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RESOLUTION 91-20385 RESOLUTION NUMBER 91-20385 A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA APPROVING THE GUIDELINES FOR THE HOTEL REHABILITATION LOAN SUBSIDY PROGRAM AND AUTHORIZING THE APPROPRIATION OF $500,000 IN LEGALLY AVAILABLE FY 91/92 RESORT TAX PROCEEDS FOR IMPLEMENTATION AND ADMINISTRATION OF SAID PROGRAM. WHEREAS, the Hotel Task Force has spent considerable time discussing methods of attracting a convention headquarters hotel to Miami Beach; and WHEREAS, the present state of the nation' s economy coupled with a weak foreign and domestic lending market have made said task extremely difficult; and WHEREAS, until market conditions develop, which will support new hotel development, the Hotel Task Force has determined that action needs to be taken to accelerate the renovation of the existing stock of hotel rooms on Miami Beach; and WHEREAS, The Hotel Task Force has worked with the City' s Department of Economic and Community Development to design a Loan Subsidy Program specifically for hotel rehabilitation; and WHEREAS, On June 10, 1991, the City of Miami Beach' s Land Use Committee approved said program in concept; and WHEREAS, On September 9 , 1991, the City of Miami Beach' s Loan Review Committee approved the Guidelines for said program attached hereto as "Exhibit 1" ; and, WHEREAS, The City Administration recommends the approval and adoption of these Guidelines by the City Commission of the City of Miami Beach, subject to such changes as may be required by the City Attorney from time to time; and, WHEREAS, Projected FY 91/92 Resort Tax proceeds will exceed the amount necessary to satisfy all obligations payable from these proceeds , and the projected excess proceeds are sufficient to fund this program; and, WHEREAS, The City Administration is requesting authorization to appropriate $500, 000 in legally available funds from FY 91/92 Resort Tax proceeds in order to implement and administer said program. NOW, THEREFORE, BE IT DULY RESOLVED BY THE CITY COMMISSION OF THE CITY OF MIAMI BEACH FLORIDA, that the Guidelines for the City of Miami Beach Loan Subsidy Program for Hotel Rehabilitation attached hereto as "Exhibit 1" are hereby approved and adopted, and that the appropriation of $500, 000 in legally available funds from FY 91/92 Resort Tax proceeds for implementation and administration of said program is hereby authorized. PASSED AND ADOPTED THIS 23rd DAY OF October , 1991. VICE - MAYOR ATTEST: Cdk LTo\AA, CITY CLERK FORM APPROVED LEGAL DEPT. By 5-sit Date , l 2 Z- / &re/ Neawd Eead FLORIDA 3 3 1 3 9 774'9 •R.rya. E :INCORP ORATED! VA(A TIONL.4 a\U U. N. .1. .26,E OFFICE OF THE CITY MANAGER CITY HALL 1700 CONVENTION CENTER DRIVE TELEPHONE: 673-7010 COMMISSION MEMORANDUM NO. 1/4017 DATE: October 23, 1991 TO: Mayor Alex Daoud and Members of the City Commission FROM: Carla Bernabei Talarico /W City Manager er )F444 SUBJECT: A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF MIAMI BEACH APPROVING THE GUIDELINES FOR THE HOTEL REHABILITATION LOAN SUBSIDY PROGRAM AND AUTHORIZING AN APPROPRIATION OF $500,000 IN LEGALLY AVAILABLE FY 91/92 RESORT TAX FUNDS FOR IMPLEMENTATION AND ADMINISTRATION OF SAID PROGRAM. BACKGROUND: Over the past year, the Hotel Task Force has spent considerable time discussing methods of attracting a convention headquarters hotel to Miami Beach. The deterioration of the nation's economy coupled with a weak foreign and domestic lending market have made this task extremely difficult. Until market conditions develop, which will support new hotel development, the Task Force has determined that action needs to be taken to accelerate the renovation of the existing stock of hotel rooms on Miami Beach. Such action would not only serve as an interim solution to providing convention quality hotel rooms, but would also enhance the area's viability for new hotel construction. As hotels renovate and upgrade their facilities, traditionally low room rates in the area will most likely increase, making new hotel development once again feasible. In an effort to encourage hotel owner's to renovate their properties, the Hotel Task Force has worked with the City's Department of Economic and Community Development to design a Loan Subsidy Program specifically for hotel rehabilitation, wherein The City will subsidize the interest rate on rehabilitation loans made by conventional lending institutions to existing hotels. Applicants will be able to apply to a lender of their choice as specified in the program guidelines. Upon approval of a loan, the City will work with the lender and the applicant to calculate the amount of the subsidy (up to a 'maximum of' 3 percent) required to make the project feasible. The subsidized period will be between three to five years and properties would be limited in size to 250 rooms or less. This will allow the City to work with more than one project per year. . The City of Miami Beach's Loan Review Committee will be responsible for reviewing applications for final approval . i ;o AGENDA • ITEM. DATE I� Commission Memorandum October 23, 1991 Page 2 . The program Guidelines which are included as an attachment to the resolution, are intended to establish some control over disbursement of funds; to impose certain design standards, to meet market requirements, to ensure quality workmanship; and to require certain financial and legal disclosures to safeguard all parties involved. THE REQUEST To approve the Guidelines for Hotel Rehabilitation Loan Subsidy Program and to authorize the Department of Economic and Community Development to finalize application procedures and program details. To authorize the appropriation of $500, 000 legally available in FY 91/92 Resort Tax funds to meet the requirements of the Hotel Rehabilitation Loan Subsidy Program. ADMINISTRATION RECOMMENDATION The Administration recommends adoption of the accompanying resolution approving the Guidelines for the Hotel Rehabilitation Loan Subsidy Program and authorizing the appropriation of $500, 000 in legally available FY 91/92 Resort Tax funds for program implementation. 16. Q THE ATTACHED DOCUMENT RELATES TO ITEM R-7-G ON THE OCTOBER 23, 1991 AGENDA CITY QF MIAMI BEACH LEAN SUBSIDY PROGRAM FOR HOTEL REHABILITATION GUIDELINES tAll 111:;/ ............. ........ City of Miami Beach Department of Economic and Community Development 1700 Convention Center Drive Miami Beach, Florida 33139 CITY OF MIAMI BEACH LOAN SUBSIDY PROGRAM FOR HOTEL REHABILITATION GUIDELINES CITY OF MIAMI BEACH .» L •70 C:.'.ENT'ON CENTEQ OPivE `.4IAMI BEACH =_:RCA 32 '9 OFFICE OF THE CITY MANAGER TELEPHONE:(305)173-7010 FAX:(305)173-7782 To: Miami Beach Hotel Owners One of the City's primary objectives is to attract a new convention headquarters hotel to Miami Beach. New hotel development is critical to the success of the recently expanded and renovated Miami Beach Convention Center. The deterioration of the nation's economy however, coupled with a weak foreign and domestic lending market have made this task extremely difficult. Until market conditions develop,which will support the construction of a new convention headquarters hotel, the City has determined that action needs to be taken to accelerate the renovation of the existing stock of hotel rooms on Miami Beach. In an effort encourage this, The City has designed this Loan Subsidy Program specifically for hotel rehabilitation. I would now like to invite you to examine the following guidelines, in the hope that you take advantage of this opportunity for your property. Due to the positive response to the program,the guidelines are intended to establish some control over disbursement of funds, allowing for more than one applicant to be considered each year; to impose certain design standards, to meet market requirements and to ensure quality workmanship; and, to require certain financial and legal disclosures to safeguard all parties involved. A Loan Review Committee, charged with reviewing and approving applications, will have some flexibility in easing and/or modifying the guideline criteria. For assistance in completing an application, and for additional information on the program, please do not hesitate to contact the Department of Economic and Community Development at (305) 673-7193. Sincerely, 21.1) a•-th/7-44:t.LA Carla Bernabei Talarico City Manager CITY OF MIAMI BEACH LOAN SUBSIDY PROGRAM FOR HOTEL REHABILITATION GUIDELINES TABLE OF CONTENTS Introduction 1 City's Review of Application 1 Interest Rate and Subsidy Calculations 1 Term of Subsidy 1 Lender Criteria 1 Loan Closings 2 Property Qualifications 2 Applicant Eligibility Criteria 3 Eligible Rehabilitation Costs 3 Non-Eligible Costs 4 Terms and Conditions for the Interest Subsidy Plan 4 Processing Applications and Disbursing Funds 5 Disbursement of Interest Subsidy 7 Loan Review Committee (LRC) 9 Defaults 10 Subsidy Agreement 11 CITY OF MIAMI BEACH LOAN SUBSIDY PROGRAM FOR HOTEL REHABILITATION GUIDELINES INTRODUCTION The Hotel Rehabilitation Program provides interest subsidies, resulting in low interest rehabilitation loans to property owners of hotels in Miami Beach. Through this program, the City will subsidize the interest rate on rehabilitation loans made by lenders which agree to make such loans under the conditions specified in the following guidelines. CITY'S REVIEW OF APPLICATIONS The Department of Economic and Community Development shall make an initial determination as to whether or not the applicant and the property are eligible for the interest subsidy plan as set forth in the guidelines. The application will then be reviewed by the Loan Review Committee (LRC), a five member committee appointed by the City, responsible for the review and selection of applications which will receive funding under the program. If the application is approved by the LRC, the amount of interest subsidy will be estimated,a fund commitment will be issued, and a reservation of funds will be made for the project. Only applications which have been reviewed and approved by the LRC shall be eligible for a City of Miami Beach interest subsidy. INTEREST RATES AND SUBSIDY CALCULATIONS The interest rate on loans will be subsidized to an effective rate necessary for the financial feasibility of the project, up to 3 percent. The availability of funding will also effect the actual rate. TERM OF SUBSIDY The term of the interest subsidy shall not exceed five (5) years. LENDER CRITERIA Applicants must apply to a lender(s) of their choice to obtain a funding commitment for the project,and provide them with the same information given to the City. The lender must be a conventional financial institution who agrees to make a loan under the program guidelines. It may be a federal or state regulated banking institution including federal or state chartered commercial banks,mutual savings banks,savings and loan associations,municipal or publicly constituted pension trusts, insurance companies or corporations, credit unions, or other financial institution which customarily provides service or otherwise aids in the financing of mortgages located in the United States. 1 It shall be the applicant's responsibility to bear all costs necessary to submit a loan application to a lender and to pay for any cost incurred by the applicant if the loan application is not approved by the lender and/or the LRC. The lender must be able to provide a statement of condition. LOAN CLOSINGS Lenders shall be responsible for the preparation and execution of all loan closing documents, and shall notify the applicant and the City of the date and location of the closing.All closings will meet the normal and standard requirements for loans of a similar nature, as established by the lender and/or its attorneys. PROPERTY QUALIFICATIONS Any property to be considered for an interest subsidy, must meet the following: * The property must be located within the boundaries of the City of Miami Beach. * The property must be a purely transient hotel' or vacant upon application and after rehabilitation. * The property cannot exceed two hundred and fifty (250) hotel rooms in size upon application. * Hotel guest rooms must conform to size requirement specified in the City of Miami Beach's Zoning Ordinance. * The property must be in need of rehabilitation to comply with the applicable codes and ordinances as determined by a City inspection. * The rehabilitation of the property must be physically and financially feasible for such rehabilitation, based primarily on the market potential of the property after rehabilitation;and,its projected income sufficient to service the debt after all operating expenses for the property are paid. * The property was not previously assisted through City programs. 1 Transient Hotel — A building containing a room or a group of rooms, with ingress or egress which may or may not be through a common lobby, intended for rental to transients on a day—to—day, week—to—week, or month—to—month basis not to exceed thirty (30) days during any one stay; and, not intended for use or used as a permanent dwelling. 2 Hotel Unit Size Requirements: * Local Historic District — 200 sq. ft. * All Other Areas — 15% of units @ 300-335 sq. ft. 85% of units @335+ sq. ft. 2 APPLICANT ELIGIBILITY CRITERIA • interest subsidymust meet the following eligibility criteria: The applicant requesting an ' or a firm contract to purchase fee simple title to the subject * The applicant must have fee simple title to, property. In t he case of a purchaser, the applicant must be able to demonstrate a financial commitment to purchase the property as evidenced videnced bya sales contract or similar agreement with the present owner of the ' control of the property.At loan closing, the applicant must be building, showing at the time of the application, P P in possession of the property, or • _ in theproperty, demonstrated by a lease contract or similar * Thea applicant must have a long-term leasehold PP agreement. • satisfaction of the City,* The applicant must demonstrate to the its ability to provide any additional funds as y of the rehabilitation work needed over and above the amount of the lender's commitment to assure completionsand ordinances. so that the building being rehabilitated, will at a minimum, comply with the applicable code ELIGIBLE REHABILITATION COSTS • • be made onlywith respect to a property which needs to be An interest subsidy for a rehabilitation loan may . sof the loan, the loan may also upto applicable codes and ordinances. However, within the limitation brought pp include amounts for purposes other than meeting those requirements. ' ' to make the property conform to the applicable codes and ordinances, In addition to those costs for rehabilitation P P bilitation loan ma include funds to cover the costs described below. a reha Y Includable costs for labor and materials should be considered in the following order of priority: . violations and/or conditions which may, in the opinion of the * Incipient Violations - Improvements to correct / I p City, develop into hazardous conditions and/or code violations. * Good and Readily Maintainable Condition - Improvements necessary to put the property and facilities in a p condition which requires a minimal amount of maintenance, and when appropriate, improvements which conserve energy. nts which are in addition to those required in applicable codes * General Property Improvements - Improveme her ancillarycomponents. Such costs shall and ordinances, including landscaping, parking, public areas and of P not exceed twenty percent (20%) of the total rehabilitation costs. * Purchase, installation or repair of furnishings. paidin preparing work write-ups, cost estimates,working drawings, * Reasonable fees for professional services P P. , g tasks. ns construction contract documents, supervision and other designated specifications, * An amount not to exceed ten percent (10%) maybe included in the loan as a contingency for any unforseen includable construction costs. * A reasonable and standard fee for loan points over and above the per annum interest rate charged by Lender. 3 * Costs attributable directly to the preparation of loan instruments and any other out-of-pocket costs incidental thereto,including,but not limited to:fees for recording and filing,credit reports,photographs,surveys,inspection fees, abstracting and title reports, appraisal fees, current accruals, and legal fees. NON-ELIGIBLE COSTS The following costs cannot be included in the amount of the loan to be subsidized: * Refinancing of existing mortgages. * Purchasing of the property. * New construction or expansion of the size of the structure. * Delinquent taxes, insurance payments, liens, charges and assessments. It shall be the applicant's responsibility to bring these payments current and to satisfy in full any liens, charges or assessments against the property prior to loan closing. TERMS AND CONDITIONS FOR THE INTEREST SUBSIDY PLAN This section sets forth the City of Miami Beach required terms and conditions for an interest subsidy. Minimum and Maximum Loan Amounts The minimum loan amount to be subsidized by the City shall include all costs necessary to bring the subject property into compliance with applicable codes and ordinances.However,the total expenditure in rehabilitation work shall be no less than$8,000 per room.The maximum loan amount shall be limited to the amount of funds available for the program, and the feasibility of the project. Points of Agreement The applicant shall agree, as required by the related documents, to abide by all applicable City,County and State regulations, and the following terms and conditions: * Completion of Work-Assure that the rehabilitation work shall be carried out promptly and efficiently through a written contract with the concurrence of the City, and completed within a certain time as established by the City. * In case of construction cost overruns, any additional funds needed to complete the project must be provided by the applicant and/or the Lender,but in no way will the City be obligated to subsidize the additional amounts. * Applicants may select their own contractor and do not have to use competitive bidding procedures. Construction draws to the contractor shall be monitored and administered by the lender. * Access to Property and Records - At any time during the rehabilitation period, designated personnel of the City of Miami Beach shall have the right to inspect the rehabilitation work, contracts, materials, equipment, payrolls and all records with respect to the project. * Applicant's Inspector - The applicant shall be required to retain the services of a qualified inspector, i.e., licensed architect or professional engineer, who must periodically inspect the project and certify to the Department of Economic and Community Development Division, on a monthly basis, the percentage of the work completed in accordance with plans and specifications. The American Institute of Architect's standards or equivalent, must be used for such certifications. 4 In case the lender provides for such services(inspections and certifications),the applicant may be exempt,at the discretion of the City, from this requirement. The applicant is solely responsible for compensating this inspector for any services provided. * Insurance -Maintain hazard,liability and flood insurance on the property in accordance with the requirements of the lender and the City. * Conflict of Interest -Allow no member of the City Administration, City employee, public official or member of the State or County Government, who exercises any functions or responsibilities in connection with the administration of the Program or approval of the project, to have any interest,direct or indirect,in the proceeds of the interest subsidy payment,or in any contract entered into by the applicant for the performance of the work financed, in whole or in part, with the proceeds of the rehabilitation loan. * Transfer of the Property - Upon transfer of the property, there will be a provision for the new owner(s) to re-apply for continuation of the interest subsidy.The application must be submitted prior to transfer of title;and, written consent must be obtained from the City Manager, upon approval and recommendation by the LRC. PROCESSING APPLICATIONS AND DISBURSING FUNDS Application Submission Requirements: An application for an interest subsidy under the program, must include the following: a. Completed application form; and b. Three Financial References c. Proof of ownership (deed or sales contract) or long-term lease (lease agreement); and d. Organizational documents (if other than individual); and e. Description of proposed work - A written description of the rehabilitation work intended to be accomplished to restore the property, identifying each item and setting forth methods to correct the deficiencies; and f.An itemized cost estimate showing the probable construction cost for each deficiency to be corrected; and g. Photographs of the property, to include exterior shots of all sides of the building, and interior shots of the units which exhibit the need for work to be performed and the specific areas to be improved; and h. Two (2) sets of to-scale plans of the proposed project that include: site plan, floor plans, elevations, and a survey; and i. A non-refundable application fee of$250.00 The applicant's proposal will be reviewed by the LRC. If the proposal is approved by the LRC, the amount of interest subsidy will be estimated, a funding commitment will be issued and a reservation of funds will be made for the project. 5 Lender's Commitment on the Project: Applicants must apply to a lender(s) of their choice to obtain a funding commitment for the project.The lender will, if feasible, issue a commitment letter to the applicant setting forth the terms and conditions of the loan. It shall be the applicant's responsibility to bear all costs necessary to submit a loan application to any Lender and to pay for any cost incurred by the applicant if the loan application is not approved by a lender and/or the LRC. Reservation of City funds for an approved application will expire sixty(60) days from the date it was approved by the LRC, unless the Economic and Community Development Department receives a written commitment issued by a lender, acceptable to the City as to form and content, at which point, the City may grant up to a thirty (30) day extension. (Refer to Item d. under Applicable Fees and Time Frames on page 7) The terms and conditions of the lender's commitment should be substantially the same as those applicable to unsubsidized loans, including, but not limited to, such matters as: submission requirements, prepayment privileges, owner's equity, credit rating of applicants, and escrow accounts. The City, will determine the amount of the interest subsidy payment necessary to reduce the loan rate to the subsidized rate. If the commitment issued by the Lender is insufficient to pay for the full cost of rehabilitation, then the work write-up and cost estimate may be adjusted downward. After adjustment, however, the property must at a minimum, conform to the applicable codes and ordinances, and any indicated requirement for additional funds must be documented to the City's satisfaction and committed to the project. Loan Closing Requirements: All applications approved by a lender and the LRC for participation in the program shall be closed in strict accordance with the terms and conditions of the lender's commitment, the City's commitment, the Subsidy Agreement and within the time specified therein. However, before a loan closing may occur and the Subsidy Agreement is executed by the City, the Economic and Community Development Department must receive and approve the following: * If applicable, approval of the proposed improvements from the State of Florida Historic Preservation Officer (SHPO). For this purpose, the applicant will have to provide working drawings, photographs and certification forms, as determined necessary by the SHPO. * An EPA study or audit of the building. * A copy of final approved plans and specifications for the rehabilitation of the project, by the City's Building Department, which include proof of satisfaction of all variances required, and compliance with all local codes and standards. Plans must also comply with the requirements of the City's Planning and Zoning Department. * Building permits must be obtained, from the City's Building Department, as required by applicable City Ordinance.Also,any other necessary permits and applicable approvals from any other governmental authorities must be obtained, if required. 6 * Copy of executed construction contract entered into by the applicant and a licensed General Contractor,which includes commencement and completion dates,contract amount,scope of work and applicable federal regulations and standards. * Evidence, satisfactory to the City's Risk Manager, of proper insurance coverage. * A revised cost breakdown, to include direct and indirect costs on the proposed work. The applicant must provide the Economic and Community Development Department with a structural report of the building prepared by an Engineer, along with a signed statement that the final cost estimate provides for any necessary structural repairs to the building. * A copy of the appraisal report that will be prepared for and used by the Lender. * The applicant must provide assurances that it is current with the legal and financial obligations and/or payments on the property, with the City. * Documentation acceptable to the City, that the Lender will accept the interest subsidy from the City and will provide a permanent loan, under the terms of the Program. * Any other requirements determined necessary by the City. The Lender will be responsible for preparing and effectuating the execution of all loan documents,including the City's Subsidy Agreement, and recording same with the Clerk of the Circuit Court. DISBURSEMENT OF INTEREST SUBSIDY After loan closing and after a Notice to Proceed has been issued by the City, the interest subsidy will be disbursed through a payment schedule acceptable to the City and to the lender. Use of the Interest Subsidy by the Lender: The interest subsidy payments disbursed by the City to the lender shall be applied to make up the difference between the monthly payment based on the loan rate and the monthly payment based on the subsidized rate. Cancellation and Refund of Subsidy Payments: At its option, the City reserves the right to cancel and terminate the interest subsidy and request the return of any unused funds to the City, by sending written notice of cancellation to the applicant and the lender at their mailing address if: (1) for a period of 30 days from the execution of the Subsidy Agreement, the applicant shall have failed or refused to cause the commencement of physical rehabilitation work on said property,or, (2) if the applicant failed or refused to complete such work within a time specified in the City's documents, or, (3) if the City or the lender determine that the purposes of the loan have been rendered impractical of fulfillment.Any events of default pursuant to any applicable contract or law, will constitute a default to the terms and conditions of the Program. The City's failure to exercise any rights or remedies to which it is entitled hereunder, shall not be deemed a waiver thereof. 7 Applicable Fees and Time Frames: Any application submitted for an interest subsidy will be subject to the following: a. An application fee of$250.00 is due at time of submission of the application to the Community Development Division. b.If the application is approved by the LRC, a commitment fee of$15.00 per each proposed unit is then due, and the subsidy funds will be reserved for a period of sixty (60) days. c. If the applicant is not able to obtain the required Lender's commitment letter within the specified time, and wishes to apply to the Economic and Community Development Division for an extension of time, a fee of$150.00 is due at the time of this request. d. If the request for extension is approved by the LRC, an extension fee of$15.00 per each proposed unit is then due, and the subsidy funds are reserved for an additional thirty (30) days. e.If the applicant fails to meet its requirements during the extension period,then the City's commitment expires. If the applicant desires to re-apply for the interest subsidy funds, a new application package and fees must be submitted to the City. f.At the time of closing, to occur no later than sixty(60) days after obtaining a firm commitment from a Lender,at which time the Subsidy Agreement is executed, a closing fee of$15.00 per each proposed unit is due. Any other items to be brought before the LRC may require, at the discretion of the City, a fee of$250.00, in order to be included as an agenda item. 8 LOAN REVIEW COMMITTEE This Section sets forth the role and responsibilities of the City's Loan Review Committee (LRC). Members The Loan Review Committee shall consist of five (5) members as follows: * City Manager or a designated representative of the City Manager's Office; * Economic and Community Development Department Director; and * Three members from different private Lenders with offices located in the City, appointed by the City Commission to serve for a one (1) year term. The members will elect a chairperson, who will serve at the will of the Committee.All meetings shall be called and set by the chairperson as needed,and shall be open to the public.Three (3) voting members shall constitute a quorum necessary to hold a meeting or take any action. The Economic and Community Development Director or a designated representative from the Economic and Community Development Department shall act as a direct liaison between the applicant, the lender, the LRC, and representatives of the City. Duties and Responsibilities of the Loan Review Committee The Loan Review Committee shall: * Study proposals and review the property qualifications and eligibility of the applicant. * If necessary, interview the applicant to obtain additional information about the proposal. * Evaluate proposals and determine which proposals shall receive approval (reservation of funds) and specify time frames and conditions for such commitment. *Estimate the amount of interest subsidy needed to subsidize selected proposals and set the reservation of funds for those projects. * Review final proposals which have received commitments from lenders, and make adjustments to interest subsidy reservations, if appropriate. * Review and make recommendations on any requests made to the City for an assignment or material change in any of the terms of the Subsidy Agreement, after loan closing. * Periodically review these Guidelines and make recommendations to the City Commission for action. The Loan Review Committee will have, at its discretion, the flexibility to ease and/or modify the guideline criteria, depending on the respective needs of each applicant. Applicability of City Resolutions and Regulations All resolutions, rules, and regulations, enacted by the City regarding membership, attendance, removal of members, voting and quorums, as amended from time to time, shall apply to the Loan Review Committee. 9 DEFAULTS The default of any loan subsidized under the program,shall be handled in accordance with the lender's normal customary procedures and applicable lending guidelines. Default by the Applicant on the Lender's Terms and Conditions of the Loan In the event any applicant of a loan subsidized under the Program defaults on any of the terms and conditions of the note, mortgage, or other loan documents and such default continues for a period of sixty (60) days, the lender shall notify the City of the default and the City may, at its sole option and discretion, within thirty (30) days of this notice, take whatever action is required to bring the loan current. If in the event the loan is not brought current,or an agreeable settlement cannot be reached between the lender and the City,within the thirty (30) day period, the lender and/or the City may take whatever measures are legal to secure payment of all or part of the total outstanding debt. Unused Prepaid Interest Subsidy In the event of default by the applicant on the Lender's terms and conditions on the loan,or on the City's terms and conditions on the Program,and the Lender forecloses on the subject property,any unused balance of interest subsidy funds shall be returned to the City and the City shall have no further financial interest in the subject property, nor any further responsibility, liability, duty or obligation to the applicant, Lender or any other party, and the City shall be entitled to recover all such costs arising out of the default. 10 LOAN SUBSIDY AGREEMENT 11 ORIG LNAL RESOLUTION NO. 91-20385 Approving the guidelines for the Hotel Rehabilitation Loan Subsidy Program and authorizing the appropriation of $500,000 in legally available FY 91/92 Resort Tax proceeds for implementation and administration of said program.