COMMITTEE SUBSTITUTE FOR ORDINANCE NO.970520
Authorizing acceptance of the payment of $375,000.00 in
full settlement of the second note and deed of trust held by the City of Kansas
City, Missouri, and secured by the property known as the Wholesale Produce
Center; and authorizing execution of certain documents.
WHEREAS, the City of Kansas City ("City")
submitted an application to the United States Department of Housing and Urban
Development ("HUD"), designated by HUD as Number B-87-AA-29-0247, the
("Application") which requested that HUD provide to the City an Urban
Development Action Grant ("UDAG") to be used for the financing of the
land acquisition and site improvements for the Wholesale Produce Center (the
"Project") at I-435 and Front Street in Kansas City, Missouri, to be
developed by KCCID Charitable Fund, Inc. ("KCCID") and Century Avenue
Associates Limited Partnership, a Missouri limited partnership
("Developer"); and
WHEREAS, the Application received preliminary
approval from HUD on April 9, 1987, by Ordinance No. 61299, and was
subsequently amended, which established the terms and conditions pursuant to
which the UDAG funds would be provided by HUD and utilized by the City; and
WHEREAS, the City subsequently loaned the UDAG funds
to KCCID for acquisition of the Project site and certain site improvements; and
WHEREAS, the Industrial Development Authority of
Kansas City, Missouri ("Authority") issued industrial revenue bonds
in the amount of $7,200,000.00 (the "Bonds") to assist in financing
the Project; and
WHEREAS, the Developer has utilized the proceeds of
the Bonds for construction of wholesale/industrial/retail facilities on the
Project; and
WHEREAS, the Project is encumbered by a deed of
trust to secure the indebtedness of the Bonds, which is a prior lien against
the Project held by Boatmen's Trust Company (the "Bank"); and
WHEREAS, on September 16, 1988, the City issued a
second deed of trust to KCCID and Developer secured by the Project site; and
WHEREAS, Developer and KCCID granted a sublease of
the Project to Tom's Quality Food Service, Inc. ("Tom's"), on which
sublease Tom's subsequently defaulted; and
WHEREAS, the first deed of trust, the balance of
which is $4,900,000.00, is now in default and it is probable that the Bank will
foreclose on the first deed of trust, thereby extinguishing the rights of the
City as to the second deed of trust; and
WHEREAS, the second deed of trust, the balance of
which is $1,509,833.00, is now in default; and
WHEREAS, the Project has been appraised and its
value is deemed sufficient only to cover the value of the first mortgage; and
WHEREAS, it is both expedient and in the public interest
to reach an accord and satisfaction of the second note and deed of trust and
all past due rent owed on the Project which is now in default; NOW, THEREFORE,
BE IT ORDAINED BY THE COUNCIL OF KANSAS CITY:
Section 1. That the Director of Finance is directed
to accept payment of $375,000.00 from Developer in full settlement of the
second deed of trust on the Project and the Director of Finance is hereby
authorized and directed to execute any necessary documents to accomplish said
settlement and to release the second deed of trust.
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Approved as to form and
legality:
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Assistant City Attorney