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? ? ? ? ? ? ? ? ? ? ? ? ? ? Let's hear. 3 S Commissioner Billie and Hughes. And Thanks it's a vision fun certain practice applying for funding the and the Housing Finance Agency. And had It's why that store. If you several. Texas year. And CNN going back to. pay it. Well, all that investment and this basis >> very important to see the state investments. I was like, let me just keep talking to catches. beginning. But yes, just very, very important when we have a, you know, we've seen sme of this project come before last year for seen them and ensuring that their investments a persistent with our dollars been met. So I'm very supportive of this. >> Reservation of funds and also supporting the projects that will be seeking funding for it, icluding those bt
not limited to those that are on the east side but throughout the city. So I'll take a motion from commissioner maker to approve any further questions. All right, seeing none. All those in favor. Aye. All opposed. in favor 0 post resolution as staff Item number 2 for discussion as resolution R E s 26 stash. 0, 2, 6, authorization to release the 40 Affordable Housing and Senate to program Covenant on 5, 5, 6, Got industry, Saint Paul District 4.47. Thank you, Kelly. Appreciate that. I'm also just correction. This is separate but also taking action today because of the time sensitive. >> Sensitivity of it. But I do want to head over And if there's anything you want to say in profits of the program folks kind of us will see why in the presentation. Yeah, thank you. Chair commissioners happy to introduce Lucas Allen. And looking forward to this informational presentation on this. Thank you. Also for no means an action item before us today. It's a rental property. >> That will be sold to come on or occupy income restricted owner occupied. But so the request having be really since of a rental property, but Mr. Allen has more information. thank you. >> Thank wishes. Well, you is
items as mentioned. So little bit of about 44 Graham is a program enabled by state law. Calls for a public place. Facts with auction to help preserve affordable housing. And so once the unit becomes enrolled in the local for the program, we take that to the state, which then takes that determination to the county for property assessments in following >> In most cases, this amounts to an up to 80% reduction in the property tax for fully enrolled for the property. But it is rated prorated to certain portion of units depending on how decide. >> So cnsidering applications open for the city's local for the program will create a more of compliance process. And that looks, as we said, compliance forms to landlords and property managers, they throw those out. And then knew that they were trying to us. And then we look primarily for compliance with 3 things. The maximum weight limits of 3% annual increase limit. And that's how you household income limits. Once they verified is compliant for all of the properties throughout that year we send that was to the state and then the state does. That's what the process change. >> program that this only receive the benefit in proportion to their units. And then the state also has a sort of compliance process. They run concurrently to ours. And then the cross reference.
Those lists. >> its and their final term nations. The county. And so the changes that happened to enrollment of a largely a name compliant not combined basis. We rarely remove individual properties from te program just because they can go into noncompliance. There aren't necessarily actions to that. Minus the using of the for the status of the attention of the program. >> So for this particular by 5, 6 Councils Street is a single unit. that 50% am rolled into the city's 40 program in 2023? Homes currently in the purchasing process with an income occupier who's actually using BPA funds help with the purchase of the And so the request to release the restricted public 5, 5, 6, got teams that still may commence. This is an because there will be no more units left over. That would be rentals after the sale or so. And so the for restrictions sort of become moved at that point. So this is helping put a title in question. CNN's right. Well, actually. just when you so I just want to make sure I understand. Properties can choose to not comply with the program and then they then they lose the benefit. and then >> you said we usually don't allow them to a enrolled because the new property owner could just she is not to comply in this case. We're
removing that question because it's we need to in order for it to sell New Salem and more about why. Yeah, chair So reason this is is because it will owner occupied rather than a rental unit. >> And the 4 tax statute is only qualifying for rental units. >> And so by having happen before the statue tied property, that is owner occupied. So complicates the process a little And it also creates an unnecessary burden in the case of future sales to fire. Because the declaration still calls for administrative process is whenever there is a sale. As well as like compliance informing things like that. >> So 40 program guidelines call for it's a sale to income qualifying on Occupy the it was a mission, the presentation. But publication's it percent am. I. One thing that has the problems. Can you saw those individuals and the declarations of can >> So again, just just so I think this is important, too, in this case. And we know about the cell. As you know about this ahead of time, correct? Yeah, we have link that they can fill out that informs us and then we go through this process to report to the board. >> What is the timeline for the closing? >> The closing in this instance was previously
scheduled and had even moved little bit to accommodate this meeting and some of times incidents, those communicated. >> Prior to the cell, though, where was that communication in place? So I just from the timeliness of it all. >> I'm not I'm not aware that the city that the jury body new in advance of of this was going to take place for other being notified in the back. And that was going to happen. Is that accurate, Mr. Yes, we were chair. We're in communication with agents involved in the process then we're sort of. >> This is the first sale that in my tenure in this position that I had to bring forward to the board. And so it was sort of a learning process has to how exactly the process with with During debate. Could you speak a little bit to the process itself the time sensitive nature what happened in the back in? Because I think >> one of the things that is a little confusing for me is how we It doesn't seem like there was like maybe. The timeframe of which you may have that discussions and time to kind of explain with the tradeoff of this property. I don't to what extent that tok place just because we we see the band. It's like, okay, here's a so it's going to happen. That's going to be owner occupied. We have to the the
40 requirement. So was multiple steps leading up to that. It's just hard to yet. Chair commissioners. >> Part of the tme sensitivity of this one is that I they preferred half little more leeway on this one. We were notified of the sale of the property after closing had been schedule. And so that closing date had was then pushed back in order to have a nature, a meeting to have this action before. But that's the reason for that consolidation report action in one meeting instead of instead of 2 as well as with the July 4th holiday. They're being the first week off from next week. Commissioner Kemp >> a question about the timing of this. But more specifically that potentially other scenarios, my thunder cells and is the reason because the title company pull title and found the declarations like is there. Is there a different process in which the city would be notified? Of that sale prior to a title company pulling Title unseen declarations on the property. Chair commissioners. And I'm actually going rely on the experts in the room to help me out on this one as well. But, you know, typically in the owners aware, and so the owners being part of in the 40 program receiving the tax benefit. Should expectation is should have a knowledge that
that covenant us on there if they choose to sell to end on our occupied. And, you know, individual. And so typically that have that awareness to know that Cavendish to release to move forward. if you want to add chicken dishes, that's essentially how the process works. Is they? >> And was on his property. And then we work on developing the documents and things specific instances where it's declaration removal. We Okay. So it's it's really typical for the owners to know. That is something that they've signed and that they need to notify the city generally speaking. Yeah, chair commissioners, I think part of it is because as being in the program there is that annual compliance. So there's that annual sort of touch point with Steph already and that communication that exists there. So that awareness of the program generally, I think a lot of it comes from the compliance and reporting. Alright, that's did. My my line of questioning is much more around Lee County where this from happening in the future. But it sounds like this maybe. Not unique, but just. Not one that. That diverted from her normal process. kind of listening to that saying, Mr. I guess my follow-up question for you is how often are you connecting with those 40 program, unlike what does the cadence in the
process look like from the and piece of justice, you know, typically when actually hear about a cell and also to what came into kind of operating in a place to ensure that we don't just have a tax credit that's put in place and someone can just decide like tomorrow they're going to the property and have to tell us. And then that we have several ones of these coming forward. chair, like what is the what are the safeguards for us and what is the press to the family back right now? >> Yeah, just add chair commissioners that. Any sale of them in there. It's not a every week things happening there and tons of them often if there's if the properties are rental property being sold off and it's being sold with the intent for to remain as a rental property in which case know a jury foreign action is needed. It's, you know, and the circumstance here that the use is going from a rental. To honor occupy a place that has the impact. mission. Anything thanks. JP should be exploration this because I do think it helps us understand the program better. And the way it sounds to me is that the annual compliance check is the way we make sure that a program still qualifies to be in 4 D. And that 40 is a benefit to the property owner because it's a tax reduction. So I
guess I'm not as worried about properties kind of falling through the cracks of this and some in the way that I sometimes and because they fall through the cracks, that just means they don't get the benefit of the property tax reduction. I think this is a really interesting conversation because I'm thinking about it. It doesn't seem to carry the same risks. Worst comes to worst. You know, we're not they don't continue to get the benefit and then we can assume they let us know if they want to see that again. Yeah, I think it's more like. >> What's up an order from receiving the benefit Ryan's doing the cell and then so they receive the benefit of being a 40 property they sell within the same year, the same time frame so they wouldn't qualified Otherwise, but they qualify because rental property. But now they're going to sell to be on property with, like kind of like. Michael Tyree like of. That communication that that was possible. Very It here. The fact that, yeah, some of that's kind of where I'm coming from it comes to just like review process itself. And then there's annual reviews that possibly happened on this property. And then there's the reality that there possibly benefiting from from being a 40 property with a tax
decrease and now selling to be ownership. I do know the program with very little notice that that is kind of what I'm sure his last of them find the cracks with more of just like. I hope that folks you have up there, Anderson, when they're in the program, just that the expectation would be that they kind of share with staff here about they're not not so that they can't to. So, but it's like intent to say, I think can be communicated in a way that does nt have especially on the back to do something retroactively commission acre. No, thanks, Joe. That's that helps me understand the question. d I wondered then my question to staff and maybe. Is there sort of any proration or back taxes paid? So I got the benefit of a lower tax rate because I have a 40 property. A month later. I understands and happen very often. But just understand. And now it's no longer affordable property owned by the the new owner and a Texas are, you know, paid annually since that. there a whole year worth of 80% reduction then or is there some way of kind of climb back or could realizing the benefit of the fact that now is actually it shouldn't be importing anymore for the rest of the year. And maybe this question can be asked if there's an annual compliance
check before the if some point during the year the property stops being affordable for whatever reason wouldn't have to be a sale. How do we know that. And is there a way to realize the tax differential? >> Czech officials say some of this more in the weeds details. I think we can follow up and provide more information just knowing that our role in it as a city as the company, you know, is 20 year getting the compliance and sending that list to the state. It's a state tax benefit. The state program. And so I think maybe will want to connect with some of state partners on some of finer details of how they apply that tax benefit and some of those questions. Losses. And they want to add check is in terms of the former question that was asked regarding the continuation of the benefits. So it is for >> Like if if site is compliant this year 2026 that is reflective of property taxes. 2027 and so in that case, Would imagine that the county has some sort of process way in which their sisters are aware of his cell transitions unit is they will be able to recognize that it is no longer rental property go ineligible for the 40 classification. Because for these only eligible for for rental units. >> And begin to understand
that now that's 80%. Tax reduction at 40%. That's a significant. Chair commissioners will fall off of some of the details of implementation. Essentially if you off the tax bnefit. >> I appreciate If you a like know, like, okay, because I head around that. But I think it's okay to the actual item itself. It is in front of us too, to take step today just authorize the release and I just want to make sure that folks don't have any other questions before we move vote. OK, seen none. I will take a I will take a motion from commissioner approve all those in favor. All of those. >> 6 and favors or oppose. resolution is adopted. Item. Number 3 is a public hearing. Resolution public hearing. 26 one 45 resolution approving and authorizing the sale Vance of a nature real personal located at 10 87 Ross Avenue authorization to enter into development agreement and authorization of expenditures for Rdevelopment District. 4 words, 6. Already. is a public hearing on this item for. Item number 3, if you're here today, too, share public comment on it now would be a time. Seeing everyone rushing to the podium. have fee. No one. I we'll take a motion commissioner gain to close the public hearing. Any questions seeing none. All those in
favor. Aye. All of 6 favors your focus. The public hearing is closed to resolution is adopted. >> As a reminder, we don't have a meeting next week or next meeting is July 8th and then when I haven't on the 15th. So following that are meeting after that will be on 22nd. So there may be a couple items that come before you with instructions that have to act on the 22nd for the meeting and if there's anything that will come up there, you may see that within those 2 dates for July. We may do a couple introductions and actions if needed, just because we do want to go the home of being able to do Do business. But otherwise, we are adjourned.