Title
RESOLUTION OF SUPPORT FOR CENTER CITY HOUSING CORPORATION’S REQUEST FOR LOW INCOME HOUSING TAX CREDITS, CONDITIONAL COMMITMENT OF UP TO $1,750,000 OF AMERICAN RESCUE PLAN ACT FUNDING AND A CONDITIONAL PRE-COMMITMENT OF $300,000 FISCAL YEAR 2023 COMMUNITY DEVELOPMENT FUNDING FOR THE CONSTRUCTION OF THE 60 UNIT WADENA WEST PROJECT.
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CITY PROPOSAL:
RESOLVED, that the City of Duluth hereby expresses its support for Center City Housing Corporation’s request to the Minnesota Housing Finance Agency (MHFA) for the allocation of low-income housing tax credits and/or other funding provided by MHFA, to construct a 60-unit affordable multifamily apartment building in the Spirit Valley neighborhood (the “Project”).
BE IT FURTHER RESOLVED, that the City Council of the City of Duluth does hereby conditionally commit up to $1,750,000 of American Rescue Plan Act (ARPA) funding to fund a portion of the cost of the Project, subject to the Developer, Center City Housing Corporation, successfully securing the necessary funding from MHFA and other funding sources to ensure project completion by 2024 and to the approval of a development agreement between the City and the Developer.
BE IT FURTHER RESOLVED, that the proper City officials hereby approve a pre-commitment of Fiscal Year (FY) 2023 funds to be received by the City of Duluth as allocated by the federal Housing and Urban Development Department (HUD) for construction of the Project. The award of $300,000 subject to the receive thereof from HUD, 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 Super RFP funding that may be awarded by MHFA for the construction of the Wadena West project. The deadline for submission of the application to MHFA is July 15, 2022. MHFA intends to finalize funding decisions at their December 15, 2022 board meeting. Additionally, this resolution expresses support of a commitment of up to $1,750,000 of the City’s ARPA funding. CCHC was one of six proposals selected through the City’s Multi-family RFP process to receive ARPA funds. The City and Developer will negotiate a formal development agreement and solicit Council approval for use of ARPA funds, subject to the Developer successfully securing the necessary funding from MHFA and other sources to ensure construction completion by 2024. Additionally, this resolution provides for a pre-commitment of a portion of the City’s FY 2023 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 22, 2022 and April 13, 2022 meeting. The Committee voted to recommend City Council approval of the proposed resolution.
The building will be located in the Spirit Valley neighborhood of Duluth near the intersection of Wadena Street and 53rd Avenue West. Construction of this multifamily apartment will provide 60 permanent supportive housing units, 30 of which will be reserved for single adults experiencing or at risk of experiencing homelessness and 9 units for people with disabilities. rental opportunities for single adults experiencing or at risk of experiencing homelessness. The units will be income restricted for individuals earning 30-60% of area median income. CCHC currently has an option agreement with DEDA for purchase of the property.
MHFA requires tax credit applicants for housing developments in Duluth to receive the support of the City Council. The support is required to assure that a given proposal is a priority for the City of Duluth and that it meets locally identified housing needs. A 2019 Maxfield Research Inc. housing analysis reported that Duluth could absorb up to 3,509 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 Image Duluth 2035 comprehensive plan update and annual Housing Indicator Reports.