Housing and redevelopment Authority meeting. Roll. Call, Commissioner. Parents. Toast here. Jalali is excused. Bowie is excused and chair Johnson here. That's for PRESIDENT 3. Absent too. Commissioners being excused. Item number one is approval. The minutes approving the FEBRUARY 2025. Entering meeting minutes. It's really so after having a second to review the but it's for eeryone there. Any questions or anything like that? Otherwise I'll take a motion from commissioner Niekerk to approve all those in favor say Aye. Aye. In favor. 0 post. The minutes are adopted. Item. Nmber 2 is a public hearing approving and
authorizing entering into a lease agreement with Avis, Budget Car Rental llc for retail and parking space in the Black 19 parking ramp located at one. 51 7th Street East District, 17 or 2. ok? So this is a public hearing on this item. But before we take public comment, I want to over to Director Newton. Certainly thank you. Chair Johnson commissioners. This item is it's lease for an Avis car rental to rent the small retail space in her 19 ramp and then they would be sparking some of their rental cars in the ramp. This is has been a vacant space and and there's capacity and in the ramp as well. So it's it's really a good thing all around. And staff recommends approval of the item.
so this is a public hearing of this item. If you're here to speak to it, you'll be able to come up to the mikes. You need to just it up. So if you're here to speak, this item, this is a public hearing. There anyone else anyone here going once okay, seeing none. I'll take a motion for missing too close. The public hearing. All those in favor say Aye. Aye. I really. Favors or opponents to take up. The resolution is adopted. The public hearing is closed. I think think about rage to just motion to close the public hearing. But itself is our public hearing and approved seconded. You can do both. Want just correct that for the record motion for missing to close the public hearing and approve all those in favor say Aye, aye. All those Foreign favored 0 opposed. The resolution is adopted. The public hearing is closed. Item number 3, there's a resolution
approving and authorizing the assess the acceptance of a land donation at 13. 66 Fremont Avenue from West Fargo Bank Na. of payment of demolition at assessment District forward 7. So this is another item here we will be hearing quickly de to the nature of it and just having staff report as well as being able to take action to do so when it handed over to director noon. Thank you. Chair Johnson commissioners. In the end, we didn't bring in like an intro item on this. It's pretty it's pretty simple. This was home that was demolished a 3rd of an acre lot. It was it was subsequently foreclosed on. And Wells Fargo, the lender is is donating this land to the hra. We would then include the center property, you know, as available inventory for residential development. It's also directly adjacent to a city-owned lot. So we will be
looking at can a combined those lot and as as it stands, it could it could support for 6 units of housing. But if we combine it with someone extort could even maybe support a little bit more. So we think, again, a good thing all around and staff recommends approval of the u Thank you. Director Newton. One thing I will say is it's the Mason Moore 7. We went through a real estate of our injury only and probably as commissioners individually at all, just simply say on the east side, our list is a little bit shorter. And so being able to see an opportunity more, we develop better housing opportunities on the east side is really important for So I apreciate the staff report as well. And entertain a motion fom Commissioner Year Jones to
approve. If there's any discussion, any questions or anything from commissioner before we move forward. Commissioner maker think students in just a question about the mechanism here because I'm familiar that. Is it? It looks like it's a little payment of demolition assessment. Is that a common practice where property? Instead of paying the most, can donate land to. Thompson, commissioner maker. It's not common. That happens because not coming that people want to donate the land necessarily. But because Cdbg is often used by dsi for demolitions in this case, it was like, you know, the public purpose need for the cdbg was to demolish the land. And so we're able to just make this this arrangement again. And in lieu of that assessment, they will just donate the land to us. There's structure that needs to be dmolished. It's been demolished chairs or the and commissioner that the it's been demolished, that cost of demolition stays ours.
But we get that. That's Any other questions from any of And doesn't really great question. Commissioner Nick are also 2 curious about just how we get to tat space. I do see this as an opportunity with. They're being a demotion in place to actually still be able to retain this property to be able to see what could be. Potential home, maybe for a few the centers in the future. So that's a very exciting. So any other questions from commissioners? Okay. Seeing none has purchased made the motion to approve. Saw all those in favor say Aye, All those posts. Foreign favors or oppose. Resolution I adopted. Item. Number 4 is a staff report. Introduction to Commerce building phase one and 2. Right. So we have staff presentation here today on
this island. I think I really excited that we have a little bit of time to go to the presentation size. And if you have questions just to kind of engage in what Holcomb from our commerce built in sales. So over to director noon for Thank you. Chair Johnson Commissioners, principal project manager Learn Hansen's here should provide an introductory presentation on the night and that will come to you for action next week. The current building owners are here, I believe as well. So we'll let learn maker precipitation. And if you have questions, we'll do our best to answer those. And again, it will come for action next week and I'll turn over Thank yu. Director Newton Kerri, Johnson Commissioners. here to present the Commerce building sale and the partial loan forgiveness ahead of the before the age or
So could some background on the property. It is hstoric downtown building on water. Sean. 4th built in 1912. Today it has 100 units of affordable housing after common Bond led the conversion from office to housing I 2007 to 2011 in 2 different places. All units in the building are subject to tax credit affordability at 60%. Am I with additional for greater affordability? And you can see that 3 ownership structure here and some of those additional affordability in the project for each phase. And so you can take top floors, phase one and the bottom floors or face too, with a separate owner for the ground floor, commercial space so what's next for Commerce After years of deficits and advancing more than one and a
half million dollars to the project. Common Bond communities has determined they can no longer own or manage the property and order in order to avoid foreclosure, - common bond market, the property for sale in 2024, they received 3 actors and selected pack properties offer of 3.2 million dollars. The sale to pack property well. Avoid thing for closure and by avoiding foreclosure. Kind of excuse the at you can keep the tax credit for it about restrictions in place. Those will be lost in the case of foreclosure This sale will also limit disruption and uncertainty to current resident and will generate some sales, it will generate sales proceeds to repay a prtion of the hra debt and a portion of Minnesota housing finance
that. And finally parties. It's a local owner. They've experience with commercial leasing in downtown Saint Paul and they'll bring that expertise to this project. So getting a little bit more into this sale and some potential changes to the property. There are at 11, long-term homeless or l t h uits in that building. 2, they're tied to the 2 and they And when the phase 01:00am Hfa loan is repaid as part of this tale. 6 of those long-term homeless units, the restrictions on those will go away. 4 of those units are currently occupied and common bond is working with those for residents to transition them to other properties that can provide commensurate level of those
services and the that are part of the long-term homeless units. The 5 long-term homeless units that will remain those remain in place and be restricted as such and pack has identified. Simpson as the service provider fr those services and Ramsey County has committed funding to that. That there are 4 section 8.11, units. Those are supportive housing for people with disabilities and then one might remain in place with the same services and sale is anticipated by MARCH. The first since the first position U.S. Bank loan, the mandatory tender date is APRIL one. The and then I'll get into a little bit more of that debt and on the property. But mh faa approved the partial forgiveness of their 2 loans at at their FEBRUARY 27th
board meeting last week. With the sale of the building. That timeline has committed to supporting the current residents of building and the property Common Bond has already notified tenant of the planned sale and we'll be providing additional notice and information to residents. This information includes providing each resident with the range of friends that will be allowed on their unit when their current leases expire. This is because current That are under these their current rents MAY be below the maximum allowed under the tax credit restrictions common bond has offered or will one year lease extensions to all residents that will maintain continuity for those tenants and then current residents can also join common bonds, interest
and waiting lists, including those for rent assisted units that they MAY qualify for and then come come Cmmerce were callers. Residents will be prioritized and those lists. You know, as allowed by fair housing laws, residents can stay in place so long as they have an active and moving expenses will be covered for up to 6 months post closing. And and finally all all the outcomes for residents will be reported to traced Act so we can keep track Apollo's project costs. Getting a little more into the debt and the loan forgiveness request that will be before you next week when the property was converted to housing, jury made deferred fully deferred subordinate loans to both phases of the project. The cdbg loan was to phase one and
that current balance, his 1.6 million Met Council loan to also to phase one with the current balance of 563,000 and a home loan to the second phase of the project and the current bounces 895,000. The total outstanding debt. As you can see, state 0.1 million. Columbine is requesting partial forgiveness of both our debt and Ma Jeff Day and existing common bond estimates anticipates sales proceeds o just under 3.3 million ad that will not be sufficient to pay off all the existing debt. - So kind of the flow of funds. With that repayment, kind on will first passed the U.S. Bank loan in fall and then they will be paid. The principal of it hfa phase one loan to the project and they has approved the forgiveness
of the interest on that loan. And that will leave one plot just around. Not 1.9 million of sales proceeds to repay a jury that since we have 3.1 million that that request ahead of you will be approximately 1.2 million of forgiveness of combined debt. With the available 1.9 million of payments for a loans. We are anticipating it will be split proportionally between the 3 loans based on the initial investment into into the project. You can see that break down here with the payment amount being largest cvg long. And of course, that. Forgiveness amounts and that last fall a well. Proportional. Commissioner maker has a
one more point about program income here is that we would receive the repayments. Program income and they would they would find additional 4 double housing be redeployed to support for affordable housing in same pot. And in summary the request will be before you next week will be to approve the partial loan forgiveness of up to one 1 million, 225,384 dollars of combined principal ad interest on 3 a cherry loans to the Commerce building phase one and phase 2 project, including the Cdbg home and that council locks. I would be happy answer questions. I do want to recognize have you asked and Smith is here. He executive vice PRESIDENT For
real estate for kind on and her colleague Parker, the director of asset management conflict at the all right, folks here from Common Bond and can help address questions. Commission and is to little bit of a bitter pill to swallow when we're not going fully repaid for long that he made. You know, I think the alternative here is to lose the affordability on this completely and the action that we have here is a local developer who has a proven record of not just affordable housing, maintaining historic buildings downtown and also falling commercial spaces which those of you who are familiar with the vacant commercial space across the street from office. A used to be a beautiful subway, frankly missing. So think that know that the developers, the purchasers. Committed to
trying to fill that space as well. Oe question I have you kind answered it. But the dollars come back and specifically the cdbg like it's all of them. Are they restricted to housing or temple to cvg comeback into our general pool? And can that be allocated as rcmp process or through other means for cbt applications that I know are flying out right now. So I can answer part of that question. Chair Johnson Commission Acre we will receive them. Program income so they will be restricted by the program like the Grant or program in the case of Cvg your home, those regular, you kind of requirements will be restricted to the way that we redeploy them. I don't can enter unless others in the room are able to I think Johnson commissioner, I think. Hme has to be used for housing. And but if your questions about cdbg it and I'm looking at tools, but in my head, it's
just gonna go back. And program income make it MAY even have less restrictions. Then. And it has had in the past. So will get you a definitive answer on that. But I don't believe it has to used for housing. Kampala, the repayment would be. Imminent and that would those dollars to be helpful in this year? Correct. Along those lines, I think I have a follow-up question more. So from a kind of those that are sitting in the process. So really kind of things level, if you could just share Laura these resources are coming back quicker than maybe it, I guess, because of the space in the timeline, it's going back quicker. So what does that process actually look like? Like walk us through just how we get here just like we get a request coming in that there is a like what is the process to get to space for like okay.
This is how we determine how much of this we can forgive or request for forgiveness of the loan. Like just walk us through the process a little bit more in depth. If you could Johnson, thank you fr the This has. So the application for loan modification is the start of the process. Any of U.S. Think, yu know, when they have hurt reason, I welcome to apply for modification to their own terms and the forgiveness will be considered that. So that's how the process started. You know, with and then I think even before that, the conversations pd staff and leadership started probably back in spring 2024, believe tools is nodding. I took this
over from colleague so You know, that that serve the initial, you know, the initial conversations around it and the condition and that the challenges for the property were a part of that conversation. And then the modification request with. And details we had number of back and forth conversations with both current owner, Common Bond and the fire around what that will look like and sort of Well, even just getting into these the details of repayments on the loan, some negotiation and discussion with our colleagues at any Jeff, a around their restrictions and how those will be released changed as part of the tea. Also, you know, it's it's fairly long
negotiation. And to your I thought that the side that shows the maturity date, we are getting a portion of these funds much sooner than we would have anticipated with the maturity dates of 2037 I 2041, these are fully deferred loan. So we have not received any payments to date and we would not have expected any payment and tell those maturity date. Maturity date and Johnson commissioner, all of just to build on to what saying. In talking with seller and potential buyer we always will convey, you know. We we want to make sure tenants are taking care of. The council. Members are going prioritize, you and suspicion the units being protected. And so so all of the kind of transition things that use are things that we work through wth with him in and all of those things
impact the numbers right? So that so how we land What, what what would have to be forgiven to get to that place is is like that back and forth. And so if that's helpful, know that we we always forward what we know. Are your priorities around things like this? And and then the council member works is, you know, given that information as well. And we have those conversations. So I feel like they did a really good job figuring out how to have this little impact much notice and is and retain as much affordability and all the things that we that we care about and then landing on request. Thank you, Director Newton and yes, I see common bond in the room today. And I just I would just say is that. As the chair, but COUNCILMAN, who's really can really loves to see transition plans and see things in place
that do center residents kind of and the space of, you know, just like and this act of businesses think it's really important to have this transition plan that's here. And so I just want to uplift and say, like it's always a great thing to see the different commitments from when a sale takes place or when there's a change of ownership that there is at least proper notification. I, you know, reading through the one-year lease that is offered to residents. I just think it's really important right now. I think one of the biggest concerns around access to resources and affordable housing is really being the ability to continue to preserve it. So I think it's really important to see that piece and it was one thing that stuck out from te presentation overall for just
kind of looking through it. So appreciate the work that has went into that transition really did feel as our residents here in Saint Paul. Centered in this 2 and that last about it. So really do appreciate both for you being here today. But also just that work that goes into those conversations. And I can someone acre your ladership that Commissioner Graham this case, but genuinely the leader's and the roles that place with staff and the multiple negotiations, but that that was quite impressive. Any other questions comments from commissioners, the for Laura or for staff. Are ready. So it's my understanding come back to us next week for this action steps. If you have any questions about it, I'm sure
either castle resident commissioner maker could be assistance in any questions or director a gritty. So seeing nothing else on the agenda. I know next week I'll just preface theirs quite a few different will be on the agenda. Will most likely try to get through jam packed session. But you have questions of things that come up next week. Don't hesitate to we chat an advance list now with that marriage and