HomeMy WebLinkAboutAuthorize Mayor to Execute Substitutions of Trustee, consent to mod., MT Board of Housing Trust Indent, Interfaith Housing.pdf
Commission Memorandum
REPORT TO: Honorable Mayor and City Commission FROM: Greg Sullivan, City Attorney
SUBJECT: Authorize Mayor to Execute Substitutions of Trustee, Consent to
Modifications, and Authorize Trustee to Enter into Subordination Agreements with the Montana Board of Housing for Trust Indentures with Bozeman Interfaith Housing II, Inc.
MEETING DATE: February 22, 2011
AGENDA ITEM TYPE: Consent
RECOMMENDATION: Authorize the Mayor to execute the Substitutions of Trustee, consent
to modification of Montana Board of Housing’s loan with Bozeman Interfaith II, and authorize Trustee to execute Subordination Agreements.
BACKGROUND: In 1997, the City of Bozeman entered into two separate trust indentures with
Bozeman Interfaith II (Interfaith) for purposes of Interfaith obtaining financing for the Pond Row
Apartments. The first trust indenture is for $12,000 and the second is for $25,000. At the time, then City Attorney Paul J. Luwe was appointed as trustee for both trust indentures. Subsequently,
to assist in construction of the project, Interfaith borrowed funds from the Montana Board of
Housing (MBOH) and First Security Bank. In 1999, the City of Bozeman agreed to subordinate
both trust indentures to the loans made by First Security Bank and the MBOH.
This request is limited to the loan to Interfaith made by the MBOH. Interfaith is now requesting a
loan modification agreement with the MBOH under which loan payments would be suspended
for six months and the loan maturity date would be extended for six months. The MBOH will
agree to the loan modification only if the City agrees to continue to allow the City’s trust
indentures to be subordinate to the MBOH’s loan.
The Substitution of Trustee is necessary to allow me to act as trustee on behalf of the City of
Bozeman, the beneficiary of the trust indentures.
According to records in the Bozeman Finance Department, Interfaith is current on all payments owed to the City under both trust indentures and has a satisfactory record of making payments.
Should the Commission approve this consent item the Commission will be taking the
following action:
1. Authorize the Mayor to Execute the Substitution Trustee to allow me, Greg Sullivan, Bozeman City Attorney, to act as trustee under both trust indentures; 2. Consent to the Montana Board of Housing’s modification of its loan agreements with Interfaith extending the maturity date of its loans and agreeing to a six month
suspension of its loan payments; and
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3. Authorize me, Greg Sullivan, as trustee, to enter into new subordination agreements for both trust indentures.
ALTERNATIVES: As suggested by the City Commission.
FISCAL EFFECTS: There are no fiscal effects. The subordination agreement does not extend
the terms of the trust indentures. The MBOH will pay for the recording of the subordination
agreements. The City will pay the costs of recording the substitutions of trustee.
UNRESOLVED ISSUES: None.
Attachments:
• Substitution of Trustee for $12,000 Trust Indenture
• Substitution of Trustee for $25,000 Trust Indenture
• Subordination Agreement for $12,000 Trust Indenture
• Subordination Agreement for $25,000 Trust Indenture
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When recorded please return original to:
Greg Sullivan Bozeman City Attorney
PO Box 1230
Bozeman, MT 59771-1230
Substitution of Trustee
WHEREAS, a trust indenture was made the 19th day of November, 1997 between BOZEMAN INTERFAITH HOUSING, INC. (II), with a current mailing address of PO Box 7090, Bozeman, Montana 59771-7090, as Grantor, PAUL J. LUWE, Bozeman City Attorney, as original Trustee, and the CITY OF
BOZEMAN, with a mailing address of PO Box 1230, Bozeman, Montana 59771-1230, as Beneficiary and was subsequently recorded in the Office of the Gallatin County Clerk and Recorder on December 19, 1997 in Book 179 of Mortgages at Pages 4299 - 4307; and
WHEREAS, the CITY OF BOZEMAN desires to substitute GREGORY S. SULLIVAN, the
current Bozeman City Attorney, with a mailing address of PO Box 1230, Bozeman, Montana, 59771-
1230, as Trustee in place and instead of said original Trustee under the above described Trust Indenture; and
WHEREAS, GREGORY S. SULLIVAN, is currently an attorney licensed to practice law in Montana; and
WHEREAS, the Bozeman City Commission is the entity authorized by law to act on behalf of the CITY OF BOZEMAN and did, on February 22, 2011, duly authorize the Mayor of the City of Bozeman,
Jeffrey K. Krauss, to execute this Substitution of Trustee.
NOW, THEREFORE, the undersigned, on behalf of the CITY OF BOZEMAN hereby substitutes GREGORY S. SULLIVAN, as Trustee for the Trust Indenture identified herein.
Date: _______________ _______________________ Jeffrey K. Krauss, Mayor
State of Montana )
):ss.
County of Gallatin )
On this ___ day of February, 2011, before me, the undersigned, a Notary Public for the State of Montana, personally appeared JEFFERY K. KRAUSS, known to me to be the Mayor of the City of Bozeman and then person whose name is subscribed to the within instrument and acknowledged to me that he executed
the same for and on behalf of the City of Bozeman. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my Notarial Seal the day and year
first above written. ______________________________________ Notary Public for the State of Montana
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When recorded please return original to:
Greg Sullivan Bozeman City Attorney
PO Box 1230
Bozeman, MT 59771-1230
Substitution of Trustee
WHEREAS, a trust indenture was made the 19th day of November, 1997 between BOZEMAN INTERFAITH HOUSING, INC. (II), with a current mailing address of PO Box 7090, Bozeman, Montana 59771-7090, as Grantor, PAUL J. LUWE, Bozeman City Attorney, as original Trustee, and the CITY OF
BOZEMAN, with a mailing address of PO Box 1230, Bozeman, Montana 59771-1230, as Beneficiary, and was subsequently recorded in the Office of the Gallatin County Clerk and Recorder on December 19, 1997 in Book 179 of Mortgages at Pages 4308 - 4315; and
WHEREAS, the CITY OF BOZEMAN desires to substitute GREGORY S. SULLIVAN, the
current Bozeman City Attorney, with a mailing address of PO Box 1230, Bozeman, Montana, 59771-
1230, as Trustee in place and instead of said original Trustee under the above described Trust Indenture; and
WHEREAS, GREGORY S. SULLIVAN, is currently an attorney licensed to practice law in Montana; and
WHEREAS, the Bozeman City Commission is the entity authorized by law to act on behalf of the CITY OF BOZEMAN and did, on February 22, 2011, duly authorize the Mayor of the City of Bozeman,
Jeffrey K. Krauss, to execute this Substitution of Trustee.
NOW, THEREFORE, the undersigned, on behalf of the CITY OF BOZEMAN hereby substitutes GREGORY S. SULLIVAN, as Trustee for the Trust Indenture identified herein.
Date: _______________ _______________________ Jeffrey K. Krauss, Mayor
State of Montana )
):ss.
County of Gallatin )
On this ___ day of February, 2011, before me, the undersigned, a Notary Public for the State of Montana, personally appeared JEFFERY K. KRAUSS, known to me to be the Mayor of the City of Bozeman and then person whose name is subscribed to the within instrument and acknowledged to me that he executed
the same for and on behalf of the City of Bozeman. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my Notarial Seal the day and year
first above written. ______________________________________ Notary Public for the State of Montana
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LOAN MODIFICATION CONSENT AND SUBORDINATION AGREEMENT
WHEREAS, Bozeman Interfaith Housing II, Inc., a nonprofit corporation (the “Owner”)
is the owner of the following described real property situated in Gallatin County, State of
Montana, to-wit:
Lot 2 of Bozeman Interfaith Housing 2, Minor Subdivision No. 223, in Gallatin
County, Montana, according to the official plat thereof on file and of record in the
office of the County Clerk and Recorder, Gallatin County, Montana.
(the “Property”).
WHEREAS, the undersigned, City of Bozeman, has a lien upon the above-described real
property as follows:
Montana Trust Indenture, dated November 19, 1997, wherein Bozeman Interfaith
Housing, Inc. (II) is the Grantor, Paul J. Luwe, Bozeman City Attorney, is the
Trustee and the City of Bozeman is the Beneficiary, which Trust Indenture
secures a loan in the amount of Twelve Thousand and No/100 Dollars
($12,000.00) and was recorded on December 19, 1997, in Film 179, Page 4299, as
Document No. 356255, records of Gallatin County, Montana.
WHEREAS, the Owner executed a Trust Indenture dated September 8, 1999, under
which Security Title Company is Trustee and the Montana Board of Housing (the “Board”) is
Beneficiary, recorded September 8, 1999 in Film 202, Page 3592, Document No. 399428,
records of Gallatin County, Montana (the “Trust Indenture”), upon the Property to secure
payment of a promissory note in favor of the Board in the principal amount of $567,500.00
(“Note”);
WHEREAS, the City of Bozeman subordinated its above-described Trust Indenture to the
Board’s Trust Indenture described above by Subordination Agreement recorded September 8,
1999 in Film 202, Page 3614, Document No. 399431, records of Gallatin County, Montana;
WHEREAS, the City of Bozeman, Beneficiary, has appointed Gregory S. Sullivan,
Bozeman City Attorney, as the successor trustee under the above-described Trust Indenture by
Substitution of Trustee duly recorded in the records of Gallatin County, Montana;
WHEREAS, the Owner and the Board have entered into a Loan Modification
Agreement dated January ___, 2011 and a Modification of Trust Indenture dated January
___, 2011, pursuant to which the payment terms and maturity date of the Note are
modified and extended and final maturity date specified in the Trust Indenture is
extended to April 1, 2030.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, in order to permit the Owner and the Board
to modify and extend the payment terms and maturity date of the Board’s Note and to
continue to secure the Note by a first priority Trust Indenture on the real property
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2
hereinabove described, the undersigned, City of Bozeman, for itself and for its heirs,
representatives, successors and assigns does hereby consent to the above-referenced
modification and extension of the Note and Trust Indenture and agree that all of its right,
title, lien and interest in and to the above-described real property shall be subject to and
subordinated to the said Montana Trust Indenture in favor of, or for the benefit of, the
Board and its assigns, which is dated the 8th day of September, 1999, and recorded on the
8th day of September, 1999 at 3:49 p.m., in Film 202, Page 3592, Document No. 399428,
records of Gallatin County, Montana, as modified by the Modification of Trust Indenture
dated the ___ day of January 2011, and recorded on the ___ day of January, 2011 at
_____ __.m., in Film ____, Page ____, Document No. _______, records of Gallatin
County, Montana, and which Trust Indenture, as modified, shall be a first and prior lien
upon the real property described above, superior to any right, title, line and interest of the
undersigned, City of Bozeman.
IN WITNESS WHEREOF, Gregory S. Sullivan, Bozeman City Attorney, has set his
hand and affixed his Seal this ____ day of ____________________, 2011.
CITY OF BOZEMAN
______________________________________
Gregory S. Sullivan, Bozeman City Attorney
and Successor Trustee
State of Montana )
):ss.
County of _________ )
On this ___ day of ____________, 2011, before me, the undersigned, a Notary Public for
the State of Montana, personally appeared GREGORY S. SULLIVAN, known to me to be the
City Attorney and Successor Trustee for the City of Bozeman and then person whose name is
subscribed to the within instrument and acknowledged to me that he executed the same for and
on behalf of the City of Bozeman.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my Notarial Seal the
day and year first above written.
______________________________________
Notary Public for the State of Montana
36
1
LOAN MODIFICATION CONSENT AND SUBORDINATION AGREEMENT
WHEREAS, Bozeman Interfaith Housing II, Inc., a nonprofit corporation (the “Owner”)
is the owner of the following described real property situated in Gallatin County, State of
Montana, to-wit:
Lot 2 of Bozeman Interfaith Housing 2, Minor Subdivision No. 223, in Gallatin
County, Montana, according to the official plat thereof on file and of record in the
office of the County Clerk and Recorder, Gallatin County, Montana.
(the “Property”).
WHEREAS, the undersigned, City of Bozeman, has a lien upon the above-described real
property as follows:
A Montana Trust Indenture, dated November 19, 1997, wherein Bozeman
Interfaith Housing, Inc. (II) is the Grantor, Paul J. Luwe, Bozeman City Attorney,
is the Trustee and the City of Bozeman is the Beneficiary which Trust Indenture
secures a loan in the amount of Twenty Five Thousand No/100 Dollars
($25,000.00) and was recorded on December 19, 1997, in Film 179, Page 4308, as
Document No. 356256, records of Gallatin County, Montana.
WHEREAS, the Owner executed a Trust Indenture dated September 8, 1999, under
which Security Title Company is Trustee and the Montana Board of Housing (the “Board”) is
Beneficiary, recorded September 8, 1999 in Film 202, Page 3592, Document No. 399428,
records of Gallatin County, Montana (the “Trust Indenture”), upon the Property to secure
payment of a promissory note in favor of the Board in the principal amount of $567,500.00
(“Note”);
WHEREAS, the City of Bozeman subordinated its above-described Trust Indenture to the
Board’s Trust Indenture described above by Subordination Agreement recorded September 8,
1999 in Film 202, Page 3612, Document No. 399430, records of Gallatin County, Montana;
WHEREAS, the City of Bozeman, Beneficiary, has appointed Gregory S. Sullivan,
Bozeman City Attorney, as the successor trustee under the above-described Trust Indenture by
Substitution of Trustee duly recorded in the records of Gallatin County, Montana;
WHEREAS, the Owner and the Board have entered into a Loan Modification
Agreement dated January ___, 2011 and a Modification of Trust Indenture dated January
___, 2011, pursuant to which the payment terms and maturity date of the Note are
modified and extended and final maturity date specified in the Trust Indenture is
extended to April 1, 2030.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, in order to permit the Owner and the Board
to modify and extend the payment terms and maturity date of the Board’s Note and to
continue to secure the Note by a first priority Trust Indenture on the real property
37
2
hereinabove described, the undersigned, City of Bozeman, for itself and for its heirs,
representatives, successors and assigns does hereby consent to the above-referenced
modification and extension of the Note and Trust Indenture and agree that all of its right,
title, lien and interest in and to the above-described real property shall be subject to and
subordinated to the said Montana Trust Indenture in favor of, or for the benefit of, the
Board and its assigns, which is dated the 8th day of September, 1999, and recorded on the
8th day of September, 1999 at 3:49 p.m., in Film 202, Page 3592, Document No. 399428,
records of Gallatin County, Montana, as modified by the Modification of Trust Indenture
dated the ___ day of January 2011, and recorded on the ___ day of January, 2011 at
_____ __.m., in Film ____, Page ____, Document No. _______, records of Gallatin
County, Montana, and which Trust Indenture, as modified, shall be a first and prior lien
upon the real property described above, superior to any right, title, line and interest of the
undersigned, City of Bozeman.
IN WITNESS WHEREOF, Gregory S. Sullivan, Bozeman City Attorney, has set his
hand and affixed his Seal this ____ day of ____________________, 2011.
CITY OF BOZEMAN
______________________________________
Gregory S. Sullivan, Bozeman City Attorney
and Successor Trustee
State of Montana )
):ss.
County of _________ )
On this ___ day of ____________, 2011, before me, the undersigned, a Notary Public for
the State of Montana, personally appeared GREGORY S. SULLIVAN, known to me to be the
City Attorney and Successor Trustee for the City of Bozeman and then person whose name is
subscribed to the within instrument and acknowledged to me that he executed the same for and
on behalf of the City of Bozeman.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my Notarial Seal the
day and year first above written.
______________________________________
Notary Public for the State of Montana
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