HomeMy WebLinkAboutR-95-0098J-95-106
2/1/95
RESOLUTION NO. 9 5 — 9 8
A RESOLUTION AUTHORIZING THE CITY MANAGER TO
NEGOTIATE THE RESTRUCTURING OF A $400,000.00
LOAN FROM THE CITY OF MIAMI TO MARTIN LUTHER
KING ECONOMIC DEVELOPMENT CORPORATION, INC.,
EVIDENCED BY AN AGREEMENT AND PROMISSORY NOTE
AND SECURED BY A FOURTH (4TH) MORTGAGE;
FURTHER AUTHORIZING THE CITY MANAGER TO
EXECUTE SUCH DOCUMENTS AS MAY BE REQUIRED TO
EVIDENCE THE RESTRUCTURING OF SAID LOAN, IN A
FORM ACCEPTABLE TO THE CITY ATTORNEY.
WHEREAS, the City Commission is committed to economic
development and the expansion of trade and commerce; and
WHEREAS, pursuant to Resolution No. 82-601, dated June 24,
1982, the city made a loan to Martin Luther King Economic
Development Corporation, Inc. ("MLKEDC"), with funds allocated
from the Eighth (8th) Year Community Development Block Grant, in
the total amount of $400,000.00; and
WHEREAS, MLKEDC applied the loan proceeds toward the
purchase of the Lincoln Square Office Complex in the Edison
Center Business District; and
WHEREAS, MLKEDC has experienced financial difficulties,
including damages sustained to the building by Hurricane Andrew
and has been unable to fulfill its obligations under the loan
documents; and
WHEREAS, MLKEDC is desirous of restructuring the loan in
order to cure the defaults and reinstate the loan; and
'Cuy COMMISSION
KEETMG OF
FEB 0 9 1995
Aocolution No,
95- 98
WHEREAS, MLKEDC has commenced making payments to the City,
starting September 1, 1994, with every intention to continue
doing so; and
WHEREAS, MLKEDC has requested a moratorium of principal and
interest from October 1, 1990 through August 30, 1994 and a
corresponding extension of the maturity date of the Promissory
Note, and other documents evidencing or securing the loan;
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.
Section 2. The City Commission is hereby authorized to
negotiate the restructuring of the $400,000.00 loan from the City
of Miami to the Martin Luther King Economic Development
Corporation, Inc.
Section 3. The City Manager is further authorized to
execute such documents, in a form acceptable to the City
Attorney, as may be required to evidence the restructuring of
said loan.
Section 4. This Resolution shall become effective
immediately upon its adoption.
-2-
PASSED AND ADOPTED this 9th day of February 1996.
EPHEN P. CLARK, MAYOR
*!T?YHIRAI
CITY CLERK
PREPARED AND APPROVED BY:
t
OLG'$eAlll REZ- IeT
ASSNT CITY ATTORNEY
APPROVED AS TO FORM AND CORRECTNESS:
A'.
CITY rlNNTTO eT YS , I I
M4932:os •ORS
95- 98
-3-
CITY OF MIAMI, FLORIDA
INTER -OFFICE MEMORANDUM 38
T°
Honorable Mayor and Members JAN 31 1995
of the City Commission DATE: FILE:
#JBJECT: Authorization to Restructure
Loan for $400,000.00 with MLKEDC
FROM: veS REFERENCES: As per Resolution #82-601
City dated 6/24/82 Ver 2
ENCLOSURES:
Attached
RECOMMENDATION
it is respectfully recommended that the City Commission authorize the City Manager to amend the
Loan Agreement with the Martin Luther King Economic Development Corporation, inc. (MLKEDC),
regarding its $400,00' ,a loan with the City of Miami, for the purpose of restructuring said loan, in
a form satisfactory to the City Attorney.
BACKGROUND
On June 24, 1982, via Resolution 82-601, the City of Miami Commission made a loan (mortgage)
to Martin Luther King Economic Development Corporation, inc. for $400,000.00 towards the
purchase of the Lincoln Square Office Complex, with an estimated worth of approximately
$1,000,000.00.
In addition, the original 1982 agreement has bet;n amended 3 times, to accommodate the
agency's needs and help meet its obligations.
The first amendment in 1985 helped justify additional administrative funding, by proposing to phase
out such funding within 3 years, as the building's revenues increased.
The second amendment allowed MLK to apply interest payments of $12,000.00 in 1986 towards
the cost of purchasing insurance for the building.
The third amendment in 1989 deferred principal and interest payment of $33,148.00 per year for 3
years. It also reflected a new loan of $66,000.00 by Dade County, for the purpose of paying
maintenance on the building.
95- 98 (304..
Page 2
Honorable Mayor and Members
of the City Commission
Presently, the mortgage holders and outstanding balances are as follows:
Outstanding
Lender Date of Principal Amount Maturity Interest Monthly
Mtn. Holder Loan Amount As of 12/31194 Date Rate Payment
First Union
10/27/89
$ 250,000
$105,488
11/01/99
12.25%***
$4,548***
Metro -Dade
10/12/82
220,000
86,191
10/12/02
3%
1,221
Metro -Dade
10112/82
69,713
47,118*-
10112102
3%
437
City of Miami
10/12/82
400,000
397,992*
02/01110
3%
1,500
Metro -Dade
03/01/88
71,000
70,461 **
02/01/08
6%
539
TOTALS
$1,010,713 $707,250
$8, 245
As per new arrangement pending City Commission approval (started payments as of
September 1, 1994). Original maturity date October 1, 2002.
** As of November, 1994.
interest rate changed to 9 1/2% as per agreement with bank. Monthly payment has been
reduced. New formula is 2 112% above the weekly average yield of the U.S. Treasury Bill.
Note: MLKEDC received $12,852.35 in rental income as of October 31, 1994.
Due to cash flow problems, poor rentability, as well as additional expenses due to Hurricane
Andrew and its aftermath, MLKEDC has been unsuccessful in fulfilling its obligation. We have met
with MLKEDC Board of Directors and its former Executive Directors, as well as its current
President/CEO, on various occasions in the last 3 years, and have not been able to work out a
repayment agreement with the organization. Based on estimates made on its cash flow, past,
present and future obligations, we have determined that the following will be a reasonable and just
solution to resolve this seriously delinquent loan:
Moratorium Principal/Interest - From 10/1/90 through 8/31194
Loan Amount - $400,000.00
Interest Rate. - 3% per annum
Payments
64 Payments at - $1,500.00 monthly, starting 9/1194 through 1211199
185 Payments at - $3,478.17 monthly, starting 111/2000
One final payment of - $3,482.57 at maturity
Maturity date - February 1, 2010
s�- 98
AMENDMENT #4
MARTIN LUTHER KING ECONOMIC DEVELOPMENT CORPORATION, INC.
An Amendment to Mesr;orandum of Agreement dated September 13, 1982, between the
City of Miami, herein after referred to as the "CITY" and the Martin Luther King
Economic Development Corporation, Inc. (MLKEDC), 4ereinafter referred to as the
"CONTRACTOR."
WHEREAS, the CITY mandated CONTRACTOR to undertake, as part of its
1982 Work Program, an economic development project within the Edison Center
Business District that will enable CONTRACTOR to become financially independent from
the CITY; and
WHEREAS, the City Commission adopted Resolution No. 82-601, dated June
24, 1982, authorized the City Manager -,o execute an Agreement between.the CITY and
CONTRACTOR; and
WHERE 4S, said Resolution further authorized the allocation of four hundred
thousand dollars ($400,000.00) to CONTRACTOR from the Eighth (8th) Year Community
Development Block' Grant Contingency Fund to purchase the Lincoln Square Office
Complex in the Edison Center Business District; and
WHEREAS, CONTRACTOR has purchased the Lincoln Square Office Complex
in the Edison Center Business District of the Model City area; and
WHEREAS, CITY has a financial interest in the project and is desirous of
CONTRACTOR to become . self-sufficient through ownership of viable commercial
structure; and
95- a8 -,3
Page 2
WHEREAS, CON TRACTOR is experiencing tnancial di ;iculties and requested
assistance from the City to maintain the viability of the Lincoln Square Office Complex
Project, and
WHEREAS, the CONTRAC I'OR has requested a restructuring of the loan in
j order to ease the financial burden on the agency...:
THEREFORE, in mutual consideration of thre. covenants, made herein and in the
agreement of which this is an amendment, the parties hereto understand and agrees as
follows:
Section 1. That the 'Memorandum of -Agreement above stated and dated
September 13, 1992, between the City of Miami and the Martin Luther King Economic
Development Corporation, Inc. (MLKEDC) is hereby amended to approve a moratorium
on payments from October 1, 1990 to August 31, 1994,
Section 2. To restructure the principal and interest payments as follows:
Payments
64 Payments at - $1,500.00 monthly, starting 9/1194 through
12/ 1 199
186 Payments at - $3,478.17 monthly, starting 111/2000
One final payment of - $3,482.57 at maturity
Maturity date' - February 1, 2010
i
Section 3. It is further understood that all the terms and conditions outlined
under the original agreement will remain in full force without modification, except as
herein stated.
f 95_ 98
Page 3
IN WITNESS WHEREOF, the part►es hereto have caused this instrument to be
executed by the respective official thereunto duiy authorized.
ATTEST. CITY OF MiAMI (Municipal
Corporation of tht - state
of Florida.
BY:
MATTY HIRAI CESAR H. ODIO
CITY CLERK CITY MANAGER
ATTEST: CONTRACTOR:
MARTIN LUTHER KING
ECONOMIC DEVELOPMENT
CORPORATION, INC.
CORPORATE SECRETARY
APPROVED AS TO'FORM AND CORRECTNESS:
BY:
PRESIDENT
(SEAL)
A. QUINN JONES, III
CITY ATTORNEY
' APPROVED AS TO FORM AND CORRECTNESS:
INSURANCE MANAGER
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