HomeMy WebLinkAboutResolution No. 2019-12U
CITY OF KENAI
RESOLUTION NO. 2019-12
Sponsored by: Legal
A RESOLUTION OF THE COUNCIL OF THE CITY OF KENAI, ALASKA, AMENDING TERMS
OF THE DEED OF TRUST FOR THE BOWLING ALLEY SUBJECT TO ADDITIONAL TERMS
AND CONDITIONS.
WHEREAS, the City sold Lot Three "A" (3A), Block one (1), SPUR SUBDIVISION, NO. 1, 1983
ADDITION, according to Plat No. 83-211, in the Kenai Recording District, State of Alaska (the
Bowling Alley) in February 2017 subject to a Deed of Trust executed February 2, 2017; and,
WHEREAS, the purchaser, Sue Chang, has requested an extension to the Deed of Trust until
February 28, 2019; and,
WHEREAS, the City has received a loan commitment letter from Denali Federal Credit Union to
pay the City the remaining balance due on the Deed of Trust and Deed of Trust Note and it is in
the best interest of the City to extend the Deed of Trust until February 28, 2019 subject to certain
new terms and conditions; and,
WHEREAS, the new terms and conditions include an increased interest rate of 5.5% and a first
right of refusal to purchase option.
NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA:
Section 1. That the City approves the attached Amendment to the Deed of Trust.
Section 2. That this resolution takes effect immediately upon passage.
ADOPTED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, this 6th day of February, 2019.
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BRIAN GABRIEL SR., MAYOR
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'DENALI:
A DIVISION OF NUVISION CREDIT UNION
January 31, 2019
Applicant: Sue Chang
Loan Type: Commercial Real Estate Term Loan
Loan Amount: Up to $285,000
Property: 10639 Kenai Spur Highway
Dear Mr. Bloom:
Based on the financial and credit information the applicant has provided, Denali, a Division of Nuvision
Federal Credit Union has approved a commercial real estate loan of up to $285,000 for the former Alaska
Lanes Property located at 10639 Kenai Spur Highway. I am also assisting Sue Chang and her partners,
Charlie and Glenn Yamada, in the process of obtaining SBA 504 funding to renovate the building and
reopen it as a bowling alley and restaurant -lounge. Denali will be the participating lending institution for
the SBA renovation loan. I anticipate that will close within 2-3 months; there have been quite a few delays
with SBA loans due to the government shutdown, which closed the SBA offices.
It is my understanding that the City of Kenai's seller's note matures on February 3; 2019. Unfortunately, I
have run into an administrative problem with the appraisal that was provided and I am thus seeking a
grace period or extension to this maturity from the City of Kenai. The appraisal I have on file was ordered
by the City of Kenai, but federal regulations require that any prior appraisal I rely on for collateral
valuation must be ordered by a financial institution. There is nothing wrong with the content of the
appraisal, the only issue is that it wasn't ordered by a bank or credit union. I have contacted the
appraisers at MacSwain and Associates and will order a new appraisal that conforms to the regulations as
soon as possible. Once that appraisal is complete I can close the loan and disburse funds to pay off the
City of Kenai in full, inclusive of any closing and transaction costs. My plan is to close the loan by the end
of February.
Sincerely,
Andrew Lyle
Assistant Vice President, Business Lending
Denali Federal Credit Union
440 E 36th Avenue, Ste. 220
Anchorage, AK 99503
Direct Line: 907-339-2570
Email Address: andrew.lyle@denalifcu.com
DENALI
A DIVISION OF NUVISION CREDIT UNION
440 E. 36th Avenue Anchorage, AK 99503 907-257-7200
FIRST AMENDMENT TO DEED OF TRUST
On February 2, 2017 Sue Y. Chang, the Trustor, whose address is 9430 Kavik St., Anchorage, AK
99502, executed a Deed of Trust, (the "Deed of Trust") with Stewart Title of the Kenai Peninsula,
Inc., as the Trustee, and the City of Kenai, as the Beneficiary.
The Deed of Trust was recorded in the Kenai Recording District on February 3, 2017 at 2017-
000739-0.
The Trustor and Beneficiary herby agree subject to approval by the Kenai City Council to amend
the Deed of Trust and agree to other specific terms for good and satisfactory consideration as
follows:
1. Section B. 14. of the Deed of Trust is amended to Read:
The maturity date of this Deed of Trust and the Deed of Trust Note is FEBRUARY 28,
2019 or earlier if Trustor sells or leases with option to buy the subject real property at which
time all amounts secured by this Deed of Trust are immediately due and payable in full.
2. The Deed of Trust is amended in all relevant parts to reflect that the Trustor shall pay
interest on any outstanding principal amounts outstanding for the Month of February 2019
at a rate of Five Point Five percent (5.5%) per annum.
3. Trustor shall not cause any act, or omission that affects the Beneficiary's fust position as
lienholder on the real property.
4. Trustor shall pay any and all costs and fees associated with this First Amendment to Deed
of Trust, including but not limited to any recording fees or financial institution processing
fees.
5. The City shall obtain a first right of refusal on the property as follows:
(a.) Grant of Right of First Refusal. Trustor does hereby grant, bargain and convey unto
Beneficiary, during the Term, the exclusive and irrevocable ongoing right of first
refusal to purchase the Property (the "Right") upon the following terms:
A. Notification of Sale. If, at any time during the Term, Trustor receives an offer from
a bona fide third party to purchase all or any portion of the Property that is
acceptable to Trustor as evidenced by a signed letter of intent memorializing all of
the material business points of such offer (the "Acceptable Offer"), then Trustor
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shall, within five (5) days after receipt of the same, forward a copy of the
Acceptable Offer to Beneficiary.
B. Exercise of Right. If Beneficiary elects to exercise the Right, Beneficiary shall give
written notice of its exercise of the Right to Trustor within five (5) days of
Beneficiary's receipt of the Acceptable Offer. If Beneficiary fails to exercise the
Right during such ten (10) day -period following, then Trustor shall be free to sell
the Property to the bona fide third party on terms and conditions, including the
Purchase Price, that are no more favorable to the bona fide third party than the terms
and conditions stated in the Acceptable Offer.
C. Purchase Price. If the Right is exercised, the "Purchase Price" shall be an amount
equal to the sum of $183,000 or the amount of the acceptable offer if less.
D. Terms/Proration. If the Right is exercised, all costs and terms related to the sale and
purchase of the Property pursuant to the Right other than the Purchase Price shall
be as set forth in the Acceptable Offer, unless expressly modified herein.
The amendments terms and conditions stated above are the only amendments, new terms and new
conditions agreed to between the Trustor and Beneficiary, and all other provisions of the Deed of
Trust and associated documents remain the same.
Approved by Kenai City Council Resolution No. 2019-12 on (date)
DATED: This day of , 2019.
BENEFICIARY:
CITY OF KENAI, Beneficiary
La
As its City Manager
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TRUSTOR:
STATE OF ALASKA
THIRD JUDICIAL DISTRICT
The foregoing instrument was acknowledged before me this day of
aby � , 2019, by Sue Y. Chang.
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STATE OF ALASKAI'''+'onFxP�ras:OY'� -
THIRD JUDICIAL DISTRICT
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NOTARY LIC FOR ALAS
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The foregoing instrument was acknowledged before me this day of
2019, by Paul Ostrander, City Manager of the City of Kenai, an Alaska
municipality, on behalf of the municipality.
Amendment to Deed of Trust
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NOTARY PUBLIC FOR ALASKA
My Commission Expires:
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