SUBJECT/RECOMMENDATION:
Title
Request for authority to initiate a foreclosure action on behalf of the City against Bethel Christian Center Church, Inc. to seek recovery of a delinquent note secured by a mortgage on property located at 1002, 1004 and 1006 Grant Street, Clearwater. (consent)
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SUMMARY:
In 1999, the City purchased three contiguous lots totaling 15,750 square feet (Property) for $54,000 using Community Development Block Grant Program funds made available from the United States Department of Housing and Urban Development. In 2006, the City sold the Property to Bethel Christian Center Church, Inc. (Bethel Christian) for $119,503 to construct a senior living facility. In lieu of collecting the full sale proceeds at closing, the City agreed to issue a loan for the property in the amount of $113,500. The property’s value dropped considerably over the next several years which reduced or eliminated the feasibility for future investment by Bethel Christian; the senior living facility was never constructed. Attempts to work out alternative payment arrangements with Bethel Christian were unsuccessful and more recently, staff’s attempts to contact Bethel Christian’s principal owner have yielded no responses. Staff has followed direction provided in the Economic Development and Housing Department Affordable Housing Loan Foreclosure and Loan Foreclosure Alternative Policy. In accordance with the policy, notices of delinquency, default and intent to seek Council approval to initiate foreclosure were sent to Bethel Christian’s address of record. Staff is now recommending the last-resort option of initiating foreclosure. The principle balance of the loan is $103,166.87 and there appears to be no superior debtors with an interest in this property.
APPROPRIATION CODE AND AMOUNT:
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USE OF RESERVE FUNDS:
N/A