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Approving issuance of a HOME loan in the amount of $2,600,000; issuance of an SLFRF loan in the amount of $2,547,408; issuance of a sub-loan in the amount of $600,000 from a Metropolitan Council LCDA TOD Grant; and execution of a development, subrecipient and loan agreement and a sub-loan agreement, all for the Marshall Avenue Flats Project located at 1606 Marshall Ave (District 13, Ward 4).
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WHEREAS, a proposal was submitted in response to the City’s Request for Proposals for its 30% AMI Deeply Affordable Housing Program - March/April 2022 for Marshall Flats, LLLP, a Minnesota limited partnership or another entity that is affiliated with and controlled by Marshall Flats, LLLP (“Developer”) to construct on property located at 1606 (formerly 1619) Marshall Ave, St. Paul, MN (“Property”) a 6-story multifamily building with 98 affordable residential dwelling units and related facilities (“Project”) with the Developer to maintain 40 years of affordability as follows: 10 units at 30% AMI, 24 units at 50% AMI, and 64 units at 60% AMI (“Affordability Terms”); and
WHEREAS, the proposal was reviewed as part of the formal solicitation process and as a result of the review it was determined that the Project is eligible for SLFRF funding, therefore, the HRA has recommended the proposal and Project and has recommended issuance of the HOME Loan, SLFRF Loan and LCDA Loan all as defined below; and
WHEREAS, the City hereby finds that the Project is in the best interest of the residents of the City and will benefit the health, safety, morals and welfare of the residents of the City; and
WHEREAS, the HRA has recommended issuance of a deferred loan, from the City’s Home Investment Partnership Program funds (“HOME”), with a term of 40 years and an interest rate of 1% in the amount of $2,600,000 for the Project (“HOME Loan”); and
WHEREAS, the City’s HOME funds are to be used to strengthen public-private partnerships and to expand the supply of decent, safe, sanitary, and affordable housing, with primary attention to rental housing, for very low-income and low-income families pursuant to 24 C.F.R. § 92.1; and
WHEREAS, the City hereby finds that: (1) the Project is an eligible use of HOME funds for housing pursuant to 42 U.S.C. § 12742(a)(1) and 24 C.F.R. § 92.205(a) because it includes incentives to develop and support affordable rental housing and homeownership affordability through the acquisition, new construction, reconstruction, or moderate or substantial rehabilitation of affordable housing; (2) the Project will meet the income determinations set forth in 24 C.F.R. § 92.203; (3) the Project includes eligible costs pursuant to 24 C.F.R. § 92.206 because the Project includes some or all of the following costs: development hard costs, refinancing costs, acquisition costs, related soft costs, community housing development organization costs, relocation costs, and costs relating to payment of loans; (4) either the Project consists of the rehabilitation of substandard housing or the Project is not rehabilitation because rehabilitation of substandard housing is not the most cost-effective way to meet the need to expand the supply of affordable housing and housing needs cannot be met through rehabilitation of the available stock pursuant to 42 U.S.C. § 12742 (a)(2); (5) the Project meets the cost limit per unit established by 42 U.S.C. § 12742 and 24 C.F.R. § 92.250; and (6) due to the Project’s proposed limits on and time periods of affordability the Project will qualify as affordable housing for rental housing under 42 U.S.C. § 12745 (a) and 24 C.F.R. § 92.252 or for homeownership under 42 U.S.C. § 12745 (b) and 24 C.F.R. § 92.254; and
WHEREAS, the HRA has recommended issuance of a deferred loan, from the City’s American Rescue Plan Act of 2021 - State and Local Fiscal Recovery Fund a portion of which the City allocated to its 30% AMI Deeply Affordable Housing account (“SLFRF”), with a term of 40 years and an interest rate of 0% in the amount of $2,547,408 for the Project (“SLFRF Loan”); and
WHEREAS, the City’s SLFRF funds are to be used “to respond to the public health emergency with respect to the Coronavirus Disease 2019 (COVID-19) or its negative economic impacts” 42 U.S.C. §§ 802(c)(1) and 803(c)(1) and pursuant to 31 C.F.R. § 35.6 the SLFRF are to be used on eligible expenses which benefit populations that have been impacted by the public health emergency or its negative economic impacts; and
WHEREAS, the City hereby finds that: (1) the population impacted by the Project constitute low- and moderate-income households as defined in 31 C.F.R. § 35.3 and are therefore preemptively impacted by the public health emergency or its negative economic impacts pursuant to 31 C.F.R. § 35.6(b)(2); (2) the Project is proportionate in response to the public health emergency or its negative economic impacts on the impacted population as required by 31 C.F.R. § 35.6(b)(3); (3) the Project will improve access to stable, affordable housing for the impacted population and that the Project is a cost-effective and proportional response to the impacted population’s needs; and (4) the use of SLFRF proposed by the Project are eligible as specifically identified in 31 C.F.R. 35.6(b)(3)(ii)(A)(5) which identifies as an eligible expense: “Development, repair, and operation of affordable housing and services or programs to increase long-term housing security”; and
WHEREAS, the City has received from the Metropolitan Council a Livable Communities Demonstration Account (LCDA) Transit Oriented Development (TOD) Grant (“LCDA Grant”) in the sum of $600,000 to be passed on to the Developer for the Project; and
WHEREAS, the HRA has recommended passing the LCDA Grant on to the Developer through issuance of a sub-loan with a term of 40 years and an interest rate of 0% in the amount of $600,000 for the Project (“LCDA Loan”); and
WHEREAS, the HRA has recommended execution of a development, subrecipient and loan agreement between City and Developer setting forth the terms of the HOME Loan and SLFRF Loan including the Affordability Terms and has recommended execution of a sub-loan agreement between City and Developer setting forth the terms of the LCDA Loan; now therefore, be it
RESOLVED by the City Council of the City of Saint Paul as follows:
1. The Recitals are incorporated herein as if fully set forth.
2. The issuance of the HOME Loan, SLFRF Loan and LCDA Loan to Developer for the Project are hereby approved as set forth in the Recitals and the Board Report.
3. The execution of a development, subrecipient and loan agreement between City and Developer setting forth the terms of the HOME Loan and SLFRF Loan including the Affordability Terms and execution of a sub-loan agreement between City and Developer setting forth the terms of the LCDA Loan are hereby approved.
4. The City Council hereby approves and authorizes City staff to take all actions necessary to carry out the activities authorized by this Resolution, including finalizing all documents and agreements, subject to approval by the City Attorney’s Office.
5. The proper City official(s) are hereby approved and authorized to execute any and all documents in connection with this Resolution, subject to approval by the City Attorney’s Office.
6. This Resolution does not constitute a binding legal agreement; rather, the action taken herein shall not be effective until said documents are executed by the appropriate official(s) of the City.