##VIDEO ID:pzECVfxWH7c## rolling cart all right I will call this meeting to order it is 701 um this is the regular Housing and Redevelopment Authority meeting of the city of Richfield it's January 21st 2025 um we'll start with the open Forum um you can always refer to the H agenda and web page for additional ways to comments we have a couple people and I think I see someone else filling up a card as well um so we'll start with open form then uh Scott do you want to come up and thank you for filling out the card we have your information typically we give people about three minutes and then can follow up with your information here if there are followup questions all right do I need to sign in yes please do that part of my three minutes or does it start my spot you're okay we don't get a lot of people coming to the H so I have even figure out how to work the timer there you go okay all right thank you is this good enough you hear me okay good evening my name is Scott dolquist I have been a Richfield resident since 1991 and I'm a member of wood Lake Lutheran Church which is across the street from the former Crossroads apartment building now known as concierge the transformation of this property into its current form was difficult to watch the property has become an assay to the community and a home to those who can afford it but at the cost of displacing many who were clearly not welcome anymore in the end I concluded that what was done was legal but I will not call it just our current state of urban homelessness is the product of many factors some within individual control and many not stable housing is the foundation of a successful life without it it is difficult to address the many problems of Life which befall all of us in one way or another the ability to own property and maximize its use is one of is also one of the foundations of our economic system which has provided all of us with many benefits but which also produces many inequalities this is a system in which we have all played a part individually and collectively by things we have done and left undone I therefore urge this commission to recommend the approval of a memorandum of understanding supporting a request for financial assistance and Ford tax status from hemple Real Estate for the acquisition and preservation of the three identified affordable rental communities I believe this action will help to ensure the presence of naturally occurring affordable housing within our community thank you thank you thank you for coming all right next I have David Snider if hello I'm Dave Snider uh been a Richfield resident for about seven years um I live right by the high school and my son's a senior there he's late sometimes but he's a good student um could just say ditto to what Scott said but uh I'll I'll just I'll be brief but uh give my input to in support of the memorandum of understanding um I've been a housing Justice advocate for a really long time and I think it's okay for our community to invest some money um with a responsible developer that's going to maintain affordability um I know people who live um at some of the the three apartment complexes named I've done uh National Night Out events there with uh previous mayor and police uh officers and registered voters there and um and my kids have gone to school with kids from those complexes so I think that a modest investment uh in maintaining those uh as stable places where workingclass folks can live is a good thing I I appreciate that you guys are thinking about um not you know what precedent are you setting it can't be universalized and I appreciate that and I I think it's it's um it's laudable really um but I think that it's still a worthwhile investment um the the personnic you know person on this side of my shoulder is saying well um okay it's going to be a couple bucks uh from our property taxes to pay for this subsidy how much do you know renters in this city and other parts of the country pay what little part of their taxes go to uh subsidize my mortgage interest deduction um they probably didn't have a chance to say yes or no to that but I'm I'm glad it happens but I also think it generates some inequalities as Scott was saying um last thought um I do think that um the provision that I've heard about about having some some measure or agreement to formally um require Temple and the city to meet um with tenants regularly um to to address issues before they get out of hand is really important again I've been doing housing Justice work for decades and there really is no substitute for having tenants who are living in a in a building um have an opportunity to say hey this is going on that's going on I won't get into all the stories that I could tell I could do that off the Record but um it's really important and there's no substitute for it so I hope that there's some way to put that into the agreement um it even staves off bigger conflict by making sure that issues are addressed uh as they come up thanks very much thank you thank you for coming all right next I have Melissa uh good evening mayor Supple and all who are present uh my name is Melissa MDA Gonzalez I'm pastor of tapestry at church here in Richfield I'm here to say a few words regarding consideration of the memorandum of understanding supporting a request for financial assistance and 4D tax status from hemple Real Estate for the acquisition and preservation of three affordable rental communities I have looked at the information and to be honest much of the actual financial piece is beyond my scope of understanding and so that is not why I'm here this evening other people much more Versed and that can make those particular decisions however my overall senses that preserving this housing as affordable for some of the most vulnerable in Richfield is crucial we have found that with uh with that obtaining housing in the city of Richfield is quite difficult and many who would like to live in Richfield are unable to find find adequate and affordable housing even some of the affordable units are add adding or bolstering requirements for W2 income specifically W2 income and specifically at three times or more the amount of rent are requiring at least a Year's rental history even what is considered affordable is a challenge for many to be able to pay the rent most of those we serve at tapestry are not able to find housing in Richfield and this is a loss to this community if indeed hemple has a good track record for preserving affordable housing it seems that this one-time decision would be favorable overall I understand there are some drawbacks with a relatively small increase for other naturally um occurring affordable housing the alternative of allowing a for-profit owner who could potentially upend all of these units as occurred with Crossroads in 2015 now concierge would not benefit the city the city or the tenants in particular especially as the housing supports many who receive um uh some sort of governmental assistance one of the issues with Crossroads was that the result of that purchase was to displace a very large number of people from federally protected groups according to housing law possible litigation if these individuals and families were displaced again would be another aspect that I imagine the city has or will consider I was directly involved with Crossroads as a news new pastor in 2015 where I met Dave for the first time and I saw the suffering ing that the dislocation of 2,000 plus people caused more than 150 children and many many people as I mentioned from protected classes we were also displaced as a church and because people were displaced at Crossroads and then often one or two times more we lost almost all of those who were part of our community the city of Richfield has stepped in in certain cases and has tried to be proactive in questions of Housing and I greatly appreciate your consideration of this issue and your dedication to maintaining afford housing in Richfield and your respect for human dignity thank you thank you thank you for coming is there anybody else who would like to speak that hasn't filled out a card make sure that everyone has a chance see none did anybody call in previously I know we're not doing live calls but okay just want to check thank you um all right with that then we will move to approval of the minutes of the regular Housing and Redevelopment Authority meeting of December 16 2024 is there a motion for approval I'll move approval commissioner subel second it's been moved and seconded any comments questions concerns seeing none um all those in favor say I I opposed the minutes have been approved taking us to item number one approval of the agenda is there a motion for approval uh motion to approve second it's been moved and seconded any questions comments concerns right seeing done all those in favor to approve the agenda say I I I opposed the agenda has been approved taking us to item number two the consent calendar and I will hand it over to executive director pilman thank you chair re Daniels members of the board the consent calendar contains several separate items which are acted upon by the H in one motion once the consent calendar has been approved the individual items and recommended actions have also been approved no further H action on those items is necessary however any HRA commissioner May request that an item be removed from the consent calendar and placed on the regular agenda for HRA discussion and action all items listed on the consent calendar are recommended for approval item a tonight consideration of a resolution authorizing the execution of a developer agreement with the West hennipin affordable housing Land Trust doing business as homes Within Reach for the acquisition Rehabilitation and sale of houses under the new home program Item B consider a resolution approving an extension of a contract for private develop private Redevelopment with Beacon Interfaith housing collaborative for the development of 6613 to 6625 Portland Avenue South and that conses concludes tonight's consent calendar thank you are there any um considerations of anything that would like to be removed consent calendar i' see none is there a motion for approval of the consent calendar I move approval second it's been moved and seconded all those in favor say I I opposed consent calendar has been approved all right item number four uh executive director pman thank you I'm going to ask uh Julie Urban assistant director to present the item thank you chair re Daniels members of the H three richro Department communities New Orleans Court Richland Court and Whitten house were recently listed for sale after having been under the same owners management for many decades the properties containing a total of 236 units are located along 77th Street at wwor and on 14th and Cedar Avenues the properties were built in the 1960s and are considered naturally occurring affordable housing or NOA properties the buildings contain a mix of one two and three bedroom units and rent levels are considered affordable to households earning between 50 and 60% of the area median income the properties are also currently home housing Choice voucher or section8 households and five kids at home program families hle real estate is seeking to purchase the properties and maintain their affordability hemple is a local real estate firm that has Acquired and preserved several Noel communities over the past few years uh in St Paul and West St Paul hle would utilize Equity from the Greater Minnesota housing funds Noah impact fund which contributes Equity to Noah Acquisitions in exchange for preserving for 15 years hle is requesting assistance from the city's Housing and Redevelopment authority to be able to ensure that affordability to limit rent increases and to undertake Rehabilitation work in the amount of around $2.5 million hle is seeking up to$ 1.77 million in financial assistance from the HRA in exchange for limiting rents and capping resident income levels which would enable the properties to qualify for 4D tax status the 4D tax classification offers the properties a combined annual savings estimated at $352,500 staff is recommending that a memorandum of understanding be approved that lays out hemple and the H's commitment to exploring HRA financial assistance for the project under the following terms up to $1.57 million in the form of a 15-year forgivable deferred loan up to $200,000 in apartment remodeling loans rent and income limits in all one and two bedroom units at 60% of the Ami which would qualify the units for tax status rent and income limits in all three bedroom units at 70% of the Ami acceptance of section8 and kids at home rental assistance and required meetings of property management and staff to share tenant landlord resources and introduce Section 8 kids at home and Public Safety staff the forgivable loan would be provided from the city's affordable housing trust fund a small amount of funding does remain in the trust fund however additional funds would need to be transferred from the spending plan in order to meet the full $1.57 million commitment the apartment remodeling loans can be funded through repayments that the current property owner will need to make upon sale of the properties the cost burden for the 4D tax classification is shifted to other taxpayers however that shift will be offset by new tax capacity that will be added to the city's tax base in 2026 upon the decertification of two large tax increment financing districts because the classification affects the city's tax capacity the city council will also be asked to consider the request and consideration of the formal agreement by the r will follow Council action that Council action is scheduled for next Tuesday supporting the purchase of the properties buy a preservation oriented buyer like hle guarantees continued affordability for the properties and offers many benefits to the residents and the community including the following housing stability the 477 plus residents including no displacement of current residents preservation of the affordability of larger apartment units including 24 three bedroom and 132 two-bedroom apartments preservation of housing for 43 housing Choice voucher and five kids at home households and continued partnership with a preservation oriented owner to provide more deeply affordable housing opportunities for these rental assistance clients the majority of whom earn less 30% of the area medium income an investment of up to $2.5 million in physical improvements to the Aging buildings including Safety and Security building Mechanicals roofs and windows Energy Efficiency measures amenity improvements paint flooring lighting and kitchen upgrades and finally local ownership with in-house Property Management Services which offers opportunities for the city to partner to the benefit of residents failure to support a preservation oriented result in the properties being purchased by a market rate buyer who could raise rents displace residents Andor displace our rental assistance residents following the work session on January 14th the developer was able to obtain additional information from the sell's broker regarding the other offers that were made on the property according to the broker there were three other offers in the best and final round for purchase of the three properties all of which were from group seeking to flip to fully renovate and resell the properties the broker stated that one of these officers would most likely be accepted if hemple was unable to move forward so there were several questions and requests for additional information at the work session and a lot of the information has been provided in the staff report I won't go over that unless you have additional questions for me and I'm happy to answer questions and the developer representative from hle is also here if you have questions for them thank you thanks um before we move to motion I'll just pause for questions for staff or the developer anyone has any there will be time for commentary and additional questions there is a motion there is ation well go ahead I had a question for the developer because one of the people that spoke at open form mentioned of residence Council and we have um that there would be scroll back to it required meetings with the property management to share staff tenant and landlord residences um are you open to having tenant councils and those types of things yes and state your name hello uh mayor Supple and members of the commission I am Josh chrck I'm the CEO of hemple real estate um yeah so one of the most important things that we do with all of our properties each year is uh we do tenant surveys um these go out once or twice a year it's the first thing we do and right off the bat what we're looking for is if there's any kind of issues on top of that we have a 24hour line that we're always answering calls and service requests and so then uh a couple times a year we have tenant Gathering parties what we have found is the best way for you to retain your tenants is to actually have your tenants know each other and so when our tenants know each other and they become friends with each other they want to stay in and so we uh we are in constant contact with our tenants um both you know through our uh kind of more technical stuff like our surveys but then also the uh Gatherings that we have often times at those Gatherings is when you do hear about things that are either going great or things that they may have suggestions about because they know they've got anyone else thank you for being here um a few questions um during this uh period with the memorandum of understanding is in place what what do you expect to learn that's different than what we know is there is there some expectation that cost savings will be Unearthed or some other structure of the transaction will be known at that time that we can talk about sure commissioner young um members of the H um what this is the due diligence period we started last week and so they're going to be doing inspections of the property and so the hope is to refine and know U more clearly what that rehab dollar amount will be and then back to us with that specific amount of requests the other thing we'll learn in this period is if the council is in support of the tax tax 4D tax classification um if if for instance we don't approve this and I know we're we're looking at a memorandum of understanding which allows everybody to go forward and talk about the details and look at the facts let's say this do go forward is there anything that can be done for the 43 housing Choice voucher residents to help them find housing do does Richfield have any resources to help them so I could just point to that when the um Crossroads of pen converted to the coner the best that we could offer to people was that because we locally administer Section 8 we have relationships with those folks and so our um two fulltime equivalent people were available to try to help people find housing um which was a lot of it was in udina or Bloomington but so we can provide that kind of assistance um in terms of finances no I wouldn't necessarily be able to do that also in the case of the crossroads we tried to get sort of an extension from the property owner to say can you give our Section 8 clients a longer period of time that broke down when law started to get filed but so those are the kinds of things that we would certainly attempt to do a lot of these folks are longtime clients they've lived in these buildings for many years um so we know them do what we can to help it you know there's only so many owners in Richville who accept Section sure um so but we also have relationships with other housing authorities and reach out but there's a limit to what we can do okay okay but my concern about this going forward is that um property taxes will be increased for everybody throughout the city and I know it's only $10 and $10 to some of us isn't a big deal and $10 to others is a big deal and I and I have that concern about this overall proposal if you go forward with theou will you will you be able to explore ways to limit that tax increase on everybody or is that already baked into the structure and cannot be changed so first I'd say that people's taxes won't necessarily be raised the TA capacity of the city is going to lower um however because we have two tax Inc districts coming online next year that is going to make up for the difference in the lower tax capacity and so people won't necessarily see their taxes change in terms of a dollar amount I mean our hope is perhaps could be less but there's lots that go you know there's still budgets that have to be gone through and stuff so we can't at this point we're estimating based on this year's conditions right so the $9 7 C whatever it is it's not a foregone conclusion at this point could be zero could be nothing commissioner uh young right in our hopes are that no one's bill will go up next year that the city will be able to maintain um or only slightly increase their Levy that these Tiff districts will roll off and so they will uh increase the tax capacity by more than we are decreasing the tax capacity through this action and hopefully people would actually see their property taxes lower um the action to approve a 4D does impact the tax capacity there are just all of these other levers that are also moving and and the hope is that no one would actually see a $977 c increase in their taxes because of this action if I could ask a followup specifically on the last question if you more please continue after this but just to be clear it would be $977 approximately more than it would otherwise be if not for this action right it's just the Tiff thing May sort of Disguise that this year that's correct okay that's correct thank you and just just so I'm clear this is one of the first bigger votes that I'll take on the H we are approving the ability for you to move forward work with the developer to uh negotiate the structure to learn more about the transaction and final approval if you get that far will happen at our next h meeting that is correct okay thank you and I'm sorry just to add the council um will take action on this next week and the council your approval here is contingent upon the council also okaying um the assistance and therefore the 4D tax classification so in addition to you there is another body that will vote on this thank you so I think you've answered most of my questions that I'm about to ask but I wanted to make sure before we vote that we were clear about the next steps so it sounds like there's going to be plenty of opportunities for the public to weigh in on this matter if we go forward with it they'll get to talk about it and talk to the city council and if that goes forward again they'll have another chance at the H so there's plenty of opportunities for people to on this matter and you've I think commissioner young talked about what Happ it goes if we say no or if we say yes I think that's been covered but I just wanted to make sure for anybody that's listening that they are there is no more opportunities coming that people can we in on this so is that correct yes that's absolutely correct there uh is a scheduled meeting with the City Council next Tuesday uh the packet will be posted for that you you can look at the information on the agenda here and then there will be hopefully a a second meeting with the HRA in February where a draft of a final contract would come before the board and that would be another opportunity to comment that was that was my concern I wanted to make sure we got community input and that everybody was aware of it um I had a question you and I spoke earlier about the budget for the 1.57 million that it does fit into our current plans um for what we have uh plan for the h currently so just wanted to clarify that that we are shifting some funds within our different buckets but we do have enough to cover and feel stable within the HRA funds for that amount as well yes so it's not specifically in the budget but that's one of the things we talk about when we approve the budget right is we don't always know what comes up but there is funding in the spending plan which is money that has to get committed this year a project has to be underway by the end of this year and we have about 2.3 million unom funds in there so if we don't get them committed any other way they would end up in the trust fund most likely anyway so yes resp are you ready for yes I am ready for motion there's other current questions go ahead so I'll move to adopt a resolution approving the execution and delivery of a memorandum of understanding with hemple holding LLC and I'll second all right it has been moved and seconded for comments questions and concerns yes go ahead if I could speak to my motion um I'm supportive of this as I believe the benefits to the community outweigh the tradeoffs we will be preserving a good deal of affordable housing with many two and three bedroom units which is a hard thing to find it's hard to get affordable housing for that size it also helps to make sure there are options for a rental assistance programs and I believe there is a significant risk of gentrification and dis of a lot of our community members and this option mitigates that risk in my opinion I also think it's important to be clear that this is not setting a predent for future policy we need to study the whole 4D issue for some of the things that came up here because it does affect um the entire community and the tax capacity but in these unique circumstances I believe it's best for the city to move forward on this proposal these three complexes have a lot of our two and three bedroom affordable units as I said they accept housing vouchers and they're home to 66 students we are already struggling to find affordable housing for those residents whose income is in the 30% of the Ami or lower um bracket and a lot of the people living in these complexes are that's where they are so I don't want to lose the housing we already have for them because then we have an even bigger problem trying to find housing for people that are at 30% of the Ami another unique circumstance is the two Tiff districts that are decertifying which will greatly offset the impact on the taxpayers although not possibly not entirely but this is a unique time when we can do this without raising taxes a great deal on anyone else because those TI districts are decertifying and so I think that weighs in factor of the decision um I'm okay with transferring funds into the trust fund is this is the type of thing we set it aside for and my understanding from talking to staff that the amount of subsidy per unit is similar to other projects that we have approved in the past it's just this is a big um lot of units so it looks like a lot of money so I think that if you divide it out by unit it's not much different than other things and staff can perhaps speak to that more later if it comes before us again um I did like the idea that came that came up tonight about looking into non-monetary asss of the developers part of this like having the tenant Council or the property management meeting with the city and I think that that's something that we should look forward to um and encourage but again overall I think the benefits seem to outweigh the trade-offs I've thought long and hard about all the questions that have been asked I do think it's important to consider um all the other residents in the community because when we look at it it you know we are not um a very we're not a overly Rich Community but we all work together and we build community and I think this is going to benefit everyone so while we don't have tons of money I think this is a good use of that money and it's a good way for all of us to stick together so I believe this is a good use of our housing money and I'm in support of The Proposal thank you thank you anyone else yeah I still have some skepticism but I I think I am going to be voting yes tonight um the main concerns and I want to thank staff for providing all the details the main concern I had is that our other options uh in the community are not significantly more expensive than the rates that this this developer is committing to with a 60 and 70% Ami but this is unusual as commissioner Supple noted um in that it has so many two and three bedroom units um in that we don't have any ability to compel uh normal private owners to accept Section 8 otherwise and so this allow us to ensure stability for those households um and that we don't have anything else immediately on the horizon that we're not already committed to um so although there's opportunity cost it's it's sort of an opportunity cost against a theoretical thing uh for a clear good I certainly share commissioner Young's concerns in general about 4D and that we are kind of robbing Peter to PayPal um in that tax relief but it's also tough to know like how much of that we should consider versus maybe that was an imperfect policy decision at the state level to shift such a low rate um obviously the intent of that law was not for cities to not subsidize affordable housing because of the tax consequences um I hope the state maybe um eases off that but recognizing where we're at now given the lack of other projects available to subsidize given the need here and the uniqueness of the two and three bedroom units I am okay moving forward tonight go ahead well I would agree with the uh what other Commissioners have expressed tonight I think this actually is a very worthy project for use of HRA funding um for the reason stated that it's there's quite a few two and three bedroom units which uh are kind of very precious type of units in our community especially for affordable housing um I I I know when I learned of like the 4D classification I did have some reservations about that because uh that kind of that shifting of taxing um capacity to other people um I just really wanted to make sure that we weren't Crea presedent and I know we've talked about predent and and it seems like people are kind of on board that we're going to make sure that this isn't a precedent um property taxes I think are a you know a real serious issue and I know that I've heard a lot of people say and I agree with it that the one flaw in the property tax is there's no relation to your ability to pay um a lot of times we think of seniors who are on fixed incomes is having difficulty but there are other folks as well people who they're laid off from their job because of illness because they have to be a caregiver and uh when you lose income like that well the the property tax bill doesn't change so it's I realized it's a very nominal amount the shift for this um particular project but um you know I think we really have to be concerned and keep those property taxes and implications of property taxes um at a kind of a real high priority of concern uh but I would support this because I do think but and actually the 4D classification actually is not an issue right before this body but the city council I think the the real issue before this body is with the memorum of understanding is are we committed to uh helping fund the project and I think this is a very worthy project of uh HRA funding um I agree with what has been said I think that these properties are hard to come and while I do agree that the tax status is call it odd uh to have to to consider that it it is happening at the right time that may not be a very visible burden in the kind of upcoming uh years and this moment in time I feel differently about it and um I think it's important to put money where we say our community lives and this is myth year on the H and it is hard to come by uh affordable housing in these sort of um apartmentss and so losing it is really hard and so um I'm incredibly supportive of moving forward with thisway and and excited to to see it hopefully forward all right if there's no other comments yes go ahead this is not directly on the vote but I do want to say publicly I do think we should be talking to our legislators about things like people having to take Section 8 because you know if there's no place for someone to go it doesn't do any good to have a Housing Voucher and I I think we need to have that policy discussion and think of all of the pros and cons of that as well as the discussion about the pros and cons of the 40 tax thing I think it was done for um good reasons but there are some unintended consequences and so I just hope that we can continue the policy discussions but I do believe that this is a unique situation that we're voting on now thank you um I just want to thank everyone for coming as well so it's lovely to see citizens come out and participate so thank you for everyone who came um all those in favor say I I I opposed the motion has been approved all right thank you um this takes us to item number five HRA discussion items are there any H discussion items seeing none uh item number six executive director's report thank you chair re Daniels I have two quick items first I wanted to let you know that in the coming month or two we're planning to re-release the RFI that's the request for um interest in the properties that the H owns at 494 and Highway 77 near the tunnel those are the Metro Sales and EcoSmart former buildings um you know the the commercial Market continues to be difficult uh but I think it's worth our time to put that out there again and see um see if there's any any good interest in those sites so um economic development manager youngquist will be working on that and that should be out soon um and then I did want to let you know that the work session scheduled for uh next Tuesday um for the H's part in that has been cancelled so you have your Tuesday evening the HRA has their Tuesday evening free I want to remind those on the council that you do still have a work session on a different item um so so you don't get to skip out those are my those are my items thank you great thank you um that takes us to item number seven claims is there a motion to approve claims uh so moved second it has been moved and seconded any comments questions concerns seeing none all those in favor say I claims have been approved and that ads us thank you everyone