On October 19, 2015, City Council approved a funding agreement between the City of Orlando, Lift Orlando, Inc. (Lift), and LOCL providing Lift with $1,250,000 in CDBG funding to support the demolition of the environmentally, contaminated, dilapidated, vacant and boarded up apartment buildings located at 2021 Orange Center Blvd., formerly known as the Washington Shores Apartments. Pursuant to the Agreement, a promissory note for $1,250,000 was executed by Lift and the City placed a lien for the Mortgage amount on the property. As acknowledged in the October 19, 2015 Council Agenda Item Summary, the City’s Mortgage would be subordinate to both the existing recorded purchase money acquisition mortgage in favor of The Dr. P. Phillips Foundation and to other project and redevelopment financing including bonds, loans by FHFC and SAIL, and other financing for the Low Income Housing Tax Credits project. Due to the lien position and due to the complex nature of the financing of Low Income Housing Tax Credit projects, in the unlikely event if the owner defaults, or if the property has to be liquidated to repay all of the funding sources, it is doubtful that the City will be able to recover its investment from the tax credit consortium or from the sale of the property. In such a situation, the City would be responsible for any repayments to HUD.
Lift was successful in their application for Low Income Housing Tax Credits and was awarded funding from FHFC. As a prerequisite to receiving the awarded funds, FHFC, the “Senior Lender”, is requiring the City to acknowledge the City’s subordinate position as a “Junior Lender” by signing the attached Subordination Agreement.
Phase 1 of the West Lakes development will consist of 200 affordable housing units with a set aside for units for chronically homeless and units affordable to households at the low and moderate income levels.
Approve and authorize the Mayor and City Clerk to execute the subordination agreement between the City of Orlando, FHFC, LOCL and West Lakes Phase 1, LP and all related documents.