HomeMy WebLinkAboutIV.F - Resolution No. 2018-06 - Rental Rehab Loan - Old Neighbor LLC
HEDRA Memorandum
To: HEDRA Commissioners
From: John Hinzman, Community Development Director
Date: October 11, 2018
Item: Resolution: Residential Rental Rehabilitation Loan – Old Neighbor, LLC (Markus
Warren) – 101 East 6th Street
Request
Markus Warren operating as Old Neighbor, LLC has submitted a request for a $6,000
rental residential rehabilitation loan to assist with window replacement for his property
located at 101 East 6th Street
Financing
The total estimated cost for the renovation is $16,389. Old Neighbor, LLC would
contribute $10,389 (63.3%) of the total cost from cash on hand with the remaining $6,000
(36.7%) being comprised of the HEDRA Loan.
Heritage Preservation Commission Review
The duplex was constructed in 1885 and site improvements are subject to Heritage
Preservation Commission (HPC) review. The HPC is scheduled to review the project at
its October 16, 2018 meeting. Approval of the loan would be subject to HPC approval of
the improvements.
Loan Terms
HEDRA may provide a ten year loan at zero percent the first year, and 0.25% above the
Prime Rate (currently 5.25%) for years 2-10. The loan would be recalibrated to reflect
changes in the Prime Rate every two years. Loan proceeds would be disbursed upon
proof of qualified rehabilitation expense. The loan would be secured with a mortgage
document.
Analysis
Eligibility – The home is a designated historic site consistent with eligibility
requirements.
Improvements – Proposed window replacement is an eligible improvement item.
Business Subsidy – The loan does not exceed the $150,000 limit for constituting
a business subsidy under state law.
Purpose – The loan assists in facilitating the following program purposes:
Preserve and make appropriate improvements to buildings which contribute to the
neighborhood appearance or historic character.
Funding Availability – Approximately $45,000 remains for both commercial and
residential loans. Upon funding the $6,000 request, $39,000 would remain for
additional loans in 2018.
Demonstration of Need – The windows are in need of repair. Failure to complete
improvements will result in compounded issues in the future.
Recommendation
Approval of the loan as presented is recommended.
ACTION – Adopt the attached resolution approving a $6,000 Rental Rehabilitation
Loan for Old Neighbor, LLC for work at 101 East 6th Street.
Please see the attached resolution and pictures for further information.
HASTINGS ECONOMIC DEVELOPMENT
AND REDEVELOPMENT AUTHORITY
RESOLUTION NO. 2018-06
APPROVAL OF RESIDENTIAL RENTAL REHABILITATION LOAN FOR OLD
NEIGHBOR, LLC AT 101 EAST 6TH STREET
Commissioner ______________ introduced the following resolution and moved its
adoption:
WHEREAS, the Hastings Economic Development and Redevelopment Authority
(HEDRA) has established an Rental Residential Rehabilitation Loan Program and
Guidelines pursuant to Minnesota State Statutes 469.01 on March 12, 2009; and
WHEREAS, Old Neighbor, LLC, property owner, have applied for a $6,000 loan
to partially finance the rehabilitation of an existing building located at 101 East 6th Street,
to replace windows. The property is legally described as follows:
The South 91.58 feet of Lot 5, Block 36, TOWN OF HASTINGS, Dakota County,
Minnesota.
AND
The South 91.58 feet of Lot 6, Block 36, TOWN OF HASTINGS, Dakota County,
Minnesota, except the east 55 feet thereof.
WHEREAS, the total investment in the rehabilitation is estimated to be $16,389
for work qualified under the Program Guidelines; and
WHEREAS, HEDRA finds that the loan is not a business subsidy under Minnesota
State Statutes 116J.993; and
WHEREAS, HEDRA finds that the work and costs meet the Rental Residential
Rehabilitation Program Guidelines.
NOW THEREFORE BE IT RESOLVED that HEDRA approves a loan in the
amount of $6,000 for rehabilitation subject to the following conditions:
1. Proof of financing and/or equity for the balance of the Total Investment amount
not financed through the Rehabilitation Loan.
2. Improvements are made subject to approval by HPC.
BE IT FURTHER RESOLVED that upon submittal of proof of financing,
HEDRA directs staff to prepare and have executed the loan and security documents and
disburse the funds with usual conditions of the program.
Commissioner _____________ seconded the resolution and upon being put to a
vote it was adopted:
Ayes:
Nays:
Absent:
The resolution was duly adopted this 11th day of October, 2018.
________________________
Scott Sinclair, Vice-President
ATTEST:
_______________________________
John Hinzman, Director