Coversheet

Housing and Redevelopment Authority Board Action Request
23-HCHRA-0021


Item Description: 2023 AHIF funding recommendations - Neg a 2021 award modification, 5/9/23-5/8/78; neg 8 2023 award agmts, 05/09/23-05/08/78, total combined NTE $5,904,137; supp app to 2023 HCHRA budget

Resolution:

BE IT RESOLVED, that the 2021 Affordable Housing Incentive Fund (AHIF) award to Walker Methodist for the Raines Building project (Agreement PR00003349; Resolution 21-HCHRA-0016), in the amount not to exceed $800,000, be rescinded and reallocated for distribution under the 2023 AHIF program as described herein: and that the Controller be authorized to disburse funds as directed; and

BE IT FURTHER RESOLVED, that repayment proceeds in the amount of $42,383.59 from Community Involvement Programs for 3601 and 3603 Rhode Island Avenue in St. Louis Park (2012 AHIF award; Agreement A120638), $14,819.06 from Community Involvement Programs for 1014 Westbrooke Way in Hopkins (2012 AHIF award; Agreement A120638), and $46,934.59 from Community Involvement Programs for 2913 Orchard Avenue North in Golden Valley (2012 AHIF award; Agreement A120638), be received and reallocated for distribution under the 2023 AHIF program as described herein; and that the Controller be authorized to disburse funds as directed; and

BE IT FURTHER RESOLVED, that a supplemental appropriation to the 2023 Hennepin County Housing and Redevelopment Authority (HCHRA) Special Projects Fund 37 budget (HRA: AHIF 2019-2023 Project 1006757) in the amount of $904,137 be authorized; and that the Controller be authorized to accept and disburse funds as directed; and

BE IT FURTHER RESOLVED, that the Executive Director be authorized to negotiate a modification to Agreement PR00003347 with Duffy Development, or affiliated entity, for the Tessman Ridge Project, increasing the not to exceed amount by $200,000 for a new total not to exceed amount of $1,125,000, and extending the period from May 10, 2066 to May 9, 2078; that following review and approval by the County Attorney’s office, the Chair be authorized to sign the agreement and related documents on behalf of the Authority; and that the Controller be authorized to disburse funds as directed; and

BE IT FURTHER RESOLVED, that the Executive Director be authorized to negotiate the following Agreements during the period May 9, 2023 through May 8, 2078:

PR00005293 with Reuter Walton Development LLC or affiliated entity, for the 901 Cedar project, with a not to exceed amount of $455,000;

PR00005287 with Wellington Management, Inc or affiliated entity, for the Agra project, with a not to exceed amount of $900,000;

PR00005291 with Sherman Associates, or affiliated entity, for the Bottineau Commons & Lofts project, with a not to exceed amount of $545,000;

PR00005294 with Little Earth of United Tribes Housing Corporation or affiliated entity, for the Little Earth project, with a not to exceed amount of $704,137;

PR00005290 with Trellis Co., or affiliated entity, for the Olson Court/Park Plaza project, with a not to exceed amount of $1,000,000;

PR00005289 with Sabathani Community Center or affiliated entity, for the Sabathani Family Housing project, with a not to exceed amount of $700,000;

PR00005286 with Woda Cooper Companies, Inc or affiliated entity, for the Sandgrass Pointe, with a not to exceed amount of $500,000;

PR00005288 with Wall Development Company LLC or affiliated entity, for the Snelling Yards Family Housing project, with a not to exceed amount of $900,000; and

that following review and approval by the County Attorney's Office, the Chair be authorized to sign the agreements and related documents on behalf of the authority; and that the Controller be authorized to disburse funds as directed; and

BE IT FURTHER RESOLVED, that the HCHRA authorizes the Executive Director to revise, as needed, the AHIF funding amounts of the HCHRA Board approved projects in response to potential changes in a specific project's funding requirements providing that such revisions will not result in an increase in the aggregate funding of $5,904,137 or any projects being funded that have not been approved by the board.


Background: The Affordable Housing Incentive Fund (AHIF) Program was created by the Hennepin County Housing and Redevelopment Authority (HCHRA) Board of Commissioners (Resolution 08-HCHRA-00) to work with municipalities, other government and nonprofit agencies, private and nonprofit developers, and lenders to encourage the preservation and development of affordable housing opportunities throughout Hennepin County. A coordinated request for proposals (RFP) for the AHIF program and federal HOME funds was released in January 2023. The RFP garnered 28 qualified multifamily rental applications requesting $33.5 million. Proposals were reviewed by Housing and Economic Development and Health and Human Services staff for consistency with county priorities. Proposals were then reviewed and ranked by a multiagency panel consisting of Hennepin County (HED and HHS), Bloomington, Brooklyn Park, Minneapolis, and St. Louis Park staff. AHIF funding is typically provided to projects in the form of a 30- to 50-year deferred loan. Loan documents include a loan agreement, promissory note, mortgage, and declaration of covenants and restrictions. In addition, at the project’s financial closing and during the term of the loan, the HCHRA may be asked to sign various related documents and amendments, including subordination agreements and disbursement agreements. Since 2000, and including the recommended 2023 allocations, the AHIF Program has committed approximately $89.9 million to affordable housing projects, leveraging over $2.28 billion dollars in additional investment to assist the development and/or preservation of over 11,171 affordable housing units in Hennepin County. Attachment A provides further detail on the nine projects recommended for funding. Recommended Project Awards: PR00005293 – Reuter Walton – 901 Cedar project – $455,000 901 Cedar Ave South, Minneapolis; construction of 126 rental units (41 units at 30 percent of AMI, 85 units at 50 percent of AMI); 12 units for homeless, 35 units for large families, and 12 units with rental assistance. PR00005287 – Wellington Management – Agra project – $900,000 901 27^th Avenue South, Minneapolis; construction of 155 rental units (46 units at 30 percent of AMI, 47 units at 50 percent of AMI, 62 units at 60 percent of AMI); 10 units for homeless, 46 units for large families, and 38 units with rental assistance. PR00005291 – Sherman Associates – Bottineau Commons & Lofts project – $545,000 1808 University Ave NE & 1929 NE 2nd Street, Minneapolis; preservation of 156 rental units (36 units at 30 percent of AMI, 120 units at 60 percent of AMI); 39 units for large families, and 15 units with rental assistance. PR00005294 – Little Earth of United Tribes Housing Corporation – Little Earth project – $704,137 2501 Cedar Avenue South, Minneapolis; preservation of 212 rental units (212 units at 50 percent of AMI); 106 units for large families, and 212 units with rental assistance. PR00005290 – Trellis Co. – Olson Court / Park Plaza – $1,000,000 525 Humboldt Avenue North, Minneapolis; preservation of 134 rental units (Park Plaza) and construction of 116 rental units (Olson Court) (50 units at 30 percent of AMI, 76 units at 50 percent of AMI, 124 units at 60 percent of AMI); 10 units for homeless, 51 units for large families, and 117 units with rental assistance. PR00005289 – Sabathani Community Center – Sabathani Family Housing – $700,000 310 38^th Street East Minneapolis; construction of 72 rental units (18 units at 30 percent of AMI, 21 units at 50 percent of AMI, 33 units at 60 percent of AMI); 20 units for large families. PR00005286 – Woda Cooper Companies – Sandgrass Pointe – $500,000 5800 69^th Avenue North, Brooklyn Park; construction of 44 rental units (17 units at 30 percent of AMI, 17 units at 50 percent of AMI); 7 units for homeless, and 11 units for large families. PR00005288 – Wall Development Company LLC – Snelling Yards Family Housing – $900,000 3601 East 44th Street, Minneapolis; construction of 90 rental units (26 units at 30 percent of AMI, 39 units at 50 percent of AMI, 4 units at 60 percent of AMI); 13 units for homeless, 58 units for large families, and 25 units with rental assistance. 2021 AHIF Project Award modification: PR00003347 – Duffy Development – Tessman Ridge – increase of existing contract by $200,000 6900 85th Ave North, Brooklyn Park; construction of 71 rental units (13 units at 30 percent of AMI, 26 units at 50 percent of AMI, 24 units at 60 percent of AMI); 8 units for homeless, 19 units for large families, and 13 units with rental assistance. Current Request: This request is to authorize negotiation of one award modification and eight implementation agreements with a combined total not to exceed amount of $5,904,137 under the 2023 AHIF Program. Impact/Outcomes: Nine projects will assist a total of 1,137 affordable housing units in Hennepin County; projects will include 247 units for households with incomes at or below 30 percent of AMI, 523 units for households with incomes at or below 50 percent of AMI, 60 units for people experiencing homelessness, 385 large family units, and 441 units with rental assistance. Housing Disparity: Black, Latino/x, and Native American Households of color are disproportionately housing cost burdened. This request creates housing opportunities for individuals with incomes at or below 30 percent and 50 percent of the area median income.


Recommendation from County Administrator: Recommend Approval

ATTACHMENTS:
Description	Upload Date	Type
Attachment A - 2023 AHIF Recommendations	5/4/2023	Backup Material