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HomeMy WebLinkAbout98-150 Resolution No. 98-150 RESOLUTION AUTHORIZING EXECUTION OF AN ESTOPPEL CERTIFICATE ON BEHALF OF THE CITY OF ELGIN REGARDING THE REFINANCING OF CENTER CITY PLACE BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN, ILLINOIS, that Kevin Kelly, Mayor, be and is hereby authorized and directed to execute an estoppel certificate on behalf of the City of Elgin regarding the refinancing of the leasehold mortgage for Center City Place, a copy of which is attached hereto and made a part hereof by reference. s/ Kevin Kelly Kevin Kelly, Mayor Presented: June 24 , 1998 Adopted: June 24 , 1998 Omnibus Vote: Yeas 7 Nays 0 Attest: s/ Dolonna Mecum Dolonna Mecum, City Clerk The above space for Recorders use only. ESTOPPEL CERTIFICATE This Estoppel Certificate is given by the City of Elgin, an Illinois municipal corporation ("Landlord"), having an office at 150 Dexter Court, Elgin, Illinois to and for the benefit of: American National Bank and Trust Company of Chicago, not personally, but solely as Trustee(the"Trustee")under a Trust Agreement dated August 24, 1992 and known as Trust No. 115935-06 (the"Trust"); and Center City Place Limited Partnership, an Illinois limited partnership (the "Partnership"), having an office at 305 South Green Street,Chicago,Illinois 60607(herein the Trustee and Partnership are collectively referred to as the"Tenant"); and Community Investment Corporation, an Illinois not-for-profit corporation("CIC"),having an office at 222 South Riverside Plaza, Suite 2200, Chicago, Illinois 60606; and Illinois Housing Development Authority(the "Authority"), having an office at 401 North Michigan Avenue, Suite 900, Chicago, Illinois 60611. RECITALS : A. The Landlord, Trustee and Center City Joint Venture (the "Joint Venture") entered into a certain Ground Lease Agreement dated September 11, 1992 pertaining to the real estate described in Exhibit A attached hereto (the "Real Estate") which was the subject of a Memorandum of Lease dated September 11, 1992, and recorded September 23, 1992, in the Recorder's Office of Kane County, Illinois (the "Recorder's Office") as Document No. 92K67569. By an Assignment and Assumption of Ground Lease,the Joint Venture assigned and transferred to the Partnership and the Partnership assumed all of the Joint Venture's rights, title, interest and obligations in and under the Ground Lease as was the subject of a certain Memorandum of Assignment of Ground Lease recorded November 12, 1992 in the Recorder's Office of Kane County, Illinois as Document No. 92K81390. The Aforesaid Ground Lease Agreement and Assignment and Assumption of Ground Lease are referred to herein as the"Ground Lease"). B. The Tenant intends to convey to CIC, by a Leasehold Mortgage dated April 1, 1998, to be recorded in the Recorder's Office(the"CIC Mortgage"), the leasehold interest of the Tenant under the Ground Lease to secure a note to CIC for $874,000, with interest, as therein provided (the"CIC Loan"). C. The Tenant has, by a Second Ground Leasehold Mortgage and Security Agreement dated November 1, 1992, and recorded on November 12, 1992 in the Recorder's Office as Document No. 92K81393 (the "Authority's Mortgage"), conveyed to the Authority the leasehold interest of the Tenant under the Ground Lease to secure a note to the Authority for $500,000,with interest, as therein provided (the "Authority Loan"). D. CIC, as a condition to their funding the CIC Loan to the Tenant, and the Authority, as a condition to their approval of the CIC Loan, have required that an estoppel certificate be issued from the Landlord as pertains to the Ground Lease and approval by the Landlord of the CIC Loan and CIC Mortgage. Therefore,the undersigned, City of Elgin, as Landlord, hereby represents and warrants the following: 1. The Ground Lease is valid and subsisting, in full force and effect, has not been rescinded, revoked or terminated, nor modified, amended or otherwise changed in any respect and is binding upon the Landlord in accordance with its terms. To Landlord's knowledge, there is no Default or Event of Default under the Ground Lease as such terms are defined therein. 2. Landlord has given all consents and approvals to the Tenant as are requisite under the Ground Lease for the construction, rehabilitation and financing of the improvements on the Real Estate subject to the Ground Lease. All obligations of Section 5.03 of the Ground Lease have been previously satisfied. 3. Landlord hereby consents to the CIC Loan and the CIC Mortgage and collateral loan documents encumbering the leasehold interest in the Real Estate. Landlord hereby recognizes the CIC Mortgage as a "Leasehold Mortgage" and CIC as a "Leasehold Mortgagee" under the Ground Lease, including, but not limited to, Section 9.03 of the Ground Lease, entitled to all rights and benefits, as well as obligations, if any,of a Leasehold Mortgagee under the Ground Lease. -2- 4. Landlord has been advised and agrees that all notices under the Ground Lease shall be given to CIC as the Leasehold Mortgagee at the address first above stated to the attention of the President of CIC. Executed as of 6 , 1998, by the undersigned. THE CITY OF ELGIN By: Name: Kevin Kelly • Its: Mayor STATE OF ILLINOIS ) COUNTY OF COOK ) Dolonna Mecum , a Notary Public in and for said county,in the state aforesaid, hereby acknowledges that Kevin Kelly ,who is personally known to me to be the same person whose name is subscribed to the foregoing instrument, appeared before me this day in person and acknowledged that he/she signed, sealed and delivered the said instrument as a free and voluntary act for the uses and purposes therein set forth. Given under my hand and Notarial Seal this 2 6 th day of Jun 1998. 4 OFFICIAL SEAL DOLONNA MECUM / NOTARY PUBLIC, STATE OF ILLINOIS / 214„,„..o 4 My Commission Expires Mar.19,200,1r0 Notary Public This instrument was prepared by, and after recording, return to: Mark W. Burns Applegate &Thorne-Thomsen, P.C. 322 S. Green Street, Suite 412 Chicago, Illinois 60607 -3- EXHIBIT A Legal Description of Real Estate Client/zuba/center city/estoppel (OF Fey Agenda Item No. City of Elgin 7 ip ti bkino' June 1, 1998 TO: Mayor and Members of the City Council FROM: Joyce A. Parker, City Manager SUBJECT: Refinancing of Leasehold Mortgage by Center City Place Limited Partnership PURPOSE To submit to the Mayor and members of the City Council infor- mation on the proposed refinancing of the leasehold mortgage by Center City Place Limited Partnership. BACKGROUND The City owns the land located at 156-158 Division Street . The improvements on the property are owned by Center City Place Limited Partnership and its affiliate organizations . The City and Center City Joint Venture entered into a develop- ment agreement on July 8, 1992 . The development agreement provided for the developer' s rehabilitation of the property for a senior citizen residential facility and the City' s agreement to lease to the developer the underlying land. The City and Center City Joint Venture entered into a ground lease agreement on September 11, 1992 . The ground lease agreement is for a 51 year term ending on September 10, 2043 , with annual rent of $1 a year. The ground lease agreement authorizes the tenant to encumber the improvements on the property and to enter into a leasehold mortgage . Center City Place Limited Partnership as tenant is now proposing to refinance its leasehold mortgage with respect to the subject property. The terms of the ground lease agreement require the City' s consent to the refinancing which consent cannot be unreasonably withheld. Attached is a draft estoppel certificate which provides for the City' s consent to the proposed refinancing. Original financing was in the principal amount of $897, 000 . The refinancing calls for a new principal amount of $874, 000, with a new lower adjustable interest rate and a term of 20 years with a 25 year amortization schedule . All other aspects of the proposed refinancing follow the terms of the original construction financing. Center City Place Refinancing June 1, 1998 Page 2 COMMUNITY GROUPS/INTERESTED PERSONS CONTACTED None . FINANCIAL IMPACT The proposed refinancing by the tenant does not create any new or additional obligations for the City. The leasehold mort- gage refinancing cannot proceed unless the City gives its written approval which approval may not be unreasonably withheld or delayed. LEGAL IMPACT The proposed refinancing complies with the leasehold mortgage financing authorized in Section 9 . 03 of the ground lease agreement . ALTERNATIVES The ground lease agreement contemplates the type of financing proposed by the refinancing. Approval of the refinancing through execution of the estoppel certificate appears to be the only appropriate alternative . RECOMMENDATION Authorizing execution of the estoppel certificate consenting to the proposed refinancing. Respectfully submitted, J• I e A. Parker City Manager WAC/mg Attachment