DISCLAIMER

05-035-O

ORDINANCE NO. __________


AN ORDINANCE AUTHORIZING THE CONSENT BY THE CITY OF DULUTH TO AN EASEMENT AGREEMENT BETWEEN CENTER CITY HOUSING CORPORATION AND CENTRAL HILLSIDE DEVELOPMENT LIMITED PARTNERSHIP, LLLP.

BY COUNCILOR GILBERT:

The city of Duluth does ordain:

     Section 1. That the city of Duluth hereby authorizes the mayor and the city clerk to execute a consent, substantially in the form of that on file in the office of the city clerk as Public Document No. __________, to an easement agreement for joint parking by and between Center City Housing Corporation (Center City) and Central Hillside Development Limited Partnership, LLLP (Central Hillside) for their respective housing projects which projects provide low- and moderate-income housing, a public purpose, said easement affecting two properties upon which the city has or will have mortgage liens:

     (a)  One mortgage lien pursuant to a HOME program grant agreement upon property located in St. Louis County, Minnesota, and legally described as follows: Lots 12 and 13, Block 108, Portland Division of Duluth;

     (b)  Two mortgage liens pursuant to two Section 108 loan agreements upon property located in St. Louis County, Minnesota, and legally described as follows:

           Parcel I: Northerly 48 feet of Lot 98 and northerly 48 feet of westerly 35 feet of Lot 100, East Fifth Street, Duluth Proper, First Division (abstract property);

           Parcel II: All those parts of Lot 98 and the westerly 35 feet of Lot 100, East Fifth Street, Duluth Proper, First Division, and the west ten feet of Lot 4, Block 108, Portland Division of Duluth that lie between two straight lines drawn across said lots and parallel with the southerly line of East Fifth Street and distant respectively 48 feet and 99 feet therefrom (abstract property);

           Parcel III: All that part of Lot 98 and the westerly 35 feet of Lot 100 on East Fifth Street, Duluth Proper, First Division, and Lot 3 and the westerly ten feet of Lot 4, Block 108, Portland Division of Duluth, that lies southerly of a line drawn across said lots parallel to the southerly line of said East Fifth Street and distant southerly 99 feet therefrom (torrens property - Certificate of Title No. 288613);

           Parcel IV: All that part of Lot 102, East Fifth Street, Duluth Proper, First Division, lying within 25 feet of the northeasterly boundary line of said Lot 102; and all that part of Lot 104, East Fifth Street, Duluth Proper, First Division, lying within 25 feet of the southwesterly boundary line of said Lot 104, East Fifth Street, Duluth Proper, First Division; and Lots 6 and 7, Block 108, Portland Division of Duluth, except minerals (torrens property - Certificate of Title No. 294879);

and

           Easterly 15 feet of Lot 100, and the westerly 1/2 of Lot 102, East Fifth Street, Duluth Proper, First Division, and the easterly 15 feet of Lot 4, and all of Lot 5, Block 108, Portland Division of Duluth (abstract property);

           Parcel V: Lot 8, Block 108, Portland Division of Duluth and the east 1/2 of Lot 104, East Fifth Street, Duluth Proper, First Division (abstract property);

           Parcel VI: Lot 9, Block 108, Portland Division of Duluth (abstract property);

           Parcel VII: Lots 10 and 11, Block 108, Portland Division of Duluth, except minerals (abstract property);

           Parcel VIII: South ten feet of the south 40 feet of the north 90 feet of Lots 14, 15, and 16, Block 108, Portland Division of Duluth, and the southerly 40 feet of Lots 14, 15, and 16, Block 108, Portland Division of Duluth (abstract property);

           Parcel IX: Northerly 50 feet of Lots 14, 15, and 16, Block 108, Portland Division of Duluth and northerly 30 feet of southerly 40 feet of northerly 90 feet of Lots 14, 15 and 16, Block 108, Portland Division of Duluth (abstract property).

     Section 2. That this ordinance shall take effect and be in force 30 days from and after its passage and publication.


STATEMENT OF PURPOSE: On October 27, 1997, the city of Duluth and Center City entered into a HOME program grant agreement pursuant to which Center City received a HOME program grant for the purpose of rehabilitating property located at 624 - 626-1/2 East Fifth Street. A mortgage lien was executed in favor of the city until 2008. The Center City property is surrounded by the parking lot for the Village Place project. Upon execution of the two section 108 loan agreements providing funding to the Village Place project, the city will have running in its favor two mortgage liens affecting the Village Place property.


The easement agreement provides for a mutual easement over the south 50 feet of the Center City property and over that portion of the Central Hillside property to be used for parking. The entire parking lot, including the area behind Center City, will be newly constructed at Central Hillside’s sole expense. The properties will be subject to a mutual agreement for the parking of vehicles, with owners and tenants of Central Hillside property and their invitees having the right to park vehicles on the Center City easement property, and the owners and tenants of the Center City property and their invitees having the right to park their vehicles upon the Central Hillside easement property.


Because of the mortgage liens in favor of the city arising out of the provision of federal HUD funding to these projects, the city has a contingent real property interest in the Center City and Village Place properties. In the event that there is a foreclosure of the city’s mortgage lien on either properties, the easement agreement may affect the city’s alienable interest in the property; therefore, the authorization for the execution of the consent requires the adoption of this ordinance.

 

DISCLAIMER