00-0577R

RESOLUTION AUTHORIZING EXECUTION OF A SATISFACTION OF MORTGAGE PERTAINING TO CERTAIN REAL PROPERTY GIVEN BY GREATER DULUTH-GRAND PORTAGE ENROLLEES, INC., IN FAVOR OF THE CITY OF DULUTH.

BY PRESIDENT GILBERT:

RESOLVED, that the proper city officials are hereby authorized to execute a satisfaction of mortgage given by the Greater Duluth-Grand Portage Enrollees, Inc. (the agency), in favor of the city of Duluth to secure a forgivable urban revitalization action program (URAP) loan in the amount of $16,000 with respect to property legally described as Lot 411, Block 78, Duluth Proper, Second Division, St. Louis County, Minnesota.


STATEMENT OF PURPOSE: The purpose of this resolution is to authorize the forgiveness of a loan to the GDGPE through a satisfaction of mortgage. On July 23, 1990, the city entered into an agreement with the GDGPE to loan up to $50,000 to assist in the acquisition and rehabilitation of three properties through the city urban revitalization action program (URAP). The GDGPE, a certified community development housing organization (CHDO), created six permanent rental units at three different locations. In the past two years GDGPE has sold off two of the properties. The recaptured funds have come back to the city and were reprogrammed through existing URAP programs (Resolution 98-0708). The city no longer has an active URAP program; and therefore, no means in which to reprogram further recaptured funds.

On May 30, 1991, the agency and the city entered into a forgivable loan agreement under which the agency was given $16,000 in state of Minnesota URAP funds to assist in the acquisition rehabilitation of the subject property under the URAP program. The agreement called for a ten year lien to ensure affordability and was secured by a mortgage on the property.

At this time the agency no longer has a need for this type of housing nor the resources to manage the property. The agency has a buyer for said property and the lien is set to expire within the next year. For these reasons, community development staff is recommending that the satisfaction of mortgage be authorized as of this date. Additionally, the community development division will be re-evaluating the community housing development organization (CHDO) status of the agency.