Tuesday, September 9, 2008

Developer wants out of City loan, sale of Walnut Street properties

Big Dog Properties is asking for the forgiveness of a second mortgage held by the City of Cincinnati that will allow them to sell their buildings at 1435, 1439, 1441 and 1443 Walnut Street in Over-the-Rhine.

The development agreement, signed in 2002, included loans from a $488,000 first mortgage from the Cincinnati Development Fund (CDF) and the $388,000 second mortgage with the City of Cincinnati for the rehabilitation of thirteen rental units.

Big Dog Properties says that, with the project operating at slightly above 50 percent occupancy, they have been operating the project at a loss for several years and would like to sell the buildings to an unnamed interested developer.

The sales price, estimated at $450,000 on buildings appraised at $540,000, would pay off the remainder of the CDF loan, fees, and past due taxes.

City staff has recommended amending the mortgage agreement, and has asked that any sales proceeds exceeding $450,000 be applied to the City mortgage payment.

The City would forgive their loan if the property is sold within two years.

An ordinance modifying the agreement is being considered by City Council's Finance Committee.

CDF would finance the sale.