Item Description:
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2024 AHIF funding recommendations - Neg 9 2024 award agmts, 05/07/24-05/06/79, total combined NTE $5,836,573; supp app to 2024 HCHRA budget
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Resolution:
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BE IT RESOLVED, that the 2019 Affordable Housing Incentive Fund (AHIF) award to American Indian Community Development Corporation for the Pokegama North project in the amount of $85,000 (Agreement PR00001141; Resolution 19-HCHRA-0022), be rescinded; and that the $85,000 be reallocated for distribution under the 2024 Hennepin County Housing and Redevelopment Authority (HCHRA) budget as described herein; that a supplemental appropriation to the 2024 HCHRA Special Projects Fund 37 budget (HRA: 2024 Affordable Housing Project 1010428) in the amount of $85,000 be authorized; and that the Controller be authorized to disburse funds as directed; and
BE IT FURTHER RESOLVED, that repayment proceeds in the amount of $130,050 from Community Involvement Programs for 5101 56th Avenue North in Crystal (2000 and 2009 AHIF awards, Resolutions 12-HCHRA-00R1 and 09-HCHRA-0013R1), $225,010 from Community Involvement Programs for 3101 and 1303 Oxford Street in Hopkins (2001 and 2012 AHIF award, Agreement A120638), and $481,512 from Plymouth Leased Housing Associates, LP for Stone Creek at Medicine Lake, 1020 West Medicine Lake Drive in Plymouth (2001 AHIF award, Agreement A030437), be received and reallocated for distribution under the 2024 HCHRA budget as described herein; that a supplemental appropriation to the 2024 HCHRA Special Projects Fund 37 budget (HRA: 2024 Affordable Housing Project 1010428) in the amount of $836,573 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 the following AHIF Agreements, in the total not to exceed amount of $5,336,573, during the period May 7, 2024 through May 6, 2079:
• PR00006156 with SRPB Strategic Housing LLC or affiliated entity, for the 700 American Boulevard West project, with a not to exceed amount of $500,000;
• PR00006151 with 925 Studios, LLC or affiliated entity, for the 925 Studios project, with a not to exceed amount of $183,350;
• PR00006154 with Alliance Housing Inc. or affiliated entity, for the 2116 Nicollet project, with a not to exceed amount of $330,000;
• PR00006219 with Clare Housing or affiliated entity, for the Clare Apartments project, with a not to exceed amount of $500,000;
• PR00006155 with Matrix Development LLC or affiliated entity, for the Logan Avenue Senior development, with a not to exceed amount of $323,223;
• PR00006150 with 1213 Franklin LP and Wellington Management Inc or affiliated entity, for the NACC-H project, with a not to exceed amount of $1,460,000;
• PR00006152 with Premier Development Corporation, LLC or affiliated entity, for The Warren project, with a not to exceed amount of $700,000;
• PR00006153 with Building Blocks Inc and United Properties or affiliated entity, for the Upper Harbor Redevelopment Parcel 6A project, with a not to exceed amount of $1,000,000;
• PR00006227 with Noor Development Group and Project for Pride in Living or affiliated entity, for the Zaria project, with a not to exceed amount of $340,000; 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 Executive Director be authorized to negotiate a modification to a 2023 AHIF award approved under Resolution 23-HCHRA-0021, recognizing additional funding awarded under the 2024 AHIF Program: Agreement PR00005294 with Little Earth of United Tribes Housing Corporation, or affiliated entity, for the Little Earth Project, increasing the not to exceed amount by $500,000 for a new total not to exceed amount of $1,204,137, extending the contract period from May 8, 2078 to May 6, 2079; 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 to authorized 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 $5,836,573 or any projects being funded that have not been approved by the board.
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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. Resolution 23-HCHRA-0044 (adopted December 12, 2023) authorized $5,000,000 for AHIF in 2024. An additional $921,573 from prior year AHIF awards and repayments are recommended for receipt/recapture and reallocation herein ($836,573) or under future AHIF funding rounds ($85,000).
A coordinated request for proposals (RFP) for the AHIF program and federal HOME funds was released in January 2024. The RFP garnered 32 qualified multifamily rental applications requesting $37.4 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.
Recognizing the length and complexity of affordable housing finance, AHIF loans are reflected as grants within the HCHRA’s financial statements.
Since 2000, and including the recommended 2024 allocations, the AHIF Program has committed approximately $93.7 million to affordable housing projects, leveraging over $2.02 billion dollars in additional investment to assist the development and/or preservation of over 12,000 affordable housing units in Hennepin County.
Recommended Project Awards:
PR00006156 - 700 American Boulevard West - Shafer Richardson - $500,000
700 American Boulevard West in Bloomington; construction of 128 rental units (8 units at 30 percent of Area Median Income (AMI), 104 units at 50 percent of AMI, 16 units at 60 percent of AMI); 5 units for large families.
PR00006151 - 925 Studios - 925 Studios LLC - $183,350
925 4th Street Southeast in Minneapolis; preservation of 45 rental units; (45 units at 30 percent of AMI.)
PR00006154 - 2116 Nicollet - Alliance Housing Inc - $330,000
2116 Nicollet Avenue South in Minneapolis; construction of 54 rental units; (33 units at 30 percent of AMI, 21 units at 50 percent of AMI); 8 units for people exiting homelessness; 24 units with rental assistance.
PR00006219 - Clare Apartments - Clare Housing - $500,000
929 Central Avenue Northeast in Minneapolis; preservation of 32 rental units; (24 units at 30 percent of AMI, 8 units at 50 percent of AMI); 32 units with rental assistance.
PR00005294 - Little Earth - Little Earth of United Tribes Housing Corporation - increase of existing contract by $500,000 (new not to exceed amount of $1,204,137
2501 Cedar Avenue South, Minneapolis; preservation of 212 rental units; (212 units at 50 percent of AMI); 106 units for large families; 212 units with rental assistance.
PR00006155 - Logan Avenue Senior - Matrix Development LLC - $323,223
529 and 535 Logan Avenue North, Minneapolis; construction of 48 rental units; (23 units at households 30 percent of AMI , 25 units at 50 percent of AMI); 9 units for people exiting homelessness.
PR00006150 - NACC-H - 1213 Franklin LP and Wellington Management Inc - $1,460,000
1213 Franklin Avenue South in Minneapolis; construction of 83 rental units; (33 units at households 30 percent of AMI, 42 units at 50 percent of AMI, 8 units at 60 percent of AMI); 11 units for people exiting homelessness; 9 units with rental assistance.
PR00006152 - The Warren - Premier Development Corporation, LLC - $700,000
New address; construction of 58 rental units; (17 units at 30 percent of AMI, 41 units at 50 percent of AMI); 8 units for people exiting homelessness; 15 units for large families.
PR00006153 - Upper Harbor Redevelopment Parcel 6A - Building Blocks Inc and United Properties - $1,000,000
3700 Washington Avenue North in Minneapolis; construction of 178 rental units; (65 units at 30 percent of AMI, 89 units at 50 percent of AMI, 24 units at 60 percent of AMI); 45 units for large families; 10 units for people exiting homelessness; 45 units with rental assistance.
PR00006227 - Zaria - Noor Development Group and Project for Pride in Living - $340,000
3030 Nicollet Avenue South in Minneapolis; construction of 89 rental units; (15 units at 30 percent of AMI, 74 units at 50 percent of AMI); 29 units for large families.
Attachment A provides further detail on the 10 projects recommended for funding.
Current Request: This request is to authorize negotiation of one award modification and nine implementation agreements with a combined total not to exceed amount of $5,836,573 under the 2024 AHIF Program.
Impact/Outcomes: Ten projects will assist a total of 927 affordable housing units in Hennepin County; projects will include 263 units for households with incomes at or below 30 percent of AMI, 616 units for households with incomes at or below 50 percent of AMI, 68 units for people experiencing homelessness, 221 large family units, and 340 units with rental assistance.
Housing Disparity Domain: 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
Recommendation from County Administrator: Recommend Approval