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Aurora fund approves renewal and new 30% guarantee to cover Gateway loan for 523 Tap and Grill
Summary
The Aurora Capital Development Corporation voted Jan. 13 to renew two existing 30% loan guarantees and to add a new 30% guarantee on an additional Gateway Mile loan to 523 Tap and Grill Inc.; the action is conditioned on updated appraisals and a combined loan-to-value at or below 90%.
The Aurora Capital Development Corporation voted Jan. 13 to renew existing 30% guarantees on two loans and to add a new 30% guarantee on an additional Gateway Mile loan to 523 Tap and Grill Inc.
Mr. Watts, presenting the item, said the new loan would be used to pay off an existing First Source Bank loan to the same borrower and called the request a cleanup of earlier paperwork. He told the board that when the fund first made its loan it filed a UCC financing statement to perfect a lien on business assets but that filing later expired and "we were in second lien position" once the UCC was not renewed. To correct that, Mr. Watts said, "we would file a UCC financing statement" for the new loan and take a mortgage lien on the adjacent 521 building to secure the borrower's personal guarantee. He said First Source must release its lien on the business assets for the new structure to achieve first-lien position.
Mr. Watts said Gateway Mile Loan Fund approved the recommended structure the prior week and asked Aurora to add a 30% guarantee to the proposed loan so the two funds would maintain a common collateral position. He warned the approval is contingent on updated appraisals for both parcels and a combined loan-to-value that "would not exceed 90% loan to value," consistent with fund parameters.
An unidentified board member moved and the board approved renewal of the 30% guarantees on the existing loans and approval of a 30% guarantee on the new Gateway loan after a voice vote in which members signaled "aye."
The fund expects loan documentation to be signed by the property owner Katina and acknowledged by George for the effect of his guarantee before closing. Mr. Watts estimated the payoff that informed his memo at about $69,000 when it was written, and said final loan terms will be subject to the payoff amount and any interim payments.
The board's action restores a secured position for the Aurora fund and aligns its guarantee exposure with Gateway Mile Loan Fund's structure, subject to the stated appraisal and loan-to-value conditions.
