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Resolution Approving Subordinating Existing HRA Debt at 1068 Raymond Avenue, District 12, Ward 4
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WHEREAS, the Housing and Redevelopment Authority of the City of Saint Paul, Minnesota (“HRA”) is a public body corporate and politic organized, existing, and operating under the laws of the State of Minnesota, Minn. Stat. Sec. 469.001, et seq. (the “Act”); and
WHEREAS, the HRA has the power to engage in development and redevelopment activities under the Act, and is authorized to create redevelopment projects as defined in the Act, and said activities include but are not limited to: (a) providing adequate, safe and sanitary dwellings, remedying housing shortages for low and moderate income residents, and providing housing for persons of all incomes through housing projects and development, (b) removing and preventing blight or deterioration, (c) bringing substandard buildings and improvements into compliance with public standards, (d) performing duties according to the comprehensive plan, (e) disposing of land for private redevelopment, and (f) improving the tax base and the financial stability of the community; and
WHEREAS, Park Crossing Apartments Limited Partnership is a 19-unit affordable housing project located at 1068 Raymond Avenue (the “Project”). The Project was originally built in 1991 by People for Pride and Living (PPL) to provide affordable housing for Saint Paul residents at 50% area medium income; and
WHEREAS, the HRA loaned the Project $525,000 of HRA funds with a 2% interest rate in second-priority position with a maturity date of July 10, 2021, and,
WHEREAS, PPL intended to sell the property to new owners and, the new owners requested to assume the existing HRA loan; and,
WHEREAS, Joseph Hughes (60% owner) and JF Development LLC (40% owner) were approved for a new, first mortgage loan not to exceed approximately $997,405, with 7.25% interest for up to 25 years; and
WHEREAS, on September 25th, 2024, the HRA increased approved the extension of loan terms through September 2029, increasing the rents from 50% AMI or below to 60% AMI or below, and subordination to new first lender; and,
WHEREAS, the new owners of the project have undertaken a rehabilitation to make $220,209 of improvements to the building; and
WHEREAS, the new owners desire the HRA to subordinate to a new first mortgage loan not to exceed $1,266,015 with 6.75% interest for 5 years; and
WHEREAS, on January 21, 2025, the PED Credit Committee reviewed and approved the subordination of the HRA debt; and,
WHEREAS, the PED Credit Committee reduced loan fees by $2,911.00 to $1,500, citing the close proximity of this request to a previous one and the resulting lower staff burden.
NOW, THEREFORE BE IT RESOLVED, that the HRA Board of Commissioners takes the following action:
1. Amend and restate mortgage to allow the amount of $1,266,015 to be in first lien position
2. Extend the maturity of the declaration of covenants and HRA loan to be co-terminus with the first priority loan on October 7, 2029.
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.