Council amends mortgage agreement to maintain affordable units downtown

Following a vote on Tuesday, the city has amended the mortgage note with Phoenix Arts LLC, extending the agreement for the Phoenix Building to provide 60 affordable units for another 15 years. The original agreement was signed in 2004 included deferred loan payments because of the affordability agreement that was put in place.

There are a total of 74 units in the building, which was the first project of its kind in the City of Birmingham. The 60 affordable units are determined by the Federal affordable housing guidelines.

Here is the item as it appeared on Tuesday’s agenda:

A Resolution authorizing the Mayor to execute, for and as the act of said City: (1) an Amendment to Mortgage Note under which a Mortgage Note between the City of Birmingham and Phoenix Arts, LLC, dated January 26, 2004, in the principal sum of $1,191,600.00, will be amended to delete the provisions requiring Phoenix Arts, LLC to make fifteen annual payments of $61,000.00 each, commencing on December 1, 2019, and continuing until December 1, 2034; to waive the accrual of interest during the period between December 1, 2021, and February 8, 2038; and to provide that the outstanding principal balance and accrued and unpaid interest thereon shall be due and payable on February 8, 2038; and (2) a First Amendment to Subordination Agreement under which a Subordination Agreement among Highland Commercial Mortgage, LLC, Phoenix Arts, LLC, and the City of Birmingham dated February 1, 2021, with respect to the City’s subordinated loan and mortgage against mortgaged property known as “The Phoenix Building,” located at 1710 Second Avenue North, Birmingham, will be amended to reflect such modification to the Mortgage Note. (Submitted by the City Attorney) (Recommended by the Mayor and the Budget and Finance Committee) *