CC MINUTES 10142008 - Laserfiche WebLink

Home Browse Search

City Council Regular Meeting Minutes October 14, 2008 Page 4 1 Ms. Kvilvang reviewed that Council provided staff direction that the amendment would not be 2 brought back to them for approval unti l the developer was certain that senior cooperatives were a 3 viable alternative and/or had attained the required 60% presales for financing purposes (HUD 4 has recently increased this to 70 %). The 7`h amendment has been drafted but has not been 5 brought before the Council for approval as the developer has not met the presale requirements 6 yet. She stated on October 2, 2008, the City sent Mr. Pratt a Notice of Default for Phase 1B of 7 Silver Lake Village. The default was due to Mr. Pratt not commencing with construction of this 8 phase by September 1, 2008 as required in the Development Agreement. Ms. Kvilvang stated in 9 light of current market conditions and the inability for the Cooperative Development to move 10 forward this fall as originally anticipated, Mr. Pratt has requested that the City request an 11 extension to the Fannie Mae loan on his behalf. She noted that a one year extension was 12 approved by Fannie Mae and the City last year, with final payment on the outstanding $2.6 13 million loan to be made by December 31, 2008. Since the development is not anticipated to 14 begin until next spring, Mr. Pratt is requesting another one year extension. Ms. Kvilvang 15 requested direction from the Council as to whether to request the one year extension on the 16 Fannie Mae loan and whether to come forward with the 7`h amendment to take the Development 17 Agreement out of the default position 18 19 Councilmember Stille requested information regarding the payment history on the Fannie Mae 20 loan. Ms. Kvilvang replied there are three principal payments required on the Fannie Mae loan: 21 $125,000 in March, $125,000 in June, and $1.8 million on September 1, 2008, with the final 22 residual to be paid by December 31, 2008. 23 24 Councilmember Stille questioned how the lower density will affect the project. Ms. Kvilvang 25 replied she does not think it has an effect on the project. The $2.6 million is paid by $1.5 million 26 in land sale proceeds so it leaves a net of $1.1 million. With the 100 units they should be able to 27 generate what is needed to pay off the $1.1 million. 28 29 City Attorney Lindgren noted that the correct maturity date on the Fannie Mae loan is December 30 12, 2008, rather than December 31, 2008. 31 32 Mr. Pratt stated it was good to hear the Congressman and Ms. Kvilvang talk about Main Street 33 and what is happening on the ground. It is difficult to sort through all of this. He pointed out that 34 there were a total of 51 transactions at Silver Lake Village in 2008. He stated each and every one 35 of these transactions has more or less had an existing home associated with it, and this has been 36 an accomplishment in itself. As he looks at the help going to Fannie Mae and Freddie Mac, and 37 the help that hopefully comes to Main Street it is important to realize it would not be out of order 38 to expect that Fannie Mae could help them here. He stated he has spent a lot of time in 39 Washington on behalf of the National Association of Homeowners, and to have these agencies 40 serve the purpose of community redevelopment was the purpose of the funding. Mr. Pratt stated 41 he has been making the interest payments on the Fannie Mae loan. They stand here ready to ask 42 for help to get this through the next year. Mr. Pratt reviewed the cost to buy a limited share in the 43 co -op and stated this becomes an affordable senior product for Silver Lake Village and the City. 44 He stated this plan has gone through various steps to get to this design and price. HUD has 45 reviewed it and accepted this site for their loan. It is just a matter of getting the homes presold.