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Council approves partial forgiveness of city mortgage to facilitate sale of Commerce Building
Summary
The council approved partial loan forgiveness of up to $238,949.88 on a city mortgage for the Commerce Building projects to facilitate a sale that will avoid foreclosure and maintain affordability, following a staff report from the Department of PED.
The Saint Paul City Council on April 16 approved a resolution authorizing partial forgiveness of up to $238,949.88 in combined principal and interest on a city mortgage tied to the Commerce Building Phase 1 and Phase 2 projects at 10 Fourth Street East to facilitate a sale and preserve affordability.
Staff presentation: Laura Henson, principal project manager in Planning and Economic Development's housing team, told the council the Commerce Building is owned by CommonBond Communities, and the agency sought to sell the property to PAC Properties to avoid foreclosure and retain affordability. Henson said staff identified a city-held mortgage and recommended partial forgiveness of the city mortgage (as distinct from HRA loans) to allow the transaction to move forward. “The Commerce Building on Fourth And Wabasha is owned by Common Bond Communities. In order to avoid foreclosure and maintain affordability, they are looking to sell the property to PAC properties and requested forgiveness of 3 HRA loans to the project,” Henson said.
Why it matters: City staff said the action is intended to prevent foreclosure and preserve the building as affordable housing. The council discussed the HRA action and confirmed the item had been reviewed by the Housing and Redevelopment Authority earlier in March.
Vote: The resolution passed unanimously in the recorded vote shown in the transcript (6–0). The council approved the staff recommendation to enable the closing scheduled for the following week.
Next steps: Staff will proceed with the transaction and closing; the forgiveness applies to the city mortgage and is limited to the combined principal and interest amount cited in the resolution.
Speakers quoted in this article are drawn from the council meeting transcript.
