HRA MINUTES 02091988 - Laserfiche WebLink

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• 1 indicated that if Gaughan went with HUD a lot more time would probably 2 have to be taken before conditional commitment would be received. If 3 Gaughan did decide to obtain financing in this manner, it would 4 probably take 45 to 60 days before the bonds can be marketed. Before 5 the FHA would give final commitment the plans, specifications, etc. 6 would all have to be submitted. There are many steps in this process 7 and it would take at least 90 days to complete it. 8 Lincoln National Life from Ft. Wayne, Indiana, was also approached by 9 Gaughan. That company offered a partnership - 50% of the deal and 10 they would put up some of the equity. Mr. Krier indicated this would 11 probably be a better deal for the developer, but would also take 45-60 12 days to close. 13 Mr. Krier feels the developers are "shopping" for the best interest 14 rates and this may be the main factor in the length of time it is 15 taking for the financing of this project. He feel sure, however, that 16 both the developers are still very interested in the project and do 17 not want to drop it. 18 Commissioner Ranallo indicated he is very concerned about the length 19 of time the potential developers are taking to get the project 20 started. He said that in actual fact, the project still does not have 21 a developer. He said he understood, as did the Minneapolis residents 22 concerned with the project, that the project was ready to go back in •23 October. The Commissioner questioned the sincerity of either 24 developer for the project. • 25 Mr. Krier indicated he felt both developers were still very 26 interested and sincere in their efforts toward the project and 27 reiterated that they were both looking for the best interest rates for 28 the financing. 29 Mr. Krier agreed with the H.R.A. that the reality is "we have nothing 30 on the table." There are options, however. 31 1. Don't deal with either Gaughan or Lang Nelson. 32 2. Inform either or both developers that they have a 33 certain number of days to complete the financing. 34 3. Inform either or both developers we would keep their 35 $10,000 (Gaughan has already given a check in this 36 amount to the City) and raise the cost every 15 days 37 until the project is financed. 38 When Commissioner Marks wondered if we would really get the project 39 going with one of these two developers, Mr. Krier again insisted that 40 the developers are shopping the market and when the interest rates are 41 economically feasible they will commit to the project. 2