TERM SHEET
For Loan Concerning the B Street Development
Lender:
City of Marysville
Borrowers:
• Presidio Companies, LLC
Loan Amount:
$925,000 (Nine Hundred Twenty-Five Thousand Dollars)
Interest:
Simple interest at 4% per annum.
Repayment Terms:
Repayment shall occur through a payment equal to 1% of the rent charged for all hotel room stays, to be remitted quarterly at the same time the transient occupancy tax (TOT) is due.
The first payment of the note shall occur on or before the last day of the month following the close of the calendar quarter in which the transient occupancy tax is required to be reported and remitted to the city pursuant to chapter 3.12 of the Marysville Municipal Code. The amount of each quarterly payment under the note shall be in the amount of 1% of the rent charged by the operator of the hotel. Rent is defined and calculated in the same manner that is used for the purposes of calculating TOT.
The 1% charge is not a tax, but a repayment mechanism for the loan. The formula simply provides a method to arrive at the amount of each quarterly payment (and should be a simple calculation because the hotel operator is required to report and remit a transient occupancy tax which should be equal to 10 times the amount of the note payment).
In the event the Hotel is not constructed, then in the event the City elects to repurchase the Hotel parcel pursuant to the Development Agreement, the City shall have the right to offset the loan amount (including any accrued interest) against the cost to repurchase. If the City elects not to repurchase the Hotel parcel, then the City shall have the right to any proceeds from the sale of the Hotel parcel in excess of the $1 million loan obtained by Presidio to fund a portion of the backbone infrastructure work.
Documentation of Costs:
Borrowers must document and prove all reimbursable cleanup costs to the City’s satisfaction.
Borrowers shall submit to the City written documentation, satisfactory to the City, establishing the amounts paid by Borrowers for the actual excavating, sorting, testing, loading, hauling, and disposal of contaminated soil from the “B Street Property” (defined as approximately 4.93 acres at the southeast corner of B Street and 14th Street in Marysville, California) to an approved disposal site, including any tipping fees associated with such disposal.
These reimbursable amounts shall not include any administrative markup, delay claims, overhead, or any other indirect cost charges or claims other than the actual costs of excavating, sorting, testing, loading, hauling, and disposing of contaminated soil, and the tipping fees associated therewith.
Reimbursement shall be limited to actual eligible remediation costs, on a reimbursable basis up to a maximum of Seven Hundred Thousand Dollars ($700,000).
The remaining Two Hundred Twenty-Five Thousand Dollars ($225,000) represents a deferral of City impact fees associated with the hotel project, as part of the total loan amount of Nine Hundred Twenty-Five Thousand Dollars ($925,000).
TERM SHEET
For Loan Concerning the B Street Development
Environmental and Remediation Requirements:
The City reserves the right to review, approve, and confirm that the site has been remediated to a 'clean' condition.
Prior to any disbursement of loan funds:
• Borrowers shall submit all testing results, laboratory analyses, and environmental consultant reports verifying that remediation has been completed and that the site meets applicable environmental standards for commercial use.
• The City reserves the right to review, approve, and confirm that the site has been remediated to a 'clean' condition based on accepted environmental standards prior to or as a condition of reimbursement.
Infrastructure Accounting and Disclosure:
Borrowers shall provide a complete, itemized accounting of all infrastructure work related to the hotel development or any other hotel-related improvements.
Failure to make payments:
Failure to make timely payments under the note (in the correct amount) shall be a default and cause all amounts of principal, interest and other charges to immediately become due and payable.
Separate Developer Obligation:
Developers remain responsible for a $100,000 Kinder Morgan payment, separate and independent from this loan.
Release:
Prior to disbursement of funds the borrowers shall provide a full release of claims to the City concerning the B Street property, the “DDA” and claims whether known or unknown pursuant to the Civil Code section 1542.