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HomeMy WebLinkAbout96-17RESOLUTION N0.96-17 • Resolution Authorizing a Loan Not To Ezceed $54,000 In Urban Development Action Grant Repayment Funds To Assist Ernest D. and Teresa J. Lee of All Country Restaurant In The Purchase of Real Estate at 220 N. Washington Avenue, Pulaski, Virginia, to allow for the company's Continued Operation and expansion WHEREAS, Ernest D. and Teresa J. Lee of All Country Restaurant have applied for a UDAG loan, in the amount of $54,000 for the purchase of real estate at 220 N. Washington Avenue for their business located in the Town of Pulaski; and WHEREAS, according to the UDAG application and business plan, the project's budget includes: Budget Amount Term Purchase of real estate $54,000 15 years TOTAL PROJECT (Town Portion) $54,000 In addition, Community National Bank will loan Ernest D. and Teresa J. Lee of All Country Restaurant $54,000. Furthermore, Ernest D. and Teresa J. Lee of All Country Restaurant will contribute a minimum of $12,000. WHEREAS, Ernest D. and Teresa J. Lee of All Country Restaurant must comply with this budget, which is part of this ordinance. • WHEREAS, due to the expressed need for the continuation of a local restaurant that provides entertainment, Town Council is providing Ernest D. and Teresa J. Lee of All Country Restaurant credit for the owner's investment of 10 percent and the Bank's participation of 45 percent of the total project cost. WHEREAS, the Town has available certain Urban Development Action Grant Repayment Funds, being repaid by Pulaski Furniture Corporation and Magnox-Pulaski, Inc., and these funds have been segregated and designated for specified activities including economic development and downtown revitalization. NOW THEREFQRE, be it RESOLVED by the Town Council of the Town of Pulaski, Virginia, sitting in regular session on June 4, -1996, ghat: Section 1. The amount not to exceed $54,000 from the Urban Development Action Grant Repayment Funds, be, and hereby is, appropriated for expenditure, to be loaned to Ernest D. and Teresa J. Lee of All Country Restaurant for the purchase of real estate at 220 N. Washington Avenue for their business located in the Town of Pulaski. Section 2. Said loans are contingent upon Ernest D. aid Teresa J. Lee of All Country Restaurant upon the Town having a shared first deed of trust on the property being purchased and all equipment now owned or hereafter acquired. The deed of trust and security agreement will equally secure this loan and the Community National Bank loan. Section 3. The loan shall bear an interest rate of two-thirds of the prime lending rate at the time of loan • closing. The term for the real estate shall not exceed 15 years. Section 4. The disbursements must substantially be in conformance with the attached budget and in no case may a category amount be exceeded without the prior approval of Town Council. . ection 5. In addition to the terms previously mentioned, the borrower agrees to invest a minimum of • $12,000 and obtain a loan from Community National Bank for the sum of $54,000. Section 6. Furthermore, the borrowers agree to establish an escrow account with Community National Bank in an amount not to be less than $8,000. This account will be established for further security of the Town and the Bank to pay payments, taxes, insurance premiums or other costs related to the loan. If funds are used by the Town or the Bank, the borrowers agree to promptly reimburse the escrow for the amount used or the loans may be declared in default. Section 7. In addition, a life insurance policy(s) in an amount of not less than $100,000 covering each borrower with terms satisfactory to the Town will be assigned to further secure this and the Bank's loans. Section 8. Furthermore, an appraisal from a licensed independent appraiser will be required to establish the value of the real estate being purchased. The minimum value must be at least the purchase price or the loan amount will be adjusted to be not more than forty-five (45) percent of the appraised value. Section . In addition, Ernest D. and Teresa J. Lee of All Country Restaurant are required to maintain their Alcoholic Beverage Control license. Section 10. The Town Manager and Town Attorney aze 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 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. • ection 11. 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 loan from the General Fund of the Town. Section 12. This ordinance is effective upon adoption and is adopted by recorded vote of the Town Council of the Town of Pulaski, Virginia, on this June 4, 1996 as follows: John Johnston ~ Lane R. Penn ~ Bettye H. Steger ~ W. Edgaz Hale g~ ~ ''~ Roy H. D'Ardenne, Jr. A~ W.H. Schrader, Jr. ~- Alma H. Holston A.ye Elbert G. Black A~e_ TOWN F P LASKI, V IN By: ~-- Andrew L. Graham, Mayor Attest: Ruth A. Harrell, Clerk of Council •