Common use of PILOT Agreement Clause in Contracts

PILOT Agreement. The mortgaged property is subject to a prior lien for amounts required under a Payment In Lieu Of Taxes (PILOT) arrangement with the Development Authority of F▇▇▇▇▇ County, Georgia. The remaining PILOT obligations during the loan term range from $10,799,250 in 2013 through $12,770,113 in 2020, and the PILOT payments continue until February 1, 2031. The borrower affiliate that owns the adjacent retail site and/or its tenants are contractually obligated to reimburse the borrower for 22.86% of the PILOT obligation. For loan underwriting purposes, the related loan seller included as expenses the PILOT obligation (which pertains to improvements only) for both the mortgaged property and the adjacent retail site, together with the real estate taxes for the land value associated with the mortgaged property. To accommodate statutory requirements for the PILOT structure, the mortgage loan borrowers are comprised of a “fee” borrower and an affiliated “leasehold” borrower, and the lease payments made by the leasehold borrower to the fee borrower equal the required PILOT payments, and are paid by the fee borrower to US Bank Trust (the “PILOT Lender”), as trustee for the bondholders. The PILOT Lender has a statutory lien on the mortgaged property that is effectively equivalent in priority and character to a municipal tax lien. If the PILOT payments are not made, the City of E▇▇▇▇▇▇▇▇ has a special assessment lien against the mortgaged property in the same amount as PILOT payments that are due but not yet paid.