Mayor Thomas Richards is asking Rochester City Council to appropriate nearly $3.2 million to pay off a federal loan used to renovate the Sibley Building.
Richards has submitted legislation for council members to consider at their June 19 meeting.
The note matures Aug. 1 with a balance of $3.2 million, Richards states in a letter to City Council filed Thursday. The amount includes outstanding principal and the final interest payment.
Richards wants to take the money from the city’s insurance reserve fund. It would be paid to the U.S. Department of Housing and Urban Development’s Section 108 loan guarantee program, he wrote.
The city and HUD refinanced the original $4 million loan in 2002 and extended the terms for an additional 10 years, Richards explained.
The Sibley Building, at the corner of East Main and Franklin streets, is owned by Rochwil Associates L.P., a subsidiary of Wilmorite Properties Inc. The company is negotiating with Boston-based Winn Cos. to sell the building.
Rochwil had not been current during the initial term since after January 1998, he wrote.
Rochwil owes more than $20 million in unpaid taxes and loans, city officials say.
“The city has been supportive of Winn’s efforts, believing that Winn has the resources and experience to resurrect the Sibley Building,” Richards wrote.
The city is owed the federal loan, a Community Development Block Grant loan and delinquent payment-in-lieu-of-taxes payments and taxes, Richards said. It also wants to put a police substation in the building.
Because of that, the city will have to enter into agreements with Winn and Rochwil to allow the sale to proceed, Richards wrote. The city’s lien on the property also will have to be negotiated, he added. A plan for those matters is to be available soon to council members.
“As previously indicated, it is unrealistic to expect that the city will be repaid all of these past due funds,” Richards wrote.
“However, it is hoped that a sale can be structured in such a manner that it will address city interests and provide Winn the ability to move quickly with its plans to renovate and find tenants to occupy the building.”
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