From: Mac Corthell

Sent: Fri Jan 28 15:22:24 2022

To: 'KIRK SAWYER'

Bcc: Sam Miller; Dan Huff

Subject: RE: Toliver Rd

Importance: Normal

Attachments: Sawyer Truck Report Promissory Note (00738429-3xB8084).docx; Sawyers Truck Repair Trust Deed (00738365-2xB8084).docx; 20201015 MURA - Sawyer Trucking Loan Agreement (00737182-2).docx;

 

Hi Kirk,

The new agreement was signed on 11/3 and we didn’t hear from you on these proposed changes until 1/17, two weeks before all documents were to be executed and returned (by 2/1/22) and more than two months after they were provided to you.

This issue has been ongoing for more than 3 years and the continuous delays and last minute change requests are not acceptable. The City has been more than fair in offering to finance $200k of the improvements you are required to make, and to forgive $100k of that financing while allowing you to amortize the remaining debt over a 30-year period – interest free.

It is the City’s position that further delays and negotiation of the financing package offered are not acceptable. Any additional project costs are due to self-inflicted delays and the City will not offer any more funding than what has been offered at this point. I would submit that if you wish to have the flexibility you mention in your email that you seek private financing for this project. The risk to the City that flows from the modifications you propose is too great and too complex, especially given that the City is doing you a massive favor by offering the financing terms that it has offered.

Thank you, and we hope to see the executed agreements by 2/1/22 as agreed. The alternative is that this financing agreement will lapse and you will be on your own to complete these improvements with latest start date 180 days after the new agreement was executed on 11/3/21. Please let me know if you intend to execute the agreements on 2/1/22 as agreed and I will have them awaiting your arrival at City Hall.

Sincerely,

Macahan “Mac” Corthell, J.D. | Community Development Director

City of Molalla

315 Kennel Ave. | PO Box 248 |Molalla, OR 97038

Phone – 503.759.0243

Email – mcorthell@cityofmolalla.com

Website – http://www.cityofmolalla.com

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From: KIRK SAWYER <1997strinc@gmail.com>

Sent: Monday, January 17, 2022 2:25 PM

To: Mac Corthell <mcorthell@cityofmolalla.com>

Subject: Toliver Rd

Mac,

I appreciate the flexibility the City has given throughout this process. We are committed to moving forward with the Development Agreement and finalizing the MURA loan and breaking ground on this project.

There are a few issues I would like to resolve with you and/or the appropriate parties, hopefully this week.

  1. 1. Property into LLC. Currently the property is held in my name, as Kirk Sawyer, individually. For various reasons, we are planning to move the ownership of the property into a limited liability company owned by my wife and I in the next few months. We need to make sure the MURA Loan documents support this transfer. We are willing to sign personal guarantees and remain personally liable for the loan.

 

  1. 2. Trucking Business Separate; Property as Collateral. We need to make sure that our business has access to financing and capital on commercially reasonable terms now and during the time this loan will be outstanding. We understand the City’s need to have security for this loan and are fine with using the property as collateral. We believe the unencumbered value of our property as an asset provides more than enough security for this loan, which will also be backed by our personal guarantee. We request that our truck repair business assets and operations are not included in collateral for the MURA loan.

 

  1. 3. Loan Structure. Based on our past conversations and my understanding of what we’ve agreed to, the MURA loan is for the full costs of the proposed and approved public improvements to Toliver Road, with 50% of the costs to be forgiven at completion, and 50% to be paid back over 30 years at 0% interest. The MURA loan security will be in second position behind our primary mortgage/commercial lending relationship. We also need to be able to refinance our primary mortgage as long as it doesn’t impair the MURA security.

 

  1. 4. Future Use of Property. Currently on the property, we have our truck repair business and a rental house as tenants. At some point in the future, we may want/need to divide the property into two parcels. We do also intend to expand our truck repair business facilities. We need the flexibility to do these reflected in the loan documents.

 

  1. 5. Cost and Timeline of Toliver Rd. Improvements. We are all living in unprecedented times, with so much uncertainty on what it takes to get things done. We are in the process of getting an updated bid on the Toliver Rd. Project, and it looks like the total cost will be approximately $300,000. In addition, though we are confident that it will be possible to complete, and indeed the project WILL be completed 1 year from starting, it is also possible that delays in materials availability or labor shortages could create issues in meeting that timeline. We ask for some flexibility for extending the ultimate completion date if necessary as long as the project is being pursued diligently by us and the contractor.

 

  1. 6. Payback Timeline. We request a payback period of 25 years, with the first payment to occur after 5 years.

 

  1. 7. Timeline for Finalizing MURA Loan. We signed a Development Agreement Amendment in November. It has a deadline of February 1 for signing the MURA Loan documents. We would like to request a limited extension of time on this point in order to finalize the loan documents.

 

Thank you for your consideration. Please let me know if it would be helpful to talk through any of the above issues, I am available this week to discuss.

In addition, I am working with an attorney, who will have edits to the Loan Document drafts and can propose language for the City to consider on the items above. Can we receive Microsoft Word versions of all of the Loan Documents?

Thank you!

Kirk Sawyer