Explanation
BACKGROUND: Community Housing Network (CHN) is a Columbus based Ohio non-profit organization that provides affordable housing opportunities for individuals with persistent mental illness and those who are homeless or in danger of becoming homeless. In 1993, CHN obtained $20,000.00 in funding from the City of Columbus for the acquisition and rehabilitation of 1204-1208 N. High Street in Columbus which has been providing affordable housing for eligible CHN residents since that time. CHN has fulfilled all the federally mandated affordability requirements associated with this loan. In addition, in 1997, CHN obtained $329,000.00 from the City of Columbus for the rehabilitation of 81 Hawkes Avenue, 1715 Weber Road, 940 Weber Road, 1234 Weber Road East, 2942 Sullivant Avenue and 1449 Columbus Avenue. All the federally mandated affordability requirements have been met on these sites as well. CHN has been awarded or will be awarded low income housing tax credits along with additional City HOME funds and State funds to recapitalize and modernize 1204-1208 N. High Street, 81 Hawkes Avenue, 1715 Weber Road, 940 Weber Road, 1234 Weber Road East and 2942 Sullivant Avenue.
In order to obtain the necessary financing to accomplish this much needed rehabilitation work, CHN is asking the City to forgive the outstanding debt on those sites. 1449 Columbus Avenue is intended to be sold. The City's proportionate share of outstanding debt on that site will remain in place until sale and if there are sufficient proceeds after payment of cost of sale and debts with higher priority, the City will recoup its investment. With the new City debt being placed on the properties, the same oversight for affordable rents and low and moderate income occupancy will be in place.
Emergency action is requested so that CHN can finance its rehabilitation activities for these sites and meet the timelines mandated by OHFA and the low income housing tax credit program to complete the rehabilitation work and place the sites into service.
FISCAL IMPACT: No funding is required for this ordinance. There will be a loss of $279,493.00 in HOME receivables.
Title
To authorize the Director of the Department of Development to release the recorded interests of the City of Columbus on loans to Community Housing Network made from HOME funds totaling $279,493.00; and to declare an emergency. ($279,493.00)
Body
WHEREAS, the Department of Development has outstanding loan balances from HOME funds totaling $349,000.00 to Community Housing Network for the acquisition and rehabilitation of 1204-1208 N. High Street, 81 Hawkes Avenue, 1715 Weber Road, 940 Weber Road, 1234 Weber Road East and 2942 Sullivant Avenue; and
WHEREAS, the owner, Community Housing Network has requested that it be allowed to mortgage the assets of 1204-1208 N. High Street, 81 Hawkes Avenue, 1715 Weber Road, 940 Weber Road, 1234 Weber Road East and 2942 Sullivant Avenue to release all of the City's existing liens on the property; and
WHEREAS, this legislation would release and forgive $279,493.00 on the HOME loans; and
WHEREAS, these loans were made from HOME Investment Partnership Funds from City of Columbus, Department of Development; and
WHEREAS, these loans were made for the acquisition and substantial rehabilitation of these sites for low-to-moderate income (60% or below area median income) rental housing with a mortgage and terms that the loans would be repaid upon sale or transfer of the property, and
WHEREAS, the current owner of the properties has secured or is in the process of securing financing in the form of low income housing tax credits, State and City loans to recapitalize and modernize the sites so that they can continue to be quality affordable rental housing and City staff has made a recommendation to forgive its existing debt on these sites based upon the review of the financial condition of the project; and
WHEREAS, the project owner has agreed to maintain the City debt on sites that are not being recapitalized and are planned to be sold so that the City may possibly recoup some of its investment leaving $279,493.00 of the HOME loans to be forgiven; and
WHEREAS, the City will have a loss of $279,493.00 in HOME accounts receivable; and
WHEREAS, an emergency exists in the usual daily operation of the Department of Development, Housing Division, in that it is immediately necessary to authorize the release of the recorded interests of the City of Columbus on the on loans made from HOME funds in order to meet the timelines mandated by OHFA and the low income housing tax credit program, all for the preservation of the public peace, health, 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 be and is hereby authorized to release the recorded interests on loans made to Community Housing Network totaling $279,493.00. There will be a loss of $279,493.00 in accounts receivable for the HOME Investment Partnerships program income.
Section 2. That for the reasons stated in the preamble thereto, which is hereby made a part hereof, this Ordinance is 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 passage if the Mayor neither approves nor vetoes the same.