City to sell and loan funds to developer to revive Warner & Swayze building as affordable housing

City officials presented ordinances that would transfer the city‑owned Warner & Swayze building at Carnegie Avenue and East 50th Street to Penrose Holdings LLC (or its designee), provide a loan of up to $3 million and reallocate previously committed Rainbow Terrace proceeds to support the project and related neighborhood beautification.

Tony Bango, bureau chief for housing development in the Department of Community Development, said the century‑old Warner & Swayze building has been vacant for decades, is a public‑safety concern, and requires a complex capital stack to complete redevelopment. Penrose Holdings told council it plans a mixed senior and family affordable housing project with 12 apartment units for seniors and additional family units in the same structure, and said the development team has secured a large number of funding sources and is seeking remaining awards to close.

Why it matters: the sale and loan would convert a long‑vacant downtown‑edge building into affordable housing and could unlock $2.9 million in county funds that require an owner mortgage. Community development said the building has one of the most complicated capital stacks the department has handled and that the city’s loan will help bridge remaining financing gaps.

Financial mechanics and approvals: economic development staff said the city will sell the property to Penrose for a stated price (approximately $2,082,286) and then provide a loan for redevelopment; the legislation also amends a prior council action that had provided $1 million to the project, moving some of those funds to neighborhood beautification in other wards. Councilman Starr and other local members spoke in favor. CD said the transaction must still satisfy board of control and other approvals and that some grant sources are still under negotiation.

Project scale and partners: Penrose described the proposed redevelopment as 12 senior units plus family housing and said Midtown Incorporated CDC will be a co‑owner and partner on the project. CD staff and Penrose representatives said they were pursuing a closing in the coming months and are coordinating an array of grants, loans and tax credit and local resources.

Discussion vs. decision: committee voted to advance the ordinances for consideration; no final closing paperwork was recorded in committee. Council asked staff to preserve transparency about all funding sources and to return with final contract documents and any deed or mortgage terms required by county or state funders.

Direct quotes: Penrose’s lead on the project said the work is “a labor of love” and community development staff called the transaction one of the most complicated capital stacks the department has handled in recent years.

What’s next: staff will continue to assemble the financing, confirm board of control approvals and return to council with the finalized sale, loan documents and any required interagency agreements for final action.