No. 1115 approving an application for real property tax deduction (Monroe Park Apartments, L.P., 502 S. Fellows St./423 E. South St.)

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(W ,BriarWooa Development Co., Inc. R O. fox 1255 0—el Indiana 46032 (317) 848 -7021 November 4, 1992 Mr. Michael A. Beitzsinger CITY OF SOUTH BEND ECONOMIC DEVELOPMENT SPECIALISTS County City Building South Bend, Indiana 46601 Dear Mike: Thanks for meeting with me a week or so ago in going over our tax abatement application. We would like to request abatement for a ten (10) year period. Our total construction costs will be in the three million to $3.2 million area. As you know we are buildina affcrdable housing and we understand that this is under the $4,000,000 required for ten year abatement, and thus we qualify for six (6). However, there are some extenuating circumstances. First of all, we are building low income housing, with 100% set aside for low income people as required by Section 42 of the Internal Revenue Code. Second, the land size available dictates the size of this development, therefore, we were unable to reach the $4,000,000 mark. Third, part of the understanding we had with the Economic Development Commission when we leased this land was that the land would be subordinated to a first mortgage. Due to idiosyncrasies in the bond documents when we obtained the title policy, after we had already completed all our plans and agreed to lease the ground, we found out that it is not possible fcr the lease to be.subordinated to a first rortgage. This creatad saveral problems in obtaining our loan and in fact has delayed our construction by over three (3) months while we worked out details. Basically, because of the fact that the loan is not subordinated, I am required to escrow ten (10) years worth of lease payments or $75,000 with the lender so that the lender would have security not available as promised by the Economic Development Commission.. The addition of four (4) more years of phased in tax abatement could possibly help offset some of this additional cost. We understand that with South Bend Heritage Development that you were able -to grant a waiver and allowed ten (10) years on the abatement, and we would like to have the same consideration.