Title
Agenda Item:
Approval of Fleetwood Building "Assignment, Assumption and Consent" Agreement
Body
Issue:
Should Council approve the Fleetwood Building "Assignment, Assumption and Consent" Agreement?
Committee Recommendation:
Not referred to a committee.
City Manager's Recommendation:
Move to approve and authorize the City Manager to sign the Fleetwood Building "Assignment, Assumption and Consent" Agreement with the Fleetwood Limited Partnership and Fleetwood Apartments LLC.
Staff Contact:
M. Anna Schlecht, Housing Program Manager, 360.753.8183
Presenter(s):
Consent Calendar Item.
Background and Analysis:
In 1996, the Low Income Housing Institute (LIHI) of Seattle acquired the vacant Pacific Northwest Bell building located at 119 7th Avenue SE, adjacent to Sylvester Park. LIHI's intent was to create 43 units of transitional housing to get homeless people off the street and into housing with services. The "Fleetwood Building" project required a diverse package of funding from a variety of federal, state and local entities, along with a diverse range of performance and debt management requirements from each funder.
City of Olympia Loans to the Fleetwood Building: Since that time, the City of Olympia has made a series of housing rehabilitation loans to maintain the building, itemized as follows:
Loan Amt Date Purpose Current Balance
$100,000 8/6/03 Roof $ 54,800.00
$110,000 11/8/07 Heating, doors, windows $109,874.52
$230,000 12/18/09 Masonry Waterproofing $230,000.00
TOTAL OUTSTANDING BALANCE OF CITY LOANS $394,674.52*
(*Reflects current payments)
At the time of the first City of Olympia loan, LIHI advised the City that in the future LIHI would need to reconfigure the legal ownership structure of the property in order to maintain compliance with all of their funders. While the legal ownership would change, the new entity would continue to honor the original purpose as codified in each funding agreement to provide housing and services to vulnerable populations of extremely low income people.
Request to Assign Ownership of the Fleetwood Building: LIHI worked with a Seattle law firm, Kantor Taylor Nelson Evatt & Decina to develop and submit to the City of Olympia a proposed Assignment, Assumption and Consent Agreement. This request is necessitated by the expiration of the 15-year low-income housing tax credits ("LIHTC") compliance period. Low Income Housing Institute ("LIHI"), as general partner of Fleetwood Limited Partnership, a Washington limited partnership ("Partnership") desires to acquire the Project from the Partnership so that it may continue to operate the Project as affordable low-income housing. LIHI has caused to be formed, Fleetwood Apartments LLC, a Washington limited liability company (the "LLC"), of which LIHI is the sole member, for purposes of taking title to the property. There will be no change in the priority of security interests. The Washington State Housing Finance Commission has already approved the transfer. All reserves will be transferred to the LLC at closing.
Staff Review: Following extensive review by the City's Legal Department, the attached draft (Attachment #1) has been determined legally sound and sufficient to continue to secure the City's fiscal interests in the property. Housing Program staff have reviewed the request and have determined that approving this "Assignment, Assumption and Consent Agreement" will continue to secure the City's housing interests in the property, ensuring that it will continue to offer 43 units of housing for very low income, formerly homeless people.
Neighborhood/Community Interests (if known):
N/A
Options:
1. Approve the recommended Agreement.
2. Do not approve the Agreement.
Financial Impact:
Approval of the LIHI "Assignment, Assumption and Consent Agreement" will have no impact on the City's outstanding principal balance against the property in the amount of $394,674.52.