Title
Resolution Approving the Assignment, Assumption, Modification and Subordination of a CDBG Loan in the Amount of $240,000.00 and a CDBG Loan in the Amount of $150,000.00, and Authorizing the Execution of Various Documents in Connection with the St. Philip's Gardens Project, District 8
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WHEREAS, the Housing and Redevelopment Authority of the City of Saint Paul, Minnesota ("HRA") has duly adopted and there is now in effect a City-Wide Comprehensive Plan/Redevelopment Plan for the acquisition, rehabilitation and resale of properties;
WHEREAS, the HRA recognizes the problems created by deteriorated and blighting buildings, inappropriate land use and vacant/under utilized land in the City's neighborhoods, and also recognizes the need to take the initiative to address these issues by providing housing opportunities in a wide range of economic diversity and add to the City's affordable housing inventory; 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: 1) housing projects and development; 2) removal of prevention of the spread of conditions of blight or deteriorations; 3) bringing substandard buildings and improvements into compliance with public standards; 4) disposition of land for private development; and 5) improving the tax base and the financial stability of the community; and engages in the aforementioned activities when redevelopment or development needs cannot be met through reliance solely upon private initiative, and may engage in said activities in targeted communities; and
WHEREAS, on May 4, 1999, St. Philip's Gardens, Inc. ("Seller"), owner of the St. Philip's Gardens apartments located at 754 Concordia Avenue (the "Project") in the City of Saint Paul, received a HRA loan using CDBG funds in the amount of $240,00.00 with two percent (2%) interest with deferral principal and interest payments until December 2, 2013; and
WHEREAS, on February 28, 2001, the Seller, received a HRA loan using CDBG funds in the amount of $150,00.00 with two percent (2%) interest with deferral principal and interest payments until December 1, 2013; and
WHEREAS, the Project consists of approximately fifty-six (56) units of affordable rental housing units; and
WHEREAS, Twin Cities Housing Development Company ("TCHDC") has a signed purchase agreement for the Project; which will be assigned to St. Philip's Gardens II Limited Liability Limited Partnership, a Minnesota limited liability limited partnership (the "Developer"); and
WHEREAS, the Developer has submitted a proposal for an Assignment and Assumption of the $240,000.00 CDBG loan and the $150,000.00 CDBG loan from the HRA; and
WHEREAS, the Developer, requested that the $240,000 CDBG loan and the $150,000 CDBG loan be subordinated to additional debt from Minnesota Housing Finance Agency ("MHFA"), Family Housing Fund ("FHF"), Housing and Urban Development ("HUD") and the Low Income Housing Tax Credit ("LIHTC") allocations; and
WHEREAS, the Developer, has requested that the $240,000 CDBG loan and the $150,000 CDBG loan interest rates be reduced from 2% to 1% and defer payments and accrued interest for at least 30 years; and
WHEREAS, the Credit Committee of the Department of Property and Economic Development ("Credit Committee") met on October 24, 2011 and approved the assignment and assumption of the $240,000 CDBG loan and the $150,000 CDBG loan from St. Philip's Gardens Inc. to St. Philips Gardens II LLLP; and
WHEREAS, the Credit Committee met on January 30, 2012 and approved the Subordination and Modification of the $240,000 CDBG loan and the $150,000 CDBG loan with deferment of principal and interest payments with accruing interest of 1% for at least 30 years; and
NOW, THEREFORE, BE IT RESOLVED by the Board of Commissioners of the Housing and Redevelopment Authority of the City of Saint Paul, Minnesota, that based upon the presentation of staff, the testimony, if any, and the Report to Commissioners that accompanied this Resolution, that:
1. The HRA Board approves the Assignment, Assumption, Subordination and Modification of the $240,000.00 CDBG loan and the $150,000.00 CDBG loan with the Developer for the Project on the terms set first in the staff report and this Resolution.
2. 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 and the HRA's Executive Director is authorized to execute any documents and instruments in connection therewith.