Title
RESOLUTION APPROVING THE HOUSING AND REDEVELOPMENT AUTHORITY OF DULUTH TO FORGIVE AMOUNTS REMAINING ON THREE LOANS MADE TO NEW APOLLO APARTMENTS LIMITED PARTNERSHIP FOR THE REHABILITATION OF THE SKINNER APARTMENTS.
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CITY PROPOSAL:
RESOLVED, the city council of the city of Duluth hereby approves forgiveness by the Housing and Redevelopment Authority of Duluth of the repayment of all amounts remaining on the following loans made to New Apollo Apartments Limited Partnership for the rehabilitation of the Skinner Apartments:
1) an affordable housing program loan in the amount of $30,000.00 pursuant to a promissory note secured by that certain Housing and Redevelopment Authority Affordable Housing Program Mortgage dated April 22, 1994 and recorded in the office of the St. Louis County Recorder on June 20, 1994 as Document No. 606687;
2) a Duluth rental property rehabilitation program loan in the amount of $109,000.00 pursuant to a promissory note secured by that certain Housing and Redevelopment Authority of Duluth - Duluth Rental Property Rehabilitation Program Mortgage dated April 22, 1994 and recorded in the office of the St. Louis County Recorder on June 20, 1994 as Document No. 606688; and
3) a single room occupancy rehabilitation program loan in the amount of $85,000.00 pursuant to a promissory note secured by that certain Housing and Redevelopment Authority of Duluth Single Room Occupancy (S.R.O.) Rehabilitation Program Mortgage dated April 22, 1994 and recorded in the office of the St. Louis County Recorder on June 20, 1994 as Document No. 606689.
Statement of Purpose
STATEMENT OF PURPOSE: The purpose of this resolution is to approve the forgiveness by the Housing and Redevelopment Authority of Duluth (“HRA”) of all remaining amounts of three deferred loans given to New Apollo Apartments Limited Partnership, whose general partner is Center City Housing Corp. (“Center City Housing”), for the rehabilitation of the Skinner Apartments; the three loans being an affordable housing program loan, a rental property rehabilitation program loan and a single room occupancy rehabilitation program loan. Each of these three loans were structured as non-recourse loans and required no interest or payments due during their term so long as specific affordability requirements were maintained. The compliance requirements were monitored by the HRA, the Minnesota Housing Finance Agency (“Minnesota Housing”), and the City of Duluth throughout the loans’ term. Center City Housing met the loans’ requirements and has since put into place project-based rental assistance vouchers and a new 40-year land use restriction agreement with Minnesota Housing to recommit to those affordability guidelines moving forward. Center City Housing is requesting forgiveness of the debt and any interest/fees due because it has completed the terms of the loans, the building’s current rents are insufficient to generate revenue to repay the debt, and so that Center City Housing may pursue more funding mechanisms to ensure that the Skinner Apartments affordable housing units are preserved for future generations. The HRA board approved forgiveness of the three loans on February 28, 2023 and Minnesota Housing’s forgiveness was completed on October 10, 2024. City staff recommended approving this request for loan forgiveness.