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RESOLUTION NO. 55 OF 2018
(Authorizing Below-Market Seller-Financing Loan Terms and a Reduced Purchase Price to Downtown Partners, LLC, for Development of Affordable Housing)
WHEREAS, Salt Lake City desires to dispose of certain real property located at approximately 320 East 400 South and 338 East 400 South (“City Property”); and
WHEREAS, to expedite and ensure the development of low and mixed-income housing, mixed use development, innovative building development including commercial space for underserved populations such as refugees, micro-housing that serves 40% AMI and below, and co-working space, incorporating tenants of the City’s adopted master plans: Plan Salt Lake and Growing SLC: A Five-Year Housing Plan, (the project is commonly referred to as “The Exchange” and may be referred to herein as the “Project”), Salt Lake City desires to sell the City Property through seller-financing, for a reduced price from five million five hundred and twenty-seven thousand and 00/100 dollars ($5,527,000.00) to four million eight hundred and two thousand and 00/100 dollars ($4,802,000.00), for a total price reduction of seven hundred and twenty-five thousand and 00/100 dollars ($725,000.00) (the “Purchase Price Reduction”), and with below-market terms for the three seller notes securing the reduced purchase price (the “Seller Notes”); and
WHEREAS, on October 9, 2018, the Board of the Redevelopment Agency of Salt Lake City (“RDA”) approved a three million and 00/100 dollar ($3,000,000.00) loan to the development group purchasing a portion of the City Property referred to as Parcel B, Downtown SLC B LLC, a New York limited liability company (“Buyer”), specifically for the residential component of Building B, (the “RDA Loan”); and
WHEREAS, the City desires to maximize the Buyer’s deferred developer fee and conventional lending sources for the RDA Loan and repayment of the Seller Notes; and
WHEREAS, the City desires that the Purchase Price Reduction be contingent upon Buyer’s performance of all its obligations under the Seller Notes; and
WHEREAS, the City desires that the terms of the Seller Notes and the RDA Loan shall be at least as beneficial to the City and the RDA, respectively, as the terms in the combined term sheet outlining all the City assistance attached as Exhibit A (the “Term Sheet”); and
WHEREAS, Utah Code Section 10-8-2(1)(a)(i) allows public entities to “appropriate money for corporate purposes only”; and
WHEREAS, Utah Code Section 10-8-2(3) provides that “a corporate purpose” is the appropriation of money for any purpose that “in the judgment of the municipal legislative body, provides for the safety, health, prosperity, moral well-being, peace, order, comfort, or convenience of the inhabitants of the municipality” so long as the procedures set forth under Utah Code Section 10-8-2 are followed; and
WHEREAS, Utah Code Section 10-8-2(3)(d) requires “the municipal legislative body making any decision to appropriate any funds for a corporate purpose under this section,” to hold a public hearing after notice of at least 14 days; and
WHEREAS, Utah Code Section 10-8-2(3)(e) requires a study “demonstrating the purpose for the appropriation” to be performed, taking into consideration the following factors: “(i) what identified benefit the municipality will receive in return for any money or resources appropriated; (ii) the municipality’s purpose for the appropriation, including an analysis of the way the appropriation will be used to enhance the safety, health, prosperity, moral well-being, peace, order, comfort, or convenience of the inhabitants of the municipality; and (iii) whether the appropriation is necessary and appropriate to accomplish the reasonable goals and objectives of the municipality in the area of economic development, job creation, affordable housing, blight elimination, job preservation, the preservation of historic structures and property, and any other public purpose” (“Study”); and
WHEREAS, the City Council has, following the giving of not less than fourteen (14) days public notice and posting of the Study, conducted a public hearing relating to the foregoing, in satisfaction of the requirements of Utah Code Section 10-8-2; and
WHEREAS, the Council has reviewed the Study, and has fully considered the conclusions set forth therein, and all comments made during the public hearing.
THEREFORE, BE IT RESOLVED by the City Council of Salt Lake City, Utah, as follows:
1. The City Council hereby adopts the conclusions set forth in the Study, and hereby finds and determines that, for all the reasons set forth in the Study, the below-market terms at least as beneficial to the City as the terms outlined in the Term Sheet for the Seller Notes and the contingent Purchase Price Reduction are appropriate under these circumstances.
2. The terms outlined on the Term Sheet represent the maximum contribution by the City to the Project, and the City Council hereby authorizes the City administration to negotiate the final terms consistent with the Term Sheet or more beneficial to the City, and execute the loan agreement and any other relevant documents consistent with this Resolution and incorporating such other terms and agreements as recommended by the City Attorney’s office.
Passed by the City Council of Salt Lake City, Utah, this 18th day of December, 2018.