Item Description:
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Neg Agmts PR00006436 with Trellis Co. and PR00006435 with American Indian Community Development Corporation for 30-year forgivable acquisition loans, 07/10/24-12/31/59, total combined NTE $1,300,000
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Resolution:
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BE IT RESOLVED, that $1,300,000 in sales proceeds from 5719 Lyndale Avenue South and 143 East 19th Street (Resolution 24-HCHRA-0019, total estimated receivable $1,300,000) be retained by the Hennepin County Housing and Redevelopment Authority for the provision of affordable housing and creation of an inpatient substance use treatment center during a 30-year period between July 10, 2024 through December 31, 2059; and that the Controller be authorized to accept, transfer, and disburse funds as directed; and
BE IT FURTHER RESOLVED, that the Executive Director be authorized to negotiate 30-year Forgivable Loan Agreement PR00006436 with Trellis Co, or an affiliated entity, for the acquisition of 5719 Lyndale Avenue South in Minneapolis (PID 22-028-24-23-0202) for the creation of affordable housing, during the period July 10, 2024 through December 31, 2059, with a not to exceed amount of $500,000 (CP 1006848 Fund 37, DeptID 843500); that following review and approval by the County Attorney’s Office, the Chair be authorized to sign the loan 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 30-year Forgivable Loan Agreement PR00006435 with American Indian Community Development Corporation, or an affiliated entity, for the acquisition of 143 East 19th Street in Minneapolis (PID 27-029-24-43-0111) for the creation of an residential substance use treatment center, during the period July 10, 2024 through December 31, 2059, with a not to exceed amount of $800,000 (CP 1006848, Fund 37, DeptID 843500); that that following review and approval by the County Attorney’s Office, the Chair be authorized to sign the loan agreement and related documents on behalf of the Authority; and that the Controller be authorized to disburse funds as directed.
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Background:
In late 2020, the Hennepin County Housing and Redevelopment Authority (HCHRA) purchased four buildings, including the Stevens Square Residence at 143 E 19th Street, Minneapolis to provide protective shelter for individuals experiencing homelessness who were impacted by the COVID-19 pandemic (Resolution 20-HCHRA-0037).
In 2022, the HCHRA also purchased the Aqua City Motel at 5719 Lyndale Avenue South to provide long-term affordable housing for low-income households, especially single adults experiencing homelessness/housing instability (Resolution 22-HCHRA-0013).
Resolution 24-HCHRA-0019 (adopted June 11, 2024) authorized the sale of 5719 Lyndale Avenue South to Trellis Co. (anticipated receivable $500,000) and 143 East 19th Street to American Indian Community Development Corporation (AICDC) (anticipated receivable $800,000).
Trellis will develop an affordable housing project with a minimum of 44 units affordable to households at or below 30 percent of the area median income (AMI). The project will include a range of unit sizes, from studios to three-bedrooms, to address the need for deeply affordable housing for families, couples, and singles.
AICDC will develop 30 residential units for culturally tailored residential substance use disorder treatment. AICDC developed this proposal with a mission to address the alarming escalation of rates (and racial disparities in rates) of opioid and other addictions.
To support and ensure affordability, the HCHRA will use property sale’s proceeds to provide a 30-year forgivable, deferred loan for acquisition to both buyers, together with a promissory note, mortgage, and declaration of covenants and restrictions memorializing the HCHRA-required affordable housing commitment. With this financing, both Trellis and AICDC will be able to acquire the relevant properties before the end of 2024.
Current Request:
This request is for Authorization to negotiate Agreements PR00006436 with Trellis, and PR00006435 with American Indian Community Development Corporation, for 30-year forgivable acquisition loans, from 7/10/2024-12/31/2059, with a total combined not to exceed amount of $1,300,000.
Impact/Outcomes:
The sale of these properties will return vacant properties to the tax base, provide for the development of new affordable housing and residential treatment programs, and address economic and racial disparities in the housing and health domains.
Housing Disparity Domain:
Households of color are disproportionately housing cost-burdened at or below 30 percent and 50 percent of AMI. This request creates 44 housing opportunities for people at or below 30 percent of AMI, and residential treatment for 30 people at or below 50 percent of AMI.
recommendation
Recommendation from County Administrator: Recommend Approval