CC_Minutes_2015_0223 - Laserfiche WebLink

Home

Regular City Council Meeting Monday, February 23, 2015 Page 27 Rich McNamara, Western Bank Mr. McNamara briefly reviewed the position of Western Bank, and results of the townhome portion of the appraisal coming back quite well. However, as he pre- viously noted and since Western Bank first began working with GMHC in Sep- tember of 2014, they had anticipated that the vacant land appraisal would come back higher than it did in reality, and due to the difficulty in finding comparable appraisal properties in Roseville, other communities were used for those compa- rabies. Mr. McNamara noted that the ten single-family home appraisals came in much lower than envisioned by Western Bank, since part of the challenge in Ro- seville was finding middle-ground comparably valued single-family homes like those proposed, since those being built had higher housing values (e.g. Pulte Homes/Josephine Lakes and Lexington/Victoria). While there were plenty of ramblers in Roseville built in the 1950's and 1960's, Mr. McNamara noted that they were not of similar type to the proposed housing product. Mr. McNamara advised that Western could clearly look at the six homes along Cope Avenue, and with the fire station razed at that point, the townhomes were anticipated to lead in- to Phases II and III. However, having to work under banking guidelines for lend- ing, Mr. McNamara noted that since the appraisals had not come in as high as an- ticipated; Western Bank could not commit to any further financing until sales of the townhomes were initiated. Mr. McNamara noted that single-family townhomes were highly sought after and successful, and while asked by GMHC to consider the entire project, he was not in a position to do so. Mr. McNamara noted that he had been working with GMHC on the 25 unit plan since September of 2014, and was prepared to move forward immediately with the first 6-unit plan as outlined in Phase I. If GMHC chose to go ahead with the 18 unit model, Mr. McNamara stated that with ap- praisals in place, the process should be smooth and move faster on the bank's end. While it still may seem like a"phase,"Mr. McNamara advised that it would prob- ably not occur that way. Mr. McNamara noted that, in a perfect world, if the plat was approved and construction begun in June of 2015, it was feasible that six units would be sold by August of 2015, and while construction would not be completed in that timeframe, the units would be sold, at which time the next phase could proceed. As noted by Councilmember Willmus, Mr. McNamara that with- out tying their hands in Development Agreement language, he was looking to start Phase I and have the City provide clear deadlines and consequences if Phase II was not firmly tied up and sold out. Mr. McNamara opined that he anticipated Phase II actually starting in the same construction season as Phase I, and he con- sidered the bank's position to be a rolling line of credit, and as each six units were sold, GMHC applied for financing for the next six units, continuing in a similar manner through completion of all phases. Mr. McNamara noted that, with the appraisal already in place, there should be no further delay for that process, but having only received the option for the 18-unit