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Legislation #: 071284 Introduction Date: 11/22/2007
Type: Ordinance Effective Date: 11/30/2007
Sponsor: COUNCILMEMBER CIRCO
Title: Authorizing the City Attorney to seek court approval of the satisfaction of $2,500,000 Section 108 loan issued by HEDFC to the LCRA through the City and to execute any and all documents necessary to cause the release of the City from its obligations relating to the Contract for Loan Guarantee Assistance between the City and HUD for the project and any other liability which may arise from such satisfaction; and acknowledging that the transaction contemplated herein will diminish the assets of HEDFC.

Legislation History
DateMinutesDescription
11/20/2007 Filed by the Clerk's office
11/20/2007 Passed

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ORDINANCE NO. 071284

 

Authorizing the City Attorney to seek court approval of the satisfaction of $2,500,000 Section 108 loan issued by HEDFC to the LCRA through the City and to execute any and all documents necessary to cause the release of the City from its obligations relating to the Contract for Loan Guarantee Assistance between the City and HUD for the project and any other liability which may arise from such satisfaction; and acknowledging that the transaction contemplated herein will diminish the assets of HEDFC.

 

WHEREAS, in November 2002, the Department of Housing and Urban Development (HUD) made a $2,500,000 loan to the City (the HUD Loan); and

 

WHEREAS, the City entered into a Non-municipal Agency Funding and Services Contract with Housing & Economic Development Financial Corporation (HEDFC) as approved by Ordinance No. 021271; and

 

WHEREAS, HEDFC in turn lent the funded to the Land Clearance for Redevelopment Authority of Kansas City, Missouri (LCRA) on a non-recourse basis with certain property and rents from property pledged as collateral; and

 

WHEREAS, LCRA acquired the property pledged as collateral and entered into an agreement which required the lessee of the property to make all of the payments required under the HEDFC Loan; and

 

WHEREAS, the lessee, through Greg Weld, was responsible to pay the HEDFC Loan in the form of rent payments under the lease of the property and has now made arrangements to refinance that obligation; and

 

WHEREAS, the HUD Loan may be defeased in accordance with the express provisions of the Contract for Loan Guarantee Assistance between HUD and the City; and

 

WHEREAS, Greg Weld and the City intend to defease the HUD Loan and the obligations to pay under each of the HUD Loan and the HEDFC Loan will be satisfied so that there will no longer be any obligation by the LCRA nor the City nor HEDFC nor Greg Weld to pay the HUD Loan or the HEDFC Loan; and

 

WHEREAS, HEDFC is under receivership pursuant to City of Kansas City, Missouri v. Housing & Economic Development Financial Corporation, Case No. 05-00368-CV-W-GAF, court approval of this transaction is necessary; and

 

WHEREAS, the City desires to concur with Greg Weld, along with the Receiver (Receiver) for HEDFC, and the LCRA, in his request that the Court approve certain releases for the property pledged as collateral as well as any other obligations, provided that the Citys interests are fully protected, NOW, THEREFORE,

 

BE IT ORDAINED BY THE COUNCIL OF KANSAS CITY:

 

Section 1. That the City Attorney is hereby authorized to seek the approval of the Court for the execution of certain releases in connection with the defeasance of the HUD Loan and, upon approval by the Court in City of Kansas City, Missouri v. Housing & Economic Development Financial Corporation, Case No. 05-00368-CV-W-GAF, of such releases, to execute any and all documents necessary to cause the release of the City from its obligations relating to the Contract for Loan Guarantee Assistance between the City and HUD for the project and any other liability which may arise from the satisfaction of the Loan, and to execute any and all documents necessary to effectuate the defeasance and satisfaction of the Loan, including the release of HEDFC and the Receiver from their obligations under the Non-municipal Agency Funding and Services Contract.

Section 2. That the City hereby acknowledges that, in the event that the HUD Loan is defeased and the HEDFC Loan satisfied, the assets of HEDFC will be diminished in the amount of $1,500,000.00 plus accrued interest.

 

________________________________________________

 

Approved as to form and legality:

 

 

___________________________

Heather A. Brown

Assistant City Attorney