12/08/1975 Meeting - Laserfiche WebLink

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E. Request by Joint Housing and Community Development COmaUttees for Use of $60,000 Revenue Sharing in Purchase of Palace Hotel (formerly Lane Hotel) Council has l'eceived memo of December 1 from the Joint Housing Committee, two memos of December 1 from the Historic Review Board, November 19 financial e outline prepared by L. G. Campbell, Realtors, and letter of December 1 from Sorgenfri. The proposal would provide that the City subsidize the purchase of the Palace Hotel to insure that it is available for older adults on fixed incomes and that it be maintained as an historic building. To effect all of this there would be contractual relations between the Sorgenfri, Inc. and the City, a contract of some 20 years, with details to be worked out satisfactorily prior to any payments or actual completion of the arrangements. Mr. Bernhard of the Joint Housing Committee stated t~at at the November 25th meeting the Committee recommended the City Council approve $60,000 of its 1975-76 revenue sharing funds be set aside for purchase of the Palace Hotel. It was the Housing Committee's feeling that the hotel should be maintained as a residential unit for single elderly adults. Without the City's participation, this resource would be lost as a lower income housing facility. The proposal is based on obtaining a sponsor to own and operate the structure, and Sorgenfri, Inc. is interested in becoming such a sponsor. In answer to Mr. Haws' question regarding why community development funds are not being used, Mr. Bernhard answered that the Joint Housing Co~ttee has $150,000 for use in housing rehabilitation and maintenance of housing for low income persons. Only about $28,000 has been spent so far. Robin Cushman, Planning Department, further explained that according to community development legislation CD funds can be used for land or. operating expenses but not for property acquisition. e Mr. Glen Pederson of Pederson and Associates, agent for development of Sorgenfri housing projects, stated Sorgenfri was formed in 1955 and has for over 20 years continually developed and maintained projects similar to the one in question. They now have 124 units for low income persons, and their operation has been very successful. They do have the resources to add the units in the Palace Hotel to their system and manage them successfully, lacking only the funds for purchasing the present equity and for rehabilitation and compliance with code requirements. Rents will be maintained between $80 and $90, made possible by reducing the debt service obligation over that period of time. It is a requirement of the organization's articles of incorporation that it address itself to that very thing. Mr. Murray wondered if, allowing for any transitional phaseout, the project would be exclusively for older folks. Mrs. Cushman answered it would have to be part of the contract for Sorgenfri to determine. It is the initial intent that it apply to single older adults on fixed incomes. On a related issue, Mr. Murray expressed interest in discussing at a future time the housing dispersal policy in terms of who it serves. Mrs. Beal moved seconded by Mr. Keller to approve drawing up a contract providing that $60,000 of revenue sharing funds be used for the Comm purchase of the Palace Hotel. 12/3/75 Approve Mr. George Boehnke, representing the Business and Property Owners Association of Oregon, raised some points for consideration. He noted that, prior to the e October 21 Joint Housing COmnUttee meeting, proposals to the Committee were invited for family housing. At the October 28 Joint Housing Committee meeting, the one proposal that was presented was turned down. He further mentioned a family housing proposal from the Home Builders Association on which he thought no positive -1~4Z 12/8/75 -'11