History: 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 the county. Since 2000, and including the recommended 2017 allocations, the AHIF Program will have committed approximately $59.9 million, leveraging over $1.3 billion dollars in additional investment to assist over 7,200 affordable units in the county.

AHIF funding recommendations are based on a competitive Request for Proposal (RFP) process. Applications are solicited each year in the months of January and February. Proposals are reviewed for consistency with AHIF priorities, transit and corridor considerations, supportive services (Human Services and Public Health Department (HSPHD), and potential environmental concerns (Environment and Energy Department)). Proposals are then reviewed and ranked by an Advisory Committee consisting of county staff (Community Works and HSPHD), and city staff (cities of Bloomington, Brooklyn Park, Minneapolis, Minnetonka, New Hope, Plymouth, and St. Louis Park).

Resolution 16-HCHRA-0047 (adopted December 13, 2016) appropriated $2.7 million to fund the 2017 AHIF Program.

In 2017, 28 proposals requesting $15.1 million in AHIF or HOME funding, were reviewed and ranked. Attachment A provides a description of the 2017 proposals received (both projects recommended for funding and projects not recommended for funding). Attachment B provides a map of the 2017 AHIF applications received.

Ten proposals are recommended for funding, totaling 657 affordable AHIF units (477 new construction and 180 rehabilitated units) and leveraging approximately $173 million in private and public resources:

Rental Housing – Rehabilitation/Preservation:

Reprise: Brooklyn Park (Amorce I GP, LLC/Boisclair Corporation) – 5825 74th Ave N and 5550 69th Ave N, Brooklyn Park; refinance and rehabilitate a seven-story 110 senior rental unit apartment building and 60 family townhome units for preservation of project-based Section 8; 170 AHIF units (NTE $250,000);

Supportive Rental Housing – New Construction:

Minnehaha Commons (Alliance Housing) – 3001 E Lake St, Minneapolis; acquire and construct 43 new supportive rental units for seniors experiencing homelessness with services provided by Touchstone Mental Health of which 10 units will serve long-term homeless; 43 AHIF units (NTE $250,000);

Minnehaha Townhomes (Minneapolis Public Housing Authority) – 5348-68 Riverview Rd and 5118 54th St E, Minneapolis; acquire and construct 16 new supportive townhome rental units for families experiencing homelessness of which four units will serve long-term homeless; 16 AHIF units (NTE $500,000);

Rental Housing - New Construction:

Aeon Prospect Park (Aeon) – 3001 4th Street SE, Minneapolis; acquire and construct 70 units of mixed-income housing at a transit oriented location of which seven units will serve long-term homeless families with services provided by Ascension Place; five HSPHD units; 63 AHIF units (NTE $250,000);

Knox & American (Knox & American I LLC/Stuart Development Corporation) – 1801-2001 80 ½ St W, Bloomington; acquire and construct 284 units of mixed-income housing at a transit oriented location; 50 AHIF units (NTE $300,000);

PLACE St. Louis Park (PLACE) – 5725-15 Hwy 7, 2565-3575 Wooddale Ave, 5814-16 36th St, 3520 Yosemite Ave and 3548 Zenwood Ave, St. Louis Park; acquire and construct 300 units of mixed-income housing in three residential buildings at a transit oriented location; 200 AHIF units (NTE $300,000);

Sabathani Senior Housing (Sabathani Community Center) – 310 E 38th St, Minneapolis; construct 50 affordable rental units for seniors age 55 and older next door to the Sabathani Community Center; five HSPHD units; 50 AHIF units (NTE $400,000);

The Mariner (Newport Midwest, LLC) – 10400, 10500 & 10550 Bren Rd, Minnetonka; construct 55 affordable rental units for Phase I in a mixed-income, mixed-use development near planned Southwest Light Rail Transit Station of which four units will serve long-term homeless; five HSPHD units; 55 AHIF units (NTE $200,000);

Affordable Homeownership – Rehabilitation:

CLCLT Homebuyer Initiated Program (City of Lakes Community Land Trust) - Scattered sites, Minneapolis; acquire and rehabilitate/construct four single-family homes (includes duplex initiative) for homeownership in the land trust; four AHIF units (NTE $100,000);

WHAHLT Homes Within Reach (West Hennepin Affordable Housing Land Trust) - Scattered sites, suburban Hennepin County; acquire and rehabilitate six single-family homes for homeownership in the land trust; six AHIF units (NTE $200,000).

AHIF funding agreements are typically in the form of a 30-40 year loan (depending upon other financers' requirements). Loan documents typically include the loan agreement, promissory note, mortgage, and declaration of covenants and restrictions. In addition, during the term of the loan, the HCHRA may be asked to sign various related documents such as subordinations and insurance endorsements.

In addition, staff recommends that Agreement A165449 with Amorce, LLC for the Amorce: Reprise project (2016 AHIF funding award, Resolution 16-HCHRA-0019, adopted May 3, 2016), which has not yet been executed, be revised in scope to refinance and rehabilitate two scattered-site rental apartment buildings at 3755 Hubbard Avenue in Robbinsdale and 8007 Bass Lake Road in New Hope. The revised scope provides stabilization of 86 affordable, project-based Section 8 and supportive housing units, including five units that will serve long-term homeless people.

Current Request: Authorize negotiation of 10 implementation agreements totaling $2.7 million under the 2017 AHIF Program; authorize change in scope to 2016 AHIF Agreement A165449 to provide stabilization of 86 affordable, project-based Section 8 and supportive housing units at 3755 Hubbard Avenue in Robbinsdale and 8007 Bass Lake Road in New Hope.

Impact/Outcomes: Ten projects will assist a total of 657 affordable housing units in Hennepin County; projects will serve 119 households/individuals at or below 30 percent of area median income (AMI), 228 households/individuals at or below 50 percent of AMI, 300 households/individuals at or below 60 percent of AMI, and 10 households/individuals at or below 80 percent of AMI.