3. HRSR 05-16-2005 - Laserfiche WebLink

Home Browse Search

of fiver MEMORANDUM TO: Housing and Redevelopment Authority FROM: Heidi Steinmetz, Assistant Director of Economic Development DATE: May 2, 2005 SUBJECT: Consider Small Cities Development Program Loan Agreement Attachment • Draft Loan Agreement including Promissory Note and Mortgage Background A key component of the Downtown Revitalization Project financing has included a Small Cities Development Program (SCDP) grant that was awarded to the city from the MN Department of Employment and Economic Development (DEED) in 2004. Although the city's application included a funding request for commercial and rental rehabilitation, a $400,000 grant was awarded specifically to the Jackson Block rental housing new construction component of the application. The grant application proposed that the city through its HRA, the designated Local Development Organization, would loan MDI Limited Partnership #70 (asset manager for MetroPlains Development, LLC) $400,000 to help fill the financing gap that results from the disconnect between the cost of constructing affordable rental housing and cash flows available to repay debt. The application proposed that the loan would be repaid in full at 1 interest at the end of 30 years consistent with MN Housing Financing Agency (MHFA) financing. Issue The attached loan agreement was prepared by the City Attorney for the HRA's consideration. Staff and MetroPlains are in agreement on the document. MetroPlains anticipates closing on the project financing for the Jackson Block by the end of June. Key components of the loan agreement include the following: • MetroPlains must construct 32 units of affordable rental housing. Affordable means that the rental rates of all units must be affordable to households earning no more than 50% of the Sherburne County Median Income. Sherburne County falls under