HomeMy WebLinkAbout98-25RESOLUTION NO. 98-25
• Resolution Modifying the Terms of a Loan Not to Exceed $135,000 in Urban
Development Action Grant Repayment Funds to Assist Community National Bank
In The Purchase and Renovation at 202 N. Washington Avenue, Pulaski, Virginia,
to Allow for Lhe Bank's Continued Operation and Expansion
WHEREAS, pursuant to Resolution No. 98-17, the Town Council approved a loan not
to exceed $135,000 in Urban Development Action Grant (UDAG) repayment funds to
assist Community National Bank, a National Banking Association, (CNB) in the
purchase and renovation of a building at 202 N. Washington Avenue, Pulaski, Virginia,
with title to the property being held by CNB Holdings, Inc.; and
WHEREAS, the original project budget of $300,000 was to be financed through a first
lien UDAG loan of $135,000, equity from CNB Holdings in the amount of at least
$50,000, and a loan from CNB in the anticipated amount of $115,000; and
WHEREAS, because of certain regulatory requirements, it is more advantageous to
CNB for title to the property to be held in the name of CNB and not CNB Holdings, Inc.;
and "
WHEREAS, the CNB cannot hold a lien upon its own property, so it has requested that
the UDAG Loan approval be restructured so that while the Town UDAG Loan would
• maintain its first lien position in the amount of not to exceed $135,000, CNB would
contribute at least $150,000 in equity contribution toward the purchase and renovation
of the property; now
THEREFORE, be it resolved by the Town Council of the Town of Pulaski, Virginia,
sitting in its regular session on July 8, 1998, that:
Section 1. The amount not to exceed $135,000 from the Urban Development Action
Grant Repayment Funds, ba and hereby is, appropriated for expenditure, to be loaned
to Community National Bank, a National Banking Association, for the purchase and
renovation of real estate at 202 N. Washington Ave. for their business located in the
Town of Pulaski.
Section 2. Said loans are contingent upon the Town having a first deed of trust on the
property being purchased :end all fixtures now owned or hereafter acquired.
Section 3. The loan shall gear an interest rate of two-thirds of the Wall Street Journal
prime lending rate at the time of loan closing. The loan rate will be adjusted at each 5
year anniversary. The tern} of the loan shall not exceed 15 years.
L~
Section 4. The disbursements must substantially be in conformance with the budget
• allocations submitted to the Town and in no case may a category amount be exceeded
without the prior approval of Town Council.
Section 5. In addition to the terms previously mentioned, the borrower agrees to invest
a minimum of $165,000.
Section 6. The Town Manager and Town Attorney are hereby authorized to draft,
approve andlor execute appropriate loan documents not inconsistent with the terms of
this resolution. Such documentation may include appropriated provisions for the
protection of the Town, including but not limited to reservation of the Town to withhold
payment or accelerate the maturity of indebtedness for good cause shown.
Section 7. Nothing contained herein shall be deemed a pledge of the full faith and
credit of the Town, nor shall it create a general obligation of the Town, nor shall any
monies be loaned from the General Fund of the Town.
Section 8. This resolution is effective upon adoption and is adopted by recorded vote
of the Town Council of the Town of Pulaski, Virginia, on this~th day of July, 1998 as
follows:
Charles W. Stewart
Pauline G. Mitchell
• Joseph L. Weddle
W. Edgar Hale
By:
Attest:
Patricia Pendergrast, Clerk: of Council
Bettye H. Steger
Jeffrey S. Worrell
Lane R. Penn
James M. Neblett
TOWN OF PULASKI, VIRGINIA
John A. Johnston, Mayor
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