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Brownfield authority directs attorney to draft personal guarantee for Kings Court loan
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Summary
After lengthy debate about precedent and legal risk, the Benton Harbor Brownfield Redevelopment Authority directed its attorney to review a Fishbeck‑prepared $25,000 loan agreement and draft a personal‑guarantee document so the loan can be signed at the next meeting if ready.
The Benton Harbor Brownfield Redevelopment Authority voted to have its attorney finalize and prepare a personal‑guarantee document tied to a $25,000 loan the board previously approved to support the Kings Court project.
The motion—moved and supported during discussion on old business—directed counsel to review the loan agreement Fishbeck prepared and produce a personal guarantee ‘‘as soon as possible’’ with an absolute deadline of having it ready to sign at the board’s next meeting. The motion passed with six yeses and two abstentions.
Consultant Theresa told the board that the loan would be repaid in five installments over five years with 1.5% interest and that the attorney recommended a personal guarantee instead of a confession of judgment, which the lawyer said was cumbersome and expensive to enforce. ‘‘He recommends doing a personal guarantee, which would be not just the LLC entering, but them personally also signing that personal guarantee,’’ Theresa said.
Several board members raised concerns about precedent and the authority’s role. One member argued the board ‘‘is in dangerous territory when we agree to make loans because we are not a bank’’ and said loans could create future expectations among other applicants. That member abstained from the final vote. Another member countered that the authority has statutory ability to make loans and that Fishbeck had presented the option after the developer requested it.
The attorney’s hourly fee was discussed as part of the timeline for drafting the document; Theresa said counsel’s reduced rate for the board is $250 per hour. The board also agreed that if counsel can deliver the document quickly, members could convene a special or call meeting to expedite signatures rather than wait for the regular meeting.
Next steps: the attorney will prepare the personal‑guarantee document, and the board expects to sign it at or before the next scheduled meeting if drafting and review are complete.
