022123 AgendaREGULAR HOUSING AND REDEVELOPMENT AUTHORITY MEETING
RICHFIELD MUNICIPAL CENTER, COUNCIL CHAMBERS
FEBRUARY 21, 2023
7:00 PM
Call to Order
Open Forum
Each speaker is to keep their comment period to three minutes to allow sufficient time for others. Comments
are to be an opportunity to address the HRA. Please refer to the HRA agenda and minutes web page for
additional ways to submit comments. You may also call 612-861-9764 or email ldubois@richfieldmn.gov with
questions. Call into the open forum by dialing 1-415-655-0001 Use webinar access code: 2466 518 7086,
password: 1234.
Appr oval of t he M inut es
Approval of the minutes of the Regular Housing and Redevelopment Authority meeting of January 17, 2023.
AGENDA APPROVAL
1. Approval of the Agenda
OTHER BUSINESS
2.Consideration of a request by the owners of the Oaks on Pleasant that the apartment building's housing
affordability requirement be reduced from 25 to 22 years.
Staff Report No. 4
HRA DISCUSSION ITEMS
3.HRA Discussion Items
EXECUTIVE DIRECTOR REPORT
4.Executive Director's Report
CLAIMS
5.Claims
6.Adjournment
Auxiliary aids for individuals with disabilities are available upon request. Requests must be made at
least 96 hours in advance to the City Clerk at 612-861-97 12.
HOUSING AND REDEVELOPMENT
AUTHORITY MEETING MINUTES
Richfield, Minnesota
Regular Meeting
January 17, 2023
CALL TO ORDER
Acting Chair Vrieze Daniels called the meeting to order at 7:00 p.m. in the Council
Chambers.
OATH OF OFFICE
Assistant Community Development Director Urban administered the oath of office for
Commissioner Hayford Oleary.
Assistant Community Development Director Urban administered the oath of office for
Commissioner Supple.
OPEN FORUM
Acting Chair Vrieze Daniels provided instructions to call in for the open forum.
There were no callers.
APPROVAL OF THE MINUTES
HRA Members
Present:
Erin Vrieze Daniels, Acting Chair; Mary Supple, Lee Ohnesorge;
Gordon Hanson; and Sean Hayford Oleary
HRA Members
Absent:
Staff Present: Melissa Poehlman, Executive Director/Community Development
Director; Julie Urban, Assistant Community Development
Director; and LaTonia DuBois, Administrative Assistant
Others Present:
None
None
HRA Meeting Minutes -2- January 17, 2023
M/Hanson, S/Supple to approve the minutes of the regular Housing and Redevelopment
Authority meeting of December 19, 2022.
Motion carried: 5-0
ITEM #1
APPROVAL OF THE AGENDA
M/Supple, S/Hayford Oleary to approve the agenda.
Motion carried: 5-0
ITEM #2
APPROVAL OF THE CONSENT CALANDER
Executive Director Poehlman presented the Consent Calendar.
a) Consider the appointment of Commissioner Hanson as Interim Secretary of
the Richfield Housing and Redevelopment Authority. (Staff Report No. 1)
b) Consider a resolution approving an extension of a Preliminary
Redevelopment Agreement with Beacon Interfaith Housing Collaborative for
the development of approximately 40 units of affordable, supportive housing
for people at 6613 – 25 Portland Avenue. (Staff Report No. 2)
Resolution No. 1447
RESOLUTION APPROVING THE EXECUTION AND DELIVERY OF AMENDED
AND RESTATED PRELIMINARY REDEVELOPMENT AGREEMENT WITH
BEACON INTERFAITH HOUSING COLLABORATIVE
M/Hayford Oleary, S/Ohnesorge to approve the Consent Calendar
Motion Carried: 5-0
Commissioner Supple spoke of a resident inquiry surrounding the Beacon development’s
level of accessibility.
Executive Director Poehlman explained the discussion would occur when the development
proposal is brought before the commission.
ITEM #3
CONSIDERATION OF ITEMS, IF ANY, REMOVED FROM THE CONSENT
CALENDAR
None.
HRA Meeting Minutes -3- January 17, 2023
ITEM #4
CONSIDERATION OF AN AMENDMENT TO THE CONTRACT FOR PRIVATE
DEVELOPMENT WITH MWF PROPERTIES FOR THE DEVELOPMENT OF 55
UNITS OF MULTI-FAMILY HOUSING AT 7700 PILLSBURY AVENUE SOUTH,
EXTENDING THE CONTRACT FOR PRIVATE DEVELOPMENT DEADLINE TO
JANUARY 15, 2024. (STAFF REPORT NO. 3)
Assistant Community Development Director Urban presented Staff Report No. 3
M/Supple, S/Hanson to adopt a resolution approving an amendment to the Contract for
Private Development with MW F Properties for the development of 55 units of multi-family
housing at 7700 Pillsbury Avenue South, extending the Contract for Private Development
deadline to January 15, 2024.
Motion carried 5-0
ITEM #5
HRA DISCUSSION ITEMS
None.
ITEM #6
EXECUTIVE DIRECTOR REPORT
Executive Director Poehlman reported the City of Richfield was recommended for GAP
funding for additional units at Woodlawn housing.
ITEM #7
CLAIMS
M/Hanson, S/Supple that the following claims be approved:
U.S. BANK 1/17/2023
Section 8 Checks: 134426-134571 $196,562.63
HRA Checks: 34302-34310 $21,174.07
TOTAL $217,736.70
Motion carried: 5-0
RESOLUTION NO. 1448
RESOLUTION APPROVING AMENDMENT TO CONTRACT FOR PRIVATE DEVELOPMENT
WITH MWF PROPERTIES, LLC
HRA Meeting Minutes -4- January 17, 2023
ITEM #8
ADJOURNMENT
The meeting was adjourned by unanimous consent at 7:13 p.m.
Date Approved: February 21, 2023
Erin Vrieze Daniels
Acting HRA Chair
LaTonia DuBois Melissa Poehlman
Administrative Assistant Executive Director
AGENDA SECTION:OTHER BUSINESS
AGENDA ITEM #2.
S TAFF REPORT NO. 4
HOUSING AND RE DEVELOPMENT AUT HORIT Y
MEET ING
2/21/2023
RE P O RT P RE PA RE D B Y: J ulie Urban, A sst. C ommunity D evelopment D irector
O THE R D E PA RTM E NT RE V IE W:
E X E C UTIV E D IRE C TO R RE V IE W: Melissa P oehlman, E xecutive D irector
2/14/2023
I T E M F O R C O UNC IL C O NS ID E RAT I O N:
Consideration of a request by the owners of the Oaks on Pleasant that the apartment building's
housing affordability requirement be reduced from 25 to 22 years.
E X E C UT IV E S UM M ARY:
The Oaks on Pleasant is a 130-unit townhome-style apartment development at 6600 Pleasant Avenue South.
The building was constructed in 2001 as part of the Urban Village redevelopment project, which includes
Woodlake Center, Mc Donald's, and the Pines senior development. The Urban Village project as a whole was
awarded a $9.5 million Tax I ncrement Financing (TI F) Pay as you Go Note for the extraordinary costs
associated with redevelopment. At that time, the Housing and Redevelopment Authority (HRA) was required to
provide a local match for TI F projects. As a condition of the TI F and the $600,000 local match, the Oaks was
required to provide 12 units of housing affordable at 70% of the Area Median I ncome (A MI ) three studios,
seven one bedrooms and two three bedrooms. The project was also required to contribute 15% of the tax
increment to the HRA's Housing & Redevelopment Fund.
The Housing Affordability Agreement (Agreement) requires the units to be affordable for a period of 25 years
with the provision that after 15 years, the HRA will give reasonable consideration to any request from the
developer to shorten the term. The owners are asking the HRA to exercise that consideration at this time, after
providing 22 years of affordability.
The owners are asking the HRA to release them from the affordability requirement due to increasing costs as
the building ages, and the challenge of finding tenants who qualify for the affordable units. Their intent is not
to impact any of the existing tenants but to be able to rent future vacant units at a market rate and without
requiring tenants to meet income restrictions.
The affordable rents have been well under the 70% A MI affordability limit, and the proposed market-rate rents
will be close to the current maximum allowed by the 70% A MI limits.
RE C O M M E ND E D AC T I O N:
By motion: Either
- Approve the reduction of affordability from 25 to 22 years for the Oaks on Pleasant and authorize the
Acting Chair and Executive Director to execute a release of the Affordable Housing Agreement.
O R
- Deny the owner's request to shorten the affordability period.
BASIS OF RECOMMENDATION:
A.HISTORICAL CONTEXT
The 130-unit Oaks on Pleasant apartment building was constructed in 2001 as part of the
Woodlake Center/Urban Village redevelopment project. In exchange for a $600,000 local match
provided by the City, the Oaks agreed to provide 12 units of housing affordable at 70% of the AMI
for a 25-year period with the option of requesting that the project be released from the requirement
after 15 years.
At the time the building was constructed, Richfield hadn't seen a market-rate apartment building
constructed since the 1980s, so the primary goal of the project was to provide a contemporary
apartment option with modern amenities, while offering some modest affordability.
15% of the overall development's tax increment has also been contributed to the HRA's housing
and redevelopment fund, which has been used to fund affordable, market-rate, and redevelopment
activities throughout the community.
B.POLICIES (resolutions, ordinances, regulations, statutes, etc):
The project was guided by the Lakes at Lyndale redevelopment plan, which there was no written
affordability policy at the time the project was built; affordability was negotiated on a project-by-
project basis.
Under current policy, the project would have been required to provide 26 units affordable at 60%
of the AMI or contribute 15% of the tax increment to the Housing & Redevelopment Fund.
C.CRITICAL TIMING ISSUES:
The owners are requesting a release at this time so they may rent future vacant units at market
rate.
D.FINANCIAL IMPACT:
There is no financial impact on the HR A from the request. The pooling contribution to the
Housing & Redevelopment Fund (Fund) will continue through the end of the TIF District,
which is December 31, 2025. The total estimated amount of tax increment to be
contributed to the Fund is $3.2 million.
E.LEGAL CONSIDERATION:
If the HRA agrees to release the owners from the affordability requirement, the HRA Attorney will
prepare a satisfaction document.
ALTERNATIVE RECOMMENDATION(S):
N/A
PRINCIPAL PARTIES EXPECTED AT MEETING:
Steve Kirchner, property owner
ATTACHMENTS:
Description Type
Letter requesting release Backup Material
Affordable Housing Agreement Backup Material
February 7, 2023
City of Richfield HRA
Attn Julie Urban
Via Email
Re: Request to Shorten the term of the Affordability Requirements at The Oaks On Pleasant
Dear Members of the HRA
I want to first say thank you to the City and the Housing and Redevelopment Authority for the
opportunity to address you on this matter. The Oaks on Pleasant has been a great
redevelopment success for the City of Richfield and we continue to be proud of the community
we have developed at the property.
This letter is our formal request to the City of Richfield HRA that the affordability requirements
for the units at The Oaks on Pleasant be shortened from 25 years to 22 years. We would
request these changes due to the following reasons:
• It has become increasingly harder to find residents who income qualify for the units.
Over the past 22 years the Oaks on Pleasant has been fortunate enough to be able to
achieve close to 100% occupancy at the property. This has been achieved by providing a
quality property at rents that are below many of our newer competition. The only units
we have struggled to rent when they come available are our income restricted units. It
is a small segment of the market that can income qualify for the program and still afford
the monthly rent.
• With inflation at a level not seen in years it has become extremely important for the
property to maximize our rents as much as possible. Expenses are increasing 8% to 12%
and we are only seeing a 3% to 5% increase in rents. Keeping these rents artificially
lower hinders our ability to keep up with expenses.
• Added expenses at the property as it ages are making it difficult to keep up with costs.
These costs include the mandated inspection of all furnaces in the property due to city
statutes. The property needs to offset these expenses with higher rents on our units.
At this time it is our intention to keep all existing affordable units in complianc e with the
affordable restrictions as long as the existing tenants continue their occupancy. The existing
tenants would be given the standard rent increases they have received in the past and their
rent levels would not surpass the rent limits established for that given year. What we are
requesting is that as our affordable units are vacated by the existing tenants that we are able to
re-rent those units at our standard market rents with no restrictions on the income of the
incoming tenant. In reality our standard market rents for our Studios, one bedrooms and two
bedrooms are well below the 70% Maximum Gross Rents by Bedroom for Hennepin County
posted by MHFA. Our current affordable unit rents compared to our proposed market rents
are as follows:
Bedroom Size Current Affordable Rent New Market Rent 70% allowable Rents
Studio $1,205 $1,265 $1,438
1 Bedroom $1,250 $1,380 $1,540
2 Bedroom $1,565 $1,775 $1,848
As you can see, even if we raise rents to the market rate of our other units, our rents continue
to fall under the 70% allowable rents and in the case of the studios and one bedrooms they fall
under the 60% allowable rents. Based on this, the Oaks on Pleasant is requesting that the final
3 years of the income restrictions be lifted for any new tenant that may apply for these units.
This will allow the property to provide housing to an expanded group of potential renter s in
Richfield while still providing rents that, per MHFA guidelines, fall into an affordable category.
We once again appreciate the opportunity to have a conversation about this topic and look
forward to answering any questions you may have.
Thank you
Duncan Susee
CEO
Metes & Bounds Management Company
Managing agent for The Oaks LLC