A request has been received from Beer Community Land Trust (CLT) asking the Council to refinance two elements of previously approved development loans.
The Strategic Lead Finance presented a request from Beer Community Land Trust (CLT) asking the Council to refinance two elements of previously approved development loans. The request was to help the Trust address delay issues through Covid and certain cost increases as identified in their request. During discussions it was stated that the council should do everything it could to be supporting CLTs especially as they was little cost involved. Members congratulated the Beer CLT for the successful work they had done to date.
Having received the report and noted the contents, members;
1. to approve Beer CLT request of refinancing previously approved development loans as detailed in the report, and
2. that the Council’s costs of entering into revised agreements, including due diligence, legal and surveying costs are to be met by the Borrower.
Toapprove BeerCLT requestof refinancingpreviously approveddevelopment loansas detailed inthe report.That Cabinetrecommends thatthe Council’scosts ofentering into revisedagreements, includingdue diligence,legal andsurveying costsare tobe metby the Borrower.
Thisbeing in line with the report:
The Councilhas made availabledevelopment financeto the CLT for two schemes providinglocal affordable housing and amendmentsof refinancingagreed as follows:
· 1st scheme(7 houses; 4 affordable rental and3 discounted sales)- Nowcomplete with original loan being£1,060,000, themajority now repaid in line withthe agreement. Thefinal sum outstandingis £290,000 duefor repayment now.The request fromthe CLT is for afurther 5 year term, with £40,000principal paid off now, leaving £250,000 beingrefinanced givinga repayment dateof October 2026.
To berefinanced onthe same terms in relation to correspondingPublic Works Loan Ratewith a margin addedto ensure compliance with subsidy control/competition rules.
· 2nd scheme(6 units;2 houses and1 flataffordable rental, 2houses and1 flat sharedequity) – Currentlyin development with a loanof £1,150,000. The request doesnot to increasethe amount borrowed butasks to reschedule the loan tranches and extend the term of the loans by a maximumof 6months.
· The 1st trancheof £250,000 scheduledrepayment June 2022 extendedto November 2022
· The 2nd tranche of£550,000 to be released inSeptember 2021 with repayment in October 2026
· The 3rd tranche of £350,000to be releasedbefore March 2022 withrepayment by November 2022
Againto be refinancedon the same terms.
The developmentfinance toBeer CLT has previouslybeen agreed on theunderstanding that appropriatecollateral is legally securedto protectthe Council and allcosts are recoveredto give a cost neutral orbetter position tothe Council. Should Cabinet agree tothe refinancing asrequested then it will be ensured thesetwo key aspects remain.
Reasons for decision:
The decisionis inline withthe recommendationsof thereport presentedto Cabinetand members of Cabinet were inagreement with the report.