SYNCHRONY BANK LINE OF CREDIT ($5,000,000) - RENEWAL - Ogden City
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SYNCHRONY BANK LINE OF CREDIT ($5,000,000) – RENEWAL
Action: Adopt/Not Adopt Resolution
Executive Summary The Board will consider a Resolution authorizing the renewal of a $5
million dollar line of credit with Synchrony Bank. Terms and conditions
of the renewal are the same as the original agreement, except the index
and margin used to calculate the variable rate will change and the draw-
down period is extended from eighteen (18) to twenty-four (24) months.
Background November 24, 2015
The Redevelopment Agency Board passed Resolution 2015-21 adopting
the Quality Neighborhood Initiative (Initiative). The goal of the Initiative
was to accelerate the revitalization of East Central neighborhoods and
build on previously established goals and vision for the community:
1. Improving business and economic development opportunities.
2. Improving the quality of life and community in general by
creating a place where people want to live.
3. Emphasizing the City’s outdoor recreation opportunities.
4. Developing a functional transit system.
5. Improving educational opportunities for residents.
6. Building on Ogden’s rich history, architecture and heritage.
To reach this vision, the Initiative established a multi-faceted approach
to tackle the issues focusing on efforts that 1) reduce the concentration
of low-income/sub-standard housing in the area, 2) increase the
standards of care for residential units, 3) increase owner-occupancy
rates, and 4) increase property values. To accomplish these goals three
intervention methods are being utilized:
1. Targeting:
a. Restructuring RDA areas.
b. Declaring intent to use authorized municipal authority.
c. Building on the bright spots (corridors and feeders).
Ogden Redevelopment Agency Meeting: April 13, 2021 1
d. Reducing impediments to investment.
2. Resource Development
a. Revising and aligning City Ordinances.
b. Accessing existing and developing new funding sources.
3. Marketing and Delivery
a. Training and educating code enforcement.
b. Marketing to attract new buyers and convert renters to
buyers.
c. Expanding parameters to allow quicker property acquisition.
d. Developing appropriate incentive programs for development,
renovations, etc.
In addition to these efforts, the City and the Redevelopment Agency
continue efforts to influence regional growth management policies, state
tax policies, and assist the school district in improving student
performance by providing safer, more stable housing environments.
August 16, 2016
The RDA Board approved Resolution 2016-15 authorizing the $5 M line
of credit with Synchrony Bank. Original terms of the line of credit are as
follows:
Loan Type: Line of Credit
Amount $5,000,000
Term: Four (4) years with an Eighteen month draw
down period
Interest Rate: Variable, LIBOR plus 1.75% (as of 6/23/16 –
2.3901%), paid quarterly
Security: Real Property (project by project)
Eligible Projects: Properties within the Quality Neighborhood
Area (20th to 30th, Washington to Harrison)
Disbursements/
Repayments: Disbursed project by project; repaid upon
refinance or disposition, after three (3) years
or at the expiration of the Loan, whichever is
soonest
Ogden Redevelopment Agency Meeting: April 13, 2021 2Debt Service
Source: Sale of property or BDO Lease Revenue
(Annual $1 M QNI appropriation over five
years)
June 5, 2018
The Board approved a Resolution to renew the $5 M Line of Credit (LOC)
with Synchrony Bank and extend the repayment period for an additional
eighteen (18) months. The original draw down period expired March 28,
2018.
Synchrony Bank (Formerly GE Money Bank)
In 2005, Ogden City entered into a line of credit (LOC) agreement with
Federal National Mortgage Association (Fannie Mae) to assist with
costs associated with HUD’s Asset Control Area program. In 2011 the
City switched to a LOC agreement with GE Money Bank. The City’s
original LOC with GE was for $1 M. This was later increased to $1.4 M.
The RDA obtained a $5M LOC in August of 2016.
In June of 2014, GE Capital changed its name to Synchrony Bank.
Synchrony Bank has an office in Draper, Utah, however, all lending
decisions are made at corporate headquarters in Connecticut.
Additional information about Synchrony can be found here.
February 15, 2021
The Board offices received an Administrative Transmittal requesting an
extension of the Synchrony Bank Line of Credit (LOC) for an additional
five years. Requests for extension of the Quality Neighborhoods
Initiative and authorization for additional BDO Lease Revenue funds
accompanied the request for the LOC extension.
March 9, 2021
The Board held a joint work session to review and discuss the proposed
LOC extension, together with the Quality Neighborhoods Initiative and
BDO Lease Revenue funding.
Ogden Redevelopment Agency Meeting: April 13, 2021 3Proposal The Administration is proposing to renew the $5 M Line of Credit (LOC).
The terms of the Line of Credit remain the same as the original except
for adjustments to the interest rate and draw down period. The terms
are as follows:
Loan Type: Line of Credit
Amount $5,000,000
Term: Four (4) years with a twenty-four (24) month
draw down period
Interest Rate: Variable, 90-day Treasury CMT plus 1.9% (as
of 2/3/21 – 1.94%)
Security: Lien on real property (project by project)
Eligible Projects: Properties within the Quality Neighborhood
Area (20th to 30th, Washington to Harrison)
Disbursements/
Repayments: Disbursed project by project; repaid upon
refinance or disposition, after three (3) years
or at the expiration of the Loan, whichever is
soonest
Debt Service
Source: Sale of subject property or BDO Lease
Revenue (Annual $1 M QNI appropriation
over five years)
Attachments Administrative Transmittal
Proposed Resolution
Board Staff Contact: Janene Eller-Smith, MPA/JD (801)629-8165
Ogden Redevelopment Agency Meeting: April 13, 2021 4Submitted to CAO:
Ogden City RDA Transmittal Received by RDA:
Renewal of Synchrony Bank Line of Credit
for Quality Neighborhoods Projects
DEPARTMENT: DIRECTOR:
Community and Economic Development Tom Christopulos
DIVISION: MANAGER:
Community Development Ward Ogden
STAFF: Ward Ogden CONTACT: wardo@ogdencity.com
REQUESTED TIMELINE: Fiscal Year 2022 Budget Approval Cycle
RECOMMENDATION: Approve resolution authorizing renewal of $5,000,000 Synchrony Bank Line of
Credit for Quality Neighborhoods projects.
BACKGROUND INFORMATION:
On August 16, 2016, the RDA Board approved a resolution authorizing the Executive Director to enter
into a loan agreement with Synchrony Bank regarding a line of credit in the amount of $5,000,000
which would be used to fund land acquisition and clearance in relation to Quality Neighborhood
projects. The initial period of the Quality Neighborhoods Initiative and the accompanying fund source
used for Synchrony Bank loan repayments was Fiscal Year 2017 through 2021.
Administration proposes to renew the line of credit with Synchrony Bank for the purpose of land
acquisition and clearance for Quality Neighborhoods projects. The repayment source is identified in
the Quality Neighborhoods Initiative as BDO lease revenues in the amount of $1,000,000 each year for
five years. This renewal would maintain the existing loan terms as listed in the attached resolution.
FISCAL IMPACT
+ $5,000,000 Synchrony Bank Line of Credit
- $5,000,000 Repayment from land sale and/or BDO Lease Revenue
ATTACHMENTS:
• Resolution including loan terms
Ogden City Council Transmittal Page 1 of 1RESOLUTION NO. 2021-6
A RESOLUTION OF THE OGDEN CITY REDEVELOPMENT AGENCY AUTHORIZING THE
AGENCY EXECUTIVE DIRECTOR TO ENTER INTO A LOAN AGREEMENT WITH
SYNCHRONY BANK TO PROVIDE FUNDS FOR COMMUNITY DEVELOPMENT
PROJECTS.
WHEREAS, the Ogden City Redevelopment Agency undertakes redevelopment
projects intended for the revitalization of neighborhoods of Ogden City; and
WHEREAS, the Redevelopment Agency and the Ogden City Council have renewed the
Quality Neighborhoods Initiative as a means of focusing effort and funding at the East Central
Community; and
WHEREAS, funding is needed to assist with the acquisition and clearance of land
intended for revitalization projects; and
WHEREAS, the Ogden City Redevelopment Agency and Synchrony Bank desire to
establish a line of credit in the amount $5,000,000 to facilitate this funding need.
NOW, THEREFORE, BE IT RESOLVED by the Board of the Ogden City
Redevelopment Agency that the Agency Executive Director is hereby authorized to enter into a
loan agreement with Synchrony Bank to obtain a line of credit in the amount of $5,000,000,
secured by a first-position lien on any Designated Property, according to terms outlined in
Exhibit “A” attached hereto, to be used to fund land acquisition and clearance in relation to
Quality Neighborhoods projects.
PASSED AND ADOPTED this _____ day of ___________, 2021.
_______________________________
BOARD CHAIR
ATTEST:
___________________________
Approved as to form: MHS 2/11/2021
Legal DateExhibit “A”
Synchrony Bank Line of Credit Terms
Loan Type: Synchrony Bank (the “Lender”) will provide a revolving line of credit to
OCRDA in the amount of Five Million Dollars ($5,000,000.00)
Term: The loan will have a four (4) year term, with a twenty-four (24) month
draw period.
Interest: Variable rate equal to the 90-day Treasury CMT plus a 1.9% margin.
(As of 2/3/21)
Index = 0.04%
Index + Margin = 1.94%
Security: A first-position lien on any Designated Property if such Designated
Property does not have improvements upon the real property. Further,
if any Designated Property does have improvements, but such
improvements are subsequently removed, OCRDA will execute such
documents or instruments as Lender may require to evidence the
creation of a lien on such Designated Property.
Eligible Projects: Increase inventory of affordable housing while achieving blight
reduction within the Quality Neighborhood Area, currently defined as
the area bound by 20th Street on the north, 30th Street on the south,
Washington Blvd. on the west, and Harrison Blvd.
Funds are disbursed from the Synchrony Bank line of credit for specific
housing projects, and are repaid upon the occurrence of the earliest of
Repayments:
(i) the sale, refinance or other disposition of any Designated Property
associated with such Disbursement, (ii) the date that is three (3) years
from the date of such Disbursement or (iii) the expiry or earlier
termination of the Loan
Interest Payments OCRDA will be required to make quarterly interest payments to
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