Background:
Transit Oriented Development (TOD) is a form of development that promotes a mixture of uses such as housing, retail, services, jobs, and open space projects within walking distance of transit. TODs are compact and typically feature pedestrian and bicycle connections, reduced or shared parking, increased density, and building orientation towards the pedestrian environment. Benefits, many of which help to reduce disparities, include lower combined housing and transportation costs, a greater range of housing options, a reduced need to drive and own vehicles, and improved connections to employment and service destinations. For example, many past Hennepin County TOD-funded projects have provided workforce housing immediately adjacent to public transportation access or have provided transit-accessible employment opportunities.
Additionally, TOD supports Hennepin County’s Climate Action Plan through more efficient use of land and infrastructure, preservation of open space, reduced vehicle miles traveled and reduced emissions through increased walking, biking, and transit ridership. TOD contributes to improved public health by creating walkable neighborhoods.
On February 12, 2003, the Housing and Redevelopment Authority (HCHRA) Board approved TOD Program Guidelines and Criteria (Resolution 03-HCHRA-04). The Guidelines and Criteria support infrastructure and development projects along the county’s transit corridors that enhance transit usage. Since 2003, the HCHRA has awarded approximately $40.3 million to over 153 TOD projects, creating or retaining over 9,400 housing units and 2,975 jobs, and leveraging more than $1.6 billion in development.
In May 2022, a Request for Proposals garnered twenty-nine applications requesting a total of over $15.6 million in funding.
Proposals were reviewed by a multi-agency panel consisting of Hennepin County, Metro Transit staff, and urban design professionals. An independent financial consultant was engaged to conduct a financial analysis, advise staff on financial feasibility, and to propose appropriate award terms. The evaluation process also includes close coordination between the TOD Program, Affordable Housing Incentive Fund, and HOME Investment Partnerships Program to fund as many priority projects as possible meeting the goals of each respective program.
Attachment A provides a summary of the seven projects recommended for funding.
TOD guidelines require that the municipality in which the project is located approve the project seeking TOD funding, and that the project be located within a redevelopment area or district adopted in accordance with Minnesota Statutes, Section 469.
Housing/Mixed-Use Projects:
Recommended funding for the five housing and mixed-use projects below will provide 1,241 housing units including 369 affordable units, over 86,000 square feet of commercial and community space, and 248 total new or retained jobs supporting transit-oriented communities. The total investment value of these projects is approximately $446 million.
- PR00004674 – Alatus, LLC – 325 Blake Road – $250,000
Hopkins; 800 housing units, including 200 affordable units; 39,800 square feet commercial and community space; 62 jobs created; public and private realm infrastructure that ties into the stormwater improvements and expansion of the Minnehaha Creek Greenway
Located adjacent to the METRO Green Line Extension Blake Road Station
- PR00004669 – Wellington Development; Native American Community Clinic – Native American Community Clinic – Housing (NACC-H) – $400,000
Minneapolis; 98 affordable housing units; 25,000 square feet clinic space; 3,100 square feet commercial space; 125 jobs created or retained
Served by local bus routes, within METRO D Line BRT and METRO Blue Line Franklin Avenue station area
- PR00004672 – Partnership in Property Commercial Land Trust – 19 East 26th Street – $100,000
Minneapolis; 2 affordable housing units; 2,600 square feet commercial space; 5 jobs created
Served by local high-frequency bus routes
- PR00004675 – JADT Development Group, LLC – Satori Lofts – $400,000
Minneapolis; 26 housing units, including 6 affordable units; 1,100 square feet commercial space; 6 jobs created
Located within METRO Blue Line Extension Emerson-Fremont Avenue station area, served by local high-frequency bus routes
- PR00004671 – Saturday Properties – Wooddale Station – $200,000
St. Louis Park; 315 housing units, including 63 affordable units; 14,500 square feet commercial and community space; 50 jobs created
Located adjacent to the METRO Green Line Extension Wooddale Station
Commercial Projects:
Recommended funding for the two commercial projects below will provide over 78,000 square feet of commercial and community space, and 141 total new or retained jobs supporting transit-oriented communities. The total investment value of these projects is approximately $35 million.
- PR00004670 – Seward Redesign, Inc. – The Coliseum Building – $250,000
Minneapolis; 85,500 square feet commercial space; 120 jobs created
Served by local bus routes, within METRO B Line BRT and METRO Blue Line Lake Street/Midtown station area
- PR00004673 – Cultural Wellness Center – Dreamland on 38th – $400,000
Minneapolis; 8,500 square feet commercial space; 21 jobs created or retained
Served by local bus routes
In the current context of economic recovery, the need for predevelopment support for projects located in disadvantaged communities, and for projects undertaken by less established, new, and emerging developers, has grown substantially and poses a significant hurdle to investments in communities hardest hit by the pandemic. The need for predevelopment support is most critical for new and emerging developers, especially for developers who are people of color and women who have historically lacked access to the financial capital. Gaps in access to predevelopment support contribute to race and gender-based disparities in the development field as a pathway to wealth creation. These gaps also contribute to continued inequitable patterns of investment in low-income communities and communities of color.
To address the need for predevelopment support and advance equity in the local development landscape, the current request includes one or more agreements with predevelopment consultants to provide up to $200,000 of support to six to ten local emerging developers, of which over 70 percent are developers of color and over 40 percent are women. The emerging developers receiving the support have completed fewer than three projects and are actively pursuing transit-oriented development projects in Hennepin County. Consultant agreements would provide technical assistance including financial feasibility analyses, conceptual renderings, proforma development and analysis, and/or assistance with the entitlement process.
Emerging developers were selected via an expression of interest process, publicly posted, and promoted from April through June 2022 to gauge interest and need for the program. A total of 20 interest forms were received, requesting almost $550,000.
Current Request: Negotiate five grant agreements during the period August 9, 2022 through December 31, 2024 with a combined total not to exceed amount of $1,200,000 and two loan agreements during the period August 9, 2022 through December 31, 2062 with a combined total not to exceed amount of $800,000 for 2022 TOD projects; negotiate Amendment 2 to Agreement PR00001161 with City of Brooklyn Center, extending contract period end date to December 31, 2023; negotiate Amendment 1 to Agreement PR00003363 with Wellington Management, Inc, to structure the funding award from a grant to a deferred loan; and negotiate one or more agreements for predevelopment consultants during the period August 9, 2022 through December 31, 2023 with a combined total not to exceed amount of $200,000.
Impact/Outcomes: Seven projects receiving awards will leverage approximately $480 million in total investment value to create 1,241 housing units, including 369 affordable units, over 164,000 square feet of commercial and community space, 389 new or retained jobs, and improved connections to support TOD in current and planned light rail transit, bus rapid transit, and within the high-frequency bus network.
Disparity Domains: This request supports Hennepin County disparity reduction efforts in income, employment, housing, and transportation by supporting a range of investments that create employment opportunities, affordable housing, community services and amenities in areas well-served by public transit, including low-income communities and communities of color.