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RESOLUTION APPROVING A PRE-COMMITMENT OF $200,000 FISCAL YEAR 2020 FUNDING ALLOCATION TO THE CITY OF DULUTH FROM THE HOUSING AND URBAN DEVELOPMENT (HUD) DEPARTMENT TO CENTER CITY HOUSING CORPORATION FOR THE CONSTRUCTION OF THE BIRCHWOOD APARTMENTS AND SUPPORTING ITS CONSTRUCTION.
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CITY PROPOSAL:
RESOLVED, that the city council hereby approves a pre-commitment of Fiscal Year (FY) 2020 funds to be received by the city of Duluth as allocated by the federal Housing and Urban Development Department for the construction of the 30 unit Birchwood Apartments. The award of $200,000 will be contingent upon the developer, Center City Community Housing, successfully securing major funding support from the Minnesota Housing Finance Agency (MHFA) and other funding sources to enable construction to begin next year. The $200,000 will be a grant issued from the City of Duluth’s 2020 HUD’s allocation to Center City Community Housing for the construction of the Birchwood Apartments. The $200,000 in HUD Funds will be a grant that will not need to be paid back to the City, unless the City of Duluth finds that the Birchwood Apartments does not fully meet HUD income and rental requirements. Center City Community Housing may lend the granted HUD Funds to the ownership entity of the proposed Birchwood Apartments to be coterminous with the first mortgage and at an interest rate that does not exceed the Applicable Federal Rate. The City of Duluth, at a minimum, will insure all federal monitoring requirements are met. The $200,000 will be available for the Birchwood Apartments when the 2020 HUD Funds have been allocated to the City of Duluth.
The award is also contingent upon the city’s receipt of the expected FY 2020 HUD grant award. The development of the Birchwood Apartments will contribute to achieving housing goals in the 2015-2019 City of Duluth Consolidated Plan and the Continuum of Care’s 10 Year Plan to End Homelessness.
FURTHER RESOLVED, that the city council finds that the proposed Birchwood Apartments site was recommended for multi-family housing development as part of a local planning process, entitled “Duluth Housing Action Framework” adopted by city council resolution 17-0435R, and affirmed in the Imagine Duluth 2035 Comprehensive Plan, adopted June 25, 2018; and that the location for Birchwood Apartments is located in the Mall Area Core Investment Area, a neighborhood node identified as a priority in the Comprehensive Plan.
FURTHER resolved, that the city council hereby expresses its support for Center City Community Housing’s application for funding for MHFA for low-income housing tax credits to assist in the financing and development of the Birchwood Apartments development.
Statement of Purpose
STATEMENT OF PURPOSE: This resolution provides for a pre-commitment of a portion of the city’s FY 2020 HUD allocation for the construction of the Birchwood apartments. Center City Housing Corporation is the developer and will be the owner. The proposed Birchwood Apartment Building would provide 30 one-bedroom permanent supportive housing units for single adults with behavioral health needs. The supportive services at this development will include on-site case management, Targeted Case Management, ARMHS, program and activity support, 24-hour front desk and part time nursing.
The pre-commitment of city funds is evidence of the city council’s support for the project. The community development committee considered the request by Center City Housing Corporation for pre-commitment of funds at its April 23, 2019 meeting. The committee voted to recommend city council approval of the proposed resolution.