HomeMy WebLinkAbout21-003 Authorizing Execution of Documents and Disbursement of Funds for a Loan of Community Development Block Grant Funds Pursuant to Resolution 15-001, Applicant: Belmont 1885, LLC Resolution 21-003
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RESOLUTION NO. 21-003
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PORT TOWNSEND,
WASHINGTON, AUTHORIZING EXECUTION OF DOCUMENTS AND
DISBURSEMENT OF FUNDS FOR A LOAN OF COMMUNITY DEVELOPMENT
BLOCK GRANT FUNDS PURSUANT TO RESOLUTION NO. 15-001
Applicant: Belmont 1885, LLC
WHEREAS, the City Council for the City of Port Townsend previously authorized
Resolution 15-001, establishing the terms and limits for certain loans of Community
Development Block Grants for sidewalk replacement and building rehabilitation and
preservation in the City business district; and
WHEREAS,pursuant to Resolution 15-001, the minimum loan amount for rehabilitation
and preservation is $1,000 and the maximum loan amount is $40,000; and
WHEREAS,the Community Development Block Grant Fund currently contains in
excess of$200,000; and
WHEREAS,the Community Development Block Grant Fund is a revolving loan fund
intended to encourage downtown reinvestment and rehabilitation, preservation, and restoration of
historic properties in the Downtown Historic District; and
WHEREAS, Belmont 1885, LLC (hereinafter referred to as "Borrower") has applied to
the Port Townsend Main Street Economics Committee ("Committee") for a loan in the amount
of$40,000.00 to help finance a new HVAC system for the Sterming Block Building (The
Belmont) at 925 Water Street in Port Townsend, Washington; and
WHEREAS, Borrower signed a Line of Credit Promissory Note for $40,000 on July 6,
2018 and has made repayments but still has an outstanding balance owed to the City; and
WHEREAS,the Committee has reviewed the application by Borrower for funds for an
historic restoration project in the Downtown Historic District and has approved the request as
being consistent with Resolution 15-001, on the condition that Borrower pay off its existing
Community Development Block Grant loan prior to disbursement of funds on the 2020 loan; and
WHEREAS,the City Council has reviewed the loan proposal previously approved by
the Committee and the terms of the loan,
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Port
Townsend that a loan of Community Development Block Grant Funds in the amount of
$40,000.00 to Borrower pursuant to the terms of Resolution 15-001 is hereby approved, subject
to the following conditions:
1. Funds shall be disbursed by the City Finance Department/Director upon
completion of construction after verification to the City's satisfaction of satisfactory
completion of the work. Borrower may elect to submit invoices for interim payments
before completion of the work. Borrower shall submit evidence of expenditures or
invoices to the City Finance Department/Director to support disbursement of the funds.
Resolution 21-003
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2. Borrower must make payment in full to the City's Finance Department on its
existing Community Development Block Grant loan, prior to disbursement of any funds.
3. Interest at the rate of 5 percent per annum shall accrue upon all funds
disbursed from the date of disbursal.
4. The loan transaction shall be in accordance with a Truth in Lending
Disclosure Statement, Promissory Note, Deed of Trust, and such other documents
necessary to close the transaction, in a form approved by the City Attorney.
5. Borrower is required to provide title insurance in the amount of the loan in
favor of the City.
6. The Promissory Note shall provide for annual payments beginning 6 months
after disbursement of the loan proceeds, in self-amortizing payments, together with
interest at the rate of 5 percent per annum, payable in 10 years.
7. Interest charges shall be rebated as follows:
a. all interest charges will be rebated for loans paid off within 12 months of date
of recorded lien;
b. all interest charges in excess of 1 percent will be rebated for loans paid off
within 24 months of recorded lien;
c. all interest charges in excess of 2 percent will be rebated for loans paid off
within 36 months of recorded lien;
d. all interest charges in excess of 3 percent will be rebated for loans paid off
within 48 months of recorded lien;
e. all interest charges in excess of 4 percent will be rebated for loans paid off
within 60 months of recorded lien.
BE IT FURTHER RESOLVED, the City Council authorizes the City Manager to
execute any and all documents necessary to close the loan, and the City Finance Director shall
issue the City's warrant or warrants for the loan from the Community Development Block Grant
Fund account for a total amount of up to $40,000.00, after Borrower has repaid its 2018
Community Development Block Grant loan in full.
ADOPTED by the City Council of the City of Port Townsend at a regular meeting
thereof, held this 4"' day of January 2021.
Michelle Sand gal
Mayor
Attest: Approved as to form:
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Joanna Sanders, MMC 1-lcidi Greei \v od
City Clerk City Attorney