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Home My WebLink About88-0728 Als Cafe gS-oag First National Bank of Elgin 6 Fountain Square Plaza Elgin, Illinois 60120 312/697-1100 August 26, 1988 Our 124th Year Ms. Pat Andrews City of Elgin 150 Dexter Court Elgin, IL 60120 RE: W. Alan Berg d/b/a/ Al's Cafe Dear Pat: Enclosed is a copy of the Subordination Agreement, duly executed by W. Alan Berg. Attorney Fred Steffens is having the original document recorded. Upon receipt of the recorded Agreement, a copy will be forwarded to you. Sincerely, FIRST NATIONAL BANK OF ELGIN /1/( Mary G. Camacho Commercial Real Estate MGC:cmg Enclosure Member FDIC/Federal Reserve System i 2 SUBORDINATION AGREEMENT 1 THIS AGREEMENT made this ;25T day of July, 1988 , between W. ALAN BERG, d/b/a AL' S CAFE & CREAMERY ( "BERG" ) , and THE CITY OF ELGIN, ILLINOIS, a Municipal Corporation ( "CITY" ) , hereby agree as follows : WITNESSETH WHEREAS, on March 3 , 1983 , BERG entered into an Installment Agreement to purchase the property commonly known as 43 Fountain Square 'Plaza, Elgin, Illinois, and WHEREAS, said Installment Agreement has become due and payable in full in March of 1988 , and WHEREAS, BERG has obtained a commitment for a loan from The First National Bank of Elgin, Illinois, in order to pay off said Installment Agreement, if said mortgage becomes the first lien against subject premises, and WHEREAS CITY, as a part of BERG' s initial purchase, loaned BERG $46 , 783 . 31, which is secured by a Note and Security Agreement on personal property located at 43 Fountain Square Plaza , Elgin, Illinois , which interest shall become the second mortgage on such property following the execution of this Agreement. NOW, THEREFORE, the parties hereby agree as follows : 1. CITY agrees to subordinate its present lien and to become second mortgagor to the first mortgage lien to be entered into between BERG and The First National Bank of Elgin. 2 . BERG agrees to sign any and all documents necessary to perfect CITY' s lien as second mortgage on subject premises 1Ilk following recording of the first mortgage lien with The First National Bank of Elgin. IN WITNESS WHEREOF, the parties have affixed their signatures the day and year first above written. 7>t) W. ALAN BERG, d/b a AL'S C CREAMERY CITY OF ELGIN, a Municipal Corporatio B y: 67gZ-ror ATTEST: City Clerk - 2 - 4• July 20 , 1988 MEMORANDUM TO: Mayor and Members of the City Council FROM: City Manager SUBJECT: Al' s Cafe CBD Loan/Refinancing PURPOSE To provide the Council with information regarding a request to subordinate the City' s CBD loan for Al ' s Cafe and Creamery. BACKGROUND In December 1983 , the City approved a Central Business District loan to Al Berg for Al ' s Cafe and Creamery in the amount of $46 ,783 . 31 . This loan featured a one year deferral with the monthly repayment schedule to begin in January 1985 . In April 1986 , the City granted an amendment to the loan install- ment agreement to defer the loan repayment period to January 1989 , ending in December 1992 . In addition to the CBD loan from the City, Al Berg has a contact purchase agreement on the building located at 43 Foun- tain Square Plaza (Al ' s Cafe and Creamery) , with the balance due March 1988 . The City' s CBD loan assumes second position to the contract purchase agreement. Mr. Berg has applied to the First National Bank of Elgin for a refinancing loan to pay off the balance due for the contract purchase. The First National Bank' s approval of the refinancing loan is subject to the City subordinating the CBD loan to the First National Bank' s loan. Mr. Berg' s attorney is requesting that the City authorize the subordination of the City' s CBD loan to the First National Bank' s refinancing loan through a Subordination Agreement (see attached correspondence) . By authorizing the subordination of the City' s CBD loan to the First National Bank of Elgin, the City' s loan would remain in second position, with the first position changing from the contract sellers of the building to the First National Bank of Elgin. (- C FINANCIAL IMPACT The current debt amount is $46,783 . 31 . The loan payment period has been deferred until January 1989 , with monthly payments of $974 . 65 due at that time. The request to subordi- nate the City' s loan does not include any further deferment of the repayment schedule . RECOMMENDATION The attached correspondence and accompanying Subordination Agreement was received by staff on Tuesday, July 19 . City staff has not had sufficient time to conduct a thorough review of the material provided. Staff will review the material provided pricr to the City Council meeting of July 27 . es J. Cobk City Manager Attachment 1 N STEFFEN 8c GABBOLL ATTORNEYS AT LAM 17 DOUGLAS AVE. P.O DOX 36 ELOIN, ILLINOIS.60121 STEFFEN.WIEDEMANN&SHELDON FREDERICK J.STEFFEN 312-741-0503 US76-196 O) PETER F.CARROLL STEFFEN SHELDON& UpeO-I9B6) July 19, 1988 Ms. Pat Andrews City of Elgin 150 Dexter Court Elgin, IL 60120 RE: W. Alan Berg, d/b/a Al' s Cafe & Creamery, 43 Fountain Square Plaza, Elgin, Illinois Dear Pat: Enclosed herewith you will find proposed Subordination Agreement with regard to the above. It is necessary for the City of Elgin' s lien to be subordinated to First National Bank of Elgin in order to pay off the Instalment Agreement. The City will then find itself in a better position, as it will be dealing directly with the owner and not a contract purchaser. Furthermore, second mortgage will put the City in a better position as a second mortgagee then as merely having a security on the fixtures and equipment, as is the case now as I understand it. If you have any questions concerning the above, please feel free to contact the undersigned. Thank you for your kind consideration in this regard. Very truly yours, / • A At rederick -ffe. �f FJS/ktp Enclosure SUBORDINATION AGREEMENT THIS AGREEMENT made this day of July, 1988 , between W. ALAN BERG, d/b/a AL'S CAFE & CREAMERY ( "BERG" ) , and THE CITY OF ELGIN, ILLINOIS, a Municipal Corporation ( "CITY" ) , hereby agree as follows : WITNESSETH WHEREAS, on March 3 , 1983 , BERG entered into an Installment Agreement to purchase the property commonly known as 43 Fountain Square Plaza, Elgin, Illinois , and WHEREAS, said Installment Agreement has become due and payable in full in March of 1988 , and WHEREAS, BERG has obtained a commitment for a loan from The First National Bank of Elgin, Illinois , in order to pay off said Installment Agreement, if said mortgage becomes the first lien against subject premises, and WHEREAS CITY, as a part of BERG' s initial purchase, loaned BERG $46 ,783 . 31, which is secured by a Note and Security Agreement on personal property located at 43 Fountain Square Plaza, Elgin, Illinois, which interest shall become the second mortgage on such property following the execution of this Agreement. NOW, THEREFORE, the parties hereby agree as follows: 1. CITY agrees to subordinate its present lien and to become second mortgagor to the first mortgage lien to be entered into between BERG and The First National Bank of Elgin. 2 . BERG agrees to sign any and all documents necessary to perfect CITY' s lien as second mortgage on subject premises following recording of the first mortgage lien with The First National Bank of Elgin. IN WITNESS WHEREOF, the parties have affixed their signatures the day and year first above written. W. ALAN BERG, d/b/a AL' S CAFE & CREAMERY CITY OF ELGIN, a Municipal Corporation By: Mayor ATTEST: City Clerk - 2 - • 1925743 „�; T_ irj i 3: � t; RE':rlPflFR SUBORDINATION AGREEMENT -16 THIS AGREEMENT made this zF day of July, 1988 , between W. ALAN BERG, d/b/a AL' S CAFE & CREAMERY ( "BERG" ) , and THE CITY OF ELGIN, ILLINOIS, a Municipal Corporation ( "CITY" ) , hereby agree as follows : WITNESSETH WHEREAS, on March 3 , 1983 , BERG entered into an Installment Agreement to purchase the property commonly known as 43 Fountain Square 'Plaza, Elgin, Illinois, and WHEREAS, said Installment Agreement has become due and payable in full in March of 1988 , and WHEREAS, BERG has obtained a commitment for a loan from The First National Bank of Elgin, Illinois , in order to pay off said Installment Agreement, if said mortgage becomes the first lien against subject premises, and WHEREAS CITY, as a part of BERG' s initial purchase, loaned BERG $46 ,783 . 31, which is secured by a Note and Security Agreement on personal property located at 43 Fountain Square Plaza, Elgin, Illinois , which interest shall become the scccnd mortgage on such property following the execution of this Agreement. NOW, THEREFORE, the parties hereby agree as follows : 1. CITY agrees to subordinate its present lien and to Z become second mortgagor to the first mortgage lien to be entered into between BERG and The First National Bank of Elgin. W N 2. BERG agrees to sign any and all documents necessary ceO a to perfect CITY ' s lien as second mortgage on 3 __ subjectpremises =, ; (°12.:%) I925743 `� f . following recording of the first mortgage lien with The First National Bank of Elgin. IN WITNESS WHEREOF, the parties have affixed their signatures the day and year first above written. vca tqc ., W. ALAN BERG, d/b a AL'S C CREAMERY CITY OF ELGIN, a Municipal Corporation • By: Mayor ATTEST: tdie 9ti i y City Clerk Prepared by: Attorney Frederick J. Steffen 17 Douglas Avenue Elgin, IL 60120 Legal Description: Lot 1 in T. O. Trigg's Subdivision of Lot 1 in Block 14 of James T. Gifford's Original Tlat of East Elgin; in the City of Elgin, Kane County, Illinois. - 2 - i 9 2 5 7 4 3 0� i 9 2 5 7 4 3 -s- 1.3 (Cs RECORDER • . • • ;•-• •-•.• .z ••• •i's • •"::.- ' •' - • . .