Catholic Charities seeks forgiveness of two loans for El Estero housing project in exchange for 40 more years of affordability

Staff told the PIES Committee that Catholic Charities has requested forgiveness of two loans on the El Estero affordable-housing project totaling about $608,000. The loans date to 2002 and 2004 and were issued when Spokane Housing Ventures owned the property; Catholic Charities assumed responsibility for those units after a 2022 merger.

City staff said the loan forgiveness is part of a broader financing restructure to allow Catholic Charities to fund necessary capital repairs and preserve long-term affordability. "As part of that merger, Catholic Charities planned on several AC rehabs to bring units up to code..." a staff presenter said, adding the request will be combined with a related Spokane County forgiveness request for documents covering both properties in the financing package.

Staff said forgiveness would be conditioned on an additional 40 years of affordability on El Estero. The presenter described the property as about 121 affordable units after some earlier counting confusion in the discussion; staff said the additional years of affordability would make the deal viable by improving the project's long-term debt ratios and enabling necessary rehabilitation work estimated to address roughly $3.5 million of remaining debt across the combined project.

Legal staff are preparing a resolution and financing documents that will record the affordability covenant and the debt restructuring; staff said the item could wait for the council meeting on Aug. 18 but asked that the resolution language and financing attachments be ready for packet deadlines (staff requested the documents by Wednesday to make the timeline).

Discussion versus decision: this meeting included a presentation of the request and a staff timeline; forgiveness was a request, not an approved transaction at the committee meeting. Council members praised Catholic Charities for taking on the properties and asked for more proactive coordination with council offices in future projects.

Next steps: legal will draft the resolution and financing documents; staff will upload those materials to the council packet for review before any final vote.