Title
RESOLUTION OF SUPPORT FOR ONE ROOF COMMUNITY HOUSING’S REQUEST TO THE STATE OF MINNESOTA FOR LOW INCOME HOUSING TAX CREDITS AND THE CONDITIONAL PRE-COMMITMENT OF UP TO $500,000 OF BROWNFIELD REVOLVING LOAN FUNDING FOR THE REHABILITATION OF THE 121 UNIT FAITH HAVEN APARTMENTS PROJECT.
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CITY PROPOSAL:
RESOLVED, that the City of Duluth hereby expresses its support for One Roof Community Housing’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 rehabilitate a 121-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 pre-commit up to $500,000 from the Brownfield Revolving Loan Fund to fund a portion of the cost of the Project, subject to the Developer, One Roof Community Housing, successfully securing the necessary funding from MHFA and other funding sources to ensure project completion by 2027 and to the approval of a development agreement between the City and the Developer.
Statement of Purpose
STATEMENT OF PURPOSE: This resolution expresses the City Council’s support of an application to be submitted to MHFA by One Roof Community Housing (One Roof), for low-income housing tax credit and other Super RFP funding that may be awarded by MHFA for the rehabilitation of the Faith Haven Senior Apartments project. The deadline for submission of the application to MHFA is July 11, 2024. MHFA intends to finalize funding decisions at their December 19, 2024 board meeting. Additionally, this resolution expresses support of a pre-commitment of up to $500,000 from the Brownfield Revolving Loan Fund. The City and Developer will negotiate a formal development agreement and solicit Council approval for use of BRLF funds, subject to the Developer successfully securing the necessary funding from MHFA and other sources to ensure construction completion by 2027.
The building is located in the Spirit Valley neighborhood of Duluth at 4901 Grand Avenue. Rehabilitation of this 121-unit multifamily apartment will provide significant updates to building systems and apartment units that were originally constructed in 1970. This work will include asbestos abatement, reconfiguration of bathrooms to meet ADA compliance standards, installing energy efficient windows, installing a VRF system to enhance ventilation and provide air conditioning, updates to fire sprinklers, and updates to each living unit including kitchens and exterior updates including a drive-under entry canopy. The project will ensure quality living conditions for the low-income renters over 62 years old who depend on these units. Thirteen units are income restricted for individuals earning 80% or less of Area Median Income, 47 units are income restricted for individuals earning 60% or less of AMI, 36 units are income restricted for individuals earning 50% or less of AMI, 25 units are income restricted for individuals earning 30% of AMI or less, 7 of which will be reserved for high priority homeless individuals.
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.