal corporation, for the uses and
purposes therein mentioned and on oath stated that they were authorized to
execute said instrument and that the seal affixed is the corporate seal of said
corporation.
Witness my hand and official seal affixed the date and year in this certificate above
written.
Q, PF1Y TE-&-- /-', '0 lit @Jt44 Tee--
_-_--
• .•z c.,. 1,. ?. = PRINTED: Pli--)Z-
=
▪ p c>° ���`��'• v ; ?_ Notary Public in and for th St to of
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`I' �o`` v� . Washington, residing at'/6/1,1-t
',/,,TATEI0 w\o-
My commission expires: 1
x:\city of yakima-20009\trailwagons-2003015\2012\request for reconveyance - lot 4 - not full satisfaction of debt - 091212.doc
AGREEMENT FOR SATISFACTION OF LOANS
PARTIES:
LUKEHART - Gary Lukehart and Mary Lukehart, husband and
Wife;
CBP- Chinook Business Park, LLC, a Washington limited
liability company;
CITY - The City of Yakima, a Washington municipal
corporation.
RECITALS:
1.1 In 2003, the City of Yakima, Washington made two loans to TrailWagons,
Inc., a Washington corporation, with its principal place of business in Yakima,
Washington. The first loan was made in July, 2003 in the amount of $2,395,000 to
assist TrailWagons in putting in a new manufacturing line at its Yakima, Washington
manufacturing facility. The second loan was made in December, 2003 for $475,000 to
pay off bridge loans, acquire vehicle chassis and retool for two new motor home models.
The loans were made with funds provided through the HUD Section 108 program.
1.2 TrailWagons, Inc. was owned by Gary Lukehart. The two loans were
secured by multiple parcels of real property owned primarily by another business
entity owned by Gary Lukehart, Chinook Business Park, LLC, and by the personal
guaranty of Gary and Mary Lukehart.
1.3 TrailWagons; Inc. closed its business operations in 2005 and thereafter
has had difficulty timely paying its debt obligations on the two City loans.
1.4 Gary Lukehart and Chinook Business Park, LLC have sold certain real
property securing the City loans since 2005, ultimately leaving three parcels of real
property that continue to secure the City loans.
1.5 The current balance owed by TrailWagons, Inc. on the City loans is
approximately $1,455,918.00. The City is holding net proceeds paid by Gary Lukehart
to the City of about $138,000 from the prior sale of Chinook Business Park, LLC
AGREEMENT FOR LOAN
SATISFACTION 1
property. Additionally, the City purchased residential Collateral from Chinook
Business Park, LLC using funds from other programs and sale of those parcels at the
price paid by the City would provide approximately $300,000.00 of additional funds.
Reduction of these amounts from the current payoff balance owed on the two loans
leaves a balance of approximately $1,018,000.00 currently due.
1.6 Chinook Business Park, LLC has a pending offer to purchase one of the
parcels of real property (commonly referred to as Lot 4 — Tax Parcel 191307-34407)
securing the City loans and Gary Lukehart has proposed paying the City $717,520.35
in net proceeds from such sale to apply to the balance of the two loans; and
1.7 Gary Lukehart has further proposed after payment of the funds from
the sale of Lot 4 to deliver a quit claim deed in lieu of foreclosure for the two
remaining parcels of real property that secure the City loans (Tract A - Parcel
191307-34405 less a small section for placement of a sign commonly known as the
"Welcome to Yakima Sign" and the Kern Parcel -Parcel 181315-43013) in full
satisfaction of the two loans. The assessed value of Tract A is $190,300.00. The
assessed value of the Kern Parcel is $86,500.00; and,
1.8 Gary Lukehart has agreed to undertake all work and cost attendant in obtaining
a short subdivision of Tract A necessary to segregate a section for placement of the Welcome
to Yakima Sign by no later than December 31, 2012.
1.9 The personal financial statement of Gary Lukehart dated May 2010 does not
show significant value in non-exempt assets.
1.10 The parties wish to document their agreement for the satisfaction of
the two loans and debt evidenced thereby owed by TrailWagons, Inc. and Lukehart
to the City on the terms and conditions set forth below.
AGREEMENT:
NOW, THEREFORE, in consideration of the foregoing Recitals, the mutual
covenants and agreements hereinafter set forth and other valuable consideration,
AGREEMENT FOR LOAN
SATISFACTION 2
the receipt and sufficiency of which is hereby acknowledged, the parties hereby
agree as follows:
1. Recitals.
The Recitals set forth above are hereby incorporated into and made a
part of this Agreement, and are true and correct as of the date of execution of this
Agreement.
2. Acknowledgement of Indebtedness - Warrantees.
TrailWagons, Inc. and Lukehart hereby admit and acknowledge that
they are indebted to the City as stated in Recital 1.5, above, and that there are no
claims, offsets or counterclaims in favor of them, any of their business entities or
the community which would reduce that amount.
Gary Lukehart and Mary Lukehart specifically warrant and represent
to the City that their personal financial statement of May 2010.fully and properly
represents their current financial condition and there has been no significant
change in their financial condition that would allow the City of Yakima to recover
significantly greater recovery under their Personal Guarantee to the City of
Yakima.
3. Satisfaction of Debt.
By this Agreement, the parties agree as follows:
3.1 The City will agree to execute and deliver to the title company of
Lukehart's choosing a Request for Reconveyance of the City Deed of Trust
encumbering Lot 4 — Tax Parcel 191307-34407 in exchange for delivery to the City
of funds from the sale of Lot 4 in the net amount of $717,520.35, provided that the
City Request for Reconveyance shall state that the debt owed by TrailWagons, Inc.
AGREEMENT FOR LOAN
SATISFACTION 3
and Lukehart is only partially satisfied and that the Promissory Notes evidencing
the debt shall not be delivered to TrailWagons, Inc. and Lukehart;
3.2 Gary Lukehart and Chinook Business Park, LLC agree that
they will deliver to the City of Yakima a quit claim deed in lieu of foreclosure
covering the Kern Parcel -Parcel 181315-43013 no later than September 30, 2012;
3.3 Gary Lukehart and Chinook Business Park, LLC agree that
they will deliver to the City of Yakima a quit claim deed in lieu of foreclosure
covering the Tract A property - Parcel 191307-34405, less as small a section of
Tract A as is legally necessary for placement of the sign commonly known as the
"Welcome to Yakima Sign" on such segregated area of Tract A. Gary Lukehart
agrees to obtain final approval for the segregation from the appropriate
governmental agencies involved no later than December 31, 2012. Gary Lukehart
further agrees to undertake all work and pay all costs and fees attendant in
obtaining a short subdivision of Tract A and further agrees that the segregation
shall not detrimentally affect the use or zoning of the remainder of the Tract A
parcel as legally allowed as of the date hereof. In the event final approval for the
segregation is not obtained from all interested parties by December 31, 2012,
Chinook Business Park, LLC agrees that it shall promptly deliver a quit claim deed
in lieu of foreclosure to the City for the whole of Tract A.
3.4 Upon delivery by Gary Lukehart and Chinook Business Park,
LLC of the quit claim deed in lieu of foreclosure covering the restructured Tract A
property - Parcel 191307-34405 and completion of all other duties and obligations of
Gary Lukehart, Chinook Business Park, LLC and TrailWagons, Inc. hereunder the
City of Yakima will declare that the two loans owed by TrailWagons, Inc. to the
City of Yakima are satisfied and the City of Yakima will cancel the debt obligations
AGREEMENT FOR LOAN
SATISFACTION 4
owed thereunder and deliver to Gary Lukehart, Chinook Business Park, LLC and
TrailWagons, Inc. such original documents that evidence the loans upon receipt of
the original documents from the United States Department of Housing and Urban
Development (HUD) after full and final payment of the underlying obligations to
HUD.
4. Severability.
In case any one or more of the provisions contained in this Agreement
should be declared invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall not in
any way be effected or impaired thereby.
5. Modifications.
No modification, amendment, waiver or change of this Agreement, or
any terms hereof, shall be valid unless the same is in writing and signed by the
party against which the enforcement of such modification, waiver, amendment,
discharge or change is sought.
6. Binding Effect.
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors, assigns, and legal representatives.
7. Notices.
All notices to be given under the terms of this Agreement shall be in
writing and shall be served by certified or registered mail or by personal service.
Notices served by mail shall be deemed to have been given on the third (3) day
following deposit in the U.S. Mail as certified or registered mail, return receipt
requested, postage paid, to the appropriate party at its address set forth below or to
AGREEMENT FOR LOAN
SATISFACTION 5
•
such other address as may be designated in a written notice sent to the other party
in accordance with this section:
City of Yakima
129 N. 2nd Street
Yakima, Washington 98901
Attn: City Manager
Lukehart / Chinook Business Park, LLC /
TrailWagons, Inc.
137 North Fair Avenue
Yakima, Washington 98901
8. Lukehart and Chinook Business Park, LLC, TrailWagons,
Inc. Release.
GARY LUKEHART, MARY LUKEHART, CHINOOK BUSINESS PARK, LLC
AND TRAILWAGONS, INC., FOR THEMSELVES AND THEIR LEGAL
REPRESENTATIVES, SUCCESSORS AND ASSIGNS, HEREBY
UNCONDITIONALLY RELEASE, WAIVE, AND FOREVER DISCHARGE THE
CITY OF YAKIMA AND ITS EMPLOYEES, AGENTS, SUCCESSORS, LEGAL
REPRESENTATIVES AND ASSIGNS, OF AND FROM ALL CLAIMS,
DEMANDS, CAUSES OF ACTION AND DAMAGES WHATSOEVER, IN LAW
OR IN EQUITY, INCLUDING ANY DEFENSES WHICH ANY OF THEM NOW
HAVE OR WHICH THEY MAY SUBSEQUENTLY HAVE AGAINST THE CITY
OF YAKIMA, ARISING OUT OF OR CONNECTED WITH, DIRECTLY OR
INDIRECTLY, THE LENDING TRANSACTIONS AND RELATED DEALINGS
WHICH HAVE TRANSPIRED BETWEEN THE CITY OF YAKIMA AND GARY
LUKEHART, MARY LUKEHART, CHINOOK BUSINESS PARK, LLC AND
TRAILWAGONS, INC., OR ANY OF THEM, PRIOR TO OR AS OF THE DATE
OF THIS AGREEMENT.
9. Attorney Fees; Expenses.
In the event of any action to enforce the terms of this Agreement, the
breaching party shall pay to the non -breaching. party all costs of enforcement
including all reasonable attorney fees and related costs, whether or not a suit is
filed, an appeal is sought or the matter is referred to arbitration.
AGREEMENT FOR LOAN
SATISFACTION 6
10. Governing Law.
All acts and transactions hereunder and the rights and obligations of
the parties hereto shall be governed, construed and interpreted in accordance with
the laws of the state of Washington. Venue for any action shall be in Yakima
County, Washington.
11. Headings.
The paragraph headings appearing in this Agreement have been
inserted for the purpose of convenience and ready reference. They do not purport to,
and shall not be deemed to, define, limit or extend the scope or intent of the
paragraphs to which they appertain.
12. Construction.
A. Unless the context of this Agreement clearly requires otherwise,
the plural includes the singular, the singular includes the plural, the part includes
the whole, "including" is not limiting, and "or" has the inclusive meaning of the
phrase "and/or." The words "hereof," "herein," "hereby," "hereunder," and other
similar terms in this Modification and Restatement refer to this Agreement as a
whole and not exclusively to any particular provision of this Agreement.
B. Neither this Agreement nor any uncertainty or ambiguity
herein shall be construed or resolved against any of the parties, whether under any
rule of construction or otherwise.,, On the contrary, this Agreement has been
reviewed by each of the parties and its legal counsel and shall be construed and
interpreted according to the ordinary meaning of the words used so as to accomplish
the purposes and intentions of all parties hereto fairly.
AGREEMENT FOR LOAN
SATISFACTION 7
13. Statute of Frauds Disclosure.
ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN
MONEY, EXTEND CREDIT, OR TO FORBEAR FROM ENFORCING
REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON
LAW.
DATED this � day of
CITY OF YAKIMA
Tony O'Roi/rke, City Manager
TRAIL WAGONS, INC., a
Washington corporation
hart, resident
CHINOOK BUSINESS PARK, LLC, a
Was d n:k on limited liabi =f omp_ ny:
/A o.
Title:
uke art
, 2012.
A\ 4 Pi I
Gare► kehart
x:\city of yakima-20009\trailwagons-2003015\2012\agreement for satisfaction of loans - 082112 - city final.doc
CITY CONTRAC r NO:
(Z-ao14)-- 1t S�
RESOLUTION NO:
AGREEMENT FOR LOAN
SATISFACTION 8
DEED IN LIEU OF FORECLOSURE CERTIFICATE
GARY D. LUKEHART AND MARY LUKEHART, husband and wife
("Lukeharts") represents and warrants to THE CITY OF YAKIMA, a
Washington municipal corporation ("Lender") and their respective successors
and assigns, as follows:
1. The Lukeharts and Lender are parties to a certain Agreement for
Satisfaction of Loans dated September 5, 2012 ("Agreement"). Unless otherwise
defined in this Certificate, all capitalized terms shall have the meanings
ascribed to them in the Agreement.
2. The Lukeharts executed and delivered, or is contemporaneously with its
execution and delivery hereof, executing, a certain Quit Claim Deed In Lieu of
Foreclosure (the "Deed"), conveying the Property to Buyer.
3. The Deed was executed and delivered pursuant to the Agreement.
4. The Deed was intended to be and is an absolute conveyance of title to
the real estate legally described in the Deed (the "Property") to Lender in effect
as well as in form; the Deed was not and is not intended to serve or operate as a
mortgage, deed to secure debt, security agreement, trust conveyance, deed of
trust, lien, security interest, or security of any kind; Lukehart, by virtue of the
Deed, the Agreement, waived, relinquished, and gave up any and all right, title,
and interest, legal, equitable, or other wise in the Property; the consideration for
the Deed was and is for the benefit of the Lukeharts and consists of Lender's
execution and delivery of the Agreement.
5. The Deed was executed and delivered as the result of the Lukeharts'
request and was the free and voluntary act of the Lukeharts; the Lukeharts
have no creditors whose rights would be prejudiced by the Deed; the Lukeharts
execution and delivery of the Agreement is not the result of duress or undue
influence, intimidation, misapprehension, bad faith, unconscionable conduct,
overreaching conduct, or misrepresentation by Lender, or any agent, attorney, or
any other representative of Lender; the Lukeharts has been represented by legal
counsel of its own choosing throughout the transactions contemplated or
referenced in the Agreement.
6. Except as disclosed below, no work, labor, or materials have been
supplied to the Property upon which anyone could base a mechanics' lien,
equitable lien, or any other type of lien against the Property which has not been
fully paid for.
7. Lender has not taken advantage of the Lukeharts by threats, duress,
intimidation, overreaching conduct, unconscionable conduct, bad faith, or
otherwise, and the Lukeharts, by executing and delivering the Agreement or the
Deed, acted freely and voluntarily, and not under coercion or duress; the
Lukeharts are proceeding with the transaction contemplated by the Agreement
as a volunteer pursuant to what it perceives to be in its own best interest. The
Lukeharts understand that the transactions contemplated by the Agreement
may have adverse tax consequences and has consulted with such tax, legal, and
accounting advisors with respect to such consequences as it has deemed
advisable.
8. After consummation of the transaction contemplated by the Agreement,
the assets of the Lukeharts at fair value will equal or exceed the sum of its
debts. The value of the Property does not equal or exceed the indebtedness owed
to Lender.
9. This Certificate is made to induce Lender to accept the Deed, is made
for the protection and benefit of Lender and their successors, grantees, and
assigns, any title insurers who may now or hereafter insure Lender's respective
interests in the Property, and all other parties hereafter dealing with or who
may acquire any interest in the Property, all of whom may rely on this
Certificate.
10. The undersigned will cause its officers, directors, shareholders,
employees, and agents to testify, declare, depose or certify before any competent
tribunal, officer, or person, in any case now pending or that may hereafter be
constituted, to the truth and accuracy of the particular facts set forth above,
11. All representations and warranties made in this Certificate shall be
deemed remade on and as of the Closing Date and shall survive said Closing
Date.
Dated this a-€3 day of
x:\city of yakima-20009\trailwagons-2003015\2012\deed in lieu of foreclosure certificate - lukehart.doc
DEED IN LIEU OF FORECLOSURE CERTIFICATE
CHINOOK BUSINESS PARK, LLC ("Chinook") represents and warrants to THE
CITY OF YAKIMA, a Washington municipal corporation ("Lender") and their
respective successors and assigns, as follows:
1. Chinook and Lender are parties to a certain Agreement for Satisfaction
of Loans dated September 5, 2012 ("Agreement"). Unless otherwise defined in
this Certificate, all capitalized terms shall have the meanings ascribed to them
in the Agreement.
2. Chinook executed and delivered, or is contemporaneously with its
execution and delivery hereof, executing, a certain Quit Claim Deed In Lieu of
Foreclosure (the "Deed") relating to that certain Deed of Trust recorded under
Yakima County Auditor's File Number 7351305, conveying a portion of the
property described in said Deed of Trust to Lender.
3. The Deed was executed and delivered pursuant to the Agreement.
4. The Deed was intended to be and is an absolute conveyance of title to
the real estate legally described in the Deed (the "Property") to Lender in effect
as well as in form; the Deed was not and is not intended to serve or operate as a
mortgage, deed to secure debt, security agreement, trust conveyance, deed of
trust, lien, security interest, or security of any kind; Chinook, by virtue of the
Deed, the Agreement, waived, relinquished, and gave up any and all right, title,
and interest, legal, equitable, or other wise in the Property; the consideration for
the Deed was and is for the benefit of Chinook and consists of Lender's execution
and delivery of the Agreement.
5. The Deed was executed and delivered as the result of the Chinook's
request and was the free and voluntary act of Chinook; Chinook has no creditors
whose rights would be prejudiced by the Deed; Chinook's execution and delivery
of the Agreement is not the result of duress or undue influence, intimidation,
misapprehension, bad faith, unconscionable conduct, overreaching conduct, or
misrepresentation by Lender, or any agent, attorney, or any other representative
of Lender; Chinook has been represented by legal counsel of its own choosing
throughout the transactions contemplated or referenced in the Agreement.
6. Except as disclosed below, no work, labor, or materials have been
supplied to the Property upon which anyone could base a mechanics' lien,
equitable lien, or any other type of lien against the Property which has not been
fully paid for.
7. Lender has not taken advantage of Chinook by threats, duress,
intimidation, overreaching conduct, unconscionable conduct, bad faith, or
.. 4
otherwise, and Chinook, by executing and delivering the Agreement or the Deed,
acted freely and voluntarily, and not under coercion or duress; Chinook is
proceeding with the transaction contemplated by the Agreement as a volunteer
pursuant to what it perceives to be in its own best interest. Chinook understands
that the transactions contemplated by the Agreement may have adverse tax
consequences and has consulted with such tax, legal, and accounting advisors
with respect to such consequences as it has deemed advisable.
8. After consummation of the transaction contemplated by the Agreement,
the assets of Chinook at fair value will equal or exceed the sum of its debts. The
value of the Property does not equal or exceed the indebtedness owed to Lender.
9. This Certificate is made to induce Lender to accept the Deed, is made
for the protection and benefit of Lender and their successors, grantees, and
assigns, any title insurers who may now or hereafter insure Lender's respective
interests in the Property, and all other parties hereafter dealing with or who
may acquire any interest in the Property, all of whom may rely on this
Certificate.
10. The undersigned will cause its managers, members, employees, and
agents to testify, declare, depose or certify before any competent tribunal, officer,
or person, in any case now pending or that may hereafter be constituted, to the
truth and accuracy of the particular facts set forth above,
11. All representations and warranties made in this Certificate shall be
deemed remade on and as of the date hereof and shall survive the execution of
this Certificate.
Dated this 2-0 day of August, 2013.
Chinook Business Park, LLC:
By:
Title: //4
x:\city of yakima-20009\trailwagons-2003015\2013\deed in lieu of foreclosure certificate - chinook - 0
13.doc
DEED IN LIEU OF FORECLOSURE CERTIFICATE
CHINOOK BUSINESS PARK, LLC ("Chinook") represents and warrants to THE
CITY OF YAKIMA, a Washington municipal corporation ("Lender") and their
respective successors and assigns, as follows:
1. Chinook and Lender are parties to a certain Agreement for Satisfaction
of Loans dated September 5, 2012 ("Agreement"). Unless otherwise defined in
this Certificate, all capitalized terms shall have the meanings ascribed to them
in the Agreement.
2. Chinook executed and delivered, or is contemporaneously with its
execution and delivery hereof, executing, a certain Quit Claim Deed In Lieu of
Foreclosure (the "Deed") relating to that certain Deed of Trust recorded under
Yakima County Auditor's File Number 7351305, conveying a portion of the
property described in said Deed of Trust to Lender.
3. The Deed was executed and delivered pursuant to the Agreement.
4. The Deed was intended to be and is an absolute conveyance of title to
the real estate legally described in the Deed (the "Property") to Lender in effect
as well as in form; the Deed was not and is not intended to serve or operate as a
mortgage, deed to secure debt, security agreement, trust conveyance, deed of
trust, lien, security interest, or security of any kind; Chinook, by virtue of the
Deed, the Agreement, waived, relinquished, and gave up any and all right, title,
and interest, legal, equitable, or other wise in the Property; the consideration for
the Deed was and is for the benefit of Chinook and consists of Lender's execution
and delivery of the Agreement.
5. The Deed was executed and delivered as the result of the Chinook's
request and was the free and voluntary act of Chinook; Chinook has no creditors
whose rights would be prejudiced by the Deed; Chinook's execution and delivery
of the Agreement is not the result of duress or undue influence, intimidation,
misapprehension, bad faith, unconscionable conduct, overreaching conduct, or
misrepresentation by Lender, or any agent, attorney, or any other representative
of Lender; Chinook has been represented by legal counsel of its own choosing
throughout the transactions contemplated or referenced in the Agreement.
6. Except as disclosed below, no work, labor, or materials have been
supplied to the Property upon which anyone could base a mechanics' lien,
equitable lien, or any other type of lien against the Property which has not been
fully paid for.
7. Lender has not taken advantage of Chinook by threats, duress,
intimidation, overreaching conduct, unconscionable conduct, bad faith, or
otherwise, and Chinook, by executing and delivering the Agreement or the Deed,
acted freely and voluntarily, and not under coercion or duress; Chinook is
proceeding with the transaction contemplated by the Agreement as a volunteer
pursuant to what it perceives to be in its own best interest. Chinook understands
that the transactions contemplated by the Agreement may have adverse tax
consequences and has consulted with such tax, legal, and accounting advisors
with respect to such consequences as it has deemed advisable.
8. After consummation of the transaction contemplated by the Agreement,
the assets of Chinook at fair value will equal or exceed the sum of its debts. The
value of the Property does not equal or exceed the indebtedness owed to Lender.
9. This Certificate is made to induce Lender to accept the Deed, is made
for the protection and benefit of Lender and their successors, grantees, and
assigns, any title insurers who may now or hereafter insure Lender's respective
interests in the Property, and all other parties hereafter dealing with or who
may acquire any interest in the Property, all of whom may rely on this
Certificate.
10. The undersigned will cause its managers, members, employees, and
agents to testify, declare, depose or certify before any competent tribunal, officer,
or person, in any case now pending or that may hereafter be constituted, to the
truth and accuracy of the particular facts set forth above,
11. All representations and warranties made in this Certificate shall be
deemed remade on and as of the date hereof and shall survive the execution of
this Certificate.
Dated this 2-0 day of August, 2013.
Chinook Business Park, LLC:
Title:4 "(
x:\city of yakima-20009\trailwagons-2003015\2013\deed in lieu of foreclosure certificate - chinook - 09 13.doc
DEED IN LIEU OF FORECLOSURE CERTIFICATE
GARY D. LUKEHART AND MARY LUKEHART, husband and wife
("Lukeharts") represents and warrants to THE CITY OF YAKIMA, a
Washington municipal corporation ("Lender") and their respective successors
and assigns, as follows:
1. The Lukeharts and Lender are parties to a certain Agreement for
Satisfaction of Loans dated September 5, 2012 ("Agreement"). Unless otherwise
defined in this Certificate, all capitalized terms shall have the meanings
ascribed to them in the Agreement.
2. The Lukeharts executed and delivered, or is contemporaneously with its
execution and delivery hereof, executing, a certain Quit Claim Deed In Lieu of
Foreclosure (the "Deed"), conveying the Property to Buyer.
3. The Deed was executed and delivered pursuant to the Agreement.
4. The Deed was intended to be and is an absolute conveyance of title to
the real estate legally described in the Deed (the "Property") to Lender in effect
as well as in form; the Deed was not and is not intended to serve or operate as a
mortgage, deed to secure debt, security agreement, trust conveyance, deed of
trust, lien, security interest, or security of any kind; Lukehart, by virtue of the
Deed, the Agreement, waived, relinquished, and gave up any and all right, title,
and interest, legal, equitable, or other wise in the Property; the consideration for
the Deed was and is for the benefit of the Lukeharts and consists of Lender's
execution and delivery of the Agreement.
5. The Deed was executed and delivered as the result of the Lukeharts'
request and was the free and voluntary act of the Lukeharts; the Lukeharts
have no creditors whose rights would be prejudiced by the Deed; the Lukeharts
execution and delivery of the Agreement is not the result of duress or undue
influence, intimidation, misapprehension, bad faith, unconscionable conduct,
overreaching conduct, or misrepresentation by Lender, or any agent, attorney, or
any other representative of Lender; the Lukeharts has been represented by legal
counsel of its own choosing throughout the transactions contemplated or
referenced in the Agreement.
6. Except as disclosed below, no work, labor, or materials have been
supplied to the Property upon which anyone could base a mechanics' lien,
equitable lien, or any other type of lien against the Property which has not been
fully paid for.
7. Lender has not taken advantage of the Lukeharts by threats, duress,
intimidation, overreaching conduct, unconscionable conduct, bad faith, or
otherwise, and the Lukeharts, by executing and delivering the Agreement or the
Deed, acted freely and voluntarily, and not under coercion or duress; the
Lukeharts are proceeding with the transaction contemplated by the Agreement
as a volunteer pursuant to what it perceives to be in its own best interest. The
Lukeharts understand that the transactions contemplated by the Agreement
may have adverse tax consequences and has consulted with such tax, legal, and
accounting advisors with respect to such consequences as it has deemed
advisable.
8. After consummation of the transaction contemplated by the Agreement,
the assets of the Lukeharts at fair value will equal or exceed the sum of its
debts. The value of the Property does not equal or exceed the indebtedness owed
to Lender.
9. This Certificate is made to induce Lender to accept the Deed, is made
for the protection and benefit of Lender and their successors, grantees, and
assigns, any title insurers who may now or hereafter insure Lender's respective
interests in the Property, and all other parties hereafter dealing with or who
may acquire any interest in the Property, all of whom may rely on this
Certificate.
10. The undersigned will cause its officers, directors, shareholders,
employees, and agents to testify, declare, depose or certify before any competent
tribunal, officer, or person, in any case now pending or that may hereafter be
constituted, to the truth and accuracy of the particular facts set forth above,
11. All representations and warranties made in this Certificate shall be
deemed remade on and as of the Closing Date and shall survive said Closing
Date.
Dated this ?@J day of
, 2013.
4(0/ I (61te-h-_i--
ary Luke4hart kry Lukehart
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