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CL-2508 New Business   Item #: C.       
Meeting Date: 04/06/2021  
Subject:    Moral Obligation for Mortgage on IDA Property at 500 Stinson Drive
From: Corrie Bobe

COUNCIL ACTION
Business Meeting:     04/06/2021
SUMMARY
The loan on property owned by the IDA at 500 Stinson Drive is due for renewal during April 2021.  This is the conclusion of the first five-year term of the mortgage, and American National Bank & Trust will require an updated moral obligation for the next five-year term of the loan.  The property is leased to Overfinch North America, and lease payments are current.
BACKGROUND
The property located at 500 Stinson Drive in the Cyber Park was purchased by the IDA on April 13, 2016, and it was financed by American National Bank & Trust Company with a 25-year mortgage which required a moral obligation from the City of Danville.  The first five years of the mortgage is now expiring, and a renewed loan is necessary to cover the remaining unpaid principal.  That amount is approximately $778,000, and the next term will be issued with a twenty-five basis points (0.25%) reduction in the interest rate charged for the loan.  All other aspects of the transaction will remain in effect as originally documented, and this action by Council will simply maintain a current status of the City's moral obligation to meet the bank's lending requirements.
RECOMMENDATION
Staff requests that the City Council concur in the renewal of the City's moral obligation for a loan on 500 Stinson Drive in Cyber Park owned by the Industrial Development Authority of Danville by adopting a resolution prepared by the City Attorney in conjunction with the Bank's attorney. 

Attachments
Resolution
Moral Obligation


    

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