Title
Resolution approving and authorizing the sale and conveyance of 652 Sherburne Avenue; recommending issuance of a Community Development Block Grant loan in the amount of $949,500; approving issuance of a Tax Increment Financing loan from unobligated increment in the amount of $386,279; approving an HRA budget amendment; and authorization to enter into a development agreement, District 7, Ward 1
Body
WHEREAS, the Housing and Redevelopment Authority of the City of Saint Paul, Minnesota (the “HRA”) is a public body corporate and politic established pursuant to the provisions of Minnesota Statutes, Section 469.001, et seq. (the “Act”); and
WHEREAS, the HRA has the power to engage in development or redevelopment activities under Minnesota law and the HRA is authorized to engage in activities relating to (a) housing projects and development, (b) removal and prevention of the spread of conditions of blight or deterioration, (c) bringing substandard buildings and improvements into compliance with public standards, (d) disposition of land for private redevelopment, and (e) improving the tax base and the financial stability of the community, and to engage in the aforementioned activities when these needs cannot be met through reliance solely upon private initiative and which can also be undertaken in targeted neighborhoods; and is authorized to create redevelopment projects as defined in Minn. Stat Section 469.002, Subd. 14; and
WHEREAS, the HRA is the owner of real property located at 652 Sherburne Avenue, St. Paul, Minnesota (“Property”); and
WHEREAS, the Rondo Community Land Trust, a Minnesota nonprofit corporation (“Rondo”), and Model Cities of Saint Paul, Inc., a Minnesota nonprofit corporation (“Model Cities”) propose to complete a project consisting of the substantial rehabilitation of a vacant 8-unit apartment building of approximately 16,000 square feet into an affordable residential housing development with 6 residential units, parking, garden and green space for residents living in the residential units on the Property (“Project”); and
WHEREAS, as part of the Project, Rondo will purchase the Property from the HRA with the land to be held in the land trust and the buildings to be sold to Model Cities under a development ground lease; and
WHEREAS, Model Cities intends to operate the Project as an affordable rental project for 5 years and then transfer the project to an affordable homeownership model consistent with the Board Report; and
WHEREAS, to facilitate the rehabilitation of a condemned property and the production of low-income housing, the HRA staff recommends issuance of a Community Development Block Grant (“CDBG”) loan in the amount of $949,500 for the Project; and
WHEREAS, by this Resolution, the HRA finds a proper public purpose in the issuance of the CDBG loan in order to produce low-income housing and finds that the Project will meet a CDBG national objective, benefit to low- and moderate- income (LMI) persons as further identified by the accompanying Board Report, making it eligible to use CDBG funds, and Model Cities and Rondo have agreed to enter into a development agreement with the HRA governing the use of such funds; and
WHEREAS, Minnesota Statutes, Section 469.176, subdivision 4n (“Subd. 4n”) authorizes the HRA to spend available tax increment from any existing tax increment financing district (“Available TIF”), notwithstanding any other law to the contrary, to provide improvements, loans, interest rate subsidies, or assistance in any form to private development consisting of construction or substantial rehabilitation of buildings and ancillary facilities, if the following conditions exist:
(1) Such assistance will create or retain jobs in the State of Minnesota (the “State”), including construction jobs;
(2) Construction commences before December 31, 2025;
(3) The construction would not have commenced before December 31, 2025 without the assistance;
(4) Available TIF under the spending plan is spent by December 31, 2025; and
(5) The City Council (“Council”) of the City of Saint Paul, Minnesota (“City”) approves a written spending plan (after a duly noticed public hearing) that specifically authorizes the HRA to take such actions.
WHEREAS, the HRA and the Council have heretofore adopted a spending plan on June 22, 2022 and adopted a Supplement to the Spending Plan on February 23, 2023 (collectively the “Spending Plan”) pursuant to Subd. 4n, which authorizes the use of Available TIF to provide improvements, loans or assistance for private development that satisfies the criteria listed above and as further described in the Spending Plan; and
WHEREAS, the Spending Plan expressly authorizes Available TIF assistance to be transferred to a project that advances private development of all types of housing production; and
WHEREAS, to facilitate the rehabilitation of a condemned property and the production of low-income housing, the HRA staff recommends issuance of a loan of Available TIF in the amount of $386,279 for the Project; and
WHEREAS, by this Resolution, the HRA finds that the Project meets all conditions of Subd. 4n because it will consist of private development on privately owned land; consists of substantial rehabilitation of buildings; will retain an estimated 12 construction and property management jobs over the next several years; will commence construction prior to December 31, 2025; the Project would not have commenced prior to December 31, 2025 except for the use of Available TIF; the Available TIF funds will be spent by December 31, 2025; the Project qualifies under the Spending Plan; and Model Cities and Rondo have agreed to enter into a development agreement with the HRA governing the use of such funds; and
WHEREAS, Model Cities and Rondo have agreed to enter into a development agreement with the HRA to govern the sale of the property, issuance of the loans and use of the funds, and construction of the Project; now, therefore, be it
RESOLVED by the Board of Commissioners of the Housing and Redevelopment Authority of the City of Saint Paul, Minnesota that:
1. the HRA hereby approves sale of the Property to Rondo to be held in the land trust and to be leased to Model Cities through a development ground lease.
2. based upon the findings set forth above, the HRA hereby recommends approval of a CDBG loan in the amount of $949,500 to Model Cities and Rondo for the Project.
3. based upon the findings set forth above, the HRA hereby approves issuance of a loan of Available TIF funds in the amount of $386,279 to Model Cites and Rondo for the Project.
4. the HRA approves and authorizes entering into a development agreement with Model Cities and Rondo consistent with the terms of this Resolution, the Board Report and subject to approval by the City Attorney’s Office.
5. the HRA hereby approves and authorizes HRA 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.
6. the proper HRA 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.
7. 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 HRA.