Title
RESOLUTION OF SUPPORT FOR THE REQUEST BY UNION GOSPEL MISSION TO THE STATE OF MINNESOTA FOR QUALIFYING MULTIFAMILY FUNDING AND A CONDITIONAL PRE-COMMITMENT OF $400,000 FISCAL YEAR 2026 FUNDING ALLOCATION TO THE CITY OF DULUTH FROM THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT FOR THE CONSTRUCTION OF THE MISSION HEIGHTS HOUSING PROJECT.
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CITY PROPOSAL:
RESOLVED, that the city council hereby expresses its support for Union Gospel Mission Inc.’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 Mission Heights Housing, a 40-unit permanent supportive housing project (the “Project”).
FURTHER RESOLVED, that the proper city officials hereby approve a pre-commitment of fiscal year 2026 funds to be received by the city as allocated by the U.S. Department of Housing and Urban Development (“HUD”) for construction of the Project; the award of $400,000 subject to the receipt thereof from HUD, the developer Union Gospel Mission 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 Union Gospel Mission (“UGM”), for low-income housing tax credits and other Multifamily Consolidated Request for Proposal funding that may be awarded by MHFA for the construction of the Mission Heights Housing project. The deadline for submission of the application to MHFA is July 10, 2025. MHFA intends to finalize funding decisions by December 2025. Additionally, this resolution provides for a pre-commitment of a portion of the City’s Fiscal Year 2026 HUD allocation for the construction of the Mission Heights Housing project. The Community Development Committee considered the request by UGM for pre-commitment funds at their April 15, 2025 meeting. The Committee voted to recommend City Council approval of the proposed resolution.
The proposed Mission Heights Housing project is located at 313 W 2nd Street, on the corner of West 2nd Street and North 3rd Ave West. Mission Heights Housing will be constructed on the second and third floors of the future UGM Mission Engagement Center building, where the first floor will house a dining hall, a warming center, and other services for people experiencing homelessness. Mission Heights Housing will consist of 40 efficiency apartments offering permanent supportive housing to homeless single adults with high barriers to long term housing stability. All tenants will be at or below 50% of Area Median Income. UGM will take applicants from multiple referral sources including the coordinated entry system and homeless shelters/programs.
MHFA requires applicants to submit a City Council resolution of support to demonstrate local support and show 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. Within that same time frame, only approximately 330 affordable units were constructed in Duluth, thus, the need remains high. The demand for this type of housing has been further substantiated through early findings from the Duluth Comprehensive Housing Study that is currently underway.