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HomeMy WebLinkAbout1985-08-12; Rehabilitation Loan Committee Ad Hoc; MinutesMEETING OF: REHABILITATION M'YUTES L A COMM TTEE MEETING DATE: AUGUST 12, 1985 MEETING PLACE: MEETING TIME: 1O:OO A.M. Redevelopment Office Conference Room MEMBERS Y CALL TO ORDER Meeting called to order at 1O:lO A.M. by :hairman Matt Hall. ROLL CALL PRESENT : Matt Hall: Housing and Redevelopment Advisory Committee Member Michael Holzmiller: Alternate for Building and Planning Director Jim Elliott: Finance Director Also Present: John McCoy: Alternate Member, Chairperson Housing and Redevelopment Advisory Committee ABSENT : Joe Holt: Bank Representative Staff Present: Patricia A. Cratty: Administrative Assistant 11/ Redevelopment APPROVAL OF MINUTES Minutes of April 22, 1985, could not be approved due to lack of quorum. ITEMS OLD BUSINESS: Staff member Cratty passed out information to Committee regarding loans that have been made under the program as of current date. I 1. RESIDENTIAL LOAN - MACPHERSON Staff member Cratty gave presentation stating that the Committee had approved this loan for $17,319 for structural work at the residence located at 351 Redwood. Ms. Cratty stated that there is additional work that needs to be done on this project due to more dry rot that was discovered in some areas of the house. Tony Mata from the Building Department has inspected the residence and verified the additional work to be done by the contractor. The additional work would cost approximately $2,787. The additional cost has not been added to the loan total because other portions of the structure have less damage. There will be a savings in some areas so the total of the loan may not change. Staff will report to the Committee the final loan balance but the Committee needs to authorize the change orders. MINUTES Rehabilitation Loan Committee 8/12/85 PAGE 2 After discussion, the Committee made motion to approve additional expense and authorized staff to approve change orders. Member Hall stated that verification should be made that Mrs. MacPherson was again employed by the Twin Inns. NEW BUSINESS: 2. COMMITTEE CHAIRPERSON/NEW MEMBER Staff member Cratty gave report stating that Matt Hall has been Acting Chairperson for the Committee and will no longer be available for the Committee due to appointment to the City's Planning Commisisor Program guidelines were discussed regarding the make-up of the Committee. Staff member Cratty informed the Committee that Member Holt has moved out of town and a person representing a lending institution will be needed to fill the vacancy on the Committee. Ms. Cratty asked that the Committee give recommendation for filling this vacancy. Staff remarked that Roy Ward who is affiliated with First National Bank of North County has expressed interest as possible member. In addition to Mr. Ward, Committee members suggested contacting Dennis Pearson and Don Schempp. Alternate Member Holzmiller suggested that a letter be drafted and mailed to these people using format the City uses to solicit members of other Committees. After further discussion, the Committee directed staff to draft letter asking these possible members to state their experience with loan processing. Chairperson position on loan committee was continuec until there was full committee membership present. 3. COMMERCIAL LOAN - 7-UP MARKET Staff member Cratty gave report regarding a request for a commercial rehabilitation loan in the amount of $52,450 to include $47,450 plus $5,000 contingency, to renovate the 7-Up Market on the northeast corner of Roosevelt and Walnut. Ms. Cratty stated that the structure served as a market- deli for many years. Plans are to renovate the entire structure and a new market-deli will occupy the building. The building is in desperate need of renovation and would enhance the area. This project was approved by the Design Review Board at their meeting of November 14, 1984. The applicants for the loan are the property owner Mrs. Jauraqui, and her two daughters. There is a third daughter as a partner in the business but not on the loan application. Mrs. Jauraqui is leasing the property to the partnership and has agreed to us the property as collateral for the loan. Ms. Cratty also stated that there were no liens on the property HALL ELLlOl HOLZM HALL T LLER ELLIOTT HOLZMILLER MINUTES Rehabilitation Loan Committee 8/ 12/85 PAGE 3 Bank of America has denied the loan based on collateral and working capital into business. Local branch would have approved the loan but the Bank has changed policy and no loans are being processed through the local branch. Ms. Cratty stated that she had spoken to Lois Cyr, Vice President, Community Development Department of the Bank of America expressing dissatisfaction with the Banks denial of this loan and requesting she review the application. Ms. Cyr was unable to change the loan officers recommendation to deny the loan. Ms. Cratty handed out data regrading cash flow and cost projections for the business. Discussion held on running title report and if applicant was willing to allow City to acquire 1st Trust Deed on building. Staff member Cratty stated that the applicants have agreed to use the property as collateral and that a title report could be run. Loan if approved by the Committee would be 10 years at lo%, 100% collateralization. After further discussion, motion made to approve loan at 10% for 10 years, 100% collateralization secured with trust deed. Statement made to have bank process title report as well. Committee approved loan in the amount of $57,450 including the $5,000 contingency requested. 4. LOAN SERVICING AGREEMENT - BANK OF AMERICA Staff member Cratty gave presentation stating that the agreement with the Bank of America to service the rehabilitation loan program was extended 90 days from April 1985 to July 1985. City at present is awaiting word form HUD to enter a two year contract instead of a one year contract that is currently being used. Ms. Cratty stated that the Bank of America has serviced the program since inception and that the main reason for staying with the Bank of America during the last few years was because they had local control. However, the local branch no longer has control over the loans and all applications and decision making is done at the area credit administrators office. At the present time, staff is seeking direction on the continuation of the service agreement with the Bank of America, or authorization to seek RFP's from local banks. Ms. Cratty stated that the agreement with the Bank of America could be extended for 90 days while proposals were being sought. Committee discussed the local banks and their familiarity with the rehabilitation program. Members stated that Security Pacific is familiar with the program and one of the largest in rehabilitation loan expertise. Ms. Cratty asked if the Committee would like to have request for proposals sent out or continue service agreement with Bank of America and extend one or 2 MEMBERS ' HALL ELLIOTT HOLZMILLER MINUTES Rehabilitation Loan Committee 8/12/85 PAGE 4 years whatever is approved with HUD. After further discussion, it was agreed that the service agreement should be extended for 90 days with Bank of America and staff should prepare the necessary documents to solicit request for proposals among the local banks. 5. RESIDENTIAL DEFERRED LOAN - FRENCH Staff member Cratty gave presentation to Committee stating that the Committee had approved a deferred loan to Mr. and Mrs. French on July 24, 1984 with the condition that the loan be reviewed every six months by the Committee. The applicant has been certified disabled by Social Security Administratior through December 1986. The Committee also deferred the loan for this time period but asked that the item be brought back every six months as an information item. Ms. Cratty stated that the applicants' annual household income is $13,232 which places them below 80% of County median income and still eligible for a deferred loan. By proper motion meeting adjourned at 10:45 A.M. Respectfully Submitted, y$?G44 PATRICIA A. CRATTY PATRICIA A. ~RATTY /- Administrative Assistagt I1 Redevelopment BIB1 LEAK Acting Minutes Clerk Carlsbad Rehabilitation Loan Committee \' \ MEMBERS HALL ELLIOTT HOLZMI LLER \ \