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Council approves forbearance to support Hoppy redevelopment and historic tax‑credit financing
Summary
Council approved Resolution 75‑70 to forbear certain city loan remedies for the Paddock LLC/Hoppy project to accommodate historic tax‑credit financing; staff said Hoppy cannot technically default until year nine and the forbearance term aligns with investor requirements.
The Beatrice City Council voted 8-0 to adopt Resolution 75‑70, executing a forbearance agreement with Paddock LLC and RIC Paddock S.T.C.I. LLC that delays the city's exercise of certain remedies on a loan tied to the Hoppy redevelopment project.
City staff explained the request is driven by the project’s historic tax‑credit financing structure. An investor purchasing historic tax credits asks for assurance that foreclosure will not occur during the period they use the credits, because foreclosure can complicate the investor's tax filings. Staff said the forbearance term requested is effectively about eight years after substantial completion of the building, which matches investor requirements and statutory timing for historic tax‑credit projects.
Staff also said that, under the city's loan agreement with Hoppy, Hoppy cannot technically default until the ninth year; if the borrower fails to meet annual requirements, the city could withhold year‑to‑year payments. The forbearance agreement formalizes a pause on foreclosure remedies for the investor’s expected eligibility period so the investor can proceed with financing. The council approved the measure unanimously.
