Item Description:
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Terminate and forgive 2002 AHIF Agmt A040987 with RS EDEN for Lindquist Apartments 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 Loan Agreement A040987 with Lindquist Apartments Limited Partnership for 1931 West Broadway Avenue in Minneapolis, awarded under Resolution 02-HCHRA-29, forgive the principal loan amount of $400,000 and accrued interest for an estimated combined total amount of $490,000, and negotiate documents to effectuate loan termination and release of the declaration; and that following review and approval by the County Attorney’s Office, the Chair be authorized to sign any related termination and award forgiveness documents on behalf of the Authority.
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Background:
RS Eden, through Lindquist Apartments Limited Partnership, was awarded $400,000 in funding from the Hennepin County Housing and Redevelopment Authority’s (HCHRA) 2002 Affordable Housing Incentive Fund (AHIF) program for the construction of Lindquist Apartments at 1931 West Broadway Avenue in Minneapolis. Agreement A040987 required compliance with affordability requirements through 2034; with 14 units at 50 percent of the area median income (AMI) and 10 units at 30 percent of AMI. A mortgage and declaration were recorded against the Lindquist Apartments property to secure the affordability.
In the more than 20 years since initial construction, Lindquist Apartments has provided supportive housing to extremely low-income youth and developed significant capital improvement needs including stucco and roof repairs, addressing water intrusion and mold, and replacing windows. These repairs and improvements must be made to ensure the property remains safe, viable supportive housing over the long term.
To address the property’s capital needs, RS EDEN has obtained new funding commitments (and associated long-term affordability restrictions) from state and local funders, including 2025 Supportive Housing Strategy funding award of $1,000,000 (Agreement PR00007252, Resolution 25-HCHRA-0014). RS EDEN plans to close on the new financing and begin property renovation in 2026. Affordability will be extended for at least 50 years, through 2078.
With the newly committed capital funding for the Lindquist Apartments, the cumulative debt on the property (after the 2026 closing) would far exceed the property’s appraised value, making the oldest debt prohibitive to closing on new funding. RS EDEN has requested termination and forgiveness of AHIF Agreement A040987, including release of the related declaration, and satisfaction of the related mortgage.
Staff have reviewed RS EDEN’s request and, consistent with county priorities, recommend approval as the best means to allow the property to remain stable, affordable, supportive housing for 24 extremely low-income youth.
Current Request: This request is for authorization to terminate and forgive 2002 AHIF Loan Agreement A040987 in the amount of $400,000 plus accrued interest and to release the related note, mortgage and declaration therewith.
Impact/Outcomes: Early forgiveness of this AHIF award will allow RS Eden to remain a stable affordable housing provider.
Housing Disparity Domain: This board action request aligns with Hennepin County disparity reduction efforts by creating affordable housing opportunities for households with extremely low incomes. Disparate impacts by race are especially stark amongst those experiencing homelessness. By providing 20 units for people experiencing homelessness, this project supports goals to reduce and eliminate disparities.
This request funds services that are: core services
recommendation
Recommendation from County Administrator: Recommend Approval