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1 <br />ORANGE COUNTY <br />BOARD OF COMMISSIONERS <br />ACTION AGENDA ITEM ABSTRACT <br />Meeting Date: November 18, 2014 <br />Action Agenda <br />Item No. 6 -f <br />SUBJECT: Inter -Faith Council Lease Estoppel Certificate and Standstill Agreement <br />DEPARTMENT: Asset Management Services, PUBLIC HEARING: (Y /N) No <br />County Attorney <br />ATTACHMENT(S): INFORMATION CONTACT: <br />1) Original Lease Jeff Thompson, (919) 245 -2658 <br />2) Proposed Estoppel Certificate and John Roberts, (919) 245 -2318 <br />Standstill Agreement <br />3) Southern Orange Campus Map <br />PURPOSE: To approve an Estoppel Certificate and Standstill Agreement authorizing the North <br />Carolina Housing Finance Agency ( "NCHFA ") to be notified prior to any changes or <br />modifications within the current Lease and to be recognized as the Tenant within the Inter -Faith <br />Council for Social Service, Inc. ( "IFC ") Lease in case of a default on an existing loan agreement <br />between NCHFA and IFC, and authorize the Chair to sign. <br />BACKGROUND: IFC is a Tenant in a 25 year Lease Agreement (Attachment 1) with Orange <br />County with regard to the Project HomeStart property located within the Southern Human <br />Services Campus in Chapel Hill. IFC has operated within the terms of the Lease Agreement <br />and is currently in good standing. The NCHFA is a lender to the IFC in the amount of $150,000 <br />with a 20 year term. This loan originated in 1995, the same time as the Lease with Orange <br />County. IFC is requesting that the loan term be extended for 5 years in order that it would be <br />consistent with the 25 year term of the Lease with Orange County. The loan is secured by a <br />Deed of Trust encumbering Tenant's leasehold interest in the Project HomeStart property. <br />NCHFA has agreed to the requested term extension of the loan, contingent on the County <br />agreeing to the proposed Estoppel Certificate and Standstill Agreement (Attachment 2). The <br />primary risk to the County is that in the event of a default, the lender would step into the shoes <br />of IFC, the lessee, in which case the County would be leasing a County -owned facility to the <br />lender at the same $1 /year rate. <br />FINANCIAL IMPACT: None. IFC intends to request an extension of the current Lease prior to <br />the June 2020 expiration. IFC intends to request an extension of the loan facility with NCHFA <br />at that time as well. In event of a potential default the County would have to expend funds to <br />avoid the default in order to maintain the status quo. <br />RECOMMENDATION(S): The Manager recommends the Board approve an Estoppel <br />Certificate and Standstill Agreement authorizing the North Carolina Housing Finance Agency <br />( "NCHFA ") to be notified prior to any changes or modifications within the current Lease and to <br />be recognized as the Tenant within the Inter -Faith Council for Social Service, Inc. ( "IFC ") Lease <br />in case of a default on an existing loan agreement between NCHFA and IFC, and authorize the <br />Chair to sign. <br />