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In a letter dated January 10, the City of Granite Falls requested that the U.S. Department of Housing and Urban Development (HUD) reconsider its asking price for the Riverview Apartment Complex. On January 27 the city received a reply, though it was not the response they had hoped for.
According to EDA Director Dennis Van Hoof, during a September conference call with HUD, the sale price for Riverview Apartments was quoted as $164,200 with mandatory repair costs estimated at $128,165.
At that time, the city was told the sale price would be adjusted relative to changes in repair cost estimates––estimates that HUD has raised to $276,761 based on a facility review by Southwest Minnesota Housing Partnership (SWMHP) findings.
From the city’s perspective, the additional $148,596 in projected expense should result in a sale price of $15,064 – which comes from subtracting $148,596 from $164,200. HUD, however, has said it is only willing to reduce the sale price approximately $40,000 to $124,300, and that this is non-negotiable
“We have no choice but to question the latest $124,300 purchase price when there just doesn’t seem to be any justification for that figure,” states the city’s January 10 letter. “In fact, we wonder if that price doesn’t run contrary to HUD’s statutory obligation of balancing the government’s financial interests against preservation of affordable housing and maintaining it in a decent condition.”
The letter also cites the recent sale of the Shingle Creek Towers apartment complex in the Twin Cities metropolitan area for a price of $1, and questions why the same opportunity to purchase a HUD owned property for a nominal fee isn’t afforded the city.
In response, HUD’s January 27 letter reiterates the Department’s unwavering stance towards their designated sale price noting, “[HUD] employs a standard process that takes into account rents, income, expenses, and necessary repairs in determining the sale price. This process results in some properties being sold for $1.00 and others being sold for hundreds of thousands of dollars.”
The city is currently working on a proposal to bring to HUD regarding a potential purchase of the apartment complex. At present, the Riverview Apartments is scheduled to go to auction on March 29, but Van Hoof said the city will need to request an extension to provide sufficient time for the city to complete further facility studies, including a 20-year capital improvement plan.
In its most recent letter, HUD indicated that an extension –– which would be at least the third granted to the city by the Department –– would need to be received by February 13. Van Hoof says a request will be, but the city has not yet concluded the length of time that will be required.
Despite HUD’s unwillingness to lower the price the city will continue to consider all options, he said.
In a letter dated January 10, the City of Granite Falls requested that the U.S. Department of Housing and Urban Development (HUD) reconsider its asking price for the Riverview Apartment Complex. On January 27 the city received a reply, though it was not the response they had hoped for.
According to EDA Director Dennis Van Hoof, during a September conference call with HUD, the sale price for Riverview Apartments was quoted as $164,200 with mandatory repair costs estimated at $128,165.
At that time, the city was told the sale price would be adjusted relative to changes in repair cost estimates––estimates that HUD has raised to $276,761 based on a facility review by Southwest Minnesota Housing Partnership (SWMHP) findings.
From the city’s perspective, the additional $148,596 in projected expense should result in a sale price of $15,064 – which comes from subtracting $148,596 from $164,200. HUD, however, has said it is only willing to reduce the sale price approximately $40,000 to $124,300, and that this is non-negotiable
“We have no choice but to question the latest $124,300 purchase price when there just doesn’t seem to be any justification for that figure,” states the city’s January 10 letter. “In fact, we wonder if that price doesn’t run contrary to HUD’s statutory obligation of balancing the government’s financial interests against preservation of affordable housing and maintaining it in a decent condition.”
The letter also cites the recent sale of the Shingle Creek Towers apartment complex in the Twin Cities metropolitan area for a price of $1, and questions why the same opportunity to purchase a HUD owned property for a nominal fee isn’t afforded the city.
In response, HUD’s January 27 letter reiterates the Department’s unwavering stance towards their designated sale price noting, “[HUD] employs a standard process that takes into account rents, income, expenses, and necessary repairs in determining the sale price. This process results in some properties being sold for $1.00 and others being sold for hundreds of thousands of dollars.”
The city is currently working on a proposal to bring to HUD regarding a potential purchase of the apartment complex. At present, the Riverview Apartments is scheduled to go to auction on March 29, but Van Hoof said the city will need to request an extension to provide sufficient time for the city to complete further facility studies, including a 20-year capital improvement plan.
In its most recent letter, HUD indicated that an extension –– which would be at least the third granted to the city by the Department –– would need to be received by February 13. Van Hoof says a request will be, but the city has not yet concluded the length of time that will be required.
Despite HUD’s unwillingness to lower the price the city will continue to consider all options, he said.
