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Committee moves subordination agreement for 8 Harlow Street to council after staff and solicitor explain financing options
Summary
The committee reviewed a draft subordination agreement allowing a lender to finance a purchase of 8 Harlow Street while preserving the city's reverter clause; staff said the buyer is Pike Development and legal counsel clarified the agreement lets financing proceed without eliminating the city's protections. The committee moved the staff recommendation to forward the agreement.
City staff summarized the history of 8 Harlow Street, explaining a development agreement put in place years ago to avoid the city taking possession when liens threatened the property. Staff said a prospective buyer, Pike Development, has expressed interest and sought bank financing to purchase and renovate the building; the proposed loan amount cited during the discussion was roughly $2,200,000.
Legal staff presented a draft subordination agreement intended to let the lender provide financing without the city having to remove its reverter clause. The solicitor, who identified himself as Dave, explained: "The subordination agreement would allow the lender ... and the reverter clause stays in place," meaning the city retains its reverter interest while enabling the buyer to obtain financing.
Committee members asked whether the developer has the capacity and track record to complete the renovation. Staff answered that Pike Development had previously worked on State Street and other local projects and had participated in the city's façade treatment program.
Motion and outcome: A committee member moved the staff recommendation to forward the subordination agreement ("move staff recommendation for a subordination agreement"); the motion received a second and was forwarded for council consideration.
What’s next: The subordination agreement will proceed to council for further action and, if approved by council, would permit the buyer to move forward with lender financing while leaving the city's reverter clause intact.
