HomeMy WebLinkAbout98-17RESOLUTION N0.98-17
• Resolution Authorizing a Loan.~lot To Exceed $135,000 In Urban Development
Action Grant Repayment Funds To Assist Community National Bank Through
CNB Holdings, Inc. In The Purchase And Renovations at 202 N. Washington
Avenue, Pulaski, Virginia, to Allow for the Company's Continued Operation and
Expansion
WHEREAS, Community National Bank through CNB Holdings, Inc. has applied for a
UDAG loan, in the amount of $135,000 for the purchase of real estate and improvements
at 202 N. Washington Ave. for their business located in the Town of Pulaski; and
WHEREAS, according to the UDAG application, the project's budget includes:
Expense UDAG Community CNB Holdings Total
National Bank
Land & Building $ 84,150 $ 71,060 $31,790 $187,000
Improvements $ 50,850 $ 43,940 $18,210 $113,000
Total $135,000 $115,000 $50,000 $300,000
Furthermore, CNB Holdings, Inc. will contribute a minimum of $50,000 in equity; and
WHEREAS, Community National Bank through CNB Holdings, Inc. must comply with
. this budget, which is part of this resolution; and
WHEREAS, due to the expressed need for the continuation and expansion of Community
National Bank in the Town and the desire to have the building at 202 N. Washington
Ave. in use, Town Council is providing Community National Bank through CNB
Holdings, Inc. credit for the owner's investment of 17 percent and the Bank's
participation of 38 percent of the total project cost; and
WHEREAS, the Town has available certain Urban Development Action Grant
Repayment Funds, repaid by other UDAG recipients, and these funds have been
segregated and designated for specified activities including economic development and
downtown revitalization;
NOW THEREFORE, be it RESOLVED by the Town Council of the Town of Pulaski,
Virginia, sitting in regular session on May 12, 1998, that:
ect' n 1. The amount not to exceed $135,000 from the Urban Development Action
Grant Repayment Funds, be, and hereby is, appropriated for expenditure, to be loaned to
Community National Bank through CNB Holdings, Inc. for the purchase and renovation
of real estate at 202 N. Washington Ave. for their business located in the Town of
Pulaski.
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,ion 2. Said loans are contingent upon the Town having a first deed of trust on the
property being purchased and all fixtures now owned or hereafter acquired. The deed of
. trust and security agreement will also secure Community National Bank with a second
deed of trust.
Section 3. The loan shall bear an interest rate oftwo-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 term of the loan shall not exceed 15 years.
e t' 4. The disbursements must substantially be in conformance with the
aforementioned expense allocation 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 $50,000 and obtain a loan from Community National Bank in the amount of
$115,000.
Section 6. The Town Manager and Town Attorney are hereby authorized to draft,
approve and/or execute appropriate loan documents not inconsistent with the terms of this
resolution. Such documentation may include appropriate provisions for the protection of
the Town, including but not limited to reservation of the right of the Town to withhold
payment or accelerate the maturity of indebtedness for good cause shown.
~• 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.
ct' .This resolution is effective upon adoption and is adopted by recorded vote of
the Town Council of the Town of Pulaski, Virginia, on this 12~' day of May, 1998 as
follows:
James M. Neblett A;,e W. Edgar Hale ATe
Lane R. Penn ~~,e Joseph L. Weddle ~~
Bettye H. Steger Ave Pauline G. Mitchell Aye .- ::.
Charles W. Stewart Aye Gerald E. Bolen Absent
TO F P {I, VIRG A
By:
ohn A. John n, Mayor
Atte
Patricia Pendergrast, Clerk Council
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