Rice jan. 6 letter
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Rice jan. 6 letter Rice jan. 6 letter Document Transcript

  • # q4y5- Fl O:!JOLiJLU AFFOR1]’ABLJ El OUSING PAR1NI LLC 745 Fort Street, Suite 1400 Honolulu, Hawaii 96813 , January 6, 2014 . Z t__ I 0% . . VIA HAND-DELIVERY AND CERTIFIED MAIL - RETURNRECEIPTREQUêED #7012 3460 0000 3130 4354 Ji • Mr. Nelson H. Koyanagi Jr., Director Department ofBudget and Fiscal Services Honolulu Hale 530 South King Street, Suite 208 Honolulu, Hawaii 96813 Re: Honolulu Affordable Housing Preservation Initiative Dear Director Koyanagi: Thank you for your letter ofJanuary 2, 2014, in response to the Protective Notice and Request, dated December 3 1 201 3 that we submitted to the City and County in accordance with Sections 5.14, 6.1(f), and 6.3 ofthe Purchase And Sale Agreement, dated October 1 8, 2012, by and between the City and County, as Seller, and our company, Honolulu Affordable Housing Partners, LLC, as Buyer, as amended by that certain Restated First Amendment to Purchase and Sale Agreement, dated effective June 28, 2013. HAHP LLC’s letter to the City and County of December 3 1 20 1 3 notified the City and County that, as of st 31 HAHP LLC had been unable to obtain all ofthe various components of the December New Financing required to close the transactions described in the Purchase And Sale Agreement by March 3 1, 2014. HAHP LLC therefore requested that the City and County agree to extend the Financing Contingency Date until March 3 1, 2014, in order permit HAHP LLC to continue to work on HAHP LLC’s financing for the transaction and for the transaction to move forward as contemplated by and subj ect to the terms and conditions of the 1 Purchase And Sale Agreement. . , , , , By your letter of January 2”’, you have indicated that, despite the introduction and consideration by the City Council of two proposed Resolutions to rescind or cancel the 1 Capitalized terms not defined in this letter shall have the respective meanings ascribed to them in the Purchase And Sale Agreement.
  • HONOLULU A]pfQRDAJLF: HOUSING PARThIERS, LLC Mr. Nelson H. Koyanagi Jr., Director Department of Budget and Fiscal Services January 6, 2014 Page 2 Purchase And Sale Agreement, the City and County nonetheless remains committed to working toward the goal of closing the transactions contemplated by the Purchase And Sale Agreement by March 3 1, 2014. In this regard, and in response to HAHP LLC’s request for an extension of the Financing Contingency Date until March 3 1 2014, you have also advised us that, in order for the City and County to consider granting the requested extension, the City and County would like to know if, assuming that the extension is granted, there is a reasonable possibility that the extension will enable HAHP LLC to close the transactions contemplated by the Purchase And Sale Agreement by March 3 1, 2014, and also whether, if the City and County were to consent to the requested extension, HAHP LLC remains committed to using its good faith efforts to proceed towards closing. , As you no doubt know, in connection with the delivery of your letter to HAHP LLC of January 2w’, various officials of the City and County, including Ember Shinn, the Managing Director, and Pamela Witty-Oakland, the Director of the Department of Community Services, contacted representatives ofHAHP LLC’s principals and suggested that, in order for HAHP LLC to meet the targeted closing date of March 3 1 2014, the City and County might be willing to provide seller-financing for the Purchase Price as a means of “bridging” part of the financing for the transactions and in order to give HAHP LLC the time to finish the work necessary to secure and put in place the various components of HAHP LLC’s long-term/permanent financing for the transactions work that, as you know, HAHP LLC was required to put on hold in light of the introduction of the two proposed Resolutions to rescind or cancel the Purchase And Sale Agreement. We understand that, at the City Council meeting last Friday, January 3rd, Ms. Shinn and Ms. Witty-Oakland also advised the City Council that the City Administration was contemplating providing seller-financing for transactions in order to permit a closing by March 3 1, 2014. , — If the City and County were willing to provide the seller-financing necessary to close the transactions by March 3 1 2014, there would obviously be a number of details that would need to be worked out between the City and County and HAHP LLC. , While acknowledging that that is the case, but at the same time in order to nd 2 HAHP LLC believes that, if the respond to the specific inquiries in your letter of January City and County were to provide “bridge” financing to cover the Purchase Price on terms and and thereby allow conditions agreeable to the City and County and HAHP LLC —
  • F1ONO1LJLLJ AFFO1U)AJBIJ IHOUSING PARTNI;RS, LLC Mr. Nelson H. Koyanagi Jr., Director Department ofBudget and Fiscal Services January 6, 2014 Page 3 HAHP LLC the opportunity and time to do what is necessary to obtain commitments for and there would be a to close HAHP LLC’s long-term/permanent financing for the transactions reasonable possibility that the requested extension ofthe Financing Contingency Date would enable HAHP LLC to close the transactions by March 3 1, 2014. Further, if the City and County were to grant the requested extension under such circumstances, HAHP LLC would remain committed, as it has all along, to using its good faith efforts to proceed towards a closing by that date. Ifthe City and County were to grant HAHP LLC the requested extension in order to permit the City and County and HAHP LLC to discuss and work out the terms for the seller-financing that the City and County has suggested, we would obviously be anxious to meet with the responsible officials of the City and County to discuss these matters in more detail. — So that there is no misunderstanding regarding these matters, and especially in 2 light ofthe recent correspondence between HAHP LLC and the City and County, we think that the City and that it would be helpful to mention, at least in passing, some of issues County and HAHP LLC will need to address and resolve fairly promptly if the City and County grants the requested extension of the Financing Contingency Date. First, aside from the general (and helpful) suggestion that the City and County would be willing to provide seller-financing to facilitate a closing by March 3 1 2014, both HAHP LLC and presumably the City and County as well will need to know what specifically the City and County has in mind regarding the financing that the City and County would provide, which will obviously have an impact on the “economics” ofthe transactions. , Second, while we would assume that, ifthe extension were granted so that HAHP LLC and the City and County could then work together to negotiate the terms of the seller-financing that the City and County has proposed as a possibility, HAHP LLC would not thereby be deemed to waive any of the claims that it has made, nor would the City and County be deemed to waive any ofthe defenses that it has raised, relating to the introduction of the two proposed Resolutions to rescind or cancel the Purchase And Sale Agreement (the “Resolutions”). Obviously, ifthe parties “get to” a closing by March 3 1 2014, HAHP LLC’s claims and the City and County’s defenses will become moot. But pending working out the , We refer here to HAHP LLC’s letter to the City and County ofDecember 10, 2013, and December 31, 2013, and the City and County’s letter to HAHP LLC of December 18, 2013. 2
  • HONOLUUJ AFFOThIL] HO1’JSING 1ARTM:RS ]iLc Mr. Nelson H. Koyanagi Jr., Director Department of Budget and Fiscal Services January 6, 2014 Page 4 terms ofthe seller-financing that the City and Countyhas proposed and other necessary details, HAHP LLC would reserve its claims and the City and County would reserve its defenses. HAHP LLC is open to discussing formal releases and waivers of these claims and defenses as part of the closing of the financing that the City and County would provide. Third, as part of HAHP LLC’ s letter to the City and County of December 3 1, 20 1 3 we advised the City and County that HAHP LLC had not been able to obtain all of the various components of the New Financing required to close the transactions by March 3 1, 2013. As you know, the Purchase And Sale Agreement contains Financing Contingencies in favor of HAHP LLC providing that, if any of the various components of the New Financing were not obtained by the applicable deadline, and the deadline were not extended, the Purchase And Sale Agreement would be terminated and the Deposit returned with interest to HAHP LLC. Accordingly, HAHP LLC notified the City and County that, in the absence of an extension of the Financing Contingency Date, HAHP LLC was entitled to the immediate return ofHAHP LLC’s Deposit in accordance with the terms ofthe Purchase And Sale Agreement. As indicated in this letter, if the City and County grants the requested extension of the Financing Contingency Date and is willing to provide seller-financing to cover the Purchase Price and “bridge” the financing for the transactions, HAHP LLC is committed to working in good faith with the City and County to close the transactions by March 3 1 2014 with the understanding that HAHP LLC would then have time to obtain commitments for and close its long-term/permanent financing, etc. If, however, HAHP LLC and the City and County, notwithstanding their respective good-faith efforts, are unable to reach agreement on the terms of the seller-financing provided by the City and County or any other related arrangements necessary for the transactions to close by March 3 1 2014, the City and County would need to agree and acknowledge that, in such event, HAHP LLC would then be entitled to the immediate return ofHAHP LLC’s Deposit. To be clear about this, we are not asking the City and County to waive any of its defenses under the Purchase And Sale Agreement relating to the claims that HAHP LLC has made relating to the infroduction of the two proposed Resolutions to rescind or cancel the Purchase And Sale Agreement. But, as discussed in HAHP LLC’s letter ofDecember 1 8, 2013, aside from any claims that HAHP LLC has and any defenses available to the City and County regarding the introduction and consideration of the two proposed Resolutions, HAHP LLC is otherwise entitled to the return of HAHP LLC s Deposit under the Financing Contingencies provisions of the Purchase , , , ‘ —
  • TjTfI rinr irT IjiJ1’ ULU w’i -ff-nrr A r jA ‘ . iryr ‘ rrirT.’ )J3N (‘ T T rA I ± t. iL . ‘ Mr. Nelson H. Koyanagi Jr., Director Department ofBudget and Fiscal Services January 6, 2014 Page 5 And Sale Agreement. HAHP LLC is committed to working in good faith with the City and County, but, in doing so and accommodating the City and County’s interest in closing the transaction by March 3 1 , 2014, HAHP LLC does not want to be put in a worse position than would otherwise be the case under the Purchase And Sale Agreement. We are appreciative of the City and County’ s proposal to consider making seller-financing available as a means of overcoming the problems posed by the introduction and consideration of the two proposed Resolutions to rescind or cancel the Purchase And Sale Agreement. As we have outlined in this letter, we will look forward to working with the City and County in this regard. Sincerely, HONOLULU AFFORDABLE HOUSING PARTNERS, LLC a Hawaii limited liability company By Highland Property Development LLC A California limited liability company Its Manager and Member aL: By:William E. Rice Its Authorized Manager cc: Department of Community Services 715 South King Street, Suite 311 Honolulu, Hawaii 96813 Attention: Director Department of Corporation Counsel 530 South King Street, Room 100 Honolulu, Hawaii 96813 Attention: Gordon Nelson, Esq.
  • HONOLULU AFFORDABLE HOUSING PARTNERS, L]LC Mr. Nelson H. Koyanagi Jr., Director Department of Budget and Fiscal Services January 6, 2014 Page 6 Schiack Ito, LLLC Topa Financial Center 745 Fort Street, Suite 1500 Honolulu, Hawaii 96813 Attention: Carl J. Schlack, Jr., Esq. Via Email: b. riceJiighlandcompanies. corn Honolulu Affordable Housing Partners, LLC do Highland Property Development, LLC 250 W. Colorado Boulevard, Suite 210 Arcadia, California 91007 2304002b.doc CBRE, Inc. Pauahi Tower, Suite 1800 1003 Bishop Street Honolulu, Hawaii 96813-3544 Attention: Scott B. Gomes