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TO: |
Board of Trustees |
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THROUGH: |
Jay Fox, Executive Director |
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FROM: |
Dave Hancock, Chief Capital Services Officer |
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PRESENTER(S): |
Paul Drake, Director of Real Estate and TOC |
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TITLE:
title
Disbursement: Bangerter Station LLC Additional Capital Contribution
end
AGENDA ITEM TYPE:
Disbursement
RECOMMENDATION:
Authorize the Executive Director to sign the Consent Letter with Bangerter Station LLC and to disburse $250,000 as an additional capital contribution, per the terms of the Bangerter Station LLC operating agreement.
BACKGROUND:
UTA is a 50% partner 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, Boulder Ventures, has fronted costs associated with the land loan and vacant land but has asked UTA to share those costs.
DISCUSSION:
The joint venture has recently refinanced its land loan, and the lender requires an initial interest payment of $250,000 to secure the loan terms. This initial payment would be used to service interest payments until exhausted. It is proposed and recommended that UTA cover the initial payment. UTA’s contribution will be handled in accordance with terms described in the existing joint venture 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 $250,000 payment are available in the approved 2024 Capital Budget as adjusted in TBA2024-11-01. Payment retains UTA’s value in vacant land. Additional Capital Contribution earns 5.5% preferred return.
ATTACHMENTS:
Consent Letter (UTA Contract No. 24-P00409)
Operating Agreement