Item Description:
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Neg 2 TOC award modifications; Amd 1 to Agmt PR00005396 MSMB II LLC, extend the end dates to 12/31/27, no change in NTE amounts
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Resolution:
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BE IT RESOLVED, that the Executive Director be authorized to negotiate award modifications to the 2024 TOC awards (Resolution 24-HCHRA-0022) with Riverfront Development Partners, or affiliated entity, for the Resolute project (Agreement PR00004640), 1200 KMA Development LLC, or affiliated entity, for the ZaRah project (Agreement PR00004664) extending the contract periods from December 31, 2026, to December 31, 2027, with no change in the not to exceed amounts; that following review and approval by the County Attorney’s Office, the Chair be authorized to sign the amendments 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 Amendment 1 to Agreement PR00005396 with MSMB II LLC, or affiliated entity, for the LOMA project (Resolution 23-HCHRA-0023), extending the contract period from December 31, 2026, to December 31, 2027, with no change in the not to exceed amount of $500,000; that following review and approval by the County Attorney’s Office, the Chair be authorized to sign the amendments and related documents on behalf of the authority; and that the Controller be authorized to disburse funds as directed.
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Background:
The Transit Oriented Communities (TOC) program, previously known as Transit Oriented Development (TOD), has been a mainstay of Hennepin County’s community development efforts since 2003 because of the wide-ranging benefits that compact, efficient use of land and walkable development patterns generate.
Like other industry sectors, construction and real estate development have been negatively affected by the federal immigration enforcement surge, tariffs, and inflation over the past year. Notably, the Federal Reserve’s October Beige Book released October 14, 2026, cites “widespread concern over high and rising costs” related to construction caused by tariffs and inflation. These effects have been pronounced in projects located in low-income communities and communities of color that have historically experienced disinvestment. High and rising costs delay projects and increase uncertainty for local developers and funders.
In response to these headwinds, the current action would provide one additional year to three projects previously awarded TOC funds, which have started or anticipate starting construction within the next year.
Current Request: This request is for authorization to negotiate two award modifications under the 2024 TOC Program and Amendment 1 to Agreement PR00005396 under the 2023 TOC Program, extending the term from December 31, 2026, to December 31, 2027, with no change in the not to exceed amounts.
Impact/Outcomes: Authorization of this request will provide these projects with additional time to move forward. At completion, these projects located in areas of high social vulnerability will leverage $37.5 million in total investment value to create 62 affordable housing units, 38,900 square feet of commercial space, including 23 affordable spaces, supporting more than 85 new or retained jobs, and improved connections to current and planned light rail transit, bus rapid transit, and the high-frequency bus network.
Disparity Domains: This request supports Hennepin County disparity elimination efforts in income, employment, housing, and transportation by supporting a range of investments that create employment opportunities, affordable housing, community services and amenities in areas of high social vulnerability well-served by public transit, including low-income communities and communities of color.
This request funds services that are: core services
recommendation
Recommendation from County Administrator: Recommend Approval