Toledo City Council on Tuesday rejected 7-5 a third proposal from a developer asking it to forgive a $500,000 loan so that he can sell the Uptown Arts Apartments and avoid foreclosure on the affordable-housing complex.
Developer Bruce Douglas’ Adams Street Limited Partnership LLC offered to repay the city $300,000 in exchange for the loan forgiveness, an increase from its previous proposal of a $175,000 repayment to the city and well over its initial loan forgiveness request that did not include any payment to the city.
Councilmen Tom Waniewski, Peter Ujvagi, Rob Ludeman, Matt Cherry, and Gary Johnson voted in favor of the measure. Councilmen Cecelia Adams, Chris Delaney, Yvonne Harper, Nick Komives, Tyrone Riley, Sandy Spang, and Larry Sykes voted against it.
“What is most disturbing to me about this deal is that it kept changing. If this offer wasn’t good enough, they would try another offer. If that offer wasn’t good enough, they would try another. And none of those offers made us whole,” Ms. Adams said.
Uptown Arts Apartments is a 52-unit affordable-housing complex located at 336 14th St. City officials authorized the $500,000 loan in 2002 as part of a $5.9 million mortgage package from banks and local and state agencies that allowed the property to be developed.
The loan, which was funded through federal HOME Investment Partnerships Program dollars, was never collected on because the project was not profitable, city officials said. The LLC had an offer to sell the property for $1.5 million to real estate investors Watermark Partners, which pledged to keep the units affordable and make overdue repairs.
Richard Chase, an attorney for the developer, said he was disappointed by Tuesday’s vote.
“I’m not quite sure what course this is going to take except none of them are pleasant,” he said. “I would imagine that the owner will run the project until it runs out of money, and then he’ll close it. And it will run out of money fairly soon.”
Ms. Harper said she expected the loan to be repaid, even if the developer didn’t turn a profit on the project.
“Will you make a profit from the selling of the Uptown Arts Apartments?” she said, looking to Mr. Chase.
Mr. Johnson said he voted in support of the sale in part because to vote against it puts the tenants’ living situation in jeopardy.
“This deal would have prevented putting 52 people living in 52 units from being put out on the street, and tomorrow we have no idea where this is going to lead,” he said.
He also said council has an obligation to try to recoup as many tax dollars as it can in situations like this one, but he doesn’t want to send a message to future developers that council isn’t willing to negotiate.
“I hope that maybe there is still some way for us to find a way to salvage this,” Mr. Johnson said.
Mr. Sykes at the meeting said another party was interested in purchasing the complex, though he did not elaborate.
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