CC WORKSESSION 08302010 - Laserfiche WebLink

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0CDRSEY $ Amount 210,697 Source Water Filtration $ 210,697 * Chandler TIF (Pooling Dollars $ 210,697 * Chandler TIF (Pooling Dollars $ 690,000 ** Apache Cub TIF 25% oolin dollars $ 560,000 TBD $ 1,882,090 N/A * Unrestricted TIF dollars since pre -1990 TIF district ** Restricted TIF dollars since created in 2003. Can only be used for "qualified" redevelopment activities If the City pays off the remaining balance, it will have paid the entire amount of the loan that was extended (approximately $2.6 million). Once the City has title to the Phase 1 B land, it is anticipated that it would be repaid when development commences as follows: City Outstanding Loan City Outstanding Loan Amount on 1 -1 -11 $ 2,630,471 Land Sale Proceeds from Phase 1 B Land $ 1,500,000 TIF Generated From Phase !B $ 1,130,471 Remaining Balance $ Note: If the City were to utilize tax increment from both the Chandler and Apache Cub TIF districts, the Council could decide that these funds don't need to be repaid since they are "pooled" TIF dollars to accomplish redevelopment. If this was the case, the remaining unpaid balance would be approximately $1.5 million. A third option is to put Apache in default immediately, with the ultimate goal of replacing it as Master Redeveloper, while attempting to negotiate and extension of loan terms from Fannie Mae. As stated above, in order to exercise the rights of the mortgagee, the HRA must have those rights reinstated by paying off Fannie Mae and obtaining a termination of the assignment of the Mortgage. Option Two requires that the HRA continue the Fannie Mae payments as and when due, and Option Three requires that the HRA pay off the loan as soon as possible. From a real estate perspective, recommend that the loan be paid in the near term and in any event within the 180 day cure period. Since the HRA cannot exercise any of its real estate remedies during this cure period, there is no real advantage to paying off the loan prior to the expiration of the cure period. The Mortgage allows the mortgagee to obtain the appointment of a receiver. A receiver, once appointed, would step into the shoes of Apache to protect the asset and hopefully generate revenue from the Property. Apache will likely argue that a receiver may not be appointed until applicable notice and cure periods have run, so I again recommend serving notice upon Apache that it is in default to commence the running of the cure period. 4 DORSEY & WHITNEY LLP