Title
Authorization to Execute Satisfaction of Loan Documents for Small Business Loans and Third Mortgage Loans. (B)
Explanation
Prior to March 31, 2004, United Gainesville Community Gainesville Development Corporation (UGCDC) originated a number of small business loans using Community Development Block Grant (CDBG) funds that were allocated by the City of Gainesville. In addition, in 1988 UGCDC made third mortgage loans to several homebuyers in Porter's Oaks Phase I using funds that were granted to UGCDC by the City.
On March 31, 2004, UGCDC ceased operations and began the process of dissolving its non-profit corporate status. As a requirement of prior contracts (subrecipient agreements) between the City and UGCDC, UGCDC was required to return to the City any assets that were attributed to City funding, including any outstanding small business loans and third mortgage loans. At the time UGCDC ceased operations, there were seven outstanding small business loans and ten third mortgage loans. These loans are in the process of being assigned to the City.
As the small business and third mortgage loans are paid off or otherwise satisfied by the respective borrowers, the City needs to execute a variety of loan satisfaction documents. To date, one small business loan that was previously in default has been cleared through bankruptcy, and another loan has been fully repaid. Staff is now in a position to execute releases and/or loan satisfaction documents for the loan that was repaid (an example is attached as back up).
Fiscal Note
Funds are budgeted in the Block Grant Division and Economic Development Department to cover the costs of recording all required documents.
Recommendation
The City Commission authorize the Interim City Manager or designee to execute all required satisfaction of loan documents pertaining to small business loans and third mortgage loans assigned to the City by United Gainesville Community Development Corporation, subject to approval by the City Attorney as to form and legality.