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HomeMy WebLinkAboutSummary FormDate: 10/14/2011 AGENDA ITEM SUMMARY FORM FILE ID: //�7O C7c9 3 Law Department Matter ID No. Requesting Department: Community Development Commission Meeting Date: 10/27/2011 District Impacted: Type: ® Resolution ❑ Ordinance ❑ Emergency Ordinance ❑ Discussion Item ❑ Other Subject: AMENDING PARTICIPATION AGREEMENT AND ASSUMPTION OF LOAN GUARANTEE ASSISTANCE AND LIABILITY AND PLEDGE AGREEMENT FOR HUD SECTION 108 LOAN WITH MIAMI-DADE COUNTY FOR PARROT JUNGLE PROJECT Purpose of Item: AUTHORIZING THE CITY MANAGER TO NEGOTIATE AND TO EXECUTE AMENDMENTS TO THE PARTICIPATION AGREEMENT (INCLUDING ALL THE ATTACHMENTS THERETO, DATED AS OF AUGUST 3, 2007 ("PARTICIPATION AGREEMENT"), AND THE ASSUMPTION OF LOAN GUARANTEE ASSISTANCE AND LIABILITY AND PLEDGE AGREEMENT, INCLUDING ALL ATTACHMENTS THERETO, ("ASSUMPTION"), AFTER CONSULTATION WITH THE CITY ATTORNEY, PROVIDING FOR THE REFINANCING OF THE CITY OF MIAMI'S ("CITY") ASSUMPTION OF NOT TO EXCEED EIGHTY PERCENT (80%) OF MIAMI-DADE COUNTY'S ("COUNTY") LIABILITY UNDER THE UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENTS SECTION 108 LOAN ("SECTION 108 LOAN") USED BY THE COUNTY, IN CONNECTION WITH THE MODIFICATION OF SECTION 108 LOAN WHICH WAS IN THE ORIGINAL PRINCIPAL LOAN AMOUNT OF $25,000,000, FOR PARROT JUNGLE AND GARDENS OF WATSON ISLAND, INC. ("PARROT JUNGLE"), AND ALL OTHER DOCUMENTS AS MAY BE REQUIRED IN CONNECTION TO AMENDING SUCH PARTICIPATION AGREEMENT AND ASSUMPTION TO PROVIDE COSTS SAVINGS TO THE CITY AND THE COUNTY, SUBJECT TO CITY ATTORNEY APPROVAL; FURTHER CONSENTING TO AND AUTHORIZING THE CITY MANAGER TO NEGOTIATE AND TO EXECUTE, AFTER CONSULTATION WITH THE CITY ATTORNEY, ANY OTHER RELATED THE MODIFICATIONS, AMENDMENTS, SUPPLEMENTS, AND ANY OTHER DOCUMENTS AS NECESSARY, TO ACCOMPLISH SUCH COST SAVINGS TO THE CITY. Background Information: Please see attached Budget Impact Analysis NO Is this item related to revenue? NO Is this item an expenditure? If so, please identify funding source below. General Account No: Special Revenue Account No: CIP Project No: NO Is this item funded by Homeland Defense/Neighborhood Improvement Bonds? Start Up Capital Cost: Maintenance Cost: Total Fiscal Impact: Final Approvals (SIGN AND DATE) CIP Budget If using or receiving capital funds Grants Risk Management Page 1 of 2 Purchasing Dept. Director Chief City Manager AGENDA ITEM SUMMARY FORM CONTINUED Background Information: On January 9, 2001, Miami -Dade County ("County") made a loan to Parrot Jungle and Gardens of Watson Island ("Parrot Jungle"), in the original principal amount of Twenty -Five Million Dollars ($25,000,000) to facilitate the financing of the development of the Parrot Jungle and Gardens of Watson Island Project (the "Parrot Jungle Loan"). The County funded the Parrot Jungle Loan by virtue of a $25,000,000, loan guaranteed by the United States Department of Housing and Urban Development ("HUD") which was advanced to the County pursuant to the Section 108 Loan Guarantee Program (the "Section 108 Loan"). The City of Miami ("City") and the County entered into a Joint Participation Agreement dated September 9, 1998 ("JPA"), in which the City agreed to replace the County as the guarantor of 80% of the Section 108 Loan, upon satisfaction of certain conditions set forth therein, including the conditions that the Parrot Jungle Loan must be current and no event of default is in existence and that the County assign to the City all of the documents securing the Loan (the "Loan Documents"). The County was not able to assign the Loan Documents to the City pursuant to the provisions of the documents evidencing or securing the Section 108 Loan. Parrot Jungle then cured, and/or the County then agreed to waive and not enforce, certain events of non- performance by Parrot Jungle under the Loan Documents. To assist Parrot Jungle to cure its failure to make payments under the Parrot Jungle Loan, the County agreed, subject to the City's approval, to modify Parrot Jungle's obligations under the Loan Documents to (I) provide that Parrot Jungle shall not be obligated to make any payments under the Parrot Jungle Loan from August, 2006, through and including the payment due in August, 2011 (the "Deferral"), and (II) required that all amounts that Parrot Jungle would have been required to pay during the Deferral, totaling $17,277,000 (the "Deferred Amount"), plus interest at the rate of 5% shall be payable in 10 equal annual installments commencing in 2020, provided that the Parrot Jungle Loan has been fully paid. It was determined to be in the best interest of the City to consent to the modification of the Parrot Jungle Loan to defer payment of the Deferred Amount, as set forth herein, and for the City to assume 80% of the County's obligations under the Section 108 Loan. On July 10, 2007, pursuant to Resolution No. 07-0405, the City Commission authorized the City Manager to execute a new Participation Agreement, including all attachments thereto, with the County which was dated as of August 3, 2007, (the "Participation Agreement") and an Assumption of Loan Guarantee Assistance and Liability and Pledge Agreement, including all attachments thereto, with the County and HUD (the "Assumption") and all other necessary documents in connection with such loan modification and assumption and related modifications of the modifications of the terms of the Parrot Jungle Loan from the County to Parrot Jungle. The original Section 108 Loan amount has been paid down to $15,560,000. Recently the County and HUD have advised the City of the opportunity to further modify the Section 108 Loan for additional savings by reducing the interest rate without extending the maturity of the Section 108 Loan and it is in the best interests of the City to amend the Participation Agreement and the Assumption and all other necessary documents to obtain such savings without extending the maturity of the original Section 108 Loan.