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Redevelopment commission tables request to release $25,000 performance mortgage on 323 South 6th Street
Summary
The commission declined to release a $25,000 performance mortgage tied to redevelopment obligations at 323 South 6th Street and voted 3-0 to table the owner's request so staff can receive a written scope and timeline for repairs and return with recommendations.
Becky, redevelopment staff, told the commission the property at 323 South 6th Street was purchased by the RDC years ago and sold at a reduced price with a $25,000 performance mortgage to guarantee agreed improvements. The mortgage was retained in later amendments and a completion deadline of April 1, 2028 remains in effect.
Timothy Hochstetler, the current owner, said he fully renovated the upstairs unit and estimated he has invested approximately $100,000, but the downstairs unit remains only partly improved and houses long‑term tenants, including a man who has lived there for about 30 years. Hochstetler told the commission he listed the property because it "economically doesn't make sense" for him to invest more now and asked whether the mortgage could be released or modified to facilitate a sale.
Commissioners pressed on enforcement and precedent. One member noted the mortgage is the RDC's mechanism to ensure public benefit from a discounted sale and that the performance mortgage can be enforced through foreclosure or by requiring the work to be completed and placing the cost as a lien. Another member said the commission would be reluctant to set a precedent of releasing performance mortgages where substantial required work remains.
Staff told the owner the commission could consider modifications tied to concrete, measurable steps. The owner asked whether smaller, less disruptive improvements (painting, a new shower, refinishing floors, windows, modest kitchen updates, and plumbing work) would be acceptable; staff encouraged him to submit a written, specific proposal and timeline for staff review and inspection by Myrony Bryce (building department). A commissioner suggested handling updates similarly to Board of Works property enforcement with periodic (e.g., 2–3 month) check‑ins.
After discussion, Commissioner [motion recorded by an on‑record speaker] moved to table the request for further information and to have staff return with a written scope and timeline; the motion was seconded and passed 3–0. The commission did not release the performance mortgage; staff will review any written proposal, inspect completed work, and bring a recommendation back to the commission. The performance mortgage remains recorded on the property and the April 1, 2028 completion deadline still applies.
