Holyoke Redevelopment Authority approves subordination to clear $500,000 Florence Bank loan for Jackson Canal property

The Holyoke Redevelopment Authority voted unanimously to approve an intercreditor and subordination agreement that will allow Jackson Canal to close new financing with Florence Bank for improvements at 55 Jackson Street.

Lee Vradecas of Jackson Canal told the Authority he is finalizing a loan with Florence Bank and needs the subordination and intercreditor documents to close. "I am trying to close on a note with Florence Bank, and part 1 of the requirements is this intercreditor agreement and the subordination agreement," Vradecas said. He described 55 Jackson as a roughly 20,000-square-foot building and identified a new long-term tenant, Encore Fire Protection, whose lease begins Jan. 1, 2024.

Why it matters: The new financing will cover landlord and tenant improvements tied to a long-term lease. Vradecas said the tenant spent about $800,000 renovating the interior and that he provided roughly $350,000 in tenant-improvement contributions, which he plans to cover with the new borrowing.

City Solicitor’s Office attorney Jane Mantileski said the HRA previously subordinated to a Florence Bank mortgage of about $325,000 and that the HRA’s outstanding loan balance on the property is "in the $80,000 mark." Mantileski said she reviewed the proposed subordination and removed a small number of provisions the city could not accept, but otherwise found the documents to be standard. "The HRA agreed to subordinate its loan, which is in the $80,000 mark, to that first loan from Florence Bank," Mantileski said.

Board members asked whether the new subordination was essentially the same form used previously; Mantileski confirmed it was substantially similar but with several provisions removed to protect the city and HRA rights. The board also heard an appraisal figure: Vradecas said the property was appraised at $1,600,000 as part of the financing.

The motion to approve the subordination came from a board member who said, "I'll make the motion," and was seconded by another member; the board then held a roll-call vote in which the members present voted in the affirmative and the chair thanked members for approving the agreement. After the vote, members arranged for documentation to be notarized and picked up by courier so signatures could be obtained the following morning.

What’s next: With the HRA’s approval, Jackson Canal expects to close with Florence Bank and complete the signings shortly; HRA staff said they would circulate the final signed documents by courier and confirmed a plan to meet again in September unless other matters arise.

Quotes from the meeting (selected): "They spent about $800,000 in renovating the interior of the building," — Lee Vradecas. "The HRA agreed to subordinate its loan, which is in the $80,000 mark, to that first loan from Florence Bank," — Jane Mantileski. "I look forward to signing it sometime in the very near future," — Chair (unidentified).

The meeting also included brief staff updates: the housing authority was before the planning board for phase 3 approvals, brownfield support efforts for High Street properties are ongoing, and a wind-development contractor is progressing while the project awaits federal historic tax-credit determinations.