Museum Plaza Update: HUD Financing Coming?

John Yarmuth got a letter from HUD Assistant Secretary Mercedes Marquez regarding the application for a $100 million loan for the development of Museum Plaza.

Upon receiving this letter, Congressman Yarmuth said, “I have been working closely with HUD officials in support of this loan application since it was filed this past summer. Getting Museum Plaza financed and back under construction is critically important for our community and will lead to the creation of thousands of good paying jobs. This is an important step forward and I am proud to join the Governor and other community leaders in advancing this effort.”


CLICK FOR PDF OF LETTER

Note that the project is so important to HUD that it can’t even get the name of the project correct.

Governor Steve Beshear noted, “It is very exciting that HUD is formally expressing its interest in helping finance Museum Plaza. This is a project that will create thousands of jobs for low- and moderate-income Kentuckians and will stimulate the economy across the Commonwealth. My administration will continue working with the development team, HUD, and Congressman Yarmuth to make this project a reality.”

See the text of the November 1 letter after the jump if you’re PDF-averse…

November 1, 2010

The Honorable John Yarmuth
United States House of Representatives

Dear Representative Yarmuth:

This letter is to provide you with the status of HUD’s review of the Commonwealth of Kentucky’s Section 108 Loan Guarantee application for $100 million to assist with part of the financing of the Museum Place development. We continue to appreciate the Commonwealth’s cooperation and responsiveness in addressing HUD’s questions and need for additional information with regard to program requirements.

Please be assured that HUD remains interested in assisting the Commonwealth with the Museum Place project. Given the progress made in demonstrating the eligibility of the proposed activities and the responsiveness of the Commonwealth and the project development team in providing underwriting information, HUD is optimistic that a commitment can be issued. Accordingly, upon receipt and confirmation of the information listed below and subject to availability of funds, HUD will move promptly to complete the process for issuance of a Section 108 commitment.

HUD’s review of the application has focused on two areas: (i) the proposed uses of the Section 108 funds and (ii) the proposed terms of the guaranteed loan. Substantial progress has been made in both areas. With respect to the proposed uses of the guaranteed loan funds, those activities would comply with the applicable program requirements if undertaken as described in the application.

Although progress has been made in addressing the proposed Section 108 loan terms, once the following items are received, HUD can finalize the determination of the loan’s financial viability:

  • Commitment to provide $140.5 million in conventional construction financing;
  • Final drafts of the joint and several personal guaranties in form and substance satisfactory to HUD;
  • Confirmation of lien position on real property collateral for the guaranteed loan relative to the project’s other creditors (with no cross collateralization of financing for the housing component of the project); and
  • Current appraisals for hotels and office/retail components of proposed development.

If you have any questions on this matter, please get in touch with Paul Webster at [telephone number.]

Sincerely,

Mercedes Marquez

Assistant Secretary

2 thoughts on “Museum Plaza Update: HUD Financing Coming?

  1. Here are the conditions with my comments:

    “■Commitment to provide $140.5 million in conventional construction financing;
    ■Final drafts of the joint and several personal guaranties in form and substance satisfactory to HUD;
    ■Confirmation of lien position on real property collateral for the guaranteed loan relative to the project’s other creditors (with no cross collateralization of financing for the housing component of the project); and
    ■Current appraisals for hotels and office/retail components of proposed development.”

    Good luck with the $140,000,000 in conventional financing still needed , and if the HUD108 needs first position as what needs to be still discussed in the third bullet condition, this financing plan is DOA.

    And appraisals on the hotels/office/retail component? Is that that with or without Iron Quarter hotels/office retail, Center City, Weyland’s proposed hotel on Fourth?

    Long way still to go on this one…

  2. I wish HUD was as forthcoming with financing for in-fill affordable, urban condominiums. You know- the kind they’ve encouraged developers to build for 20 years only to leave them high and dry with inventory when times get tough.

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