Item Description:
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Amd Agmt A041148 to transfer ownership of Willow Wood Estates to SRE Willow Wood, LLC, with no change to the contract period or NTE
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Resolution:
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BE IT RESOLVED, that the County Administrator be authorized to negotiate the assignment and assumption of Agreement A041148, and its related documents, allowing the assignment and assumption of debt and the transfer of ownership of property at 10850 South Shore Drive in Plymouth, from CB Willow Wood Estates Holding LLC, an affiliate of CommonBond Communities, to SRE Willow Wood, LLC, an affiliate of Springhold Group LLC; that following review and approval by the County Attorney's Office, the Chair and County Administrator be authorized to sign assignment and assumption agreements and other related documents on behalf of the County.
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Background:
Willow Wood Estates is a 40-unit affordable housing townhome development located at 10850 Southshore Drive in Plymouth. The project receives HUD Project-Based Section 8 assistance on all 40 units, further enhancing affordability for all tenant households.
In 2003, Hennepin County awarded Dominium a $573,000 deferred loan from the HOME Investment Partnership Program (HOME) to acquire and rehabilitate Willow Wood Estates (A041148, Resolution 03-5262).
In 2020, Hennepin County approved sale of Willow Wood Estates to CommonBond Communities and executed an Assumption and Amendment Agreement with the buyer and seller, assigning all original loan documents to CB Willow Wood Estates Holding LLC. The Agreement added accrued interest to loan principal, for a new principal balance of $841,494.00, and extended the loan and affordability term to July 1, 2064 (Resolution 20-0188).
The current property owner, CommonBond Communities, is selling the property to Springhold Group LLC. Springhold will maintain all affordability restrictions, assume the Section 8 rental assistance contract, and assume and continue all tenant leases remaining at the time of sale.
To facilitate the transfer of ownership of the properties, Springhold has requested assignment and assumption of the existing HOME loan. Subordination to new debt may be necessary to effectuate the transfer assignment and assumption of debt contemplated by this action. Springhold anticipates closing on the sale of the property in late November 2025.
The project has also received financing from the Hennepin County Housing and Redevelopment Authority’s (HCHRA) Affordable Housing Incentive Fund (AHIF), and a companion request for assignment and assumption will be made at an upcoming HCHRA board meeting.
Current Request: This request is for authorization to negotiate the Assignment and Assumption of Agreement A041148 to transfer ownership from CB Willow Wood Estates Holding LLC to SRE Willow Wood, LLC for 10850 South Shore Drive in Plymouth, allowing the transfer of ownership and assumption of debt with no change to the affordability period of July 1, 2064.
Impact/Outcomes: Approval of this request will preserve affordability for 40 housing units, all of which are further supported by project-based Section 8 rental assistance.
Housing disparity outcome: Households of color are disproportionately housing cost burdened and experience housing instability at disproportionate rates. This request allows for the continued preservation of affordable housing opportunities in Plymouth.
recommendation
Recommendation from County Administrator: Recommend Approval