Explanation
BACKGROUND: This legislation authorizes the City of Columbus, Department of Development to release its recorded mortgage interests in residential properties (referenced below) that secure five City loans with outstanding balances totaling $136,575 made to borrower Northside Development Corporation. The purpose of the releases is to enable the City to receive a $73,000 payment rather than receiving nothing if the property is resold through an unavoidable foreclosure action. The action would, however, require the city to forgive $63,575 of the original loan amounts.
Northside Development Corporation purchased these properties using city HOME dollars in 1996 to create a rental income portfolio. Due to the large number of rental units in the area Northside has shifted focus to homeownership development. In addition, the properties are in need of significant repair and maintenance. Northside is unable to effectively manage the properties and lacks the operating dollars to complete the rehabilitation work needed. An existing landlord in the area, JR Haller, has agreed to purchase the properties for $232,500, rehabilitate the units and maintain affordability. In order to complete the sale for the negotiated price, the city must forgive $63,575 of the original loans but will receive a payment of $73,000. The transaction would enable Northside to satisfy the first mortgages and closing costs totaling $159,500 as well as provide a partial payment to the city but Northside would retain no dollars. Thus a known landlord in the area would upgrade the units and keep them affordable and enable Northside to focus efforts on homeownership activities.
The property addresses are:
1293-1295 Fifth St.
1297-1299 Fifth St.
1323-1325 Fifth St.
1333-1335 Fifth St.
1319-1321 Fifth St.
Emergency action is requested to expedite authorization for a settlement and the closing on the properties.
FISCAL IMPACT: There is no impact on current operating...
Click here for full text