- How about all the government support of Cedar Riverside Associates (CRA) against the community groups in Cedar Riverside that were opposing the CRA project.
[Johnson] Mains 16Jan05 post produces nothing to substantiate his conjured notion of "government support" for CRA to defend against the rent strikes, mobs in the streets and buildings, and other antics of the socialist/anarchist hippies in those days of the VVAW - Vietnam Veterans Against the War.
[Mains continues on 14Jan05] - How about the funding for Cedar Square West from Housing and Urban Development under the New Town program.
- How about the foreclosure by HUD for nonpayment of the mortgage?
[Mains writes 16Jan05] Here is a sampling of four quotes from the article that substantiate my comments (about half way through the article):
"In 1968, Congress passed legislation providing federal funds for New Towns (though not all of them were "in town") around the country. In Minnesota, the initiative would result in the creation of Jonathan, twenty-five miles southwest of downtown Minneapolis, and the Cedar-Riverside development near the city's historic heart." ...
"Loans would be guaranteed by the Department of Housing and Urban Development."...
"By the late eighties, HUD had foreclosed on the project,
[Johnson] Well, folks, it's right there in Mains' quotes on 16Jan05 -
not needles, but two-by-fours in the haystack:
(a) the loans were guaranteed by HUD, (b) HUD foreclosed, and (c) HUD's "funding" of Cedar Square West was as a loan guarantee.
And that's what happened. Cedar Square West was financed by private
investors, and loans from the First National Bank of St. Paul. The loans
were against collateral provided by Cedar Riverside Associates. HUD guaranteed that FNB St. Paul would be paid any amount outstanding after collateral had been liquidated in case that the mortgage payments stopped being made causing default.
And that's what happened. HUD didn't make the loans, FNB St. Paul did.
CRA stopped making mortgage payments, triggering the HUD foreclosure.
The collateral provided by CRA made FNB St. Paul whole so that HUD
was not on the hook to reimburse FNB St. Paul.
Sure, in 1988 when HUD sold the Cedar Square West buildings and land
to the City of Minneapolis (held by its MCDA) for $15 million, the liquidation by FNB St. Paul of all of CRA's collateral had not yet occurred. That took several years. Realize that on foreclosure, FNB St. Paul took not only the Cedar Square West buildings and land, but also all the property East of Cedar Avenue which CRA had acquired, and that was a lot. But the end result was that the lender, FNB St. Paul, was made whole so that HUD's guarantee was only that - a paper guarantee.
Furthermore, no Tax Increment Financing (TIF) funds went into Cedar
Square West - that project happened in 1971-1973 before the heady
days of City subsidies. Cedar Square West actually had a large number of private investors, believe it or not. Thus, Cedar Square West was not like the Target project, the Sears project, and many other smaller projects since 1980 or so which have large amounts of City funding via TIF, NRP, and other pots of City money because the project developers do not want to invest their own money. Putting their own money at risk
is a lot riskier than putting the taxpayer's money at risk.
So Mains needs to do some more digging, or realize that he had found the data he needed, but didn't know how to analyze it.
I have had two home mortgages in my days. It was easy to see that the
mortgage amount was considerably less than the actual value of the property. So if I had ceased to make payments, the bank could have foreclosed, that is, taken control of the property, sold it, and been made whole, perhaps even making money.
Bob Johnson Cedar-Riverside West Bank W2/P10
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