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Council approves Portland Apartments sale with legal safeguards to preserve affordability
Summary
City council approved the assignment and assumption of loans and related agreements for the proposed sale of the 68-unit Portland Apartments to Sunrise Affordable Housing Group, adding limited legal language to allow a lender to take title in foreclosure while preserving affordable-restriction protections.
Mark Van Lew presented the council with a proposed transaction in which Sunrise Affordable Housing Group would acquire the Portland Apartments, a 68-unit multifamily property in downtown St. Petersburg restricted to households at 60% or less of area median income (with seven units restricted at 35% AMI or below). The buyer proposes to partner with the Pinellas County Housing Authority: the housing authority would obtain fee simple ownership of the land and ground-lease the property to Sunrise for 99 years while serving as management agent and providing resident services.
Haley Sawyer, an attorney for Sunrise, told the council the buyer plans eventual tax-credit resyndication and a substantial rehabilitation to preserve and extend affordability. "The intent isn't to wipe out the affordable restrictions," Sawyer said, explaining the lender’s concern relates to the ability to take title in a foreclosure scenario and not to eliminate affordability covenants.
Assistant City Attorney Isabella Sobel and other legal staff reviewed the city's code and noted the workforce housing bonus density and intensity agreement contains city-approval provisions for title transfers. Council members expressed concern about preserving the bargains that produced density bonuses and other concessions. Legal proposed narrow, surgical language that would allow the mayor to execute a limited agreement consenting to a transfer in the event of foreclosure while protecting the affordability terms.
Council asked about loan maturities and city loans (SHIP and LHF). Administration said Sunrise is proposing to extend SHIP/LHF loan maturities from 08/01/2045 to 08/01/2070 to align with new financing; those are interest-free loans currently being repaid by the ownership entity. Mark Van Lew said Sunrise plans to fund the $8,000,000 purchase with equity and new senior financing; if the buyer cannot assume the primary mortgage, new financing would be arranged.
After legal presented the redlined, limited subordination/consent language, the council approved the resolution with the updated safeguards. Legal said the revised language is designed to let the lender take title if necessary while leaving affordability covenants intact and enforceable. The clerk announced the motion passed unanimously with one member absent.
The council’s action authorizes assignments and assumptions and authorizes the mayor to execute documents needed to permit the transaction, provided the legal department secures language to preserve affordability protections. Council members asked that staff and the buyer continue to coordinate a final transaction timeline and recorded documents.
Next steps: Administration and counsel will finalize documents for closing and record the necessary subordination/consent instruments that the council authorized.
