Explanation
BACKGROUND:
This legislation authorizes the Director of the Department of Development to forgive the principal on a loan to Commons at Grant and to terminate a land lease between The Commons at Grant Limited Partnership and the City of Columbus. The Commons at Grant was the first property of significant size (100 units) to serve as permanent supportive housing in Ohio. It was developed at 398 S. Grant Ave., Columbus, Ohio 43215. City support included acquiring the site and leasing to the project rent free for 99 years and providing a $900,000 interest free loan both of which were authorized by Ord 1298-01. In addition, a HOME loan of $1,500,000 was made which was forgiven in 2023 pursuant to Ord 2773-2023. The property has completed its 20-year compliance period under the HOME requirements and has been approved by the Ohio Housing Finance Agency for a recapitalization which is expected to close in 2025. Any loans retained in the new ownership entity (which will be managed by original and existing developer National Church Residences) must be able to demonstrate that they can be repaid. Due to the population served (those who are homeless or at risk of homelessness) and the extensive supportive services that are provided to the tenants, it is unlikely that the new owner will be able to repay the existing loan. The 99-year land lease had provided for a buy-out option that required a payment of $740,000 plus adjustment for the consumer price index over time. Because the property is intended to remain as affordable housing for at least the next 30 years, the developer has requested that title to the land be transferred to the new owner at no cost. As part of the recapitalization, the City of Columbus plans to provide a HOME ARP loan of $2,000,000.00 and a grant for supportive services from HOME ARP for $144,462.00. Both awards are subject to completion of the Environmental Review and City Council approval.
FISCAL IMPACT: There will be a loss of $900,000 in receivables.
Title
To authorize the Director of the Department of Development to forgive principal for a loan to The Commons at Grant Limited Partnership due to the City of Columbus totaling $900,000.00, to authorize the Director of the Department of Development to execute the necessary documents to convey the title of the property located at 398 S. Grant Avenue, Columbus, Ohio 43215 to the The Commons at Grant (TC2) Senior Housing Limited Partnership at no cost.
Body
WHEREAS, in January 2002, the City of Columbus, Department of Development, entered into a ground lease with The Commons at Grant Limited Partnership and provided a $900,000.00 interest free loan to assist with development and construction of the first property of significant size in Ohio to serve as permanent supportive housing; and
WHEREAS, since 2003, the Commons at Grant has provided supportive housing to individuals who are homeless or in danger of being homeless; and
WHEREAS, in 2024, National Church Residences, which is the developer and manager of the Commons at Grant, received Low Income Housing Tax funding from the Ohio Housing Finance Agency which will recapitalize and update the development so that it can serve as permanent supportive housing for an additional 30 years; and
WHEREAS, upon the recapitalization of the property, the financial ability of the new owner to successfully amortize the loan provided and acquire the site based upon the purchase price provided for in the ground lease is unlikely; and
WHEREAS, as part of the recapitalization process, the City of Columbus, subject to City Council approval, plans to provide a $2,000,000.00 loan with HOME-ARP funding as well as a grant for supportive services that will require the City of Columbus to monitor the project for 15 years; and
WHEREAS, the City will have a loss of $900,000.00 in receivables; NOW, THEREFORE,
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
SECTION 1. That the Director of the Department of Development be and hereby is authorized to forgive $900,000.00 of principal for the City loan to The Commons at Grant Limited Partnership. There will be a loss of $900,000.00 in receivables.
SECTION 2. To authorize the Director of the Department of Development to execute any and all necessary agreements and deeds for the conveyance of title to two parcels of real estate to The Commons at Grant (TC2) Senior Housing Limited Partnership:
PARCEL NUMBER: (010-018957)
ADDRESS: 398 S. Grant St., Columbus, Ohio 43215
PRICE $0
PARCEL NUMBER (010-264283)
ADDRESS: 398 S. Grant St. Columbus, Ohio 43215
PRICE: $0
SECTION 3. That this ordinance shall take effect and in force from and after the earliest period allowed by law.