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HomeMy WebLinkAbout2015-09-8295377 ORDINANCE NO. 2015 — 9 - 8295 AN ORDINANCE OF THE CITY OF PADUCAH, KENTUCKY, APPROVING AND AUTHORIZING THE EXECUTION OF A SUBORDINATION AGREEMENT BETWEEN THE CITY OF PADUCAH, KENTUCKY, AND COMMUNITY FINANCIAL SERVICES BANK; RELATING TO THE REDEVELOP AND REVITALIZATION OF THE SMEDLEY YEISER BUILDING IN THE LOWERTOWN NEIGHBORHOOD WHEREAS, by deed dated June 26, 2015, of record in Deed Book 1303, page 681 in the McCracken County Clerk's office, the City of Paducah conveyed to Bighorn Properties LLC, a Kentucky limited liability company, ("Bighorn") real property located at 533 Madison Street, Paducah, Kentucky, generally known as the Smedley Yeiser Building (the Property"); and WHEREAS, the Property was conveyed from the City to Bighorn with the following conditions and re -conveyance rights in favor of the City (a) Grantee shall rehabilitate and revitalize, at its sole cost and expense, the improvements located on the Property in accordance with designs and plans to be approved by the Historical and Architectural Review Commission of the City of Paducah, with a capital investment of at least $500,000.00, exclusive of the value of the Property (the "Project"), within one (1) year from the date of this deed of conveyance. (b) In the event Grantee has not substantially completed the Project within one (1) year from the date of this deed of conveyance, Grantee agrees that this deed shall be forfeited and the Property shall at once revert back to Grantor and Grantee shall promptly take all steps to cause the transfer and re -conveyance of the Property back to Grantor, at no out-of-pocket cost to the Grantor, such that the Grantor is restored with merchantable fee title to the Property free and clear of any mortgages, liens, encumbrances, and adverse interests. The parties further agree that substantial completion of the Project shall mean that a certificate of occupancy has been issued by the City of Paducah's inspection department. WHEREAS, Bighorn desires to finance its rehabilitation and revitalization of the Property with a construction loan from Community Financial Services Bank ("CFSB"), loan will be secured with a first mortgage upon the Property in favor of CFSB: WHEREAS, as a condition to providing the loan, CFSB is requiring the City to subordinate its re -conveyance rights in the Property to the first mortgage interest of CFSB; to which the City is agreeable. NOW THEREFORE, BE IT ORDAINED BY THE CITY COMMISSION OF THE CITY OF PADUCAH, KENTUCKY, AS FOLLOWS: Section 1. Recitals and Authorization. The City of Paducah, Kentucky, hereby approves the Subordination Agreement between the City and CFSB in substantially the form attached hereto as Exhibit A and made a part hereof.. It is hereby found and determined that the Subordination Agreement it is in the best interest of the citizens, residents and inhabitants of the City. The Mayor is hereby authorized to execute the Subordination Agreement with such changes in the Subordination Agreement that are not inconsistent with this Ordinance and not substantially adverse to the City as may be approved by the official executing the same on behalf of the City. The approval of such changes by said official, and that such are not substantially adverse to the City, shall be conclusively evidenced by the execution of the Subordination Agreement by such official. Section 2. Severability. If any section, paragraph or provision of this Ordinance shall be held to be invalid or unenforceable for any reason, the invalidity or unenforceability of such section, paragraph or provision shall not affect any of the remaining provisions of this Ordinance. f -- - - 11_ 1 378 Section 3. Compliance With Open Meetings Laws. The City Commission hereby finds and determines that all formal actions relative to the adoption of this Ordinance were taken in an open meeting of this City Commission, and that all deliberations of this City Commission and of its committees, if any, which resulted in formal action, were in meetings open to the public, in full compliance with applicable legal requirements. Section 4. Conflicts. All ordinances, resolutions, orders or parts thereof in conflict with the provisions of this Ordinance are, to the extent of such conflict, hereby repealed and the provisions of this Ordinance shall prevail and be given effect. Section 5. Effective Date. This Ordinance shall be read on two separate days and will become effective upon summary publication pursuant to KRS Chapter 424. ATTEST: City Clerk Introduced by the Board of Commissioners, September 1, 2015 Adopted by the Board of Commissioners, September 15, 2015 Recorded by City Clerk, September 15, 2015 Published by The Paducah Sun, September 18, 2015 \ord\plan\agree-subordination-533 Madison -Smedley Yeiser 379 EXHIBIT A TO ORDINANCE SUBORDINATION AGREEMENT ----- THIS SUBORDINATION AGREEMENT made and entered into on this the day of September, 2015, by and between CITY OF PADUCAH, KENTUCKY, for the use and benefit of the Planning Department (f/k/a The Main Street Department of the City of Paducah, Kentucky), a Kentucky municipal corporation of the home rule class ("City"), of 300 South 5t' Street, Paducah, KY 42003, and COMMUNITY FINANCIAL SERVICES BANK ("CFSB"), of 3390 Park Avenue, Paducah, KY 42001; WITNESSETH: WHEREAS, by deed dated June 26, 2015, of record in Deed Book 1303, page 681, McCracken County Clerk's Office, City conveyed to Bighorn Properties LLC, a Kentucky limited liability company ("Bighorn"), certain real property located at 533 Madison Street, Paducah, Kentucky, and being more particularly described in Exhibit "A" attached hereto (the "Property"); WHEREAS, the aforesaid deed contained certain restrictions and conditions regarding Bighorn's use and development of the Property and provided for a possible forfeiture of title and reversion of title to the City, as follows: "(a) [Bighorn] shall rehabilitate and revitalize, at its sole cost and expense, the improvements located on the Property in accordance with designs and plans to be approved by the Historical and Architectural Review Commission of the City of Paducah, with a capital investment up to $500,000.00, exclusive of the value of the Property (the `Project'), within two (2) years from the date of this deed of conveyance. (b) In the event [Bighorn] has not substantially completed the Project within two (2) years from the date of this deed of conveyance, [Bighorn] agrees that this deed shall be forfeited and Property shall at once revert back to [City] and [Bighorn] shall promptly take all steps to cause the transfer and re -conveyance of the Property back to [City], at no out-of-pocket cost to the [City], such that [City] is restored with merchantable fee title to the Property free and clear of any mortgages, liens, encumbrances, and adverse interests. The parties further agree that substantial completion of the Project shall mean that a certificate of occupancy has been issued by the City of Paducah's Fire Department, Fire Prevention Division." WHEREAS, Bighorn desires to finance its rehabilitation and revitalization of the Property with a 12 -month construction loan from CFSB secured by a mortgage on the Property in the principal amount of up to $199,750.00, which construction loan shall thereafter be converted to a permanent mortgage loan in an amount then to be determined (the "Mortgage Loans"); WHEREAS, as a condition for providing the aforesaid financing, CFSB is requiring that the Mortgage Loans be first and superior mortgages upon the Property and that its mortgages securing the Mortgage Loans be superior to any right, title, or interest of the City in the Property reserved or retained in the aforesaid deed from the City conveying the Property to Bighorn; NM NOW, THEREFORE, in consideration of the premises, and to induce CFSB to make the Mortgage Loans to Bighorn, and for other good and valuable consideration, City and CFSB agree as follows: 1. City hereby subordinates City's entire right, title, and interest in and to the Property to the lien or liens of the Mortgage Loans, and any renewal, extension, or refinancing of the Mortgage Loans, and to the right, title, and interest of CFSB in and to the Property, as fully and with the same effect as if the Mortgage Loans had been duly executed and recorded and the principal of the notes secured by the Mortgage Loans had been fully disbursed prior to the creation or retention of City's right, title, or interest in the :Property by virtue of the City's conveyance of the Property to Bighorn by the aforesaid deed. 2. It is further hereby agreed that City's aforesaid right, title and interest in the Property shall be deemed automatically extinguished and of no further force and effect in the event and at such time as the Property is sold through a Master Commissioner's Sale pursuant to a foreclosure action to enforce the Mortgage Loans, or any renewal, extension, or refinancing of the Mortgage Loans; provided, however, that said right, title and interest of the City will not be extinguished unless CFSB gives City at least sixty (60) days advance written notice prior to instituting foreclosure proceedings of any default by Bighorn under the Mortgage Loans, or any renewal, extension, or refinancing of the Mortgage Loans, and allows City to cure any such default. 3. The terms and conditions of this Subordination Agreement shall be binding upon and redound to the benefit of the respective successors and assigns of the City and CFSB, including any assignee of one or both of the Mortgage Loans, or any renewal, extension, or refinancing of the Mortgage Loans. 4. The City agrees to take or cause to be taken such further action, including the execution, delivery, and recording of such further documents, deeds, instruments, and consents as reasonably may be requested hereafter by CFSB in order to effect or provide notice of the terms of this Subordination Agreement. , ] - J 5. This Subordination Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Kentucky. 2015. IN TESTIMONY WHEREOF, witness our signatures on this the day of September, CITY OF PADUCAH, KENTUCKY Gayle Kayler, Mayor COMMONWEALTH OF KENTUCKY ) ss. COUNTY OF McCRACKEN ) COMMUNITY FINANCIAL SERVICES BANK Title: The foregoing instrument was subscribed, sworn to, and acknowledged before me by City of Paducah, Kentucky, a municipal corporation of the second class, by and through its duly authorized Mayor, GAYLE KALER, on this the day of September, 2015. NOTARY PUBLIC KENTUCKY STATE AT LARGE My commission expires: Notary ID No. COMMONWEALTH OF KENTUCKY ) ss. COUNTY OF McCRACKEN ) The foregoing Subordination Agreement was subscribed, sworn to, and acknowledged before me by Community Financial Services Bank, by and through , its duly authorized , on this the day of September, 2015. NOTARY PUBLIC KENTUCKY STATE AT LARGE My commission expires: Notary ID No. I hereby certify that this instrument has been prepared by: Law Offices McMurry & Livingston, PLLC 201 Broadway / P.O. Box 1700 Paducah, KY 42002-1700 M.", G. KENT PRICE File No. 15229 381 382 Exhibit "A" BEING A PART OF BLOCK 19, ADDITION "D" OR LOWER TOWN, PADUCAH, KENTUCKY, AND BEGINNING AT THE NORTHEAST CORNER OF THE INTERSECTION OF SIXTH AND MADISON STREETS; THENCE WITH THE NORTHERLY LINE OR SIDE OF MADISON STREET, AND TOWARD FIFTH STREET 86 FEET 7-1/4 INCHES; THENCE AT RIGHT ANGLES AND TOWARD 14ARRISON STREET 131 FEET AND 3 INCHES; THENCE AT RIGHT ANGLES 86 FEET 7-1/4 INCHES TO THE EASTERLY LINE OF SIXTH STREET; THENCE WITH THE EASTERLY LINE OF SIXTH STREET 131 FEET AND 3 INCHES TO THE POINT OF BEGINNING.