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HomeMy WebLinkAbout98-284 Resolution No . 98-284 RESOLUTION ACCEPTING THE AMENDED PROMISSORY NOTE OF CENTER CITY PLACE LIMITED PARTNERSHIP BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN, ILLINOIS, that Joyce A. Parker, City Manager, be and is hereby authorized and directed to accept the amended promissory note on behalf of the City of Elgin of Center City Place Limited Partnership, a copy of which is attached hereto and made a part hereof by reference, in lieu of the existing promissory note dated January 15 , 1993 . s/ Robert Gilliam Robert Gilliam, Mayor Pro Tem Presented: December 2 , 1998 Adopted: December 2 , 1998 Omnibus Vote: Yeas 4 Nays 0 Attest: s/ Dolonna Mecum Dolonna Mecum, City Clerk AMENDED PROMISSORY NOTE $32 , 500 . 00 Elgin, Illinois July 6, 1999 For Value Received, the undersigned, Center City Place Limited Partnership, a limited partnership organized and existing under the laws of the State of Illinois (the "Maker" ) having an office at 1300 W. Belmont #316, Chicago, Illinois, 60657 hereby promises to pay to the order of the City of Elgin, Illinois, a municipal corporation (the "Payee" ) , at its office at 150 Dexter Court, Elgin, Illinois, or such other place as the holder hereof may from time to time designate in writing, on the Maturity Date (as defined below) in lawful money of the United States of America, the principal sum of Thirty Two Thousand Five Hundred and No/100 Dollars ($32 , 500 . 00) or so much thereof as shall from time to time remain outstanding, with 5 . 5% interest pursuant to the following payment schedule : Payment Date Principal Interest Total 1/1/99 $ 3 , 250 . 00 $ -0- $ 3 , 250 . 00 7/1/99 3 , 250 . 00 804 . 38 4 , 054 . 38 1/1/00 3 , 250 . 00 715 . 00 3 , 965 . 00 7/1/00 3 , 250 . 00 625 . 50 3 , 875 . 50 1/1/01 3 , 250 . 00 536 . 25 3 , 786 . 25 7/1/01 3 , 250 . 00 446 . 88 3 , 696 . 88 1/1/02 3 , 250 . 00 357 . 50 3 , 607 . 50 7/1/02 3 , 250 . 00 268 . 13 3 , 518 . 13 1/1/03 3 , 250 . 00 178 . 00 3 , 428 . 00 7/1/03 3 , 250 . 00 89 . 38 3 , 339 . 38 $32 , 500 . 00 $4 , 021 . 01 $36 , 521 . 02 The Maturity Date, at which all principal shall become due and payable, shall be July 3 , 2003 . Privilege is reserved to make principal payments in whole or in part without premium or fee . Any one of the following occurrences shall constitute a "Default" under this Note : (a) The occurrence of a default by Maker in failing to make any payment upon this Note as and when the same becomes due and payable in accordance with the terms hereof, which default shall not be cured within five (5) Business Days after the due date of such payment; (b) The occurrence of any default under this Note other than as described in the preceding clause (a) which default shall not have been cured by the Maker within thirty (30) days of the occurrence of such default; or Upon the occurrence of a Default hereunder: (i) the entire unpaid principal balance of this Note shall , at the option of the holder hereof and without notice or demand of any kind to Maker or any other person, immediately become due and payable; and (ii) the holder hereof shall have and may exercise any and all rights and remedies available at law or in equity. The remedies of the holder hereof shall be cumulative and concurrent, and may be pursued singularly, successively or together, at the sole discretion of the Payee, and may be exercised as often as occasion therefore shall arise . No act of omission or commission of the Payee, including specifically any failure to exercise any right, remedy or recourse, shall be deemed to be a waiver or release of the same, such waiver or release to be effected only through a written document executed by the Payee and then only to the extent specifically recited therein. A waiver or release with reference to any one event shall not be construed as continuing, as a bar to, or as a waiver or release of, any subsequent right, remedy or recourse as to a subsequent event . Timely performance of all of Maker ' s obligations herein is of the essence . If any suit or action is instituted by an attorney employed to collect this Note or any part thereof, the Maker promises to pay all costs of collection, including reasonable attorney' s fees and expenses, court costs, and expenses of every kind incurred by the Payee in connection with such collection. Maker for itself and for is successors, transferees and assigns and all guarantors, endorsers and signers, hereby waives all valuation and appraisement privileges, presentment and demand for payment, protest, notice of protest and nonpayment, dishonor and notice of dishonor, bringing of suit, lack of diligence or delays in collection or enforcement of this Note and notice of the intention to accelerate, the release of any party liable, the release of any security for the debt, the taking of any security and any other indulgence or forbearance, and agrees that this Note and any or all payments coming due hereunder may be extended or renewed from time to time without in any way affecting or diminishing Maker ' s liability hereunder. All notices or other communications hereunder to either party shall be (a) in writing and, if mailed, shall be 2 • deemed to be given on the third Business Day after the date when deposited in the United States mail , by registered or certified mail , postage prepaid, addressed as provided hereinafter, and (b) addressed: If to Maker: c/o Center City Place Joint Venture MZB, Inc . 305 South Green Street Chicago, Illinois Attention: Henry Zuba With a copy to: Applegate Thorne-Thomsen P.C. 322 S . Green Chicago, IL 60607 Attention: Mark W. Burns, Esq. (312) 421-8400 If to Payee : City of Elgin 150 Dexter Court Elgin, Illinois 60120 Attention: City Manager With a copy to : City of Elgin 150 Dexter Court Elgin, Illinois 60120 Attention: Michael Gehrman, Esq. or to either party at such other addresses as such party may designate in a written notice to the other party. "Business Day" shall mean any day when Payee is open for business other than Saturday, Sunday or any other day on which national banks in Elgin, Illinois are not open for business . If any provision of this Note or any payments pursuant to the terms hereof shall be invalid or unenforceable to any extent, the remainder of this Note and any other payments hereunder shall not be affected thereby and shall be enforceable to the greatest extent permitted by law. All payments under this Note shall be payable in lawful money of the United States which shall be legal tender for public and private debts at the time of payment . Each payment of principal or interest under this Note shall be paid not later than 2 : 00 P.M. Elgin, Illinois time on the date due therefor and funds received after that hour shall be deemed to have been received by Payee on the following day. All payments not received in immediately available funds are subject to collection. This Note shall be governed by and construed under the laws of the State of Illinois . The Maker shall have liability for the obligation to pay principal under this Note . Notwithstanding the Maker ' s 3 liability for payment of principal of this Note, the Payee shall have no recourse against the Project or Maker ' s interest therein for collection of amounts due hereunder, through foreclosure or receivership of the Project, all such recourse being waived by the Payee . Payee shall have recourse to and Maker shall make payments from net operating revenues derived from the Project, being gross rental income and other Project receipts less Project operating and capital expenses, reserves and debt service on mortgage financing encumbering the Project . To further secure the payments due hereunder from net operating revenues of the Project, the Maker herein grants to Payee a security interest in and encumbrance upon said net operating revenues of the Project and this Note shall be deemed a security agreement under the Uniform Commercial Code as adopted in Illinois (the "Act" ) for said purposes . Maker shall further execute and file financing statements to perfect and continue perfection of the security interests herein granted as required by the Act . The security interest granted bythis Note shall be and remains subordinate and junior to J all liens and encumbrances now existing or hereinafter created securing indebtedness of the Maker which liens or encumbrances currently or in the future constitute encumbrances against the Project . This amended promissory note shall amend, supplement and replace apriorpromissorynote between the parties hereto P dated January 15, 1993 . IN WITNESS WHEREOF, the undersigned has signed and delivered this Note as of the day and year first above written. Center City Place Limited Partnership, an Illinois limited partnership By: Center City Place Joint Venture, its general partner By: MZB, Inc . , its general partner, an Illinois corporation By �..� ./� Name : Henry Zuba Title : President 4 OFE ' C' , City of Elgin Agenda Item No. , October 21, 1998 TO: Mayor and Members of the City Council FROM: Joyce A. Parker, City Manager SUBJECT: Center City Place Loan PURPOSE The purpose of this memorandum is to present to the Mayor and City Council a request by Center City Place Limited Partnership to extend the terms and provisions of their loan agreement . BACKGROUND In January 1993 , the City loaned the Center City Place Limited Partnership (CCPLP) $32 , 500 to complete sanitary sewer work required by the Fox River Water Reclamation District . The non-interest bearing promissory note required no payments until the final balloon amount in January, 1999 . Mr. Hank Zuba, on behalf of the Center City Place Limited Partnership, has requested that the existing loan terms be extended. The partnership has indicated that the project has been breaking even but not generating any significant cash flows . The current promissory note stipulates that the note shall be paid off from net cash flows . CCPLP has indicated that because of the recently approved mortgage refinancing (June, 1998) they are now in a position to begin to make payments . They have requested that the terms of the note be changed to the following: A) Extend the note out five years B) Semi annual payments of $3, 250 beginning in January, 1999 will be made C) An interest rate of 5 . 5 will be charged on the outstanding balance COMMUNITY GROUPS/INTERESTED GROUPS CONTACTED None • Center City Place Loan October 21, 1998 Page 2 FINANCIAL IMPACT / Staff has reviewed the financial statements of CCPLP. The statements were prepared by independent certified public accountants and confirm the fact that sufficient cash flows are not available to make the required balloon payment . The proposed changes provide for semi-annual principal payments from any available revenues plus provide interest income over the five year life of the note . ow LEGAL IMPACT A new promissory note will be required. ALTERNATIVES Demand that the original terms of the promissory note be followed. RECOMMENDATION It is recommended that the City Council approve a revision in the terms of the promissory note with CCPLP to include a five year term, semi-annual principal payment of $3 , 250 and a 5 . 5% interest rate on the outstanding balance . R pectfully subm' ted, J ce . Parker City Manager MZB Inc. 305 s Green Chgo II. 312 258 8010 fax 312 258 8011 Mr James Nowicki Aug 12 1998 Dear Mr Nowicki, As you know the Center City project has a note for a loan of 32500 due jan 1999. As you can see from our cash flows the project has been breaking even but not generating significant cash flow. I believe now that we have lowered our debt payment we can begin to make payments from cash flow. I would like to propose an extension of the note for five years at 5.5% interest and semi annual payments of 3250 beginning in jan 1999. Please advise. I have previously sent copies of all financials on the project. Thank you in advance for your consideration. Regards, Hank uba on behalf of Center City LP