Loading...
09/04/2012 08 Final Payment Extension; Promissory Note Modification; United Builders of Washington, Inc.; CDBG Loan • I3USINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT Item No. For Meeting of: September 4, 2012 ITEM TITLE: Resolution authorizing the execution of a Promissory Note • Modification Agreement to extend the final payment by United Builders of Washington, Inc. for repayment of a CDBG loan, said loan being secured by The Seasons Music Hall property together with the personal guarantees of J. Patrick Strosahl and Stephen R. Strosahl. SUBMITTED BY: Jeff Cutter, City Attorney CONTACT Jeff Cutter /575 -6030 PERSON /TELEPHONE: SUMMARY EXPLANATION: The City of Yakima entered into a Loan Agreement with United Builders of Washington, Inc. on April 22, 2009 in the amount of $200,000.00 to provide operating funds for business operations within the City of Yakima. The loan was fully due and payable within two (2) years. The loan was secured by real property located in Yakima, Washington commonly known as the Seasons Music Hall, and also by the personal guarantees of J. Patrick Strosahl and by Stephen R. Strosahl, owners of United Builders of Washington, Inc. United Builders of Washington, Inc. has not been able to pay off the loan when it became due and payable, and has requested that the City of Yakima agree to an extension of the payment due date on the loan to April 22, 2014. To satisfy the current accrual of interest under the Promissory Note J. Patrick Strosahl has agreed to transfer title to certain vacant residential real property to the City, said real property having an assessed value of $16,500.00. Other Promissory Note Resolution X Ordinance Modification (specify) Agreement Contract Mail to: One Original Agreement to Don Boyd of Carlson Boyd PLLC, 230 S. 2nd St., Ste. 202, Yakima, WA 98901 Contract Term: Amount: Expiration Date: Insurance Required? No Funding Phone: 509 - 834 -6611 Source: APPROVED FOR • SUBMITTAL: City Manager STAFF RECOMMENDATION: Adopt Resolution. BOARD /COMMISSION RECOMMENDATION: ATTACHMENTS: Click to download ❑ Resolution- United Builders- Seasons Promissory Note Amendment -8 -2012 ❑ United Builders- Seasons Promissory Note Amendment -8 -2012 RESOLUTION NO. R -2012- A RESOLUTION authorizing the execution of a Promissory Note Modification Agreement to extend the final payment date of indebtedness owed to the City by United Builders of Washington, Inc. resulting from a loan of certain CDBG funds the City previously provided to United Builders of Washington, Inc., said loan being secured by certain real property owned by United Builders of Washington, Inc. commonly known as The Seasons Music Hall and by the personal guarantees of J. Patrick Strosahl and by Stephen R. Strosahl. WHEREAS, the City of Yakima entered into a Loan Agreement with United Builders of Washington, Inc. on April 22, 2009 whereby The City of Yakima loaned United Builders of Washington, Inc. $200,000.00 for use as operating funds for business operations within the City of Yakima; and WHEREAS, the loan to United Builders of Washington, Inc. incurred interest at the rate of 4.0% per annum and the loan was fully due and payable within two (2) years; and WHEREAS, the loan to United Builders of Washington, Inc. was secured by real property located in Yakima, Washington commonly known as the Seasons Music Hall, and also by the personal guarantees of J. Patrick Strosahl and by Stephen R. Strosahl, owners of United Builders of Washington, Inc.; and WHEREAS, United Builders of Washington, Inc. of has not been able to operate sufficiently profitably to pay off the loan when it became due and payable; and WHEREAS, United Builders of Washington, Inc. has requested that the City of Yakima agree to an extension of the payment due date on the loan to April 22, 2014; and WHEREAS, J. Patrick Strosahl has proposed transferring title to certain vacant residential real property owned by Nob Hill Realty Co., Inc., a Washington corporation, which real property is commonly known as 112 South Sixth Street, Yakima, Washington and is listed as Yakima County Tax Parcel 191319 -13418 having a current assessed value of $16,500.00, to satisfy the current accrual of interest under the Promissory Note; and WHEREAS, the City Council finds it to be in the best interests of the citizens of Yakima to amend the promissory note provided by United Builders of Washington, Inc. and to accept the real property identified in the MODIFICATION AND RESTATEMENT OF PROMISSORY NOTE attached hereto and incorporated herein by this reference; 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: • 1. execute the attached and incorporated MODIFICATION AND RESTATEMENT OF PROMISSORY NOTE; and 2. execute any and all other documents necessary and appropriate for full performance of this Resolution and the MODIFICATION AND RESTATEMENT OF PROMISSORY NOTE. ADOPTED BY THE CITY COUNCIL this 4th day of September, 2012. ATTEST: Micah Cawley, Mayor City Clerk • MODIFICATION ANI) RESTATEMENT OF PROMISSORY NOTE _, 2012 Yakima, Washington This Agreement is made and executed this day of , 2012, by and between City of Yakima, Office of Neighborhood Development Services ( "Lender "), and United Builders of Washington, Inc. ( "Maker ") and modifies and amends that certain note dated April 22, 2009, in the principal sum of $200,000.00 executed by Maker (the "Note "). 1. The Note is hereby modified as follows: a. Maker shall cause the owner of that certain real property located at 112 South Sixth (6th) Street, Yakima, Washington, Yakima County Tax Parcel No. 191319 - 13418, to deed to Lender by Bargain and Sale Deed free and clear of all liens and encumbrances thereon, except those specifically approved by Lender. The transfer of said property to Lender shall be in payment of all accrued base interest and late charges on the Note through the date hereof which the parties agree to be in the amount of $20,000.00. Lender hereby waives default interest under the Note through the date hereof. The parties agree that upon recording of the Deed on said property, the Note shall be current and in good standing. b. Section 3. of the Note is hereby changed as follows, effective as of the date hereof: Maker shall make full and final payment of all principal, interest, costs and charges due under the Note on April 22, 2014. 2. Except as modified herein, the terms and conditions of the Note and any other agreements shall continue in full force and effect, including without limitation the provisions for default specified therein. Each of the Makers agree to and are bound jointly and severally by the terms of the Note, as modified herein. 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. United Builders of Washington, Inc. City of Yakima, Office of Neighborhood Development Services By B Its _ Its P.O. Box 9488 City Hall— Second Floor Yakima, Washington 98907 129 North Second Street Yakima, WA 98901 x: \cit of yakima- 20009 \onds - united builders cobg loan- 2009081 \loan documents \promissory note - modification 052512.doc Note Modification Agreement Page -1-