Title
Resolution to Approve the Transfer of Affordable Housing Project at 201 W. William to Avalon Housing Inc. and Extend the Lease Term
Memorandum
William Street Apartments Limited Dividend Housing Association Limited Partnership (“William Street LP”), an affiliated entity of Avalon Housing Inc. (“Avalon”), owns the housing project located on the City-owned property at 201 W. William St. The project includes six units of affordable housing for individuals earning at or below 50% Area Median Income.
In 2009, City Council approved $65,851 in HOME funds to William Street LP at 0% interest to refinance and rehabilitate the project for use as affordable housing. At the same time, the City entered into an Affordability Agreement with William Street LP with an affordability period of 99 years, and a Ground Lease with William Street LP for a term ending on August 31, 2029.
The City received a request to consent to the transfer of William Street LP’s interest in the affordable housing project to Avalon to achieve overall cost savings and reduced administrative burden. The transfer will require the City to provide written consent to the assignment by William Street LP and assumption by Avalon of the Ground Lease, Affordability Agreement, and loan documents.
Once the transfer to Avalon is complete, the City and Avalon will execute an amendment to the Ground Lease to extend the lease term for an additional 20 years. Thereafter, the 20-year term will automatically renew for up to three additional 20-year terms unless either the City or Avalon notifies the other party of its intent not to renew.
Staff
Prepared by: Nicole Vargas, Assistant City Attorney
Reviewed by: Derek Delacourt, Community Services Area Administrator
Approved by: Milton Dohoney Jr., City Administrator
Body
Whereas, In 2009 the City entered into a Ground Lease, Affordability Agreement, and loan documents, including a Promissory Note and Leasehold Mortgage, with William Street Apartments Limited Dividend Housing Association Limited Partnership (“William Street LP”) to allow Williams Street LP to lease the land and rehabilitate six units of affordable housing at 201 W. William St., Ann Arbor, MI (the “Property”);
Whereas, The six units of affordable housing are available for individuals earning at or below 50% Area Median Income;
Whereas, William Street LP now desires to transfer its interest in the housing project to Avalon Housing, Inc., (“Avalon”) in order to realize cost savings and reduced administrative burdens;
Whereas, The City’s consent to an assignment by William Street LP and assumption by Avalon of the Mortgage, Affordability Agreement, and Ground Lease will allow Avalon to continue administering the six units of affordable housing under the same terms and obligations; and
Whereas, The term of the Ground Lease ends in August 2029, and a 20-year extension with three automatic renewal terms will allow Avalon to continue providing the affordable housing pursuant to the terms and conditions of the Affordability Agreement;
RESOLVED, That City Council approve the City’s consent to the assignment of the Mortgage, Affordability Agreement, and Ground Lease for the affordable housing project at 201 W. William by William Street Apartments Limited Dividend Housing Association Limited Partnership, and assumption of those agreements by Avalon Housing, Inc.;
RESOLVED, That the Mayor and City Clerk are authorized to sign assignment and assumption agreements for the Mortgage, Affordability Agreement, and Ground Lease, consistent with this resolution and subject to approval by the City Administrator and City Attorney;
RESOLVED, That the Mayor and City Clerk are authorized and directed to execute a first amendment to the Ground Lease consistent with this resolution and subject to approval by the City Administrator and City Attorney; and
RESOLVED, That the City Administrator is authorized to take all appropriate action to implement this resolution, including execution of all appropriate documents.