Title
THE PALMS PARKING LICENSE AGREEMENT (B)
The City Commission approve a First Amendment to the License Agreement for Use of Parking Garage and a Collateral Assignment of License Agreement to allow the Developer of The Palms to assign its rights to 96 parking spaces in the Southwest Downtown Parking Garage to Millennium Bank as collateral for purposes of financing the construction of the project.
Recommendation
The City Commission authorize the City Manager to execute the First Amendment to License Agreement for Use of Parking Garage between the City and Southwest Second Avenue, LLC and authorize the City Manager to execute the Collateral Assignment of License Agreement between Southwest Second Avenue, LLC, Millennium Bank, and the City of Gainesville, both Agreements subject to approval by the City Attorney as to form and legality.
Explanation
In July 2007, the City and Southwest Second Avenue, LLC executed a License Agreement for Use of Parking Garage, whereby the City granted to the Developer of The Palms certain rights to 96 spaces in the City's Southwest Downtown Parking Garage for use by The Palms. The Developer is now requesting the City's consent to assign its (the Developer's) rights, as specified in the License Agreement, to Millennium Bank as additional collateral for the purposes of securing a construction loan for the project.
The License Agreement for Use of Parking Garage does not permit an assignment except to a condominium association created in connection with the project. Therefore, the License Agreement would have to be amended. In addition, the City is being requested to consent to the execution of a Collateral Assignment of License Agreement for Use of Parking Garage between Southwest Second Avenue, LLC and Millennium Bank.
The First Amendment would permit a collateral assignment of the rights provided for in the Agreement to Millennium Bank in the event the Developer defaults on his construction loan. In the event of such an assignment, the Amendment would also permit Millennium to further assign these rights to a successor owner taking title from Millennium on the condition that upon project completion, the successor owner relinquish title to the License Agreement to the condominium association created in connection with the project. There would be no further assignments past the condominium association and the assignment to the condominium association will also be subject to the consent of the City Commission. The City Attorney's office has consulted with the City Manager, who concurs in the recommendation below.