6:18The Commerce Building, originally constructed in 1912 and converted into affordable housing by Common Bond Communities between 2007 and 2011, was at the forefront of the meeting due to its financial challenges. Facing ongoing deficits, Common Bond opted to sell the building to avoid foreclosure. Listed for sale in 2024, the property received three offers, with Pack Properties ultimately selected as the buyer. The sale is intended to preserve the building’s affordable housing status while addressing its financial obligations.

During the meeting, it was noted that the Minnesota Housing Finance Agency (MHFA) had approved a partial forgiveness of two loans, facilitating the sale process. The building, which houses 100 affordable units, will see changes in its occupancy following the sale. There are currently 11 long-term homeless units linked to the first phase of the loan, with restrictions lifted for six units upon repayment. Meanwhile, four occupied units will transition to alternative properties with suitable services, with Simpson identified as the service provider for ongoing support. Ramsey County has committed funding for these services.

The anticipated sale date is set for March, with an important deadline on April 1. Tenants have been informed of the sale and assured that they will receive updates about potential rent adjustments when leases expire. They have the option to extend their leases for an additional year, providing continuity during the transition. Additionally, residents can join Common Bond’s interest lists for other qualifying rental units, with priority given as per fair housing regulations.

18:20In conjunction with the sale, the meeting highlighted the financial restructuring required to address outstanding debts associated with the Commerce Building’s two phases. The discussions emphasized the request for loan forgiveness from Columbine, which sought partial forgiveness for approximately $1.2 million of combined principal and interest on three loans. The total outstanding debt amounted to about $3.1 million, including a Community Development Block Grant (CDBG) loan of $1.6 million, a Met Council loan of $563,000, and a home loan for $895,000.

The repayment strategy discussed involved prioritizing the U.S. Bank loan, followed by the principal of the Housing Finance Agency (HFA) phase one loan, with interest on the HFA loan already approved for forgiveness. After these repayments, it was anticipated that around $1.9 million from sales proceeds would remain, to be proportionally distributed among the three loans based on initial investments.

A commissioner raised questions about program income and its restrictions, specifically regarding whether CDBG repayments could be reintegrated into the general pool or would be restricted to housing use. While HOME funds were confirmed for housing use, there were suggestions that CDBG funds might have fewer restrictions, although a definitive answer was not provided at the meeting.

6:18The meeting also addressed the land donation on Fremont Avenue from Wells Fargo Bank in lieu of payment for a demolition assessment. The third-acre foreclosed and demolished lot was added to the Housing & Redevelopment Authority’s inventory for potential residential development. The lot’s proximity to a city-owned parcel could support four to six housing units. Director Newton explained that the donation was made possible through Community Development Block Grant (CDBG) funds used for demolition, facilitating the lender’s decision to donate rather than pay the assessment.

Additionally, the meeting included a public hearing to authorize a lease agreement with Avis Budget Car Rental LLC for retail and parking space in the Black 19 parking ramp at 151 7th Street East. The lease intends to occupy a previously vacant retail space and allocate parking for rental cars, deemed beneficial given the ramp’s existing capacity. With no public comments received, the hearing was closed, and the lease agreement moved forward without opposition.