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With respect to the request to release certain guarantors, staff does not support this
modification. Ownership changes were made without prior notice or consent, constituting
a breach of the loan agreement. Given this breach, the governance risks it presents, and
the borrower's history of challenged payment performance, staff recommends
strengthening—rather than reducing—guarantor coverage. Specifically, all owners
holding 10 percent or greater equity should be added as personal guarantors, and no
releases should be granted during the extension period. These measures are necessary
to protect the Authority's position and mitigate risk.
Accordingly, NNRHA and City staff recommend approval of the proposed loan extension,
suspension of late fees incurred during the approved catch-up period, and a required
guarantor realignment to include all original guarantors and any new owners with 10
percent or greater ownership interest, with the possible exception of the LLC currently
involved. All original collateral and loan covenants should remain in effect.
If approved by the Board, the loan balance—net of late fees incurred during the catch-up
period—uwill be re-amortized over a two-year period, with payment beginning in May 2026
and final maturity in April 2028. The loan will be paid in full by that date.
Board approval of the attached resolution is recommended.Jump to an indexed page (195 of 195)