BY COUNCILOR GILBERT:
RESOLVED, that Resolution 05-0069 which authorized a Section 108 loan agreement with the Housing and Redevelopment Authority of Duluth, MN (HRA), DEDA and developer is hereby repealed.
FURTHER 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 DEDA and the developer relating to property acquisition and demolition, public utility relocation and improvements to the adjacent alley thereon 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 housing project.
FURTHER RESOLVED, that the city of Duluth hereby pledges $148,500 in future CDBG funding to cover 25 percent of the Section 108 loan value as is required by HUD.
STATEMENT OF PURPOSE: This resolution repeals Resolution 05-0069 which authorized a Section 108 loan agreement with the HRA, DEDA and developer. Following city council approval of Resolution 05-0069, the agreement was restructured and HRA is no longer a party to the agreement.
This resolution authorizes a Section 108 loan agreement which provides for the issuance of a Section 108 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 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 approved this agreement at its March 7, 2005, meeting. The authorization to enter into this agreement is also subject to HUD’s approval of the redevelopment project.
HUD requires 125 percent coverage on the Section 108 loan value. DEDA is pledging $594,000 which is 100 percent of the loan value. This resolution pledges $148,500 in future CDBG funding to cover the required additional 25 percent of the Section 108 loan value.