Saint Paul HRA briefed on Commerce Building sale and request for up to $1.23 million in loan forgiveness

The Saint Paul Housing and Redevelopment Authority on a staff presentation was briefed on a planned sale of the historic Commerce Building at Fourth and Wabasha and a request that the HRA authorize partial forgiveness of subordinate loans to avoid foreclosure and preserve most tax-credit affordability.

The Commerce Building, built in 1912 and converted to housing in phases between 2007 and 2011, contains about 100 tax-credit-restricted apartments at 60 percent of area median income, staff said. Laura Hainesen, principal project manager, told commissioners CommonBond Communities — the current owner and borrower — marketed the property in February 2024, selected PAC Properties’ $3.2 million offer and is pursuing the sale to avoid foreclosure and keep affordability restrictions in place that would otherwise be at risk.

Hainesen said proceeds from the sale are expected to be just under $3.3 million. The property carries roughly $3.1 million in outstanding subordinate HRA and related loans: a CDBG loan to Phase 1 with a current balance of about $1.6 million; a Met Council loan to Phase 1 with a current balance of about $563,000; and a HOME…