Item Description:
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Terminate and forgive the portion of 2009 AHIF Agmt A091782 with Urban Homeworks associated with 620 23rd Ave N, NTE $125,000; terminate the portion of Agmt A091782 associated with 2200 6th St N, Mpls, $41,667 (recv)
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Resolution:
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BE IT RESOLVED, that the Executive Director be authorized to terminate that share of the 2009 Affordable Housing Incentive Fund (AHIF) Agreement A091782 with UHW R:R I, LLC (Urban Homeworks/Housing in Action) associated with 620 23rd Avenue North, Minneapolis, (Resolution 09-HCHRA-0013R1), and to forgive $125,000 of the Agreement amount of $250,000; that the Chair be authorized to sign any related documents to effectuate termination, forgiveness, release of declaration, and related documents on behalf of the Authority; and
BE IT FURTHER RESOLVED, that the Executive Director be authorized to terminate that share of Agreement A091782 with UHW R:R I, LLC associated with 2200 6th Street North, Minneapolis, , and to accept repayment of the pro-rata share of $41,667 of the Agreement amount of $250,000; that the Chair be authorized to sign any related documents to effectuate termination, release of declaration, and related documents on behalf of the Authority; and that the Controller be authorized to accept and disburse funds as directed.
endBackground:
Resolution 09-HCHRA-0013R1 (adopted June 2009) approved 2009 Affordable Housing Incentive Fund (AHIF) program funding (NTE $250,000) for Urban Homeworks’ Rental Reclaim project (acquisition and rehabilitation of rental housing developments at scattered sites in the city of Minneapolis) and authorized the Chair and Executive Director to sign related documents in support of the project.
UHW R:RI, LLC, an affiliated entity of Urban Homeworks, executed Agreement A091782 (dated September 24, 2010) and used AHIF funding to acquire three eligible properties (620 23rd Avenue North, 1727 Emerson Avenue North, and 2200 6th Street North) totaling 12 rental units. Agreement A091782 requires that 10 of the 12 units across the three properties remain restricted to households at or below 50 percent of the Area Median Income (AMI) for at least 30 years.
In the current cost environment, operating scattered-site affordable housing has proven financially difficult to unsustainable. In addition, crime and vandalism at 620 23rd Avenue North increased significantly. In January 2025, Urban Homeworks (now known as Housing in Action) relocated residents for safety and stability. The building experienced escalated vandalism despite fencing, boarding, and regular patrolling. Due to high estimates to repair the building (starting at $300,000) and a 2025 cyberattack that wiped out the organization’s operational and reserve accounts, Housing in Action cannot afford to renovate the building to livable standards. Housing in Action has made ongoing efforts to manage the three properties, including hiring a new property management company and private security company, but has now determined that it must consider portfolio changes that include the sale of both 620 23rd Avenue North and 2200 6th Street North.
Housing in Action has requested the HCHRA consider:
§ For 620 23rd Avenue North (6 units): early forgiveness of a pro-rata share ($125,000) of the 2009 AHIF award, satisfaction of the related mortgage and note, and release of the related affordability declaration.
§ For 2200 6th Street North (2 units): accept repayment of the pro-rata share ($41,667) of the 2009 AHIF award, satisfaction of the related mortgage and note, and release of the related declaration.
Staff have worked extensively with Housing in Action, Minnesota Housing and the City of Minneapolis to determine the best course of action for the three Rental Reclaim I properties. Housing in Action plans to use any sales proceeds from 620 23rd Avenue North and 2200 6th Street North for capital improvements across their portfolio, including the final site remaining under Agreement A091782 (1727 Emerson Avenue North). Staff recommends approval of these changes as proposed to ensure Housing in Action can maintain its portfolio of larger apartment buildings as quality affordable housing into the future.
Current Request: This request is for authorization to terminate and forgive that portion of 2009 AHIF Agreement A091782 with UHW R:R I, LLC related to 620 23rd Avenue North, in the amount of $125,000, and to release the note, mortgage and declaration associated therewith; and to terminate that portion of 2009 AHIF Agreement A091782 with UHW R:R I, LLC related to 2200 6th Street North, in the amount of $41,667, and to release the note, mortgage and declaration associated therewith.
Impact/Outcomes: Approval of this request will help to stabilize Housing in Action so that they may continue to provide affordable housing to households at or below 50 percent of AMI.
recommendation
Recommendation from County Administrator: Recommend Approval