Title
RESOLUTION OF SUPPORT FOR ARTSPACE PROJECTS INCORPORATED’S REQUEST TO THE STATE OF MINNESOTA FOR QUALIFYING MULTIFAMILY FUNDINGAND THE CONDITIONAL COMMITMENT OF UP TO $1,800,000 OF AMERICAN RESCUE PLAN ACT FUNDING FOR THE REHABILITATION AND RECONFIGURATION OF THE WASHINGTON STUDIOS PROJECT.
Body
CITY PROPOSAL:
RESOLVED, that the City of Duluth hereby expresses its support for Artspace Projects Incorporated’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 rehabilitate the existing 39 units and reconfigure to provide six (6) new units to result in a 45-unit affordable multifamily apartment building in the Central Hillside neighborhood (the “Project”).
BE IT FURTHER RESOLVED, that the City Council of the City of Duluth does hereby conditionally commit up to $1,800,000 of American Rescue Plan Act (ARPA) funding to support a portion of the cost of the Project, subject to the Developer, Artspace Projects Incorporated, successfully securing the necessary funding from MHFA and other funding sources to ensure project completion by 2026 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 Artspace Projects Incorporated (Artspace), for low-income housing tax credit and other Multifamily Consolidated RFP funding that may be awarded by MHFA for the rehabilitation and reconfiguration of the Washington Studios 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 expresses support of a commitment of up to $1,800,000 of the City’s ARPA funding. Washington Studios 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 2026.
The building is located in the Central Hillside neighborhood of Duluth at 315 N Lake Avenue. Rehabilitation and reconfiguration will completely redevelop the residential portion of the building and result in the creation of six new affordable units, bringing the building’s total unit count to 45. The building will continue to focus on supporting income-qualified tenants in the creative and artistic communities. Units will be income restricted for individuals earning 50-60% or less of Area Median Income (AMI).
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. Preservation of existing affordable housing in our community ensures current tenants do not face displacement.