Item Description:
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Terminate and forgive AHIF Agmts A030962, A061468, and A090091 with the Little Earth of United Tribes Housing Corporation for 2501 Cedar Avenue South in Minneapolis.
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Resolution:
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BE IT RESOLVED, that the Executive Director be authorized to terminate the 2002 Affordable Housing Incentive Fund (AHIF) program’s Loan Agreement A030962 with the Little Earth of United Tribes Housing Corporation for 2501 Cedar Avenue South in Minneapolis, awarded under Resolution 02-HCHRA-29 and forgive the loan amount of $400,000; that the Chair be authorized sign any related documents to effectuate loan termination and award forgiveness on behalf of the Authority; and
BE IT FURTHER RESOLVED, that the Executive Director be authorized to terminate the 2005 and 2006 AHIF program’s Grant Agreement A061468 with the Little Earth of United Tribes Housing Corporation for 2501 Cedar Avenue South in Minneapolis, awarded under Resolutions 05-HCHRA-08 and 06-HCHRA-09 and forgive the total combined grant amount of $800,000; that the Chair be authorized to sign any related documents to effectuate grant terminations and forgiveness of awards on behalf of the Authority; and
BE IT FURTHER RESOLVED, that the Executive Director be authorized to terminate the 2008 AHIF program’s Grant Agreement A090091with the Little Earth of United Tribes Housing Corporation for 2501 Cedar Avenue South in Minneapolis, awarded under Resolution 08-HCHRA-07-S1R1 and forgive the grant amount of $740,000; that the Chair be authorized to sign any related documents to effectuate grant termination and award forgiveness on behalf of the Authority.
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Background:
The Little Earth of United Tribes Housing Corporation (Little Earth) was awarded $1,940,000 in funding from the Hennepin County Housing and Redevelopment Authority’s (HCHRA) 2002, 2005, 2006, and 2008 Affordable Housing Incentive Fund (AHIF) program to renovate three affordable housing buildings at 2501 Cedar Avenue South in Minneapolis. First constructed in 1973, the complex includes 212 rental housing units and a community building.
Agreements A030962, A061468, and A090091 required compliance with the affordability requirements through 2039; provided that requirements were met, no repayment of funds would be due at the end of each term. Mortgages and declarations were recorded against the property to secure the affordability.
Since the 2008 renovation, the buildings have developed significant capital improvement needs and requires improvements that can only be achieved via a substantial rehabilitation across all 212 housing units. Little Earth has obtained new funding commitments (and associated long-term affordability restrictions) from state and local funders, including 2023 and 2024 AHIF awards of $1,204,137 (Agreement PR00005294, Resolutions 23-HCHRA-0021 and 24-HCHRA-0015). Little Earth plans to close on the new financing and initiate rehabilitation in 2025.
Staff recommend early forgiveness of the 2003, 2006, and 2009 AHIF awards to Little Earth, release of the related declarations, and satisfaction of the related mortgages, because the cumulative debt on the property, after the 2025 closing, would exceed the property’s appraised value.
Current Request: This request is for authorization to terminate and forgive 2002 AHIF Loan Agreement A030962 ($400,000), 2005 and 2006 AHIF Grant Agreement A061468 ($800,000), and 2008 AHIF Grant Agreement A090091 ($740,000) with Little Earth of United Tribes Housing Corporation, in the total amount of $1,940,000, and to release the notes, mortgages and declarations therewith.
Impact/Outcomes: Early forgiveness of these AHIF awards will allow Little Earth of United Tribes Housing Corporation to remain a stable affordable housing provider.
recommendation
Recommendation from County Administrator: Recommend Approval