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HomeMy WebLinkAbout05/11/2005 Special Meeting 14 2 CITY OF YAKIMA, WASHINGTON SPECIAL MEETING OF THE CITY COUNCIL MAY 11, 2005 - 4:45 P.M. YAKIMA CITY HALL - COUNCIL CHAMBERS 1. Roll Call Present: Council: Mayor Paul George, presiding, Council Members Ron Bonlender, Neil McClure, Mary Place, Bernard Sims, and Susan Whitman Staff: City Manager Zais, Assistant City Attorney McMurray and City Clerk Roberts Absent: Council Member Dave Edler (excused) 2. Consideration of Resolution extending the previous deadline to May 31, 2005 for the closing of a Section 108 loan to Yakima Hotel, LLC to construct a Hilton Garden Inn Hotel City Manager Zais clarified that city management, not Joe Morrier, is making this request. Our financial experts, bond counsel, and attorneys who have been examining the financial transactions require additional time to complete and review the loan package. The deadline was May 15; however, it became evident that it would be difficult to meet that deadline and still keep our confidence in what we were doing. This is a complicated transaction involving the bank, HUD, NDC, new market investor and investment fund interests. The new market investor, Trans Capital, out of Chicago, requested additional information and clarification from us. We have never done a transaction like this involving the new market tax authority, which is a key investment strategy and has to interface between the Treasury and HUD. Mr. Morrier made it clear to us that he had to have a combination of tax credits with a loan from the bank and a loan from HUD. As work progressed with appraisals, it required additional investment from Mr. Morrier. He made an additional pledge of $1.6 million from the Morrier Trust to obtain financing and keep the loan -to -value guideline of 70 %. John Finke has helped the city and is available by phone. Don Boyd, city consultant attorney is here. We have been in touch with our bond attorneys. We would like to close as soon as possible and might be able to do it by May 20th, but would like to have the extra time if needed to close this. The City Clerk read the Resolution by title; SIMS MOVED AND BONLENDER SECONDED TO ADOPT THE RESOLUTION. David Picatti, speaking for the Yakima Downtown Association, expressed the Association's support of this project. MAY 11, 2005 — ADJOURNED MEETING George Pechtel reported the North Front Street Association met this morning and supports this project. Although she did not vote to endorse this project, Council Member Place stated that in order to protect the city's interest she would vote for the extension. Council Member McClure stated he would support this also, but expressed frustration that we have a project expected to close within a week, after a 30 -day extension already, facing another potential problem. He previously voted against it because he felt it wasn't a strong financial package to begin with. Council Member Sims commented that this is a complicated process and our first time to go through it. We always learn something by our experiences and bring new businesses to Yakima because we have these experiences. Council Member Bonlender stated he has two weeks to wait and see what happens. Council Member Whitman said it would have to be a very compelling reason to give another extension. The question was called for a vote on the motion. The motion carried by unanimous roll call vote; Edler absent. RESOLUTION NO. R- 2005 -77, A RESOLUTION authorizing the City Manager to grant an extension of the deadline of May 15 to May 31, 2005, for Joseph R. Morrier and Elizabeth Morrier of JEM Development and Yakima Hotel, LLC to meet all conditions and execute all documents related to the $3,560,000 Section 108 loan for construction of a Hilton Garden Inn Hotel. 3. Adjournment PLACE MOVED AND SIMS SECONDED TO ADJOURN THE MEETING. The motion carried by unanimous voice vote; Edler absent. The meeting adjourned at 5:05 p.m. / 6C-- READ AND CERTIFIED ACCURATE BY a co, C MEMBER DATE CO C EMBER D TE ATTEST: // CITY CITY CLERK PAUL P. GEORGE, MAYOR Minutes prepared by Karen Roberts. An audio and video tape of this meeting are .available in the City Clerk's Office 2