OOT and BDC

[Ted]

 Well, well, well.

  It looks like RFischer may have been right on the money on this one (literally).

  I went down to the County Building to see what the deliquent taxes were on the OOT property and when they were paid.

The OOT property had deliquent taxes on it up until October 21, 2013.

  On Monday, October 21, 2013, an amount of $90,862.52 was paid to the county to pay off the taxes on the OOT property.

So, here is what we have:

1. On Friday, October 18, 2013, the Berwyn Development Corporation loans Windsor Properties (owners of the OOT property) an amount of $93,062.52.

2. On Monday, October 21, 2013, deliquent taxes on the OOT property are paid off in an amount of $90,862.52.

  Strange, isn't it,  that the dollar and cents amount are identical (62 dollars and 52 cents).... <LOL>

The taxes were sold to "FAIR DEAL II, INC." on behalf of Windsor Properties.

The deposit was made by one of the owners of the property (James F. Gay) which is one of the names in the loan.

  I don't think this is a coincidence.

  btw, the penalty was 12% per annum, which added $13,633.95 to the taxes that were not paid those 3 years. 

[Ted]

1. Council approval. Maybe certain lower amounts do not need to be approved in public? Whoever typed or took that meetings minutes left it out?

  A loan of $93,000 is not small.  In addition, all mortgage loans in the past were approved by the city council.
 
  Also, in the past, the city council has approved much much smaller amounts of money (in the $1,000 to $5,000) range.  I think every BDC allocation or loan has to be approved by the city council.

  Finally, the City Of Berwyn is identified as the Lender in the document.  If the City of Berwyn is going to be legally identified as the Lender in a legal document for a loan, then I damn well expect that the Berwyn City Council would have approved that loan.

I think if minutes were modified, I would have seen the modified minutes posted or something in subsequent minutes saying there was a modification.  I never even saw this loan on any agenda in the last 4 years.

2. $385,000 limit on a loan. Not the total of more than one loan but the limit on a loan?

The document was a modification to an existing mortgage that the city extended to the OOT owners in 2010. The minutes from 2010 indicate that the mortgage loan should not exceed $385,000.

  Bu modifying the mortgage to issue an additional $93,000 on top of the $385,000 amount of the mortgage, I believe that violates what was dictated to the BDC by the city council in 2010.

  This is a new loan on top of an existing mortgage.  The mortgage was not to exceed $385,000.

3. Seneca property. Someone at the county screwed up! The BDC is not the lender for one thing the City of Berwyn is the lender aren't they? It's not the BDC's money its the City of Berwyns.

  You may be right.  Maybe the lawyer preparing the paper work screwed up.  But, Anthony Griffin, Martin Medicino and Jim Gay all signed the document.  Why wouldn't they have caught this before signing the document.

Also, of the thousands of addresses in Berwyn, why would the county or the lawyer mistakenly pick an address (the Seneca property) that the BDC has/had an ownership claim on.

  That seems like an amazing coincidence, given the thousands of addresses in Berwyn.

But, I do tend to agree with you.  The transaction doesn't make sense if a lien on the Seneca property is somehow involved in this loan to OOT.

  Happy hunting Ted hope you figure it out.

  Well, I think I have figured in out.  The BDC gave a loan of $93,062.52 to the OOT owners on Friday, October 18 without getting city council approval for the loan and then on Monday, October 21 the owners of OOT paid off their deliquent property taxes in an amount of $90,862.52 .

  I think RFischer had it right all along.


  I bet there are a lot of people in Berwyn with deliquent property taxes who would like the BDC to give them money to pay their deliquent taxes.... LOL

  PKD50 had it right - it's all about clout. 

[Bonster]

  Finally, the City Of Berwyn is identified as the Lender in the document.  If the City of Berwyn is going to be legally identified as the Lender in a legal document for a loan, then I damn well expect that the Berwyn City Council would have approved that loan.

My thought is that the city, although identified as the "Lender", does not have a big ol' pile o' money which they dole out in return for collateral, but that it's their line of credit they're using to secure a bank loan on behalf of businesses.  Hence, putting up city property in the form of Seneca as collateral for the bank in case OoT fails to pay.   The original loan was held thru Citizens' Bank, I believe. 

[Ted]

  Finally, the City Of Berwyn is identified as the Lender in the document.  If the City of Berwyn is going to be legally identified as the Lender in a legal document for a loan, then I damn well expect that the Berwyn City Council would have approved that loan.

My thought is that the city, although identified as the "Lender", does not have a big ol' pile o' money which they dole out in return for collateral, but that it's their line of credit they're using to secure a bank loan on behalf of businesses.  Hence, putting up city property in the form of Seneca as collateral for the bank in case OoT fails to pay.   The original loan was held thru Citizens' Bank, I believe. 

  Mark, no where is Citizen's Bank mentioned in the document for the loan of $93,062.52.  They are not signer's of the document.  Citizen's Bank is not even mentioned as one of the Grantors or Grantees.

  The document states that the loan is coming from the Berwyn Development Corporation.

It appears the property has two mortgages on it - a primary mortgage of $1.344 million from Citizens Bank issued in 2005 and a secondary mortgage of $385,000 issued by the BDC in 2010.

  This additional loan of $93,062.52 was a modification to the secondary mortgage from the BDC in 2010, not the primary mortgage from Citizens Bank in 2005.

    I see absolutely no evidence that Citizen's Bank was involved in this loan of $93,062.52.  None whatsoever. There is also no evidence in the document that this is about a line of credit.

  This loan of $93,062.52 is coming from the Berwyn Development Corporation and the City of Berwyn.

   Finally, in the past, when the Berwyn Development Corporation has loaned money to a business for its mortgage (Benny's Pizza, Jack's Tool, etc), the loan was voted on and approved by the Berwyn City Council.  It appears this loan never went to city council.

[Ted]

   I think this whole loan stinks to high heaven.  First of all, it appears it was never voted on or approved by the Berwyn City Council.

  Second, it is a loan to a business so that they can pay off their deliquent taxes.  I don't think the City of Berwyn or the BDC should be loaning money to businesses so that they can pay off their deliquent taxes.

   What really gets my gall on this is the "quarter pounder" speech given at the December, 2009 city council meeting on the 15% tax hike.

  That lady figuratively and literally shook her finger at the tax payers in Berwyn and told us to suck it up.  And, now we find out that a business her family was involved in wasn't paying its property taxes after the 15% tax increase!!!

   And, so my property taxes that go into the BDC to fund the BDC are being used by a politically connected business so that that business can pay off their deliquent taxes, including an interest penalty of $13,000.

  Think about that for a minute - Your taxes and my taxes are going toward paying the penalty interest on someone else's deliquent taxes.

  This is wrong.  I don't know if it is criminal and I don't know if a fraud has been committed.

  But it is wrong.

[justme]

   I think this whole loan stinks to high heaven.  First of all, it appears it was never voted on or approved by the Berwyn City Council.

  Second, it is a loan to a business so that they can pay off their deliquent taxes.  I don't think the City of Berwyn or the BDC should be loaning money to businesses so that they can pay off their deliquent taxes.

   What really gets my gall on this is the "quarter pounder" speech given at the December, 2009 city council meeting on the 15% tax hike.

  That lady figuratively and literally shook her finger at the tax payers in Berwyn and told us to suck it up.  And, now we find out that a business her family was involved in wasn't paying its property taxes after the 15% tax increase!!!

   And, so my property taxes that go into the BDC to fund the BDC are being used by a politically connected business so that that business can pay off their deliquent taxes, including an interest penalty of $13,000.

  Think about that for a minute - Your taxes and my taxes are going toward paying the penalty interest on someone else's deliquent taxes.

  This is wrong.  I don't know if it is criminal and I don't know if a fraud has been committed.

  But it is wrong.

Not to mention that people connected with OoT are working for the city with a very nice salary for "created jobs". Amazing, isn't it?

They expose Cicero for crap, why hasn't anyone touched Berwyn?

[Ted]

My thought is that the city, although identified as the "Lender", does not have a big ol' pile o' money which they dole out in return for collateral, but that it's their line of credit they're using to secure a bank loan on behalf of businesses.  Hence, putting up city property in the form of Seneca as collateral for the bank in case OoT fails to pay.      

Ah, the light bulb just went off in my head!!  Now I understand what you are saying.

So, Mark, you think the BDC did not have $93,000 in cash to give immediately to the owners of OOT.  The OOT property is already maxed out on mortgages versus what it is worth.  According to the Assessor's site, the OOT property is worth $714,000 but there are mortgages outstanding on the property in the amount of $1.729 million.

So, the BDC could not get cash or a line of credit using the OOT property as collateral.  Therefore, the BDC used the Seneca property as collateral to get the cash for OOT to pay off its deliquent taxes.

Mark, is that what you are hypothesizing? 

  I think I get it now.

[buzz]

  I don't think the City of Berwyn or the BDC should be loaning money to businesses so that they can pay off their deliquent taxes.
  Think about that for a minute - Your taxes and my taxes are going toward paying the penalty interest on someone else's deliquent taxes.
  This is wrong.

Berwyn rising.

[berwyn senator]

I would love to have a business in Berwyn,taxes are paid,remodeling is paid, hell open a business as front,just keep getting money from the town bigger better mortgages,what a deal. Goes any one know a guy?

[berwyn senator]

No matter how good a town looks on the surface,be assured there's always a layer of shit somewhere,why else would anyone want to be a politician??





''

[maraire]

As much as i do not want to respond to this thread, I feel I must clear up the misinformation that is being given here. This will be my one and only response to what Ted is trting his hardest to turn into a conspiracy. Please be aware and respectfull to the fact that this is MY personal business and no one elses.

Previous mistakes on our side and attempts to keep the restaurant open had us run behind on property taxes. Our mortgage with the BDC is guaranteed by the building and delinquent property taxes would have lost the collateral for the BDC. The original mortgage document which was approved before I was on the Board
is boilerplate and has specific authority to pay property taxes which is in the mortgage for this type of instance and protects the BDC in worse-case scenario on loans.

My loan was modified based upon the authority in the mortgage to pay for delinquent property taxes but NOT with property tax dollars or TIF. The seven banks that make up the loan program also serve as the BDC's loan commission which took a look at this and approved the loan modification using the BDC's line of credit with these same seven banks for property taxes that had to be paid or lost to a tax lien to out of town tax lien scavengers.

The loan modification came with very harsh conditions but I recognize that we placed ourselves in this situation so we are living with the loan modification terms. I have also resigned from the BDC Board. After significant effort and money from us, we did close the restaurant and are lucky to have Wishbone operating the space.

We do not have any ownership of Seneca and it is not pledged as collateral. The building on Windsor is the only collateral for the mortgage.

I am not happy that our attempts and our money could not create the destination restaurant that everyone wanted but not because we didn't try or spend a lot of our money and credit on the attempt. Hopefully for the Depot District and our City that Wishbone can have a ton of success rather than seeing a boarded up foreclosure.

Sorry to report that there is no master conspiracy. 





 



 

[Ted]

As much as i do not want to respond to this thread, I feel I must clear up the misinformation that is being given here. This will be my one and only response to what Ted is trting his hardest to turn into a conspiracy. Please be aware and respectfull to the fact that this is MY personal business and no one elses.

Previous mistakes on our side and attempts to keep the restaurant open had us run behind on property taxes. Our mortgage with the BDC is guaranteed by the building and delinquent property taxes would have lost the collateral for the BDC. The original mortgage document which was approved before I was on the Board
is boilerplate and has specific authority to pay property taxes which is in the mortgage for this type of instance and protects the BDC in worse-case scenario on loans.

My loan was modified based upon the authority in the mortgage to pay for delinquent property taxes but NOT with property tax dollars or TIF. The seven banks that make up the loan program also serve as the BDC's loan commission which took a look at this and approved the loan modification using the BDC's line of credit with these same seven banks for property taxes that had to be paid or lost to a tax lien to out of town tax lien scavengers.

The loan modification came with very harsh conditions but I recognize that we placed ourselves in this situation so we are living with the loan modification terms. I have also resigned from the BDC Board. After significant effort and money from us, we did close the restaurant and are lucky to have Wishbone operating the space.

We do not have any ownership of Seneca and it is not pledged as collateral. The building on Windsor is the only collateral for the mortgage.

I am not happy that our attempts and our money could not create the destination restaurant that everyone wanted but not because we didn't try or spend a lot of our money and credit on the attempt. Hopefully for the Depot District and our City that Wishbone can have a ton of success rather than seeing a boarded up foreclosure.

Sorry to report that there is no master conspiracy.   

   At what city council meeting was the loan for $93,062.52 approved by the Berwyn City Council?  The original vote by the city council in June 2010 states that the mortgage to you will not exceed $385,000.   By issuing a modification in the amount of $93,062.52, you and the BDC have violated the dictate from the city council that the mortgage should not exceed $385,000.

  And, why should the tax payers of Berwyn provide a loan to you so that you can pay your deliquent taxes? The document on the Recorder of Deeds site states that the City of Berwyn is the lender and that the City of Berwyn is extending the loan.

  You may think this is your own personal business but it involves money provided by the tax payers of Berwyn via the BDC, which makes it our business.

[mustang54]

  Ted did you read the mans response? Your answers are right there in front of you and the rest of us. No city money was used it was seven banks correct? There is also structure within the mortgage to do what was done from what I read so apparently no vote at a council meeting was needed. To think lawyers and city officials would risk their lively hoods for something like this seemed a bit far fetched to me from the beginning. BTW Ted to tell the man its not his business is down right fucking ignorant and rude. It is his, he is taking all the risks, shame on you I thought you were a better man than that. He has more vested in the city than many others ever will. He signed the papers,he takes the risks.

[Ted]

  Ted did you read the mans response? Your answers are right there in front of you and the rest of us. No city money was used it was seven banks correct? There is also structure within the mortgage to do what was done from what I read so apparently no vote at a council meeting was needed.

Then, why did the loan have to go through the Berwyn Development Corproation?  Why didn't the OOT owners deal with the banks directly? 

And, why does the document say the City of Berwyn is the Lender and that the City of Berwyn wishes to extend the loan?  If the City of Berwyn is involved in a loan, then the Berwyn City Council should vote on that loan.

  I still don't like the fact that a loan from the Berwyn Development Corporation was used to help someone pay their deliquent taxes.  I still think it is wrong.

[mustang54]

  Ted my Friend listen to the old man here. Like it or not apparently its not illegal. What makes sense to me is it was done to protect a much larger investment of city money from like he said some out of state tax vultures coming in and grabbing it. And you must admit Ted wether you like the guy or not he has been very good for the depot district. No one has tried harder to make that area relevant than him and his partners. Hopefully one day soon it will all come together for that area and all of this discussion will be forgotten. BTW Ted happy new year.

[Ted]

  Ted my Friend listen to the old man here. Like it or not apparently its not illegal. What makes sense to me is it was done to protect a much larger investment of city money from like he said some out of state tax vultures coming in and grabbing it. And you must admit Ted wether you like the guy or not he has been very good for the depot district. No one has tried harder to make that area relevant than him and his partners. Hopefully one day soon it will all come together for that area and all of this discussion will be forgotten. BTW Ted happy new year.

I never said it was illegal.  I said I didn't like it and I thought it was wrong.

  And, I still think any loan issued by the BDC where the City of Berwyn is identified as the Lender should be approved by the Berwyn City Council.

Period.

  I agree Marty has done a lot to try to make the Depot District viable.  But, I don't think BDC money should be used to pay off someone's deliquent taxes.

[mustang54]

  Ted I agree and I'm sure everyone does that all loans should be voted on for approval. But on the other hand Ted having that option in the original loan to protect the city from a forclosure and losing its position is smart. Ted knowing how governments and schools work you don't always have time to wait for a council meeting to cast votes, by then the property could be gone. I would also think Ted that that part of the mortgage contract was thought of by city attorneys to protect the investment.

[Ted]

  Ted I agree and I'm sure everyone does that all loans should be voted on for approval. But on the other hand Ted having that option in the original loan to protect the city from a forclosure and losing its position is smart. Ted knowing how governments and schools work you don't always have time to wait for a council meeting to cast votes, by then the property could be gone. I would also think Ted that that part of the mortgage contract was thought of by city attorneys to protect the investment.

  One more thought - Why weren't the 7 banks listed in the document as Grantees?  Usually when banks are involved in a loan or mortgage, the banks are listed as Grantors or Grantees in the Recorder of Deeds document.  The only lending entities listed in the document were the Berwyn Development Corporation and the City of Berwyn.

  I still think the City Council should have voted on this loan.  And, I still think it's wrong for BDC money to be used to pay off someone's deliquent taxes.

  Otherwise you have the potential for fraud and abuse.  The Berwyn Development Corporation could then just issue loans willy nilly to whomever they wanted in the name of the City of Berwyn without the city or the city council knowing about it.

  There has to be some kind of checks and balances on what the BDC does.  That check and balance is the Berwyn City Council.

[mustang54]

   Ted do you know if they have ever given a loan out specifically just for a tax payment? I mean not like this scenario to protect a larger loan they have already made but a first time loan to cover late taxes? I would guess this was a first and done to protect themselves.

[Ted]

   Ted do you know if they have ever given a loan out specifically just for a tax payment? I mean not like this scenario to protect a larger loan they have already made but a first time loan to cover late taxes? I would guess this was a first and done to protect themselves.

According to RFischer, the BDC is not allowed to give out loans to pay deliquent taxes.

Mustang54, what makes you think there was an urgency here to pay the taxes?  After all, there are a city council meeting just two days before the loan.  Why not put it on the agenda then?

  And, if this is the scenario that raises a larger question - Should the City of Berwyn (via the BDC) even be in the business of providing mortgage loans to businesses?

  If the city has to worry about tax vultures swooping in and taking property, then I don't think the city should even be in the business of providing mortgage loans.

I know they have done it now on at least three occasions for 3 different businesses, but maybe the city should not be providing mortgages to businesses.

  But, again, why do you think there was an urgency here - especially since the original mortgage loan was in July 2010 and the loan wasn't documented until August 2013 (which I still find strange)?

  Why the urgency?  What evidence is there that a tax vulture was coming in to take the property?  Especially in view of the fact that the property is worth $700,000  (according to the Assessors office) but it had mortgages on it?

  Would a tax vulture want to pay $90,000 of taxes on a property worth $700,000 when there were mortgages on the property?