CALLING FOR A PUBLIC HEARING AND AUTHORIZING PUBLICATION OF A NOTICE OF PUBLIC HEARING

WHEREAS, the Hennepin County Housing and Redevelopment Authority (the “Issuer” or “HCHRA”) is a housing and redevelopment authority and a public body corporate and politic duly organized and existing under the Constitution and laws of the State of Minnesota; and

WHEREAS, pursuant to Minnesota Statutes, Chapter 462C, as amended (the “Housing Act”), the Issuer is authorized to carry out the public purposes described in the Housing Act by issuing revenue bonds or other obligations to finance or refinance multifamily housing developments, and as a condition to the issuance of such revenue bonds, adopt a housing program providing the information required by Section 462C.03, subdivision 1a of the Housing Act; and

WHEREAS, on June 11, 2019, the Board of Commissioners of the HCHRA (the “Board”) adopted Resolution No. 19-HCHRA-0025 approving the issuance of one or more series of multifamily housing revenue bonds or other obligations (the “Bonds”), in an aggregate principal amount not to exceed $10,000,000, under the provisions of the Housing Act, to assist in the financing of the acquisition, rehabilitation, and equipping of an approximately 54-unit existing multifamily rental housing development and facilities functionally related and subordinate thereto located at 114 Fifth Street Southeast, Minneapolis, within Hennepin County (the “County”), for occupancy by persons and families of low and moderate income (the “Project”), to be owned and operated by Holmes Housing Partners, LP, a Minnesota limited partnership, whose general partner is Holmes Housing Management, LLC, a Minnesota limited liability company, or its affiliate or assigns (the “Borrower”); and

WHEREAS, on June 11, 2019, the Board further approved the Executive Director and other officers, employees, and agents of the Issuer to participate in the preparation and review of necessary documents relating to the Project and the Bonds issued in connection therewith, including application to the State of Minnesota Department of Management and Budget (“MMB”) for allocation of bonding authority, and preparation and submission to the Metropolitan Council for its review and comments on a housing program with respect to the Project (the “Housing Program”) in accordance with the requirements of Section 462C.04, subdivision 2 of the Housing Act; and

WHEREAS, under Section 147(f) of the Internal Revenue Code of 1986, as amended (the “Code”), prior to the issuance of the Bonds a public hearing duly noticed must be held by the Board of Commissioners of the HCHRA (the “Board”). Under Section 462C.04, subdivision 2 of the Housing Act, a public hearing must be held on the Housing Program after publication of notice in a newspaper circulating generally in the County, at least fifteen (15) days before the hearing.

History: Vitus Development III, LLC (the “Developer”) has submitted an application for housing revenue bond financing to assist in the acquisition and rehabilitation of 54 affordable rental housing units at 114 Fifth Street SE (the “Project”) in northeast Minneapolis.

The Project contains 18 one-bedroom and 36 two-bedroom apartments. All 54 units will be affordable to households at or below 60 percent of area median income (AMI), as determined by the U.S. Department of Housing and Urban Development (HUD). The project has an existing Section 8 rental assistance contract for 50 of the 54 units. The developer has committed to retaining the Section 8 contract and extending the affordability period for an additional 30 years.

The current 60 percent annual income limits established by HUD for Hennepin County range from $42,000 for a one-person household to $60,000 for a four-person household.

The Hennepin County Housing and Redevelopment Authority (HCHRA) granted preliminary authorization to issue tax-exempt multifamily housing revenue bonds for the Project (Resolution 19-HCHRA-0025). At a future meeting, the HCHRA will consider final authorization to issue bonds. In a similar timeframe, the Hennepin County Board of Commissioners will consider a companion resolution approving the HCHRA’s action.

Since 2000, the HCHRA has issued approximately $158.6 million in conduit financing for seven projects supporting 1,066 affordable housing units. Another five projects - including 114 Fifth Street SE, totaling approximately $170.8 million in revenue bonds and 752 affordable housing units, currently have obtained HCHRA’s preliminary approval.

Current Request: This request is to establish a public hearing on Tuesday, August 20, 2019 at 1:30 p.m., or as soon thereafter as practicable, for the purpose of public comment on the issuance of tax-exempt multifamily housing revenue bonds for a project to be located at 114 Fifth Street SE, Minneapolis.

Impact/Outcomes: Issuance of multifamily housing revenue bonds will rehabilitate and preserve 54 housing units serving households at or below 60 percent of AMI, of which 50 units will have project-based Section 8 rental assistance.