BY PRESIDENT GILBERT:00-0709R
RESOLUTION AUTHORIZING A HOME PROGRAM LOAN AGREEMENT AND A COMMUNITY DEVELOPMENT BLOCK GRANT LOAN AGREEMENT WITH CENTER CITY WINDWOOD PARTNERS IN THE AMOUNT OF $58,364 AND $69,000 RESPECTIVELY AND WAIVING REPAYMENT BY CENTER CITY HOUSING CORPORATION OF $2,435.83 IN 1997 HOME PROGRAM MONIES LOANED.
RESOLVED, that the proper city officials are hereby authorized to enter into a HOME program loan agreement and a community development block grant (CDBG) loan agreement substantially in the form of those on file in the office of the city clerk as Public Document No. ___________________, with Center City Windwood Partners for the rehabilitation of property at 739 Upham Road (Windwood Townhomes) in amounts as follows:
$50,000 payable from 1999 HOME Program Fund 260, Agency 020, Org. 2682, Obj. H003;FURTHER RESOLVED, that the city of Duluth hereby waives repayment by Center City Housing Corporation of $2,435.83, relating to a 1997 HOME program CDBG project specific loan agreement in the amount of $10,800.
$8,364 payable from 1997 HOME Program Fund 260, Agency 020, Org. 2662, Obj. H010;
$69,000 payable from 2000 CDBG Fund 262, Agency 623, Obj. 6302.
To date $2,435.83 has been expended by Center City; the contract expires in October 2000. In 1998, Center City began seeking funding for the project, which was named the "Hillside Initiative." The community development committee awarded a 1999 HOME development grant of $50,000, and a 2000 CDBG development grant of $69,000 to the Hillside Initiative. This past June, as Center City Housing pulled together the application for housing tax credits, they discovered that the asking price of rental properties had substantially increased, and that those buildings that could be bought for a reasonable price needed extensive renovation. The per unit cost to acquire and rehab was prohibitively high, in the range of $140,000. In consultation with city staff, Center City decided not to go forward with the Hillside Initiative at that time and did not submit an application for housing tax credits. In fact, no tax credit applications were submitted to the city of Duluth by the July 20, 2000, deadline.
Subsequently, Minnesota housing finance agency (MHFA) approached Center City and city staff on the Windwood Townhomes, a 69 unit rental property located at 739 Upham Road. Currently affordable due to a HUD mortgage, the property is in jeopardy of conversion to market rate rents, or even loss of units due to extensive problems with deferred maintenance. MHFA, who is acting on HUD's behalf in this effort to preserve affordable rental housing, has accepted a "post-deadline" application submitted on September 15, 2000. The state is proposing to provide mortgage funds, housing tax credits, and a housing preservation grant.
During discussions, MHFA indicated their desire to see city of Duluth participation in the project. Staff agreed to accept (along with MHFA) Center City Housing's application for tax credits, and the Duluth housing commission has made a recommendation concerning awarding the city's 2001 credits. In addition, the community development committee has made a recommendation to reallocate to Center City Windwood Partners (with Center City as a general partner) HOME and CDBG funds previously awarded to Center City Housing. Because the original project's intent was the acquisition and rehabilitation of rental units in the Central neighborhoods of Duluth, and since Windwood Townhomes is located in this area, the purpose for which these funds were awarded remains the same.
This resolution authorizes a HOME program loan in the amount of $58,364 and a CDBG loan in the amount of $69,000 for rehabilitation of the Windwood Townhome project. This resolution also waives the repayment of $2,435.83 in 1997 HOME program project specific loan.