BY COUNCILOR GILBERT:
RESOLVED, that the proper city officials are hereby authorized to enter into a Section 108 loan agreement, substantially in the form of that on file in the office of the city clerk as Public Document No. __________ with HRA, DEDA and the developer relating to acquisition of properties for the Fifth Street redevelopment housing project in the amount of $594,000 payable from Fund 262, said authorization is subject to HUD’s approval of said redevelopment housing project and DEDA’s approval by resolution of the Section 108 loan agreement.
STATEMENT OF PURPOSE: This purpose of this resolution is to authorize the issuance of a loan in the amount of $594,000 from the city’s approved HUD Section 108 guaranteed loan allocation. The funds will be used for property acquisition and demolition, public utility relocation, and improvements to the adjacent alley, for the proposed Village Place housing development located on the lower side of East Fifth Street between Sixth and Seventh avenues East. The Duluth HRA is acquiring and improving the site on behalf of the developer. Repayment of this loan will be made by DEDA using uncommitted proceeds from TIF District 7.
DEDA had committed $900,000 in MHFA funds to the acquisition and demolition for the site assembly of the Village Place project. DEDA has already contributed $450,000 from unspent MHFA funds towards this commitment. The other $450,000 of grant money did not materialize. Staff recommends fulfilling DEDA’s commitment to the project. The additional cost of $150,000 is due to increased acquisition and utility relocation costs.
This authorization is subject to HUD’s approval of the redevelopment project and DEDA’s approval of the agreement which is scheduled on the February 7, 2005, DEDA agenda.