Title:
Title
Agreement: Township 9 Bankruptcy Claims Reimbursement
End
FileID
File ID: 2019-01431
Location
Location: District 3, Richards Blvd. and North 7th Street
Recommendation:
Recommendation
Pass a Motion authorizing the City Manager or the City Manager's designee to execute the Agreement for Reimbursement of Bankruptcy Claims Payments with Township Nine Avenue, LLC for eligible HCD Proposition 1C grant claims in the amount of $638,252.
Contact: Rachel Hazlewood, Senior Project Manager, (916) 808-8645, Office of Innovation and Economic Department
Body
Presenter: None
Attachments:
1-Description/Analysis
2-Agreement: Township 9 Bankruptcy Claims Reimbursement
Description/Analysis
Issue Detail: The City, on behalf of the Township 9 project, applied for and was awarded approximately $37.6 million in five different grants between 2009 and 2015 from the State Housing and Community Development Department (HCD) under Proposition 1C. The grants were used by the Developer, Capitol Station 65 LLC, to construct infrastructure improvements and parks. In January of 2017, the Developer's lender filed for foreclosure and many contractors had outstanding payments owed under the grants. HCD withheld the grant funds due to the foreclosure. In May 2017, the Developer filed for Chapter 11 bankruptcy to delay foreclosure by its lender. While HCD subsequently agreed to release submitted draw requests for grant funds to pay the contractors, during bankruptcy proceedings, the lender for the Township 9 project, Copia Lending, paid most of the outstanding contractor invoices. The Developer was unable to find a responsive buyer for the property during the bankruptcy proceedings, so Copia Lending was allowed to proceed with the foreclosure and assumed title to the property on December 28, 2018.
Three of the HCD grants remain open at this time. Copia Lending has requested reimbursement for eligible contractor invoices it paid during bankruptcy proceedings....
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