Explanation
BACKGROUND: In 1995 and 1996 when Northside Development Corporation and Columbus Housing Partnership were in the process of acquiring and renovating the Indianola Homes Limited Partnership properties, the City made three loans to the Partnership - a HOME funds loan of $316,500, a HOME funds loan of $133,500 and a Lead Safe Columbus loan of $81,055. The partnership and its partners have fulfilled all the federally mandated affordability requirements associated with these loans. The project has struggled financially and has obtained funds from Neighborworks to do renovations to improve occupancy and rental income. Even with this investment, the project continues to perform poorly and it has been decided that it would be in the best interest of the project and its tenants to find a buyer who can recapitalize the property. A purchase has been negotiated with a buyer for this project. The sales price, which is reflective of the market value of the project, provides insufficient proceeds from the sale to satisfy the first mortgage and all outstanding mortgages and payables. After negotiations with Columbus Housing Partnership, it is the recommendation of the City Housing Division staff that the City accept $250,330 in satisfaction of its mortgages. This legislation releases and forgives a portion of the recorded interest of the City of Columbus on Mortgage Note One on the Indianola Homes Project, fully forgives principal and accrued interest on Mortgage Note Two and fully forgives principal and interest on the LSCP Mortgage Note.
Emergency action is requested so that Indianola Homes can sell its assets pursuant to a sale contact that is expected to close on or before December 1, 2008.
FISCAL IMPACT: The City will generate a total of $250,330 in program income as a result of the mortgage satisfaction. There will be a loss of $199,670 plus accrued interest in HOME receivables and $81,055 plus accrued interest in Lead Safe Columbus receivables. ...
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