Explanation
BACKGROUND: The Economic Development Division established a business loan program in the early 1980's for acquisition, rehabilitation, working capital and purchase of equipment for commercial and industrial businesses. The program includes the following loan products: Business Development Loan, Working Capital Loan, NCR Investment Fund Loan, NCR Commercial Improvement Loan Fund (CILF), and the NCR Façade Loan. These loans are funded by Community Development Block Grant Funds (CDBG), Urban Development Action Grant (UDAG) repayment funds and Urban Site Acquisition Loan Funds (USAL). In 2004 the Economic Development Loan Program was out-sourced to the Community Capital Development Corporation (CCDC) by authority of legislation number 0913-2004, passed June 21, 2004.
Loans closed prior to June 21, 2004 require the Development Director to sign various documents pertaining to authorization and servicing of the business loan deals. These documents include: loan modification agreements, term note modification agreements, subordination agreements, forebearance agreements, satisfaction of mortgages, UCC filings and releases, consent agreements and assumption agreements.
This legislation authorizes the Director of the Department of Development, or his designee, to sign various documents associated with the Economic Development Loan Program on loans closed prior to June 21, 2004 on behalf of the City of Columbus.
Emergency action is requested to allow the Director of Development to sign various loan documents in a timely manner to avoid interruptions in program services.
FISCAL IMPACT: No funds are associated with this legislation.
Title
To authorize the Director of the Department of Development, or his designee, to sign various loan documents on CDBG, UDAG and USAL repayment loans closed prior to June 21, 2004 on behalf of the City of Columbus in connection with the Economic Development Loan Program; and to declare an emergency.
Body
WHEREAS, the Economic Development Loan Program was established in the early 1980's per regulations established by the Federal Department of Housing and Urban Development, (HUD) pursuant to 24 CFR, Part 570; and
WHEREAS, the program includes the following loan products: Business Development Loan, Working Capital Loan, NCR Investment Fund Loan, NCR Commercial Improvement Loan Fund (CILF), and the NCR Façade Loan; and
WHEREAS, these loans are funded by Community Development Block Grant Funds (CDBG),Urban Development Action Grant (UDAG) repayment funds and Urban Site Acquisition Loan Funds (USAL); and
WHEREAS, in 2004 the Economic Development Loan Program was out sourced to the Community Capital Development Corporation (CCDC) by authority of legislation number 0913-2004, passed June 21, 2004; and
WHEREAS, in the administration of the Loan Program it is necessary to authorize the Director of Development, or his designee, to execute various loan documents on loans closed prior to June 21, 2004, when changes to loans are consistent with HUD regulations at 24 CFR, Part 570 and the HUD approved City underwriting guidelines; and
WHEREAS, consideration needs to be given on a case-by-case basis to enter into agreements associated with economic development loans closed prior to June 21, 2004, all in the financial interest of the City of Columbus, per HUD regulations 24 CFR, Part 570 and City of Columbus underwriting guidelines; and
WHEREAS, an emergency exists in the usual daily operation of the Department of Development in that it is immediately necessary to possess the authority to sign loan documents to avoid interruptions in program services, all for the immediate preservation of the public health, peace, property, safety and welfare; NOW, THEREFORE,
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
Section 1. That the Director of the Department of Development, or his designee, is hereby authorized to sign the following loan documents on CDBG, UDAG and USAL repayment loans closed prior to June 21, 2004, in connection with the Economic Development Loan Program: loan modification agreements, term note modification agreements, subordination agreements, forebearance agreements, satisfaction of mortgages, UCC filings and releases, consent agreements and assumption agreements when consistent with the requirements of the regulations of the Federal Department of Housing and Urban Development, (HUD) at 24 CFR, Part 570 and pursuant to HUD approved City of Columbus underwriting guidelines.
Section 2. That for the reason stated in the preamble hereto, which is hereby made a part hereof, this ordinance is hereby declared to be an emergency measure and shall take effect and be in force from and after its passage and approval by the Mayor, or ten days after passage if the Mayor neither approves nor vetoes the same.