09-1397Council File # 6�
Green Sheet # 3091376
RESOLUTION
CITY OF,SAINT
Pre:ented bv
L, MINNESOTA
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RESOLliTIO\ AtiTHORIZI\G THE CH.ARGE-OFF O� A STAR LOA\
WHEREAS, the CiTy of Saint Paul ("City") has under[aken a process to �deniity STAR loans in the portfolio that hace
not been performin�; and _
W HEREAS. City staff with the counci] of the Ciry Attomey Office has determined tlirough a rieorous collection effort
that this loan is uncollectable, and City has applied a nsk raung to this loan and rated this Loan as loss, the loan being described
as foLlows�
(1) Wm� Heog, Inc., Kevin Lam in tlie unpaid principal amount of $299.223.00: and
WHEREAS, the CiCy staff recommends that d�e loan be charged-off in the amount listed above together with mterest.
NOW, THEREFORE BE IT RESOLVED, the C�ty Council hereby takes the fotlowing action:
( L) That the write off of the Loan as being uncollect�ble is in fhe public's interest, does not constitute gif[s_ and is m conYormity
with generally accepted accounting procedures for the maintenance of accounts concerned with defaulted, uncollechble and
foreclosed loans.
(2) The City staff is auth�r�zed and directed to effect the charge off of the Loao.
Yeas Nays Absent
Bo5trom j /
Carter �
Harris
Helgen �
Lantry �
Stark
Thune �
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Adopted by Council: Date �������%
Adoption Certified by Coun 1 Secretary
BY� ! f //o//i/ �.iJ�F1/�O/J
Approvecj.b'�Mayo Date � (Q p
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By: (>4i�� (/ �
Requested by Deparf�nent of:
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BY . ; -
Approved t Office �an� erm� /
By: �� I Y �
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Form Approv ey
By: � ,
Form A oved b M� r fo ssion to Council
By:
� Green Sheet Green Sheet Green Sheet Green Sheet Green Sheet Green Sheet
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DepartmenUOffice/Council: Date Initiatetl: v �
PE _Planning & Economic 10 DEC 2009 Green Sheet NO: 3091376
Development
Contact Person & Phone: Deoartment Sent To Person InitiallD
TOm Si� � 0 lannin & Economic Develo me PED Accountin
266-6686 1 lanoin & Economic Develo me De arhnent Directar
A55ign 2 inancialServices Mar aretKellv
Must Be on Council Agenda by�Date): Number 3 a or's Office Ma or
For
Routing 4 ouucil Kath Lan
Doc. Type: RESOLUTION Wl�v Order 5 i Clerk ��
TRANSACTION �
E-DOCUment Required: Y
Document ConYact: Kelly Bauer
ConWct Phone: 266-6604
Total # of Signature Pages _(Clip All Locations for Signature)
Action Requested:
Approval of a charge off on an uncollectable STAR loan issued to Wing Heng, Inc, Kevin Lam.
Recommendations: Approve (A) or Reject (R): Personal Service Contrects Must Answer the Following Questions:
Planning Commission 1, Has this person/frm ever worked under a coniract for this department?
CIB Committee Yes No
Civil Service Commission 2. Has this person/firm ever been a city employee?
Yes No
3. Does this person/firm possess a skill not normally possessed by any
current city employee?
Yes No
Explain all yes answers on separete sheet and attach to green sheet.
Initiating Problem, issues, Opportunity (Who, What, When, Where, Why):
Foreclosure and bankruptcy have eliminated the collectablity of this loan.
Advantages If Approved:
Confornvs with generally accepted accounting practices. �-
Disadvantages If Approved:
None.
Disadvantages If Not Approved:
The Ciry would keep a valuless asset on the books.
Total Amount of
Transaction: $29g�2Z3.00 CostlRevenue eudgeted:
Funding Source: STAR �OAN pctivity Number:
Financial Information: Acct#77535
(Explain)
December 11, 2009 2:49 PM Page 1
DEPART'MENT OF PLANNING &
ECONOMIC DEVEIAPMEPIT
Cecite Bedor, Director
CI'TY OF SAINT PAIJL
Christopher B. Colem¢rt, Ivtayor
25 7/est Fow'th Street
Saint Pm�l, MN55102
To: STAR Board
From: Thomas Sitz
Date: November 18, 2009
RE: Wing Heng, Inc., Kevin Lam
STAR Loan #O1-122
Account # 77535
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Telephone: 651-266-6700
Facsim i(e: 651-228-3220
This loan has an outstanding principal balance of $299,223.00. The business is a La Quinta Inn
located at 1800 Old Hudson Road. The properry is owned by Kevin Lam. The property is in
foreclosure by the first mortgage holder, Brickwell Bank of Woodbury. It is being operated
through a receivership. The first mortgage exceeds the value of the property. The STAR second
mortgage is being eliminated through the foreclosure.
The STAR loan originated iu June 2003 in the amount of $375,000. The original borrower has a
Staz bound Hotel owned by Dr. Chen of California. In June 2007, Dr. Chen soid the hotel to
Kevin Lazn of St. Paul. Mr. Lam assumed the STAR loan which had a balance of $302,649.23
and Dr. Chen was released from liability.
Kevin Lam personally guaranteed the STAR loan. Mr. Lam has filed Chapter 7 banlcrnptcy
which has rendered the guazantee to be worthless.
There remains no collection altemarive available to collect the STAR loan. I am asking the
STAR board to approve this chazge-off prior to presenting the charge-off to the City Council for
final acfion. The PED credit committee has akeady approved this charge-off.
TS:kp
AN AFFIRMATNE ACTION EQUAL OPPORTLJNITY EMPLOYER