big issue is a large hole in the foundation. It's described as a 10 foot hole and was
identified by the Fire Department, who contacted the Department of Safety and
Inspections (DSI). The building is otherwise generally dilapidated as well. 18 months
ago, when this was identified, it was condemned and referred to the vacant building
program. The building is now on the cusp of foreclosure. I spoke twice with the
attorney representing Loan Care LLC and David Sharpe from Guardian Asset
Management. What they were looking for was time for their client to be able to figure
out if they wanted to rehabilitate or demolish this building. In our two conversations,
they had yet to have the sheriff's sale. Perhaps they had it yesterday. My
recommendation to you is that because we don't have a performance deposit or a
code compliance inspection report applied for, they haven't shown a good faith effort
that they're going to be moving forward with a rehab. In these cases, I recommend
the building's removal. The attorney representing can speak to where their client is at
with any rehabilitation.
Kibong Fondungallah: We do have an update on this matter. We're trying to reach an
agreement with an investor who's willing to take on the rehab. They in partnership
with Metro Holdings and Kevin Vue, who I believe is known to this Council. The
agreement just arrived like 30 minutes or so before this hearing. We have not yet
done the paperwork that is needed to be presented to Council, but it will take a few
days to get the final paperwork. The investor is willing to, on our behalf, order the
code inspection. The sale occurred yesterday and we are looking to reduce the
redemption period to five weeks, so that ownership of the property can get to the
lender faster and we'll be able to process all the necessary paperwork needed. I am
asking Council to please give us a little bit more time to get the paperwork together,
have the performance deposit posted by the investor, and order the code compliance
inspection. The investor is also willing to inspect and maintain the property, and want
to make sure it's updated to prevent any waste, fraud or abuse. They will do anything
that needs to be done in order to protect the property. If Council can transfer this
back to Moermond so that we can finalize this process, post the deposit, and order
the code inspection, the lender would really appreciate your consideration.
Councilmember Yang moved to close the public hearing. Approved 7-0.
Yang: Moermond, did you receive any of the of the updates that the attorney
mentioned during their testimony today?
Moermond: I became aware today. Being in discussion with an investor to do the
work is fine, but it's not what's directly in front of Council right now. That's a
potentiality for the future. The bank is seeking a shortened redemption time period. If
they get it, that would be 6 weeks. That means the earliest they could take title is
mid-to-late December. After that, then the investor would buy it through this
development agreement that you would have to approve. Then you'd be looking at
getting the performance deposit posted and the code compliance inspection
application. It doesn't explain to me why the buyer isn't incentivized to post the
performance deposit now and deal with any money later in the purchase agreement
and contracts that they have. It's a consistent rule that we follow in Legislative
Hearing and our recommendations to you is that those be taken care of. If you want
to grant grace, that is always the Council's prerogative to do so.
Yang: If we approve your recommendation but then within the 15 days there is a lot of
progress being made, are we then able to change in our decision?
Moermond: If Council orders the building removed within 15 days, that would put the
deadline out to November 22, and you would be only looking at a demolition at that
time. The only change, that I could hear, that might happen in that time is a
preliminary agreement with someone who would work in partnership with the owner
to redevelop the property. The key attributes to begin with aren't yet there. Could they
do those? Yes. If you want to give them a chance to do that, we have Legislative
