Agenda

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County Administrator's Report 11. 2.

BCC Regular Meeting

Discussion

Meeting Date:	05/19/2016
Issue: CDBG Mortgage at 604 Chaseville Street
From:	Tonya Gant
Department:	Neighborhood & Human Svcs
CAO Approval:

RECOMMENDATION:

Recommendation Concerning the Community Development Block Grant Mortgage at 604 Chaseville Street - Tonya Gant, Neighborhood & Human Services Department Director

That the Board consider and approve one of the following items regarding the Community Development Block Grant (CDBG) Mortgage at 604 Chaseville Street:

A. Foreclose on the County CDBG Mortgage on the property at 604 Chaseville Street, Pensacola, Florida 32507; OR

B. Offer the current owners $6,000, less any property taxes owed to the County to deed the property to the County, or a pre-approved not-for-profit organization for the development of affordable housing; OR

C. Take no action.

BACKGROUND:

On September 14, 1994, Ray Riles signed a no monthly payment, 0% interest mortgage and note in favor of Escambia County for repairs performed to his home at 604 Chaseville Street, Pensacola, Florida under the Community Development Block Grant (CDBG) program (Exhibit I). Program terms state that the loan is payable if the property is sold or transferred during the 20 year loan period.

Mr. Riles passed away in July 2008 before the expiration of the loan. The property at 604 Chaseville was probated later that year and transferred to the heirs, causing a loan default, since the transfer occurred during the 20 year loan period. Since 2008, the property has been utilized both as a rental property and as the homestead property of one of the heirs, Barry Riles. The Neighborhood Enterprise Division was contacted in December 2015 regarding a payoff of the CDBG Mortgage and indicated that the full amount was due. Barry Riles has attended several public forums requesting forgiveness of the loan in order to sell the property. A timeline of activities associated with the property is attached as Exhibit II, including building permits and code enforcement issues.

As of May 9, $1040.80 is owed in 2015 and 2014 property taxes. A tax certificate was issued in June 2015 on the 2014 taxes. The assessed value of the property is $32,055 (Exhibit III).

Due to the default on the CDBG Mortgage, staff does not recommend release of the CDBG Mortgage. Release of the mortgage after default would open the County to having to provide the same relief for other CDBG loans in default.

Staff recommends that the Board consider and approve one of the following items regarding the CDBG Mortgage:
(1.) Foreclose on the County CDBG Mortgage on the property at 604 Chaseville. A title search of the property does not reveal any other superior encumbrances. The foreclosure cost by an outside agency could average $5000 and take 6 months-1.5 years to complete depending on the case. The foreclosure expense could be borne by SHIP, HOME, or other affordable housing cost center IF the property will be set aside for affordable housing. If not, the foreclosure expense would be paid through the County's typical foreclosure process and would be sold via the surplus property disposition procedure.
OR
(2.) Offer the current owners $6000 to deed the property to the County or a pre-approved not for profit for the development of affordable housing. This cost is consistent with what the County might have to spend for a foreclosure action. The cost could be borne by SHIP, HOME, or other affordable housing cost center IF the property will be set aside for affordable housing.
OR
(3.) Take no action. The current owners or buyers can pay off the County loan if desired. Alternately, non-payments of property taxes may result in the property eventually coming to the County via escheatment or being acquired by an agency or individual who has purchased the tax deeds.

BUDGETARY IMPACT:

Not applicable at this time. Depending on Board direction, an additional recommendation may be brought to the Board for consideration.

LEGAL CONSIDERATIONS/SIGN-OFF:

Not applicable at this time.

PERSONNEL:

No impact to personnel.

POLICY/REQUIREMENT FOR BOARD ACTION:

Not applicable.

IMPLEMENTATION/COORDINATION:

Neighborhood Enterprise Division (NED) will work with the County Attorney's office and/or the Property Division based on Board direction.

Attachments
Ex I-CDBG Mortgage
Ex II-604 Chaseville Timeline
EX III-ESCPA 604 Chaseville