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HRA proposes LISC CAT Fund amendment to expand eligible borrowers and terms; staff introduces proposed CAT-funded acquisition at 964–968 Payne Ave
Summary
Staff asked the HRA on May 7 to authorize an amendment to the city's LISC CAT Fund Master Participation Agreement to allow mission-aligned for-profit borrowers and up to 10-year loans, and introduced a proposed CAT-funded acquisition at 964–968 Payne Ave to be considered next week.
HRA staff said they will seek approval on May 14 to amend the city's Master Participation Agreement (MPA) with LISC Twin Cities for the Community Asset Transition (CAT) Fund and introduced a pending CAT Fund participation request for 964–968 Payne Avenue.
Angela Reif, principal project manager in PED, described the requested MPA amendment as updating terms to match LISC’s second capital fund iteration (CAT Fund 2). The main changes staff will ask the HRA to authorize are to extend permissible loan terms from five to 10 years and to expand eligible borrowers to include mission-aligned for-profit developers, rather than limiting loans to seven preapproved nonprofit developers. Reif said those changes are intended to help right-size financing for a growing pipeline of projects.
Jonathan Reester, project manager, presented an introduction to a proposed CAT Fund loan package for the acquisition of 964–968 Payne Avenue in Ward 6. He said the borrower is "968 Payne LLC," an acquisition entity for developer Georgia Ford and Black Press (the proposed main-floor tenant and headquarters for Black Press and a nonprofit Center for Broadcast Journalism). The purchase agreement extension is $400,000, with LISC underwriting $275,000 and the HRA participation to be $150,000; borrower equity is shown as $56,000. Reester said LISC would underwrite and service the loan, and the HRA's participation would be 0% interest for five years under the current MPA, though the proposed MPA amendment would allow longer terms to match CAT Fund 2 standards. The blended borrower rate cited in underwriting was about 1.7% and the proposed term described in the presentation was six years with amortization over 25 years and a balloon at term end.
Georgia Ford, the developer and community publisher, told commissioners the project would house Black Press's headquarters and programming space, a business suite and a broadcast studio in later years. Commissioner Yang praised Ford’s investment in the East Side and said she would support the loan when it comes before the HRA.
Ending
Staff said the MPA amendment and the CAT Fund participation for 964–968 Payne Avenue will be before the HRA for action on May 14; staff noted other projects will also be eligible under the amended terms.
