Res 039-2022 DuraPro Enterprises, LLC to assume loan for 707 N. Scott, LLC known as Dental Planet 03/15/2022 Resolution No. 39-2022
Resolution authorizing DuraPro Enterprises, LLC to assume the
Wichita Falls Economic Development Corporation's existing loan to
707 North Scott, LLC and to subordinate WFEDC's existing lien
against the Property to a new bank lien for DuraPro to finance the
remaining portion of the purchase price
WHEREAS, Texas Local Gov't. Code §501.073(a) provides "The corporation's
authorizing unit will approve all programs and expenditures of a corporation and annually
review any financial statements of the corporation"; and,
WHEREAS, on February 17, 2022, the WFEDC approved the Project listed below
and as stated in its agenda.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF WICHITA FALLS, TEXAS, THAT:
1. The Wichita Falls Economic Development Corporation's approval and funding
of the following program modification as described below and in said corporation's
agenda, are approved:
DuraPro Enterprises, LLC:
• DuraPro Enterprises, LLC is authorized to assume the WFEDC's existing loan to
707 North Scott, LLC and to subordinate WFEDC's existing lien against the
Property to a new bank lien for DuraPro to finance the remaining portion of the
purchase price.
PASSED AND APPROVED this the 15th day of March, 2022.
MAYOR
ATTEST:
ity Clerk
WICHITA FALLS ECONOMIC DEVELOPMENT CORPORATION
PROJECT SUMMARY
February 17,2022
ITEM/SUBJECT: Dental Planet/DuraPro LLC project
INITIATED BY: Henry Florsheim
ATTACHED: Letter from DuraPro; current performance agreement with 707 North Scott LLC
COMMENTARY: The owners of Dental Planet are attempting to purchase the property where
the company is located(at 707 North Scott). This includes their assumption of the existing
performance agreement between the WFEDC and 707 North Scott LLC. Their bank is requiring
a first position on collateral;the company is asking if the WFEDC would take a subordinate
position to allow the sale of property to go through.
Since this loan was made in 2014, $224,753 has been forgiven. Dental Planet has met its
employment requirements each year except in 2020 when they fell short by four positions; that
year they repaid the required$4,364. The remaining balance of the loan is $98,193,which will
be completely forgiven or paid for by December 1,2024.
RECOMMENDATION:
Considering the small amount left on the loan balance,I recommend the EDC agree to move to a
second collateral position on the existing loan. This will allow local ownership to purchase the
property and be more in control of their own future.
SAMPLE MOTION: To amend the existing performance agreement with 707 North Scott LLC
to allow the WFEDC to take a subordinate position on collateral.
Respectfully submitted,
Henry Florsheim
Wichita Falls Chamber of Commerce
4
Frank Gibson(1925-2011) 3711 Maplewood Ave.,Suite 200
Joseph N.Sherrill,Jr.(1929-2013) Wichita Falls,Texas 76308
p.940.264.4400
Matthew D.Anderson f.940.264.4401
AnthonyM. Bates SHERRILL&GIBSON
Kara M.Blanco** 4315 Guadalupe Street,Suite 202
Richard K.Bowersock ;1 t o o rneys at Law Austin,Texas 78751
Peyton W.Cannedy p.512.474.1144
R.Caven Crosnoe f.512.474.9023
D.Todd Davenport
Erwin Davenport* 222 Sidney Baker South,Suite 525
Barbara Gibson** Kerrville,Texas 78028
Robert W.Goff,Jr.* www.sgpllc.law p.830.893.3145
R.Ken Hines f.940.264.4401
Michelle F..Wurster
Of Counsel
Tony Hotchkiss February 11,2022
John E.Prothro,Jr.*
*Board Certified,Estate Planning and Probate Law,Texas Board of Legal Specialization
**Board Certified,Residential Real Estate Law,Texas Board of Legal Specialization
Wichita Falls Economic Development Corporation
PO Box 1431
Wichita Falls,Texas 76307
RE: DuraPro Enterprises,LLC Assumption and Subordination Request
Dear WFEDC Board Members:
Our firm represents DuraPro Enterprises,LLC("DuraPro")in connection with DuraPro's
proposed purchase of 707 North Scott Avenue,Wichita Falls,Texas 76306(the"Property")from
707 North Scott, LLC("707 NS"). The purpose of this letter is to provide context for DuraPro's
assumption and subordination request. Below is a brief history of the background of the proposed
purchase and request.
1. WFEDC and 707 NS entered into a Performance Agreement to incentive 707 NS to employ
or lease to a tenant to employ a certain level of people to keep and create jobs in Wichita Falls.
2. In connection with such Performance Agreement and to incentive such performance with
the Agreement,WFEDC and 707 NS also entered into a forgivable Combined Promissory Note in
the principal amount of$327,310 on December 1,2014 secured by a Deed of Trust covering the
Property.
3. If 707 NS employed or leased to a tenant who employed the requisite number of employees
as provided for in the Performance Agreement, WFEDC agreed to forgive the full principal and
interest amounts owed under the loan.
4. If there was a shortfall in reaching the requisite number of employees, 707 NS would be
required to repay a portion of the loan for each employee below the requisite number.
5. 707 NS has leased the property to Dental Planet,LLC("Dental Planet")exclusively since
the date of the loan.
RE:DuraPro Enterprises,LLC Assumption and Subordination Request Page 1 of2
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6. In August 2020,Nick Whittington and Tony Brumley purchased Dental Planet. Nick and
Tony have been employees of Dental Planet for 21 years and 17 years,respectively, and minority
owners since March 2012. They are local businessmen who wanted to keep Dental Planet in
Wichita Falls and decided to invest in the business to make that happen.It is with that same mindset
that they have approached the owners of 707 NS to purchase the Property and bring ownership
back into local hands.
7. Nick and Tony formed DuraPro to purchase the Property from 707 NS.
8. Since the time the loan was made, $224,753 has been forgiven and$4,364 has been repaid.
Dental Planet's employment has met the qualifications for the maximum loan forgiveness for each
annual installment, except for 2020 in which they had a shortfall of 4 full-time positions in part
due to the pandemic.
9. The remaining balance of the loan to be forgiven, or a portion to be paid if qualifications
are not met,annually is$98,193 by December 1,2024.
10. Dental Planet intends to continue to meet the terms of the Performance Agreement to
qualify DuraPro for the maximum loan forgiveness for the reminder of the loan.
11. In order to purchase the Property, DuraPro is requesting WFEDC (i) to consent to
DuraPro's assumption of WFEDC's existing loan to 707 NS and(ii)to subordinate its existing
lien against the Property to a new bank lien for DuraPro to finance the remaining portion of the
purchase price.
Nick and Tony are passionate about keeping business local and anticipates employment growth as
they continue to implement their business strategies and solutions within Dental Planet. They are
excited for the possibilities that owning the Property will afford them and are hopeful to work in
cooperation with the WFEDC to make this transaction a reality. My client and I would be happy
to answer any question or comment you may have.We appreciate your consideration of this matter
and look forward to your response.
Sincerely,
SHERRILL&GIBSON
17/7--0/
PEYTON W.CANNEDY
pcannedy@sgpllc.law
Encl: None
Cc: None
RE:DuraPro Enterprises,LLC Assumption and Subordination Request Page 2 of 2
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