HomeMy WebLinkAbout1999 03-29 CCM Special Work Session MINUTES OF THE PROCEEDINGS OF THE CITY COUNCIL
OF THE CITY OF BROOKLYN CENTER IN THE COUNTY
OF HENNEPIN AND THE STATE OF MINNESOTA
SPECIAL WORK SESSION
MARCH 29, 1999
CITY HALL - CONFERENCE ROOM B
CALL TO ORDER
The Brooklyn Center City Council met for a Special Work Session at Brooklyn Center City Hall
and was called to order by Mayor Myrna Kragness at 6:00 p.m.
ROLL CALL
Mayor Myrna Kragness, Councilmembers Debra Hilstrom, Kay Lasman, Ed Nelson, and Robert
Peppe. Also present: City Manager Michael J. McCauley, Assistant City Manager/HR Director Jane
Chambers, and Recording Secretary Maria Rosenbaum.
SHINGLE CREEK TOWER PROJECT
Stephen Wallace, Attorney at Law from Peabody and Brown, discussed the project is currently
encumbered by a HUD Section 236 Mortgage held by Fannie Mae. HUD provides interest reduction
payments (IRPs) to subsidize the interest rate on the mortgage note. The Developer has proposed
that in order to maintain the IRPs, the City would need to agree to hold the mortgage under the HUD
mortgage. This is a new program that was first used on a recent California project which allows the
IRPs to remain in place since the Section 236 mortgage held by Fannie Mae is purchased by the City
with a portion of the proceeds of the bonds. In addition, a 1998 Minnesota law which requires a 12
month notice to all tenants, the Metropolitan Council and the municipality, upon termination of any
federally insured mortgage program would not be required.
The City would enter into an IRP Agreement with HUD pursuant to which HUD would agree to pay
the IRPs to the City. The City would assign the IRPs to the Trustee pursuant to a participation
agreement and use the IRPs to pay a portion of the debt service on the revenue bonds. The City
would also be required to enter into a regulatory agreement with the developer. The City's
obligations under the regulatory agreement are to be the "primary regulator" for the project. The
City's duties under the regulatory agreement are to regulate compliance with HUD rules and
regulations and include monitoring compliance with affordability restrictions, tenant occupancy
requirements, physical condition of the project, and financial monitoring. The City would give HUD
an annual report on these matters.
03/29/99 -1-
Council discussed the concerns they had with the project and the obligations the City would incur
with this new program.
Mr. McCauley suggested researching having another agency hold the mortgage on the project such
as the Metropolitan Council. Mary Ahern, representative from the Metropolitan Council, advised
the Council that this would be something new for the Metropolitan Council, however, she would be
willing to bring before the Metropolitan Council and suggested the Council prepare a proposal to
help move the project forward. Ms. Ahern also suggested contacting the Minnesota State Housing
Financing Agency.
Mr. Boisclair stated that he had checked with the Minnesota State Financing Agency and they were
not able to meet the time line requested.
It was the consensus of the Council to check other agencies to hold the mortgage on the project.
ADJOURNMENT
Council adjourned the meeting at 7:07 p.m.
W 4�4�
City Clerk Q Mayor 0
03/29/99 -2-