The owners of the massive affordable housing complex Huntington Place are likely to default on a $5 million loan from the city of Brooklyn Park after failing to make a substantial payment.
City officials worry about a looming threat that the financially struggling complex could face possible foreclosure, which would endanger housing for 2,500 low-income residents. The alternative, nonprofit property owner Aeon says, is for city officials to forgive the loan and clear the path for them to sell to the real estate investment firm MAS Capital.
The prospective buyer has shared plans to renovate the 834 units across six buildings and bring the aging complex up to modern standards. The buyers and Aeon have said they would keep the property’s affordable housing covenants for 30 years.
Eric Anthony Johnson, CEO of Aeon, said the potential sale would be “positive for the community and the many residents that call Huntington Place home.
“The transaction will allow for the investment of additional capital into the project and further the vision that Aeon had for Huntington Place in preserving affordability,” he said.
But City Council members have stalled on deciding whether to forgive the loan.
Moshe Mermelstein, principal with MAS Capital, recently told city officials that rents would increase after the sale. The firm would not extend leases when they expire but would allow tenants to enter into new leases for renovated units. City officials worry this would displace some residents.
Here’s where the talks are at: