Explanation
BACKGROUND: This legislation authorizes the Director of the Department of Development to execute a HOME Agreement, Subordination Agreement of a HOME Agreement, Assignment and Assumption Agreement, and/or amend an existing restrictive covenant with North Central Owner, LLC, which is the intended buyer of North Central Village, a multi-unit apartment complex currently owned by Columbus Elderly II, LLC.
In 2009, the City, through the Department of Development, financially supported the construction of North Central Village, a 74-unit apartment complex, using HOME Investment Partnerships Program (HOME) funds. The City and Columbus Elderly II, LLC executed a loan agreement in the amount of $500,000.00, and a Mortgage, Note, and Restrictive Covenant were also executed by Columbus Elderly II, LLC. The HOME Period of Affordability (PoA) is for 20 years, through June 2030. The project was also supported by the Ohio Housing Finance Authority (OHFA) through LIHTC and other means. The LIHTC PoA is through 2040.
Columbus Elderly II, LLC desires to sell the property to North Central Owner, LLC. North Central Owner, LLC, through agreements with OHFA and Fannie Mae, will retain the current affordability requirements for, at least, another 15 years. This covers the City’s remaining affordability period requirement of four and one-half years.
Because the property is being sold during the HOME PoA, the City and North Central Owner, LLC need to execute a HOME Agreement that memorializes applicable HOME requirements during the PoA. No funding will be included in the agreement. In 2026, North Central Owner, LLC anticipates converting the apartments to condominiums, while keeping them as affordable rental units. If this conversion were to occur, the existing Restrictive Covenant on the property may need to be amended to list all the parcels for which the restrictions apply in order to maintain the HOME PoA. The current plan is for Columbus Elderly II, LLC to sell the units to North Central Owner, LLC. But, if something were to change and North Central Owner, LLC wished to assume responsibility for the HOME loan documents, authority to execute an Assignment and Assumption agreement is needed.
Contract Compliance: not applicable as North Central Owner, LLC will not be receiving payment from the City.
Fiscal Impact: none
Emergency Designation: An emergency ordinance is necessary in the usual daily operation of the Department of Development in order execute the necessary documents before and at the transaction closing date in early December so as not to incur additional costs for North Central Owner, LLC that would result in less funding available for maintenance and repairs.
Title
To authorize the Director of the Department of Development to execute a HOME Agreement, Subordination Agreement of a HOME Agreement, Assignment and Assumption Agreement, and/or amend an existing restrictive covenant with North Central Owner, LLC; and to declare an emergency. ($0.00).
Body
WHEREAS, the City of Columbus is a participating jurisdiction of the U.S. Department of Housing and Urban Development; and
WHEREAS, the City of Columbus is the recipient of HOME Investment Partnerships (HOME) funds from the U.S. Department of Housing and Urban Development; and
WHEREAS, the City of Columbus financially supports affordable housing development using HOME funds; and
WHEREAS, from time to time a recipient of the City’s HOME funds may sell a HOME-funded development and the City must execute certain documents to facilitate the sale; and
WHEREAS, Columbus Elderly II, LLC, a recipient of HOME funds for North Central Village, desires to sell the HOME-funded property to North Central Owner, LLC; and
WHEREAS, the Director of the Department of Development is requesting authority to execute a HOME Agreement, Subordination Agreement of a HOME Agreement, Assignment and Assumption Agreement, and/or amend an existing restrictive covenant with North Central Owner, LLC to facilitate the purchase of North Central Village;
WHEREAS, an emergency exists in the usual daily operation of the Department of Development such that it is immediately necessary to authorize the Director of the Department of Development to execute a HOME Agreement, Subordination Agreement of a HOME Agreement, Assignment and Assumption Agreement, and/or amend an existing restrictive covenant with North Central Owner, LLC to facilitate the purchase of North Central Village in early December so as not to incur additional costs for North Central Owner, LLC that would result in less funding available for maintenance and repairs; for the immediate preservation of the public health, peace, property, safety and welfare; and NOW, THEREFORE,
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
SECTION 1. That the Director of the Department of Development is hereby authorized to execute a HOME Agreement, Subordination Agreement of a HOME Agreement, Assignment and Assumption Agreement, and/or amend an existing restrictive covenant with North Central Owner, LLC, which is the intended buyer of North Central Village, a multi-unit apartment complex currently owned by Columbus Elderly II, LLC.
SECTION 2. That for the reasons stated in the preamble hereto, which is hereby made a part hereof, this Ordinance is hereby declared to be an emergency measure and shall take effect and be in force from and after its approval by the Mayor, or ten days after passage if the Mayor neither approves nor vetoes the same.