HomeMy WebLinkAboutAgenda - 02-04-2014 - 6k 1
ORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: February 4, 2014
Action Agenda
Item No. 6-k
SUBJECT: Authorization of a Deed of Trust by Orange Enterprises, Inc.
DEPARTMENT: Attorney PUBLIC HEARING: (Y/N) No
ATTACHMENT(S): INFORMATION CONTACT:
January 24, 2014 Orange Enterprises John Roberts, (919) 245-2318
Letter
Resolution Authorizing Orange
Enterprises to Subject the Property on
Elizabeth Brady Road to a $250,000
Deed of Trust In Excess of the Current
$715,000 Limit
PURPOSE: To authorize Orange Enterprises, Inc. (OE) to obtain a deed of trust in an amount
of$250,000.
BACKGROUND: OE is an Orange County Nonprofit Corporation organized for the purposes of
providing "creative opportunities for handicapped persons and/or persons with other
employment barriers." In 2005 Orange County and OE entered into an Agreement (the
"Agreement") whereby Orange County would contribute funding towards OE's purchase and
upfit of a property and building located at 348 Elizabeth Brady Road (PIN 9874-550-774) for the
purposes of OE's expansion of operations.
The terms of the Agreement limit OE's ability to encumber the property with any deed of trust in
excess of Seven Hundred Fifteen Thousand Dollars ($715,000) without the express written
authorization of the County. OE currently has a deed of trust encumbering the property in an
amount of Six Hundred Eighty Thousand Three Hundred Sixty-Two Dollars ($680,362). The
current assessed value of the property is One Million Ninety-One Thousand Five Hundred
Nineteen Dollars ($1,091,519).
The terms of the Agreement also provide that in the event of OE's default, the property shall
revert to Orange County. Should such a reversion occur, Orange County would be responsible
for any outstanding deeds of trust on the property. The limitation protects Orange County by
limiting the amount Orange County would have to pay in such a circumstance.
OE has requested the County authorize an additional deed of trust in an amount of Two
Hundred Fifty Thousand Dollars ($250,000). In support of this request OE states the following:
"OE is in good financial health. The line of credit is necessary to meet cash flow
requirements of its operations, not as a stopgap measure to meet long-term obligations.
For instance, several of OE's customers are government entities with payment schedules
much longer than traditional net-thirty terms. Since these receivables do not turn over as
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quickly as short-term cash flow needs arise, the line of credit would offer OE significant
flexibility in meeting these demands."
FINANCIAL IMPACT: There is no direct financial impact. Should OE cease operations or
default, the property could revert to Orange County in which case Orange County could
ultimately be responsible for all outstanding deeds of trust.
RECOMMENDATION(S): The Manager recommends the Board adopt and authorize the Chair
to sign the resolution.
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OE Enterprises, Inc.
Corporate Office
348 Efizabetk Brady Rpad
7fiCfs6oroug6,NC27278 January 24, 2014
Phone:(919)732-8124
'Fax-(919)732-4027
Alamance Office Orange County Board of Commissioners
717 worth ParkAve. 200 S. Cameron Street
Burfington,XC27217 Hillsborough,NC 27278
Phone:(336)506-2515
Tax:(336)513-4410
RE: OE Enterprises, Inc.'s request for approval of$250,000.00
Line of Credit Facility from BB&T
Dear Commissioners:
OE Enterprises, Inc. ("OE") is a community rehabilitation
program operating in Orange, Durham, and Alamance Counties
whose mission is to assist people who face employment barriers.
For thirty years, OE has offered vocational training and support to
individuals with developmental disabilities, mental illnesses,
substance abuse problems, and physical disabilities.
OE has a long-standing relationship with Orange County as
evidenced by an agreement between OE and Orange County dated
April 26, 2005 and recorded on May 4, 2005 in Book 3737, Page
159, of the Orange County Registry (the "Agreement"). The
Agreement demonstrates the County's appreciation for the services
OE provides by granting certain financial accommodations to OE
for performing these services. In return, the Agreement restricts
certain activities of OE to ensure it is a good steward of the
County's resources. One such restriction is a limit on the amount
of debt financing OE may place on its facility at 348 Elizabeth
Brady Road, Hillsboro, North Carolina (the "Property"). The
Agreement restricts OE from encumbering the Property with a
deed of trust greater than $715,000.00, without the written consent
of the County.
On December 19, 2011, OE placed a first mortgage on the
Property in favor of BB&T in the amount of $680,362.00. OE
now plans to obtain a line of credit from BB&T in the amount of
$250,000.00 by using the Property as collateral. The debt
limitation, however, restricts OE from doing so without the
County's written consent. Accordingly, we are writing to request
that such consent be given.
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OE Enterprises, Inc.
Corporate Office
348 ECiza6eth Brady Rgad
Miffs6orough,NC 27278
Phone:(919)732-8124 As further background, OE is in good financial health. The
Eajq(919)732-4027 line of credit is necessary to meet cash flow requirements of its
Alamance Office operations, not as a stopgap measure to meet long-term
717-Worth TarkAve. obligations. For instance, several of OE's customers are
Burlington,NC 27217 government entities with payment schedules much longer than
Phone:(336)506-2515 traditional net-thirty terms. Since these receivables do not turn
Ewq(336)513-4410 over as quickly as short-term cash flow needs arise, the line of
credit would offer OE significant flexibility in meeting these
demands.
We appreciate your time and attention to this request. OE
appreciates the relationship it has with Orange County and the
broader community and looks forward to serving individuals with
special needs and our customers for many years to come. If you
have any questions or concerns please feel free to contact me
directly.
Sincerely,
Kathryn Sticksel,
President
cc: Tad van Dusen
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RES-2014-008
ORANGE COUNTY BOARD OF COMMISSIONERS
RESOLUTION AUTHORIZING ORANGE ENTERPRISES TO SUBJECT THE PROPERTY ON
ELIZABETH BRADY ROAD TO A$250,000 DEED OF TRUST IN EXCESS OF THE CURRENT
$715,000 LIMIT
WHEREAS, Orange Enterprises, Inc. ("OE") is an Orange County Nonprofit Corporation organized for the
purposes of providing "creative opportunities for handicapped persons and/or persons with other employment
barriers;" and
WHEREAS, Orange County and OE entered into an Agreement dated April 26, 2005 (the "Agreement")
whereby Orange County would contribute funding towards OE's purchase and upfit of a property and building
(PIN 9874-550-774) for the purposes of OE's expansion of operations; and
WHEREAS, among the terms of the Agreement was a limitation by which OE was prohibited from encumbering
the property by any deed of trust in excess of Seven Hundred Fifteen Thousand Dollars ($715,000) without the
express written authorization of the County; and
WHEREAS, OE currently has a deed of trust encumbering the property in an amount of Six Hundred Eighty
Thousand Three Hundred Sixty-Two Dollars ($680,362); and
WHEREAS, OE has requested Orange County authorize OE to secure an additional deed of trust on the property
in an amount of Two Hundred Fifty Thousand Dollars($250,000); and
WHEREAS, it is in the interest of the citizens and residents of Orange County and particularly disadvantaged
citizens and residents of Orange County that OE be authorized to secure additional funding through an additional
deed of trust on the property;
NOW, THEREFORE, BE IT RESOLVED that the Orange County Board of County Commissioners, pursuant
to the terms of the Agreement, authorizes OE to exceed the limitation of the Agreement by securing a deed of
trust against the Elizabeth Brady Road Property (PIN 9874-550-774) in an amount of Two Hundred Fifty
Thousand Dollars ($250,000). This authorization is limited and any additional deed of trust shall be subject to the
requirements and terms of the Agreement. In no event shall OE be authorized to encumber the property beyond
the Nine Hundred Thirty Thousand Three Hundred Sixty-Two Dollars ($930,362) sum of the now existing deed
of trust and the deed of trust authorized by this Resolution.
This the 4t'day of February, 2014.
Barry Jacobs, Chair
Orange County Board of Commissioners
Attest:
Clerk to the Board of Commissioners