Title
RESOLUTION OF SUPPORT FOR CENTER CITY HOUSING CORPORATION’S REQUEST TO THE STATE OF MINNESOTA FOR QUALIFYING MULTIFAMILY FUNDING AND A CONDITIONAL PRE-COMMITMENT OF $300,000 FISCAL YEAR 2024 FUNDING ALLOCATION TO THE CITY OF DULUTH FROM THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (HUD) AND INTENT TO APPROVE A HOUSING AND REDEVELOPMENT AUTHORITY OF DULUTH TAX INCREMENT FINANCE PLAN TO PROVIDE UP TO $1,400,000 FOR THE CONSTRUCTION OF THE 30 UNIT WELCH PLACE PROJECT.
Body
CITY PROPOSAL:
RESOLVED, that the City of Duluth hereby expresses its support for Center City Housing Corporation’s request to Minnesota Housing Finance Agency (MHFA) for the allocation of low-income housing tax credits and/or other funding provided by MHFA, to construct a 30-unit deeply affordable multifamily apartment building in the Spirit Valley neighborhood (the “Project”).
BE IT FURTHER RESOLVED, that the Duluth City Council hereby states its intent to approve a tax increment financing (“TIF”) plan creating a housing TIF district if and when brought forward by the Housing and Redevelopment Authority of Duluth, MN (HRA) to support up to $1,400,000 over a term of up to 26 years in connection with construction of the Project.
BE IT FURTHER RESOLVED, that the proper City officials hereby approve a pre-commitment of Fiscal Year (FY) 2024 funds to be received by the City of Duluth as allocated by the Department of Housing and Urban Development (HUD) for construction of the Project. The award of $300,000 subject to the receipt thereof from HUD, and the Developer, Center City Housing Corporation, securing the necessary funding from MHFA and other funding sources and to the approval of a development agreement between the City and Developer thereof.
Statement of Purpose
STATEMENT OF PURPOSE: This resolution expresses the City Council’s support of an application to be submitted to MHFA by Center City Housing Corporation (CCHC), for low-income housing tax credit and other Multifamily Consolidated RFP funding that may be awarded by MHFA for the construction of the Welch Place project. The deadline for submission of the application to MHFA is July 13, 2023. MHFA intends to finalize funding decisions at their December 14, 2023 board meeting. Additionally, this resolution provides for a pre-commitment of a portion of the City’s FY 2024 HUD allocation for construction of affordable multi-family apartments. The Community Development Committee considered the request by CCHC for pre-commitment funds at their March 21, 2023. The Committee voted to recommend City Council approval of the proposed resolution. This resolution also approves support of creation of a tax increment financing (TIF) district through the HRA to support TIF financing up to $1,400,000 over a term of up to 26 years.
The building will be located in the Spirit Valley neighborhood of Duluth near the intersection of Wadena Street and 53rd Avenue West on DEDA-owned property. Construction of this 30-unit multifamily apartment will provide rental opportunities for high priority homeless adults. The units will be income restricted for individuals earning 30% or less of Area Median Income.
MHFA requires applicants to submit a City Council resolution of support to demonstrate local support and that the project meets locally identified housing needs. A 2019 Maxfield Research Inc. housing analysis reported that Duluth could absorb roughly 3,500 additional units of affordable housing by 2024. The demand for this type of housing has been further substantiated through staff research and analysis during both the Imagine Duluth 2035 comprehensive plan update and annual Housing Indicator Reports.