Title
Phalanx Defense Systems, LLC - Requested Lender Modification (B)
The City Commission approve the Phalanx Defense Systems, LLC modification of lender terms associated with occupation of the Armory building located at 1125 NE 8th Avenue.
Explanation
On May 19, 2016, the City Commission approved the ranking of proposals for the “Reuse/Development of the Former U.S. Army Reserve Property” and authorized City staff to begin negotiations with the top proposer Phalanx Defense Systems.
On September 1, 2016, the City Commission authorized the City Manager to execute a Purchase and Sale Agreement with Phalanx Defense Systems, LLC for disposition of the subject property in the amount of $635,000 (the appraised market value of the northern portion of the subject property).
The purchase was secured by a mortgage provided by Phalanx Defense Systems, LLC to the City of Gainesville in the amount of $635,000 at zero (0%) percent interest payable within 10 years (September, 2026), if not paid earlier or forgiven. In addition, a note dated the same date as the First Mortgage (September, 7, 2016) provided the terms under which debt forgiveness could be provided.
This included a maximum total amount of the loan eligible for forgiveness in the amount of $535,000 regardless of Phalanx’s actual expenditures or number of qualified jobs actually created. This was inclusive of a maximum cap of $335,000 towards qualified actual expenditures for repair, remediation, and improvements on the property and a maximum cap of $200,000 for qualified new full time job creation and retention.
On February 15, 2018, the City Commission approved the forgiveness of $335,000 due to Phalanx Defense Systems actual expenditures of approximately $533,000 in various building repair, remediation and improvements put into the Army Reserve Property.
On December 3, 2020, Phalanx Defense Systems, LLC made a request for forgiveness of the qualified new full time job creation and retention compo...
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