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Council approves continued negotiations on Washington Manor purchase; staff to seek bonding/indemnification details
Summary
Council voted to continue work on a draft purchase agreement with the Housing and Redevelopment Authority for Washington Manor and to permit staff to pursue bonding options that may require a city general‑obligation indemnity to St. Louis County.
Councilors voted to allow staff to continue negotiating and advancing a draft purchase agreement between the city and the Housing and Redevelopment Authority (HRA) for Washington Manor, subject to further work on two specific financial items raised by the HRA.
Dana Haltonen of the HRA said the Authority needs either a St. Louis County general‑obligation pledge or a city general‑obligation pledge to achieve a debt ratio that will support the bond financing for building upgrades (including steam conversion and HVAC). Haltonen said proceeding without a general‑obligation pledge would reduce the capital the HRA could raise by about $800,000 compared with bonded financing with a GO pledge; she said the difference between county‑backed bonding and a city GO pledge was about $250,000 based on prior estimates.
Haltonen also asked the city to agree to reimburse the HRA for architectural and engineering costs directly related to the steam conversion and HVAC upgrades in the event the purchase agreement is later determined null and void; she said the HRA estimated those costs at about $81,000 and that the HRA would be out roughly $186,000 overall if the deal fails. City attorney Brian Lindsay described the county indemnity and guarantee arrangements used in similar projects and said the city would likely be in a customary legal position to provide such an indemnity if the council so voted; he characterized the approach as joint‑power or guarantee agreements used elsewhere.
Councilors discussed budgeting and reserve implications, questioned whether indemnity obligations would be covered by insurance (Lindsay said the form would be a bond guarantee rather than an insurance payment), and asked how rent revenues would relate to bond payments. Haltonen said the closing is targeted by July 1, 2025, but bonds could be issued earlier depending on timing. Councilor Johnson moved and the council approved a motion to continue staff work to advance the agreement and related financing steps.
The council recorded a voice vote in favor of continuing staff negotiation and preparing documents for the purchase agreement.
