Title
Approving the Frogtown Entrepreneur Center (FEC) note, loan agreement, and mortgage amendment.
Body
WHEREAS, in 1997 the City of Saint Paul ("City"), through its STAR program, entered into a STAR loan ("Loan") in the amount of $154,500 with Frogtown Entrepreneur Center ("FEC") to, together with other funders providing a private match, provide financing to acquire and renovate 501 N Dale Street to establish the Frogtown Entrepreneur Center, a business incubator facility; and
WHEREAS, the FEC also acquired and renovated 625 University Avenue and combined it with 501 N Dale to operate a business incubator facility (the "Project") whose target is minority, women owned and small businesses; and
WHEREAS, the FEC is currently home to approximately 15 business about 80% of which are minority owned, and
WHEREAS, the age of the buildings, the state of the economy, the fragile nature of the businesses served and the vacation of the Project's largest tenant have all created cash flow difficulties for the project; and
WHEREAS, the original terms of the Loan indicated that repayment would be made only after all operating expenses including debt service for other loans and an operating reserve of $10,000 was established and maintained and that all unpaid principal and interest repayment would be due as a balloon payment on the original maturity date of December 1, 2006; and
WHEREAS, previous amendments to the Loan have extended the maturity and deferred repayment; and
WHEREAS FEC requested that the City again defer payments on the Loan; and
WHERAS the Department of Planning and Economic Development Credit Committee has reviewed the request, determined that the loan is secured with a mortgage on the property and recommends a) amending the Loan terms to defer Loan repayment from January 1, 2011 through December 1, 2012. and resuming on January 1, 2013.
NOW, THEREFORE, the City of Saint Paul City Council authorizes and approves an amendment to the Loan including the note, loan agreement and mortgage with Frogtown Entrepreneur Center, such amendment to incorporate the terms described above, and the City Council directs the appropriate city officials to execute the amendment and other documents.
BE IT FURTHER RESOLVED, that city staff are hereby directed and authorized to take such action as necessary to implement this Resolution.