Monday, October 22, 2007

Missed Item: Another Loan Subordinated

An item was left out a week ago, Friday, from the “Meetings, Meetings…” story. The county board also had on the agenda (and subsequently approved during its Oct. 13 regular meeting) an increase in the subordination of the loan it made to AHC Inc., to build the community center currently under construction near the corner of N. Glebe and N. Henderson roads.

Similar to the item that was reported, this simply means that the $8.5 million loan the county made in November, 2004, to AHC is even more subordinate to other loans from other lenders. The county’s subordination has moved from $50 million to $53 million.

David Cristeal, in the county's housing division, in a subsequent interview wanted to make sure people understood that the loaned amount is not increasing either in this case or in the case of Buckingham Village. Also, this subordination lasts only during the construction of the community center.

The only threat to the county’s coffers is if AHC Inc. or Buckingham M.I. Limited Partnership should default on the loans. Monies paid would be paid in order of subordination—the more subordinate the county’s loan is, the less likely it would be paid. The county is satisfied that the projects will pay off.

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