City Council may have end in sight for Summertree Apartments project

James Threatt, a representative from Real Estate Asset Development from Kansas City, Missouri who came onto the project about 2 months ago, provided the City Council with an update on the Hopeville Apartments project.

The update consisted of vague explanations and uncertain timelines, although Threatt did say he expects a term sheet from a tax credit investor in California to come in over the next two weeks. Threatt has also made an arrangement with the construction lender for an assignment of the promissory note to the City of Natchitoches if the project cannot go any further, so rather than condemning the property, the City can take the property back and demand payment. The bank will lose $3.7 million and the earlier equity investor will lose about $500,000 on this.

There are full construction drawings and a contract between the owner and the general contractor that will be finalized by the end of the week. Construction costs are coming in at $5.2 million which is around $130,000 per unit. The program this project is made possible under requires a certain amount of money to be spent on the property. Another piece of the project that still needs to be lined up is the construction financing. Other steps involve fashioning a settlement with the existing limited partner and the existing general partner.

“The bank had no desire to foreclose because there’s not going to be a recovery but no one wants to hold up the City of Natchitoches,” said Threatt. “We’re really not behind the wheel yet. We’re not even really in the car. The car is in the ditch and we’re trying to get in the car.”

The company is trying to get control of the project and see if the numbers will work to move forward with it. The equity investor will require a new market study for this project. Then the Louisiana Housing Finance Agency will give approval regarding the structure. There’s also a 60-day process to close a long term housing tax credit transaction.

Threatt offered to have the Council join closing checklist calls so they can follow along and know exactly where things stand. The floor plans are ready and the Fire Marshal has signed off on everything. Mayor Ronnie Williams said the City is just waiting on payment for permit fees.

“You don’t want to light money on fire,” said Threatt, speaking to striking a deal with the limited partner, who’s indicated that they want out.

Agenda items included:

ORDINANCES – FINAL:
Approve An Amendment To That Lease Entered Into With The United States Government For The Lease All Or A Portion Of The Property Located At 607 Trudeau Street/Depot Street And 720 Sixth Street, Natchitoches, Louisiana, And Authorizing The Execution Of The Lease Amendment By The Mayor, Ronnie Williams, Jr., After Due Compliance With The Law, And Further Providing For Advertising Of The Lease Amendment And An Effective Date.

RESOLUTIONS:

Approve The Execution Of An Assignment Agreement Assigning The Interests Of JBL Communications, LLC DBA V1fiber To Neo Network Development, Inc. In The Instrument Titled Memorandum Of Understanding Between The City Of Natchitoches And JBL Communications, LLC DBA V1fiber
Enter Into A Contract With Employers Risk Management Services As The Workers Compensation Third Party Administrator For The City Of Natchitoches
Execute An Agreement With The Louisiana Department Of Transportation And Development (LADOTD) For Agricultural Apron – Phase I (Design)
Appoint The Finance Director For The City Of Natchitoches
Execute An Intergovernmental Agreement (IGA) Between Natchitoches Parish Fire Protection District 6, A Political Subdivision Of Natchitoches Parish In Louisiana (“Grantee”), And The Following: The City Of Natchitoches, By And Through Its Fire Department; Natchitoches Parish Fire Protection District 1; Natchitoches Parish Fire Protection District 2; Natchitoches Parish Fire Protection District 3; Natchitoches Parish Fire Protection District 4; Natchitoches Parish Fire Protection District 5; Natchitoches Parish Fire Protection District 7; Natchitoches Parish Fire Protection District 8; Natchitoches Parish Fire Protection District 9; Natchitoches Parish Fire Protection District 10
Support For A Grant Application Submitted To FEMA For The Assistance To Firefighters Grant (AFG) Program For Personal Protective Equipment
Enter Into A Contract With Midwest Employers Casualty Company For The Workers’ Compensation Excess Coverage Policy For The City Of Natchitoches

ANNOUNCEMENTS:

The next scheduled City Council meeting will be January 10, 2022.
There will not be a City Council meeting on Monday, December 27, 2021.
The City of Natchitoches offices will be closed Thursday, December 23, Friday, December 24, 2021 for the Christmas Holidays and Thursday, December 30, 2021 & Friday, December 31, 2021 for New Years.

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