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Record #: O2018-6573   
Type: Ordinance Status: Passed
Intro date: 7/25/2018 Current Controlling Legislative Body: Committee on Finance
Final action: 9/20/2018
Title: Restructuring of debt to approve settlement payment from original owner NHS Redevelopment Corp., and allow multiple property transfers, restructuring of City loans, affordability restrictions and project rehabilitation agreements with new owner, Villa Capital Partners LLC and Villa Capital Managers LLC
Sponsors: Emanuel, Rahm
Topic: AGREEMENTS - Loan & Security
Attachments: 1. O2018-6573.pdf, 2. O2018-6573 (V1).pdf
ORDINANCE
WHEREAS, the City of Chicago (the "City"), a home rule unit of government under Section 6(a), Article VII of the 1970 Constitution of the State of Illinois, has heretofore found and does hereby find that there exists within the City a serious shortage of decent, safe and sanitary rental housing available for persons of low and moderate-income; and
WHEREAS, the City has determined that the continuance of a shortage of affordable rental housing is harmful to the health, prosperity, economic stability and general welfare of the City; and
WHEREAS, NHS Redevelopment Corporation, an Illinois not-for-profit corporation, is the sole shareholder of each of the general partners of the Illinois limited partnerships described in Exhibit A attached hereto and made a part hereof (collectively, the "Original Owner"); and
WHEREAS, the Original Owner is the owner of that certain real property in Chicago, Illinois relating to certain multi-family rental affordable housing projects (the "Projects"), all as described in Exhibit A; and
WHEREAS, each Project was partially financed by the City with certain loans (collectively, the "City Loans") made by the City to the Original Owner as described in Exhibit A; and
WHEREAS, the Original Owner wishes to sell the Projects (together, the "Property Transfer") to (i) Villa Capital Managers LLC, an Illinois limited liability company ("VCM"); (ii) Villa Capital Partners, LLC, an Illinois limited liability company ("VCP"); or (iii) an entity affiliated with VCM or VCP, as approved by the Commissioner of DPD (the "Commissioner") or a designee of the Commissioner (each, an "Authorized Officer"); and
WHEREAS, subsequent to the Property Transfer, the New Owner will invest no less than $3,000,000 to substantially rehabilitate and equip the Projects (the "Rehabilitation"); and
WHEREAS, the New Owner anticipates receiving a new senior loan in an amount not to exceed $10,000,000 (the "New Senior Loan") secured by the Projects or a portion thereof and to execute a mortgage (the "New First Mortgage") in connection with the Property Transfer and the Rehabilitation in favor of The Leaders Bank or an entity approved by the Authorized Officer (the "New Senior Lender"); and
WHEREAS, the Original Owner has requested that the City restructure the City Loans in a manner that would release the Original Owner from payment of the outstanding balances of the City Loans as described in Exhibit A attached hereto, in exchange for a payment from the Original Owner to the City in the total amount of $2,100,000 (the "Settlement Payment"); and
WHEREAS, DPD desires a restructuring of the City Loans in a manner which will (i) allow for the Property Transfer to the New Owner; (ii) allow for the Rehabilitation of the Projects; (iii) extend the term of affordability restrictions for each Project a minimum of at least 7 years

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from the closing date of the related Property Transfer (the "New Affordability Restrictions"); (iv) accept the Settlement Payment as payment in full of the City Loans; (v) release the mortgages relating to the City Loans; and (vi) allow for the amendment, assumption of and/or the entering into any other documents and agreements, as deemed necessary by the Authorized Officer to effectuate the Restructuring (collectively, the "Restructuring"); now therefore,
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF CHICAGO:
SECTION 1. The above recitals are expressly incorporated in and made a part of this ordinance as though fully set forth herein.
SECTION 2. The Restructuring is hereby approved and authorized.
SECTION 3. Neither Section 2-45-110, Section 2-45-115, Section 2-45-117, nor Section 2-45-119 of the Municipal Code of Chicago (the "Municipal Code") shall apply to the Restructuring or the Projects. .
SECTION 4. Each of the Authorized Officers is hereby authorized, subject to approval by the Corporation Counsel, to enter into and execute such agreements, instruments, amendments to documents, and agreements and instruments relating to the Restructuring, with such additions and/or deletions as are approved by the Authorized Officer, and to perform any and all acts as shall be necessary or advisable in connection with effectuating the Restructuring.
SECTION 5. To the extent that any ordinance, resolution, rule, order or provision of the Municipal Code, or part thereof, is in conflict with the provisions of this ordinance, the provisions of this ordinance shall control. If any section, paragraph, clause or provision of this ordinance shall be held invalid, the invalidity of such section, paragraph, clause or provision shall not affect any of the other provisions of this ordinance.
SECTION 6. This ordinance shall be effective as of the date of its passage and approval.




















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Maturity Date: October 1, 2018. Outstanding Balance: $515,321.
Project: East Garfield Park
Original Owner/Borrower: East Garfield Limited Partnership, an Illinois limited partnership.
Address(es): 3502 - 3508 West Van Buren Street; and 301 - 311 South Central Park, Avenue, Chicago, Illinois 60622 (collectively, the East Garfield Park Property")
City Authorization:
Ordinance enacted on December 6, 1989 and published at pages 8330 through 8332 of the Journal of Proceedings for such date, as corrected by the ordinance enacted on December 20, 1989 and published at page 10446 of the Journal of Proceedings for such date.
Ordinance enacted on December 6, 1989 and published at pages 8332 through 8335 of the Journal of Proceedings for such date, as corrected by the ordinance enacted on December 20, 1989 and published at page 10446 ofthe Journal of Proceedings for such date.
City Financing:
Closing Date: January 9, 1990
Principal Amount: $530,680
Interest Rate: 50% of surplus cash per annum Maturity Date: March 1, 2020
Principal Amount: $866,141
Interest Rate: 50% of surplus cash per annum
i
Maturity Date: March 1, 2020 Aggregate Outstanding Balance: $1,396,821.
Project: East Garfield Park II
Original Owner/Borrower: East Garfield Park II Limited Partnership, an Illinois limited partnership.
Address(es): 3540 - 3542 West Monroe Street; 3525 - 3527 West Van Buren Street; 217 - 229

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South Central Park Boulevard; 317-319 South Central Park Boulevard, Chicago, Illinois 60624; 1323 South Fairfield Avenue; and 1332 South Washtenaw Avenue, Chicago, Illinois 60608 (collectively, the East Garfield Park II Property").
City Authorization: Ordinance enacted on March 26, 1993 and published at pages 30214 through and including 30218 of the Journal of Proceedings for such date.
City Financing:
Closing Date: July 28, 1993
Principal Amount: $1,474,240.
Interest Rate: 0% per annum
Maturity Date: December 31, 2025 Outstanding Balance: $1,316,992.
Project: Pine Central
Original Owner/Borrower: Pine Central L.P., an Illinois limited partnership.
Address(es): 557 - 565 North Pine Avenue, and 743 - 755 North Central Avenue, Chicago, Illinois 60644 (together, the "Pine Central Property").
Project Description: acquisition and rehabilitation of two (2) buildings with seventy-six (76) units of affordable rental housing on the Pine Central Property.
City Authorization: Ordinance enacted on February 7, 1997 and published at pages 38243 through and including 38246 of the Journal of Proceedings for such date.
City Financing:
Closing Date: May 28, 1997
Principal Amount: $3,206,780
Interest Rate: 0% per annum
Maturity Date: May 28, 2029 Outstanding Balance: $3,206,780.
Project: Pine Race II



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Original Owner/Borrower: Pine Race II Limited Partnership, an Illinois limited partnership.
Address(es): 541 - 555 North Pine Avenue; and 5458 - 5464 West Race Avenue, Chicago, Illinois 60644 (together, the "Pine Race II Property").
City Authorization: Ordinance enacted by the City Council on November 5, 2003 and published at pages 9555 through and including 9559 of the Journal of Proceedings for such date.
City Financing:
Closing Date: June 24, 2004
Principal Amount: $1,605,481
Interest Rate: 0% per annum
Maturity Date: June 24, 2035 Outstanding Balance: $1,605,481.
Project: Roseland Ridge Apartments
Original Owner/Borrower: Roseland Ridge Apartments Limited Partnership, an Illinois limited partnership.
Address(es): 10505 - 10555 South Michigan Avenue, Chicago, Illinois 60628.
City Authorization: Ordinance enacted on November 12, 1998 and published at pages 81869 through and including 81874 of the Journal of Proceedings for such date.
City Financing:
Closing Date: December 17, 1999
Principal Amount: $2,148,728
Interest Rate: 0% per annum
Maturity Date: March 1, 2031 Outstanding Balance: $2,148,728.
Project: 901 North Hamlin
Original Owner/Borrower: NHS Redevelopment Corporation, an Illinois not-for-profit corporation. Address(es): 901 - 903 North Hamlin Avenue, Chicago, Illinois 60651.

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City Authorization: pursuant to an ordinance enacted on June 9, 1993 and published at pages 33200 through and including 33203 of the Journal of Proceedings for such date.
City Financing:
Closing Date: December 2, 1993
Principal Amount: $565,921
Interest Rate: 0% per annum
Maturity Date: December 2, 2023 Outstanding Balance: $450,963.








































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OFFICE OF THE MAYOR
CITY OF CHICAGO
RAHM EMANUEL
MAYOR
July 25, 2018










TO THE HONORABLE, THE CITY COUNCIL OF THE CITY OF CHICAGO


Ladies and Gentlemen:

At the request ofthe Commissioner of Planning and Development, I transmit herewith an ordinance authorizing a sale ofthe NHS Redevelopment Corporation portfolio to Villa Capital, and associated provisions.

Your favorable consideration of this ordinance will be appreciated.


Very truly yours,


Mayor
CHICAGO September 20. 2018


To the President and Members of the City Council:

Your Committee on Finance having had under consideration an ordinance authorizing the approval of multiple Loan Restructuring Agreements which would authorize the transfer of the NHS Redevelopment Corporation loan and property portfolio to Villa Capital Partners LLC and Villa Capital Managers LLC.

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Having had the same under advisement, begs leave to report and recommend that your Honorable Body pass the proposed Ordinance Transmitted Herewith.

This recommendation was concurred in by
of members of the committee with
Chairman