COMMITTEE SUBSTITUTE FOR RESOLUTION NO. 090463

Supporting the transfer of Foreclosure Sale Use Agreement Restrictions of the United States Department of Housing and Urban Development from the Pickwick Plaza Apartments to the Nob Hill Apartments and Townhomes.

WHEREAS, the former Pickwick Hotel in downtown Kansas City, Missouri at 933 McGee Street some years ago was renovated and converted to apartments known as the Pickwick Plaza Apartments (Pickwick ) with the use of proceeds from bonds, said bonds now being in default and the property in receivership; and

WHEREAS, the Pickwick is operating at a substantial financial loss and requires significant costly repairs due to its age in order to continue viable operations; and

WHEREAS, Bergen Capital, a division of Scott & Stringfellow, Inc., is the bondholder for the defaulted funds and it has been working with the receiver of the Pickwick to keep it operating and to find a purchaser to redevelop the Pickwick; and

WHEREAS, a Foreclosure Sale Use Agreement with the United States Department of Housing and Urban Development (HUD) restricts all Pickwick tenants to households earning 80% or less of the Area Median Income (AMI) for metropolitan Kansas City, Missouri (the City) as determined by HUD (Tenant Restriction); and

WHEREAS, efforts to find a purchaser and redeveloper for the Pickwick have been made very difficult by its significant operating losses, the need for expensive building and equipment repairs, and limitations on prospective tenants under the Tenant Restriction; and

WHEREAS, favorable conditions for finding a purchaser and redeveloper for the Pickwick would be enhanced significantly by a transfer of the HUD Tenant Restriction to another apartment property within the City and Bergen Capital, therefore, has requested HUD for permission to transfer the Tenant Restriction from the Pickwick to the Nob Hill Apartments and Townhomes at 9422 Cleveland Avenue, Kansas City, Missouri; and

WHEREAS, the HUD Kansas City Regional Office has expressed its support, subject to HUD approval in Washington, D.C., for a transfer of the Foreclosure Sale Use Agreement; and

WHEREAS, a condition to HUDs approval of the transfer of the Foreclosure Sale Use Agreement and the Tenant Restriction is its receipt of a letter, resolution, or other expression of support for the transfer of the Tenant Restriction from appropriate local government officials in the city in which the property is located; and

WHEREAS, the City wishes to encourage the renovation of the Pickwick and to that end, subject to conditions for relocation of existing Pickwick tenants and continued requirements for partial tenancy of the Pickwick by households earning 80% or less of AMI, wishes to express its support for the transfer of the Tenant Restriction from the Pickwick to the Nob Hill Apartments; and

WHEREAS, Bergen Capital is agreeable to providing Uniform Relocation Assistance Act benefits to relocate existing Pickwick tenants and to restricting 15% of the units of the redeveloped Pickwick to households earning 80% or less of AMI; NOW, THEREFORE,

BE IT RESOLVED BY THE COUNCIL OF KANSAS CITY:

That the City Council of the City of Kansas City, Missouri, hereby expresses its support for the transfer of the Foreclosure Sale Use Agreement and Tenant Restrictions from the Pickwick Plaza Apartments to the Nob Hill Apartments and Townhomes, subject to the following conditions:

(a) Benefits under the Federal Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (42 U.S.C. Sections 4601 to 4655, as amended) must be provided to all existing Pickwick tenants; and

(b) At least 15% of the units of the redeveloped Pickwick must be rented to households earning 80% or less of Area Median Income as established by the United States Department of Housing and Urban Development, with said restriction being applicable to the current owner and subsequent owners that redevelop or own the Pickwick as a covenant running with the land.

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