Agenda Item # __________
Columbus Consolidated Government
Council Meeting
June 5, 2007
TO: Mayor and Councilors
SUBJECT: Subordination Agreement ? National Security Associates, Inc.
INITIATED BY: City Manager?s Office
Recommendation: Approval is requested for the subordination of the Development
Authority?s Security Deed, to include the Service Agreement, with National
Securities, Inc.
Background: Resolution #536-05 authorized the transfer of 692 acres of
property (Chattahoochee Land), which the City obtained through the Land Swap
with Fort Benning, to the Development Authority. The Development Authority
sold the property to National Security Associates, Inc., for cash of $300,000
and in-kind services of $650,000. As part of the sell of the property, the
City entered into a services agreement with National Security Associates, Inc.,
to provide $650,000 of in-kind services for training for the City?s public
safety employees. The Development Authority retained a security deed to
include the service agreement in order to secure performance of the agreement.
This security deed was in a second priority position after the funds for the
purchase of the property.
National Security Associates, Inc. is wishing to secure additional funding in
the amount of $2 million to refinance the acquisition indebtedness and
additional financing for improvements on the property. The additional funding
will go towards land improvement, building construction and upgraded training
equipment. In order for this loan to proceed, the Development Authority will
need to subordinate the security deed, to include the service agreement, to a
second priority position after the $2 million.
Analysis: The Development Authority has reviewed the proposed loan agreement
and has requested the City to authorize the Development Authority to
subordinate the security deed (see attached letter). The additional
improvements will increase the value of the property and will directly enhance
the ability of National Security to perform its obligations to the City.
Financial Considerations: The Development Authority returned $292,859.36 to
the City from the initial sale of the property. Currently, the City has
utilized $13,500 of the $650,000 of in-kind service through training for our
public safety employees leaving a balance of $636,500.
Legal Considerations: The City Attorney has reviewed and approves as to form.
Recommendation: Approve the attached resolution authorizing the subordination
of the Development Authority?s Security Deed, to include the Service Agreement,
with National Securities, Inc.
A RESOLUTION
NO. _____
A RESOLUTION AUTHORIZING THE SUBORDINATION OF THE DEVELOPMENT
AUTHORITY?S SECURITY DEED, TO INCLUDE THE SERVICE AGREEMENT, WITH NATIONAL
SECURITY ASSOCIATES, INC.
WHEREAS, on December 8, 2006, the City entered into a Service Agreement with
National Security Associates, Inc. in the amount of $650,000 to provide in-kind
services for training of the City?s public safety employees; and,
WHEREAS, the Development Authority retained a security deed to include the
Service Agreement to secure performance of the agreement ; and,
WHEREAS, National Security Associates, Inc. is wishing to secure $2 million in
additional financing for refinancing of indebtedness and improvements to the
property; and.
WHEREAS, the Development Authority will need to subordinate the security deed,
to include the service agreement, to a second priority position for the loan.
NOW, THEREFORE, THE COUNCIL OF COLUMBUS, GEORGIA, HEREBY RESOLVES AS FOLLOWS:
The Development Authority is authorized to subordinate the security deed, to
include the service agreement, with National Security Associates, Inc.
Introduced at a regular meeting of the Council of Columbus, Georgia, held the
_________day of _____________, and adopted at said meeting by the affirmative
vote of ____________members of said Council.
Councilor Allen voting __________.
Councilor Anthony voting __________.
Councilor Baker voting __________.
Councilor Barnes voting __________.
Councilor Davis voting __________.
Councilor Henderson voting __________.
Councilor Hunter voting __________.
Councilor McDaniel voting __________.
Councilor Turner Pugh voting __________.
Councilor Woodson voting __________.
_______________________________ ____________________________
Tiny B. Washington, Clerk of Council Jim Wetherington, Mayor
Attachments