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Home My WebLink AboutR-97-0328J-97-310 5/6/97 RESOLUTION NO. 9 7- 3 2 8 A RESOLUTION AUTHORIZING THE CITY MANAGER TO (1) EXECUTE A SUBORDINATION AGREEMENT, IN A FORM ACCEPTABLE TO THE CITY ATTORNEY, FOR THE APPROVED LENDER IN THE FINANCING OF A NEW LOAN TO THE MARTIN LUTHER KING ECONOMIC DEVELOPMENT CORPORATION, INC. ("MLK") FOR THE PURPOSE OF SATISFYING THE FIRST MORTGAGE SECURED BY THE LINCOLN SQUARE OFFICE BUILDING, IN WHICH THE CITY HOLDS A FOURTH MORTGAGE AND IS A DEFENDANT ALONG WITH MLK, IN FORECLOSURE PROCEEDINGS BY THE FIRST MORTGAGEE, TACOLCY ECONOMIC DEVELOPMENT CORPORATION; (2) ACCEPT A $15,000.00 PAYMENT FROM MLK ON THE CURRENT $33,000.00 IN ARREARS ON THE CITY LOAN; (3) MODIFY THE EXISTING LOAN IN ORDER FOR MLK TO DEFER PAYMENT OF THE BALANCE IN ARREARS OF $18,000.00 AT MATURITY OF THE LOAN IN FEBRUARY, 2010; AND (4) TO EXECUTE SUCH DOCUMENTS WITH MLK AS MAY BE REASONABLY REQUIRED, IN A FORM ACCEPTABLE TO THE CITY ATTORNEY, TO EVIDENCE THE MODIFICATION OF THE LOAN AND SECURE PAYMENT THEREOF. WHEREAS, pursuant to Resolution No. 82-601, adopted by the City Commission in October, 1982, the City of Miami made a loan to the Martin Luther King Economic Development Corporation, Inc. ("MLK"), in the amount of $400,000.00, for the purpose of assisting in the purchase of the Lincoln Square Office Complex ("the Loan"); and WHEREAS, the Loan to MLK is a fourth mortgage secured by the property known as Lincoln Square Office Complex; and cm cobs srox MEETING OF Resolution No, 97- 328 I . a i 1 I WHEREAS, the first mortgage on the property is currently owned by the Tacolcy Economic Development Corporation ("TEDC"); and WHEREAS, the first mortgage is in default and TEDC has accelerated the note and has filed an action to foreclose the mortgage; and WHEREAS, MLK has arranged for new financing in order to satisfy the first mortgage; and WHEREAS, the City is currently owed the sum of $33,000.00 in past due payments and MLK will apply a portion of the Loan proceeds to reduce the Outstanding Delinquent Balance by $15,000.00 ("ODB"); and WHEREAS, the approved lender has requested a subordination of the City's mortgage; and WHEREAS, the subordination agreement will protect the Loan on the property which could be extinguished if the first mortgage is foreclosed; NOW, THEREFORE, BE IT RESOLVED BY THE COMMISSION OF THE CITY OF MIAMI, FLORIDA: Section 1. The recitals and findings contained in the Preamble to this Resolution are hereby adopted by reference thereto and incorporated herein as if fully set forth in this Section. - 2 - 9'7- 328 Section 2. The City Manager is hereby authorized'I to: (1) Execute a subordination agreement, in a form acceptable to the City Attorney, for the approved lender in the financing of a new loan to the Martin Luther King Economic Development Corporation, Inc. ("MLK") for the purpose of satisfying the First Mortgage secured by the Lincoln Square Office Building, in which the City holds a fourth mortgage and is a defendant along with MLK, in foreclosure proceedings by the First Mortgagee, Tacolcy Economic Development Corporation; (2) Accept a 15,000.00 payment from MLK to reduce the current ODB of $33,000.00 which is currently owed to the City; (3) Modify the existing loan between the City and MLK in order to defer the payment of the balance of the ODB due February, 2010, wherein a balloon payment of $18,000.00 will become due; (4) Execute such documents with MLK as may be reasonably required, in a form acceptable to the City Attorney, to evidence the modification of the loan and secure payment thereof. Section 3. This Resolution shall become effective immediately upon its adoption. PASSED AND ADOPTED this 7th day of May , 1997. JOE CAR LO, MAYOR A ST WALTER J. MAN CITY CLERK l� The herein authorization is further subject to compliance with all requirements that may be imposed by the City Attorney, including but not limited to those prescribed by applicable City Charter and Code provisions. - 3 - 97— )28 COMMUNITY DEVELOPMENT REVIEW: ELBERT WATERS, INTERIM DIRECTOR BUDGET AND MANAMEMENT ANALYSIS REVIEW: DIPAKH PAR19tH, DIRECTOR PREPARED AND APPROVED BY: i OL IREZ- E4TT A ASS TANT CITY EY APPROVED AS TO FORM AND CORRECTNESS: 07 W1600:0'gS:BSS:et - 4 - 07- 328 MARTIN L.UTHER KING ECONOMIC DEVELOPMENT C0ItP0ItA►i10N MODEL 2000 Economic Development Plan 1. Housing Development 2. Credit Union 3. Health Care ;. Revitalize Area 5. Enterprise Zone 6. Job Creation 7. Job Training 8. Business Network 9. Business Prep/Referal (contracts) 10. Rent MLKEDCO office space It's time to110 to work; I( Martin Luther King Economic Development Corporation ji 6116 NW 7 Ave. • Miami, FL • 305-757-7652 9 I-- 328 The Board of Directors and the small, but dedicated, staff at the Mar- tin Luther King Economic Development Corporation have been hard at work. As you may have heard, MLKEDCO was under the threat of foreclosure, about to lose everything. But some on the Board of Direc- tors had a plan, and we will not be foreclosed. We secured a loan to pay off our main creditor. Now that we saved MLKEDCO, its time for MLKEDCO to do its job - develop the Model City area. Now that we have resolved our most pressing issue, we are ready to move forward with our plan- the Modef 2000 Phu; designed to resurrect our economically damaged commu- nity. But we need your help. We need a strong Board of Directors with the courage to implement these bold initiatives. Your MLKEDCO (it is a community develop- ment corporation, owned by all residents of the target area) is holding elections on Wednesday, April 2, 1997 at the MLK office, 6116 NW 7th Ave, Miami beginning at 5:00pm. If you live or work in the Model City area and want to see it economi- cally develop, come out and vote for the people listed below to the Board of Directors. You will be glad you did. Its time toga to Work. ' Model 2000 Plan Ray Fauntroy Leroy Jones Teresa Leverson Rommie L. Loudd Grady Muhammad Fabyan Williams Ernestine Worthy Leo Casino James Smith Vote for the Team That Works! II Martin Luther King Economic Development Corporation III 6116 NW 7 Ave. • Miami, FL • 305-757-7652 �'�;;:"Mfttirtl,;. -, ;rkl ° ..' 1 i' y�.;•?'11,�rsdrty.�Janugi�.16, 1997 .;. .rhe Games People Play" I. ail I Open Letter Frorrr Adhor. Contrrtrllee The destruction of MIX Economic Development Corporation started when co►►tracts were made hc- twreu Tacolcy Ecor►on►ic Development Corp. alid a multi--rnilliori dollar retail corporation seeking to hnild one of their stores mi the very land MLIC Mud rres,; Center now occupies. tine. earl only speeulaw the ruagnitude of the deal reached between these two par(ics. The deal that, in effect, sealed the down. ward spiral of MLKEDC. The machinations were well in place when the trc.asure.r, . of MLKEDC 1'ic.r.re• Rutledge and ,Iiis pa.rtrrer, Dewey Knight 111, made no attempts to pay rent to their landlord, the NI L.K Development Corp. despite the fact that (heir cmiipauy, the Model Cities Payment Center, Inc. conducted and were .paid for 20-40,000 transactions every month by BellSouth and PPL. Curiously, no attempts were made to evict the Model Cities Payment Center, even th(Aigh they were nearly ` 20,000 in arrears . Inter- estingly enough, if MLK was dissolved, Rutledge and Knight would have g(liter► away without paying Ownsands of dollars their company owes in back rent to 114L.KEDC. Who was minding the store you ask? How could this happen? Attorney Clinton Pitts was Chair- person of both MLKEDC and TEDC. It's hard to believe an astute attorney did not recognize the bla- tant conflict of interest of his dual posts. It's even harder to be- lieve that Atty. Pitts took no legal steps to correct the slow, steady dissolution of MLKEDC. Even after well over five months of delinquency, MLKEDC Chairperson Pitts made little or no attempts to evict Model Cities Payment Center, co -owned by fel- low MLKEDC board member, Pierre Rutledge. As board members of MLKEDC, Pitts and Rut- ledge were supposed to serve in the best interest of MLKEDC. It's clear that both Atty. Pitts and Mr. Rutledge showed poor judgement acid by doing so almost forced the MLKEDC into dissolve- ment. After the public became aware of their dealings, both Attorney Pitts and Mr. Rutledge resigned their posts at MLKEDC. The story becomes even more bizarre. While Atty. Pitts and MLKEDC's day to day operations, TEDC was allowed to enter MLKEDC office and spent four days examining and photocopying MLKEDC internal financial papers, articles of Incorporation, by-laws, minutes of meet- uigs lield, confidential memos, rental records, leases and mortgages. During this time, the staff of MLKEDC was in- formed not to offer leases beyond a year and new tenants and present tenants could only enter into month to month leases. All of this intricate scheming was done in efforts to lower TEDC's impending acqui- sition costs, and to force MLKEDC's dissolution. Another MLKEDC board member, Ms. Elaine Black, executive director of Tools for Change, is well aware that MLKEDC owns another piece of real estate not under financial scru- tiny. This property could have been mortgaged to save MLKEDC from fi- nancial ruin. Continued on page 9 continued from page 2 What's particularly damning about this is that at no time did Ms. Black mention this option, the board's minutes reflect this fact. To add insult in injury, TEDC, seeking absolute control of MLKEDC's property and'financial base, they purchased MLKEDC's first mortgage and ten days later demanded payment hi full. All this after having played a major role in. MLKEDC's delinquency. In light of the massive deception and deceitful behavior of former, self appointed MLKEDC board members, where do we go from here? j -- l rrrthc r Infr►rmation Call: Martin Luther King Economic Dev. Corp. 757-7652 Lj 97- 328