TO: CRA Board of Commissioners
FROM: Kim N. Phan, Legal Advisor
THROUGH: Renée A. Jadusingh, Executive Director
DATE: May 24, 2022
Title
FIRST AMENDMENT TO THE CONSTRUCTION LOAN AGREEMENT WITH HATCHER CONSTRUCTION & DEVELOPMENT, INC.
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Recommended Action:
Recommendation
Approve the First Amendment to the Construction Loan Agreement with Hatcher Construction & Development, Inc. (“Hatcher”) for the purpose of constructing two separate 2-story commercial buildings on CRA owned land located at 20 and 26 NW 6th Avenue, in substantially the attached form.
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Background:
On June 11, 2019, the CRA Board approved a ground lease (“Ground Lease”) with Hatcher to construct a two-story 6,000 SF office building on two (2) adjacent, vacant CRA-owned parcels located at 20 and 26 NW 6th Avenue (“Project”). The Ground Lease was executed on July 18, 2019.
On October 21, 2021, the CRA Board approved a Loan Commitment Letter providing a $1.4 million dollar loan to Hatcher for the Project. Accordingly, on February 9, 2022, the CRA and Hatcher executed a construction loan agreement (“Construction Loan Agreement”). Hatcher has made one draw in the amount of $279,287.10 pursuant to the Construction Loan Agreement.
The Construction Loan Agreement currently states that repayment of the principal and interest begins when the promissory note and the Construction Loan Agreement are executed and delivered to the CRA for eighty-four (84) consecutive months. More specifically, the Construction Loan Agreement states the following:
The proposed first amendment to the Construction Loan Agreement (“First Amendment”) and restated and amended promissory note (“Amended and Restated Promissory Note”) will require repayment of interest to start May 1, 2022 and the principal and interest to begin after the certificate of occupancy has been received. More specifically, the proposed language in the First Amendment will state:
1.2 Commencing on May 1, 2022,...
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