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Home My WebLink AboutMN-CC-1983-10-20c Special Fleeting PRESENT: Havor - Shaw Aldermen (10) COMMON COUNCIL PROCEEDINGS CITY OF ITHAC:A, NEIV YORK 5:00 P'M. October 20, 1.983 Banfield, Clynes, Dennis, Roffman, Holdscvorth, Holman, Killeen, Myers, "ch)-ather, Schuler OTHERS PRESENT: Director, Planning & DeveloPment - Vancort Deputy Director, Planning & Development. ._ Sieverd.i_ng City Attorney - Tavelli Personnel Administrator - Best Supt. of Public Works - Kinsella City Clerk - Rundle Citizens Savings Bank G(,-, ssl'in. Center Ithaca - Goldberg Tompkins County 'Trust Co. VanHoutue PLEDGE OF ALLEGIANCE: May - -- or -Shaw led all present in the Pledge of Allegiance to the American flag. SPECIAL ORDER OF BUSINESS: Mayor Shaw commented tat the purpose of the meeting was dis- cussion and a proposed resolution concerning the property next to the Center Ithaca and the requested subordination of a. mort- gage on that property. Members of the Council asked questions concerning the loan mortgage subordination and received responses from G. Gessleir,, R. VanHoutte, Ha Sieverding, M. VanCort, and Mayor Shaw, Iszard - Working Capital Loan Mortgage Subordination By Alderman Holman: Seconded By Alderman Myers WHEREAS,, the banks holding the IDA bond used to finance the construction of the Rothschild building have conditionally agreed to lend. $1.45m in working capital to the proposed new tenant far the building, the S.F. Iszard Company, and WHEREAS, said banks require additional collateral- in the form of real estate to secure this loan, and WHEREAS, the IURA holds a first mortgage on Lhe land under the Green Street parking garage and adjacent to the Rothschild building with G and M Associates, and WHEREAS, G and M Associates will agree to a. $100,000 first collateral lien. against this property to satisfy the bank lending requirements, and WHEREAS, G and M Associates cannot enter into this agreement without prior approval of the IURA, and WHEREAS, the IURA has agreed to subordinate its first mortgage position with G and M Associates to the $100,000 first lien with the following terms- a) that the lien is released in three years provided that the S.F. Iszard loan is current. In the event the loan is not current in three years, the lien will be released immediately upon the loan becoming current; and b) that all other sources of collateral be exhausted before the banks take action on. this lien. The priority is understood to be as follows: -3- October 1.2, 1.983 (e) UDAG payment to be deferred in the event prime x,11 nlus 1% exceeds 15% during years 4 -12 will equal the difference between prime plus 1% less.l5% multiplied by the outstanding term loan principal. The maximuri interest amount deferred will be 3 %. (f) All deferred UDAC payments per (d) and (e) above will be reimbursed to the Ci ty by the equity investors. Amending Resolution By— Aderman Payers: Seconded by Alderman Banfield RESOLVED, that item 3(c) read as follows: "Minimum interest rate is set at 4.5% and maximum interest rate at 7.5% with any payments in excess of 7.5% interest return applied to principal reduction. Payment of outstanding principal_ dice would be payable to the City upon resale or refinancing of assumable subject to approval of the City." Carried Unanimously Amending Resolution By A erman Sc lather: Seconded by Alderman Clynes RESOLVED, that item 3(f) be amended by adding "annually" following investors. Discussion. followed on the floor. A vote on the amendment resulted as follows: Ayes (4)- Hoffman, Clynes, Schuler, Schlather Nays (5) - Banfield, Killeen, Holman, Myers, Dennis Absent (1) - Holdsworth Motion Defeated Amending Resolution By Alderman Myers: Seconded by Alderman Banfield RESOLVED, that item 3(f) be amended to read "with 1% in year 1 -3 guaranteed annually, and 3% in year 4 -12, contingent on a minimum of 10% cash on cash return on the initial investment by the capital lease investors," following equity investors. Carried Unanimously Amending Resolution By Al e man Sc lat er: Seconded by Alderman Dennis RESOLVED, that the following be added to the resolution: "RESOLVED, that Common Council reasserts its strong commitment to Affirmative Action and expectation that that same commitment will be shared by the S.F. Iszard Co., and be it further RESOLVED, that Common Council strongly encourages the S.F. Iszard Co. to give a preference to qualified local people in its hiring policies and practices." Carried Unanimously A vote on the Main Motion as Amended resulted as follows: Ayes(8) - Banfield, Hoffman, Killeen, Dennis, Holman, Myers Clynes, Schlather Nays(1) - Schuler Absent(1) - Holdsworth Carried ADJOURNMENT: On a motion the meeting adjourned at 9:SS p.m. kVJos fpl .Run 1e, ity Caerc�— - _� hi lliam R. Shaw, M. ayor 1) 2) 3) 4) subject to the 1st 3rd 3rd 1st :onc lien: lien: lien: lien: urrence -2- October 20, 1983 Inventory and Accounts Receivable: Ithaca store Inventory and Accounts Receivable: Elmira stores Elmira warehouse and store Green Street property, Of Common Council, NOW, THEREFORE BE IT RESOLVED, that the Common Council concurs with the IURA subordination and related terms. Amending Resolution By Alderman Myers: Seconded by Alderman Holman (400" RESOLVED, that the last Whereas item (A) add after the S.F. Iszard loan is current, "or thereafter when the loan principal is paid down by $150,000 (except by liquidation) Carried Unanimously 21:1 Amending Resolution By Alderman Schlather: Seconded by Alderman Killeen REOLVED, that the last Whereas end with to the $100,000 first lien. And add "subject to the concurrence of Council. And I .! add NOW, THEREFORE BE IT RESOLVED, that the Common Council concurs ll, with the IURA subordination only upon the following terms: Adding conditions "A" and "B 1 % j Carried Unanimously i,! Main Motion as Amended WHEREAS, the banks olding the IDA bond used to finance the construction of the Rothschild building have conditionally agreed to lend $1.45m in working capital to the proposed. new tenant for the building, the S.F.Iszard Company, and. WHEREAS, said banks require additional collateral in the form of real estate to secure this loan, and WHEREAS, the IURA holds a first mortgage on. the land under the Green Street parking garage and adjacent: to the Rothschild building with G and M Associates, and WHEREAS, G and M Associates will agree to a $100,000 first collateral lien against this property to satisfy the bank lending requirements, and WHEREAS, G and M Associates cannot enter into this agreement without prior approval of the IURA, and WHEREAS, the IURA has agreed to subordinate its first mortgage position with G and M Associates to the $100,000 first lien subject to the concurrence of Council; NOW, THEREFORE BE IT RESOLVED, that the Common Council concurs with the IURA subordination only upon the following terms: a) that the lien is released in three years provided that the S.F. Iszard loan is current, or thereafter when the loan principal is paid down by $150,000, (except by liquidation). ' b) that all other sources of collateral be exhausted before the banks take action on. this lien. The priority is understood to be as follows: 1) 1st lien: Inventory and Accounts Receivable: Ithaca store 2) 3rd lien: Inventory and Accounts Receivable: Elmira stores 3) 3rd lien: Eilmira warehouse and store 4) 1st lien: Green Street property. Pill ..3- October 20, 1983 A. vote on the Main Motion Amended resulted as follows: Carried Unanimously Ai)•TOURNN'I NT: On a motion the meeting adjourned at 6:15 P.M. Jo �p Rundle, City Clerk William R. Shaw ,iNlayor