Explanation
Background: This emergency legislation authorizes the Director of the Department of Development to execute an Assignment, Assumption, and Subordination Agreements-along with a modified HOME Loan Agreement, Promissory Note, and Mortgage-with the Columbus Metropolitan Housing Authority (CMHA) and/or POAH Walnut Grove II LLC for Walnut Grove Apartments.
This action facilitates the transfer and restructuring of financial instruments for Walnut Grove Apartments, a multi-unit apartment complex currently owned by Blacklick Apartments, LLC, which is owned by Preservation of Affordable Housing, Inc. (POAH).
Declaring this an emergency measure is necessary to ensure the timely drafting and execution of all essential closing documents before the anticipated financial closing date of September 30, 2026. Immediate passage prevents the incoming buyer from facing expensive project delays and guarantees uninterrupted access to the capital required to complete critical facility maintenance.
PROPERTY
Walnut Grove Apartments is a 176-unit mixed-income multifamily affordable housing community located in the Blacklick area of Columbus. The property serves vulnerable residents-including those utilizing Housing Choice and project-based vouchers-who would otherwise face homelessness.
LOAN TERMS
In 2003, the City partially funded the development with a $1,000,000.00 HOME Investment Partnerships Program loan. The current accrued interest on this loan is $1,148,805.88 at an annual rate of 5.09%.
The HOME loan requires repayment to the City based on cash flow as defined in the operating agreement.
Legislation Details
This action builds upon previous Council support:
Ordinance 3363-2021 passed authorized the Director of Development to modify a promissory note and mortgage for the purpose of reinvesting Cash flow payment to address routine maintenance and repair needs and writing off $67,025.00.
Ordinance 1766-2025 authorized the appropriation of $1,000,000.00 in bond funds to major renovations (HVAC and Roofing) and rehabilitation of 123 of the 176 units (PO531324). This work is in construction at this time.
Reinvestment Request and Sale Assumption
The current owner, Blacklick Apartments, LLC (which has independently invested $3,619,227.08 in repairs since 2019), is selling the property to CMHA, with CMHA then ground leasing the property to POAH Walnut Grove II LLC.
Additionally, this legislation authorizes the modification of the promissory note and mortgage to forgive a total of $44,646.00 cash flow payment currently owed to the City. These funds will be legally restricted for reinvestment directly into the complex to address routine maintenance and repairs. No new City funding is authorized under this legislation.
Because the current sale occurs within the active HOME loan period, the CMHA and/or POAH Walnut Grove II LLC must formally assume the loan, mortgage, and all regulatory compliance requirements.
Lastly, this legislation authorizes an amendment to the HOME loan agreement, extending its maturity date to December 31, 2056.
Contract Compliance No.: Expiration 6/18/28
Fiscal Impact: No additional funding will be included in the agreement and legally redirecting $44,646.00 back into the property.
Title
To authorize the Director of the Department of Development to execute an Assignment, Assumption, and Subordination Agreement with Columbus Metropolitan Housing Authority (CMHA), and an Assignment, Assumption, and Subordination Agreement, a modified HOME Loan Agreement, a Promissory Note, and a Mortgage with POAH Walnut Grove II LLC; to authorize the modification of terms to forgive a cash flow payment of $44,646.00 for restricted property reinvestment; to extend the loan maturity date; and to declare an emergency. ($0.00)
Body
WHEREAS, the Walnut Grove Apartments is a 176-unit mixed-income multifamily affordable housing community serving vulnerable residents in the Blacklick area; and
WHEREAS, in 2003, the City funded said development with a $1,000,000.00 HOME Investment Partnerships Program loan, which currently carries an accrued interest balance of $1,148,805.88 at an annual rate of 5.09%; and
WHEREAS, the current owner, Blacklick Apartments, LLC, is selling the property to the Columbus Metropolitan Housing Authority (CMHA), which will subsequently ground lease the property to POAH Walnut Grove II LLC; and
WHEREAS, because this transaction occurs within the active HOME loan period, CMHA and/or POAH Walnut Grove II LLC must formally assume the loan, mortgage, and all regulatory compliance obligations; and
WHEREAS, this legislation further authorizes the modification of the promissory note and mortgage to forgive a cash flow payment of $$44,646.00, strictly conditioning those funds for reinvestment into routine maintenance and repairs; and
WHEREAS, the Property Owner has requested a modification to the terms of the HOME Loan to adjust the Applicable Federal Rate (AFR) to the applicable AFR at the time of closing; and
WHEREAS, an emergency exists in the usual operation of the Department of Development in that it is immediately necessary to execute all required closing documents before the anticipated financial closing date of September 30, 2026, to prevent costly project delays and ensure uninterrupted capital for critical maintenance, all for the immediate preservation of the public health, peace, property, safety, and welfare; and NOW, THEREFORE,
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
SECTION 1. That the Director of the Department of Development is hereby authorized to execute an Assignment, Assumption, and Subordination Agreement, along with a modified HOME Loan Agreement, Promissory Note, and Mortgage, with the Columbus Metropolitan Housing Authority (CMHA) and/or POAH Walnut Grove II LLC for the Walnut Grove Apartments.
SECTION 2. That the Director of the Department of Development is authorized to modify the existing promissory note and mortgage to forgive a total cash flow payment of $$44,646.00 currently owed to the City, provided that these funds are legally restricted for direct reinvestment into the housing complex for routine maintenance and repairs.
SECTION 3. That the Director of the Department of Development is authorized to amend the HOME loan agreement to extend its final maturity date to December 31, 2056.
SECTION 4. That no new City funding is authorized or appropriated under this ordinance, and the fiscal impact is limited to the legal redirection of the $44,646.00 cash flow payment back into the property.
SECTION 5. That the historical interest rate of 5.09% per annum shall be restructured to bear interest at the Applicable Federal Rate (AFR) in effect at the time of closing.
SECTION 6. That for the reasons stated in the preamble, which hereby is 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 passage and approval by the Mayor, or ten days after its passage if the Mayor neither approves nor vetoes the same.