O R D I N A N C E
WHEREAS, the City of Chicago (the "City") is a home rule unit of government under Section 6(a), Article VII of the 1970 Constitution ofthe State of Illinois and as such may legislate as to matters which pertain to its local government and affairs; and
WHEREAS, the City Council of the City (the "City Council") has determined that the continuance of a shortage of rental housing affordable to persons of low and moderate income is harmful to the health, prosperity, economic stability and general welfare ofthe City; and
WHEREAS, the City has certain funds available from a variety of funding sources ("Multi-Family Program Funds") to make loans and grants for the development of multi-family residential housing to increase the number of families served with decent, safe, sanitary and affordable housing and to expand the long-term supply of affordable housing, and such Multi-Family Program Funds are administered by the City's Department of Planning and Development ("DPD"); and
WHEREAS, the City Council, pursuant to an ordinance enacted on November 7, 2007, and published at pages 13020-13243 of the Journal of the Proceedings of the City Council (the "Journal of Proceedings") of that date, authorized DPD to provide Multi-Program Funds in the aggregate amount of $2,000,000 (the "Loan") for the acquisition, rehabilitation, construction and equipping of a five-story building (the "Building") located at 3251 East 92nd Street, in Chicago, Illinois, which contains 112 residential dwelling units for low-income elderly individuals (the "Project"); and
WHEREAS, South Chicago SLF Associates, L.P., an Illinois limited partnership (the "Borrower"), owns the Building; and
WHEREAS, in connection with the Project, the City made the Loan to the Borrower on December 1, 2007 with an interest rate of one percent per annum, which Loan is secured by, among other things, that certain Junior Mortgage, Security Agreement and Financing Statement dated December 1, 2007 and recorded on December 20, 2007 in the Office of the Recorder of Deeds of Cook County, Illinois as document number 0735411063, made by the Borrower in favor of the City (the "Mortgage"); and
WHEREAS, the Mortgage was subordinated to that certain mortgage dated as of December 1, 2007, securing a loan in the amount of $10,685,000 (the "Original Senior Loan"), made by the Borrower in favor of Capmark Finance Inc., which was subsequently assigned to Berkadia Commercial Mortgage; and
WHEREAS, the Original Senior Loan was made in connection with the issuance by the City of certain Multi-Family Housing Revenue Bonds (Victory Centre of South Chicago Project), Series 2007A (FHA Insured/GNMA) (the "Bonds"); and
WHEREAS, the Borrower is refinancing the Original Senior Loan to reduce interest costs, and consequently has requested that DPD approve a proposed modification of the Loan; and
1
S:\SHARED\Finance\Victory Centre of South Chgo Project\Senior Refi 20l8\Ordinance v3.docx
WHEREAS, in order to secure the long-term affordability of the Building, DPD has agreed to allow the Borrower to refinance and repay the Original Senior Loan to redeem the Bonds and to receive the proceeds of a new loan from Wells Fargo Bank National Association (the "New Senior Lender") in an amount not to exceed $10,400,000 at a fixed interest rate not to exceed 4.75% per annum for a term not to exceed forty years (the "New Senior Financing"); and
WHEREAS, the New Senior Financing will be secured by a new mortgage made by the Borrower in favor of the New Senior Lender (the "New Senior Mortgage"); and
WHEREAS, Borrower will be entering into additional junior financing from MB Financial Bank, N.A. in an amount not to exceed $450,000 ("New Junior Financing"), which New Junior Financing will be subordinate to the Loan and secured in part by accounts receivable of the Borrower; and
WHEREAS, DPD has approved a modification of the Loan (the "Restructuring") in a manner which (1) will not alter the principal amount ofthe Loan, (2) will not alter the interest rate on the principal balance of the Loan, (3) will alter the maturity date of the Loan, (4) will alter the repayment terms of the Loan, and (5) will subordinate the Mortgage and regulatory agreements in favor of the City related to the Project to any liens which will secure the New Senior Financing, including but not limited to the New Senior Mortgage (collectively, the "Material Terms"); 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 as described above. The Commissioner of DPD (the "Commissioner") or a designee of the Commissioner, are each hereby authorized, subject to approval by the Corporation Counsel, to negotiate any and all terms and provisions in connection with the Restructuring which do not substantially modify the Material Terms as described herein. The Commissioner, or a designee of the Commissioner, are each hereby authorized, subject to approval by the Corporation Counsel, to enter into and execute such agreements and instruments, and perform any and all acts as shall be necessary or advisable in connection with the implementation of the Restructuring, including without limitation, consenting to any liens and the terms thereof which will secure the New Senior Financing or the New Junior Financing. The Commissioner or a designee of the Commissioner are each hereby authorized, subject to approval by the Corporation Counsel, to enter into and execute such agreements and instruments, and perform any and all acts as shall be necessary or advisable, in connection with any future restructuring of the Loan, which do not substantially modify the Material Terms.
SECTION 3. To the extent that any ordinance, resolution, rule, order or provision of the Municipal Code of Chicago, 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
2
S:\SHARED\FinanceWictory Centre of South Chgo Project\Senior Refi 2018\Ordinance v3.docx
shall not affect any of the other provisions of this ordinance. Neither Section 2-45-110 nor Section 2-45-115 ofthe Municipal Code of Chicago shall apply to the Building in connection with the Restructuring.
SECTION 4. This ordinance shall be effective as of the date of its passage and approval.
3
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 modification and subordination of a City mortgage for South Chicago
SLF.
Your favorable consideration of this ordinance will be appreciated.
Mayor
Very truly yours,
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 Commissioner of the Department of Planning and Development to enter into and execute a Loan Restructuring/Modification Agreement with South Chicago SLF Associates, LP.
02018-6583
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
(signed)^-/
Respectfully submitted
Chairman
Approved Approved
