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County Administrator's Report 9. 4.
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| BCC Regular Meeting |
Discussion |
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| RECOMMENDATION: |
Recommendation Concerning Request for Subordination of Mortgage for the Gregory Street Rental Project - Clara Long, Interim Neighborhood & Human Services Department Director
That the Board take the following action concerning the Request for Subordination of Mortgage between Escambia County, 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 Gregory Street 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 secure a new first mortgage loan not to exceed $200,000, to pay off the balance of their first mortgage on this development, to make needed capital improvements for various affordable rental developments owned by CEII (estimated at $100,000), and to secure a credit line to use for future rental and homeownership affordable housing projects. The capital improvements to be performed include roofing replacement, wood repairs, and painting and will target older developments in their portfolio. Repairs are scheduled to be made at Devilliers Gardens (16 units/completed 1990); Carr Cottages (6 units/completed 1999); Valcour Villas (4 units/completed 1998); and Gregory Street Rentals (2 units/completed in 2001). All of these developments with the exception of Valcour Villas still have an encumbrance with the County.
$40,517 is still owed to the County on its second mortgage, with the balance to expire in 2023, provided that CEII stays compliant with the HOME/SHIP Agreement, Mortgage, and Note requirements. The County does not receive any monthly payments on this second mortgage. 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. All units are in compliance. 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 (Exhibit III) 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. |
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