Title
Resolution approving modifications to the 2002 HOME loan to Saint Paul Family Project Limited Partnership owner of Jackson Street Village project located at 1497 Jackson Street, District 6, Ward 5
Body
WHEREAS, the Housing and Redevelopment Authority of the City of Saint Paul, Minnesota (the "HRA") is a public body corporate and politic established pursuant to the provisions of Minnesota Statutes, Section 469.001, et seq. (the “Act”); and
WHEREAS, the HRA has the power to engage in development or redevelopment activities under Chapter 469 of the Minnesota Statutes, Housing and Redevelopment Act ("Act") and by authority of said Act engages in activities relating to: a) housing projects and development; b) removal and prevention of the spread of conditions of blight or deteriorations; c) bringing substandard buildings and improvements into compliance with public standards; d) disposition of land for private development; and e) improving the tax base and the financial stability of the community, and to engage in the aforementioned activities when these needs cannot be met through reliance solely upon private initiative and which can also be undertaken in targeted neighborhoods; and
WHEREAS, Jackson Street Village (the “Project”) is comprised of 25 large size, deeply affordable rental units, that serve families and was constructed in 2002 by the Saint Paul Family Project Limited Partnership (an affiliate of the developer RS Eden) (the “Borrower”), which remains as the owner, operator and developer of the Project; and
WHEREAS, the Board of Commissioners of the HRA, through Resolution No. 01-9/12-6 adopted on September 12, 2001, approved a $387,500 HOME loan (“2002 HOME Loan”) to the Borrower to acquire and develop the Project, and the Borrower gave a mortgage in that amount to the HRA, as mortgagee, encumbering the Project (the “Mortgage”); and
WHEREAS, the 2002 HOME Loan approved by the HRA allowed for the deferral of principal and interest payments for its approximately 30 year term, and the loan, and all principal and interest payments thereunder, is scheduled to become due on July 25, 2032; and
WHEREAS, the Project is also encumbered by a certain affordable housing Declaration of Covenants that runs with the land and has not yet expired (the “Declaration of Covenants”), which Declaration of Covenants is intended to remain in effect for the requisite affordability period; and
WHEREAS, in connection with the Borrower’s application for renovation financing from the Minnesota Housing Finance Agency (“MHFA”), the HRA has received a request from Borrower that the HRA make certain modifications to the 2002 HOME loan that include extending the term and modifying the interest rate; and
WHEREAS, the requested HOME loan extension and interest rate modification will be contingent upon the award of MHFA preservation financing to Borrower for the renovation of the Project; and
WHEREAS, the HRA’s staff has determined that the 2002 HOME Loan modification request is reasonable and warranted, and that there is a proper public purpose for making modifications to the 2002 HOME Loan for the Project, including to support investment in low-to-moderate income areas, and support affordable housing initiatives.
NOW, THEREFORE BE IT RESOLVED, that the HRA Board of Commissioners takes the following action:
1. The HRA hereby approves of an amendment of the 2002 HOME Loan that contains the following terms:
a. Reduce the interest rate from 2% to 0%; and
b. Extend the maturity date up to 30 years so that the new maturity date is coterminous with the maturity date of anticipated MHFA financing; and
c. Subject to the advance approval of the PED Department’s Credit Committee and if required as a condition to the award of the anticipated MHFA financing for the renovation of the Project, an agreement to subordinate the Mortgage to the new MHFA renovation mortgage on the Project.
2. The Executive Director of the HRA is hereby authorized and directed to prepare and enter into a loan modification agreement with Borrower that is consistent with the terms of these resolutions and the accompanying Board Report, and the HRA’s Executive Director and other appropriate HRA officials are empowered to execute that loan modification agreement on behalf of the HRA, and are further authorized to execute any other documents and instruments in connection therewith.
3. The HRA Executive Director, staff, and legal counsel for the HRA are further directed and authorized to take all actions necessary to implement this Resolution.
4. This Resolution does not constitute a binding legal agreement; rather, the action taken herein shall not be effective until said documents are executed by the appropriate official(s) of the HRA.