Summary:
On May 30, 2002, the City of Orlando entered into a HOME/SHIP Loan Agreement with Church Street Housing Partners I, LLC which is reflected in the June 3, 2002 Promissory Note (“Note”) between the City of Orlando and Church Street Housing Partners I, LLC for HOME Investment Partnership Program (“HOME”) and State Housing Initiatives Partnership Program (“SHIP”) funding in the amount of One Million Eight Hundred Thousand Dollars ($1,800,000). These funds were used to fund the construction of 71 units in a 266 unit residential rental development known as City View Apartments located at 101 South Terry Avenue, Orlando, FL 32805. The Note was secured by a Mortgage and Security Agreement dated as of June 3, 2002. Church Street Housing Partners I, LLC has an existing loan from Orange County Housing Finance Authority for Fourteen Million Dollars ($14,000,000) (1st Lender), under which the City of Orlando occupies a fourth mortgage lien position. Church Street Housing Partners I, LLC has subsequently applied to Greystone Funding Corporation for a refinancing of the existing loan to take advantage of available lower interest rates. The refinancing would increase the principal by One Million Twenty-Five Thousand Dollars ($1,025,000) which would be applied to 1) Replacement Reserve deposit of over $200,000, 2) Transaction Costs of Refinance, 3) Reimbursement to exiting Bank of America manager/member for operating deficit contributions of and redemption of their partnership interest, 4) Payment of deferred developer fee, 5) Repairs to the property, 6) Painting of the property, 7) Cash reserves for operations and capital expenses. The debt service will be greatly reduced by the reduction in interest rate, and is currently expected to improve property operations by over $300,000 per year which will be split between cash flow and higher capital reserve deposits. Greystone Funding Corporation, as the new 1st Lender, is requesting the City of Orlando subordinate its loan position to the same fourth position it currently occupies under the existing loan and restricting its right to payment. The Loan and Restrictive Covenant stipulated a twenty (20) year affordability period which will remain in effect. The debt on this project is $18,546,132 and the appraised value in 2012 was $20,990,000. As a non recourse loan it is possible the project would not be in a position to repay the loan. The project has been running successfully since its inception and with this refinance it is anticipated the project will continue to operate as intended providing affordable housing beyond 2023 when all HUD HOME program goals have been met. |