Agenda

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County Administrator's Report 12. 2.

BCC Regular Meeting

Discussion

Meeting Date:	07/18/2019
Issue: Request for Subordination of Mortgage for Gregory Street Rental Project
From:	TONYA GREEN
Department:	Neighborhood & Human Svcs
CAO Approval:

RECOMMENDATION:

Recommendation Concerning Request for Subordination of Mortgage for the Gregory Street Rental Project - Tonya Green, Neighborhood & Human Services Department Director

That the Board take the following action concerning the Request for Subordination of Mortgage between Escambia County, Florida, ServisFirst Bank, and Community Enterprise Investments, Inc., F/K/A Community Equity Investments, Inc., for the Gregory Street Rental Project:

A. Approve the Request for Subordination of Mortgage subject to Legal review and approval, for the HOME Investment Partnerships Program (HOME) and State Housing Initiatives Partnership (SHIP) Program assisted Caminitti Place Rental Project, owned by Community Enterprise Investments, Inc. (CEII); and

B. Authorize the Chairman or Vice Chairman to execute the Subordination Agreement and all related documents required to complete the Subordination Agreement, including any actions that may be required of the County Attorney’s Office.

[Funding: N/A]

BACKGROUND:

On May 18, 2000, the Board approved a Rental Development Agreement with CEII for utilization of HOME Investment Partnerships Program (HOME) and State Housing Initiatives Partnership (SHIP) program funds to construct a 10 unit scattered site rental development for low income households (Exhibit I) named Gregory Street Rental Project. CEII developed the facility and has continued to operate the development for the intended purpose since initial occupancy in compliance with the original Agreement and Mortgage and Note related to the development (see Exhibit I for copy of recorded Mortgage).

CEII has submitted a request (Exhibit II) for the County to subordinate the County HOME/SHIP mortgage so they may get a loan for approximately $200,000, to pay off the balance of their first mortgage on this development and to make needed capital improvements, such as re-roofing, on this development as well as other workforce rental developments owned by CEII. $40,517 is still owed to the County on its second mortgage and the balance will expire in 2023, provided that CEII stays compliant with the HOME/SHIP Agreement, Mortgage, and Note requirements. The Gregory Street property was monitored by the Neighborhood Enterprise Division (NED) with a file review in December 2018, and physical inspections of five units in February 2019. There were minor findings which were resolved within 30 days. NED is not aware of any compliance issues with any other CEII developments.

BUDGETARY IMPACT:

No County expenditures are involved in this transaction. Any recording or property transfer fees that arise will be paid by CEII.

LEGAL CONSIDERATIONS/SIGN-OFF:

The Agreement for Subordination of Mortgage is subject to Legal review and signoff.

PERSONNEL:

N/A

POLICY/REQUIREMENT FOR BOARD ACTION:

Mortgage subordination requests must be reviewed and approved by the Board.

IMPLEMENTATION/COORDINATION:

Upon approval by the Board, Mortgage subordination will be coordinated with CEII. Neighborhood Enterprise Division (NED) will oversee the process with the assistance of the County Attorney’s Office to the extent necessary. NED will continue with the monitoring of the Project for rents, income limits, and occupancy requirements.

Attachments
Ex I-Gregory St Mortgage
Ex II-Subordination Request CEII Gregory St