|
TO: |
Board of Trustees |
|
THROUGH: |
Jay Fox, Executive Director |
|
FROM: |
Dave Hancock, Chief Capital Services Officer |
|
PRESENTER(S): |
Paul Drake, Director of Real Estate and TOC |
|
|
|
TITLE:
title
R2025-02-01 - Resolution Authorizing Additional Capital Contribution of Funds in the Jordan Valley Transit Oriented Development
end
AGENDA ITEM TYPE:
Resolution
RECOMMENDATION:
Approve Resolution R2025-02-01 to authorize the Executive Director to sign the Consent Letter with Bangerter Station LLC and to disburse amounts up to $1,285,039.74 as an additional capital contribution, per the terms of the Bangerter Station LLC operating agreement. The total value of the transaction is $1,700,000.00, which includes, as explained below, prior capital contributions by UTA.
BACKGROUND:
The Utah Public Transit District Act requires the Board of UTA to approve any expense in excess of $200,000.00, as well as provide oversight of Transit Oriented Development projects. Further, Board Policy 5.2 requires that the Board approve real estate and real estate related transactions with a value in excess of $1,000,000.00 via a resolution.
UTA is a 50% partner with Bangerter Station Associates, LLC in a joint venture (Bangerter Station LLC) establishing a TOD at the Jordan Valley TRAX Station. To fund infrastructure for the project, the joint venture obtained loans secured by the vacant land. Several phases of development have been successfully completed. Individual parcels are removed from the land loan when they are developed. Costs associated with the loan and vacant land are the obligation of the joint venture. However, due to market conditions, lease-up of the latest phase of development has been slower than projected, straining joint venture cashflows. UTA’s partner, Bangerter Station Associates, LLC, has provided payment for costs associated with the land loan and vacant land but has asked UTA to share those costs.
DISCUSSION:
A letter of agreement has been drafted to address costs associated with the vacant property. The letter commits UTA to cover joint venture costs associated with the vacant land through the end of 2025, up to $1,700,000.00. Afterward, Bangerter Station Associates, LLC, will cover the costs through 2026, up to $1,700,000.00. UTA has made previous capital contributions in the amount of $414,960.26 which are considered part of UTA’s $1,700,000.00 obligation. The associated requisition of $1,285,039.74 reflects additional capital contribution amount needed. Each contribution will be handled according to the terms of the Bangerter Station LLC operating agreement.
ALTERNATIVES:
Failure to make the proposed payment would incur remedies from the lender, including increase in interest rate. Failure to make interest payments would cause the loan to default and the vacant land to revert to lender.
FISCAL IMPACT:
Funds for the anticipated costs are available in the approved 2025 Capital Budget Project MSP263, $2,388,000.00. Budget availability after obligating funds according to this resolution and previous encumbrances is $1,097,960.00. Payment retains UTA’s value in the vacant land. Additional capital contributions earn 5.5% preferred return.
ATTACHMENTS:
Resolution
Consent Letter (Contract # 25-P00428)
Operating Agreement