111824 HRA AgendaREGULAR HOUSING AND REDEVELOPMENT AUTHORITY MEETING
RICHFIELD MUNICIPAL CENTER, COUNCIL CHAMBERS
NOVEMBER 18, 2024
7:00 PM
Call to Order
Open Forum
Please refer to the HRA agenda and minutes web page for additional ways to submit comments.
Appr oval of t he M inut es
Approval of the minutes of the Regular Housing and Redevelopment Authority meeting of October 21, 2024.
AGENDA APPROVAL
1.Approval of the Agenda
2.Consent Calendar contains several separate items which are acted upon by the HRA in one motion.
Once the Consent Calendar has been approved, the individual items and recommended actions have
also been approved. No further HRA action on these items is necessary. However, any HRA
Commissioner may request that an item be removed from the Consent Calendar and placed on the
regular agenda for HRA discussion and action. All items listed on the Consent Calendar are
recommended for approval.
A.Consider the approval of a resolution accepting contributions for the 2024 Tour of Remodeled Homes.
Staff Report No. 21
B.Consideration of a resolution authorizing the execution of the First Amendment to the Declaration of
Covenants, Restrictions, and Easements Between the Housing and Redevelopment Authority and Brixmor
for the property at 140 - 66th Street West.
Staff Report No. 22
C.Consideration of the updated Richfield Housing and Redevelopment Authority Administrative Plan to
conform with the new Housing Opportunity Through Modernization Act final ruling under the Section 8
Housing Choice Voucher Program.
Staff Report No. 23
3.Consideration of items, if any, removed from Consent Calendar
RESOLUTIONS
4.Consideration of a Housing and Redevelopment Authority Loan Forgiveness Policy.
Staff Report No. 24
HRA DISCUSSION ITEMS
5.HRA Discussion Items
E X E C U T IV E D IR E C TO R R E P O R T
6.E xecutive D irector's Report
C LAIMS
7.C laims
8.A djournment
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 612-861-9739.
HOUSING AND REDEVELOPMENT
AUTHORITY MEETING MINUTES
Richfield, Minnesota
Regular Meeting
October 21, 2024
CALL TO ORDER
Chair Vrieze Daniels called the meeting to order at 7:00 p.m. in the Council Chambers.
HRA Members
Present:
Erin Vrieze Daniels, Chair; Sean Hayford Oleary; John Young,
Gordon Hanson and Mary Supple
HRA Members
Absent:
Staff Present:
Guests Presenter:
Melissa Poehlman, Executive Director; and Michelle Friedrich,
City Clerk.
Senior Municipal Advisor Rebecca Kurtz, Ehlers, Inc.
OPEN FORUM
Chair Vrieze Daniels gave instructions on how to participate in the Open Forum. No
residents participated in the Open Forum.
APPROVAL OF THE MINUTES
M/Supple, S/Hayford Oleary to approve the minutes of the Regular Housing and
Redevelopment Authority meeting of September 16, 2024.
Motion carried: 5-0
ITEM #1 TIF STATUS REPORT PRESENTATION
Executive Director Poehlman introduced Senior Municipal Advisor Rebecca Kurtz from
Ehlers Inc. Senior Municipal Advisor Kurtz reviewed the Tax Increment Financing (TIF) report for
2024 and gave an overview of the TIF management plan for 2023. Senior Municipal Advisor
Kurtz reviewed opportunities and challenges with TIF and summarized districts are on track with
no modifications recommended and are in compliance.
HRA Meeting Minutes -2-October 21, 2024
ITEM #2 APPROVAL OF THE AGENDA
M/Hayford Oleary, S/Young to approve the agenda.
Motion carried 5-0
ITEM #3 APPROVAL OF THE CONSENT CALENDAR
Executive Director Poehlman presented the consent calendar.
A.Consideration of the adoption of a resolution approving Assignments of the
Contract for Private Development and Tax Increment Financing Note relating
to the sale of the Rya Apartments.
(Staff Report No. 20)
M/Hayford Oleary, S/Young to approve the consent calendar.
Motion carried 5-0
ITEM #4 CONSIDERATION OF ITEMS, IF ANY, REMOVED FROM THE CONSENT
CALENDAR
None.
ITEM #5 HRA DISCUSSION ITEMS
None.
ITEM #6 EXECUTIVE DIRECTOR’S REPORT
Executive Director Poehlman updated the Commission on Penn Station pre-
development costs, Aster Commons funding, and noted Housing and Redevelopment Authority
federal funding and spending deadlines.
ITEM #7 CLAIMS
M/Young, S/Hayford Oleary that the following claims be approved:
HRA Meeting Minutes -3-October 21, 2024
U.S. BANK 10/21/2024
HRA Checks: #37124-37149 $165,369.57
Section 8 Checks: #136171-136249 $210,274.44
TOTAL $375,644.01
ITEM #8 ADJOURNMENT
The meeting was adjourned by unanimous consent at 8:00 p.m.
Date Approved: November 18, 2024
Erin Vrieze Daniels
HRA Chair
Michelle Friedrich Melissa Poehlman
City Clerk Executive Director
AGENDA SECTION:Consent Calendar
AGENDA ITEM #2.A.
STAFF REPORT NO. 21
HOUSING AND REDEVELOPMENT AUTHORITY
MEETING
11/18/2024
Hilary Lovelace, Housing SpecialistREPORT PREPARED BY:
EXECUTIVE DIRE CTOR RE VIEW: Melissa Poehlman, Executive Director
11/13/2024
ITEM FOR COUNCIL CONSIDERATION:
Consider the approval of a resolution accepting contributions for the 2024 Tour of Remodeled Homes.
EXECUTIVE SUMMARY:
The Community Development Department solicited financial sponsorship for the 2024 Renovation
Celebration: Tour of Remodeled Homes in Richfield (Tour). Four sponsors donated to sponsor the Tour. The
funds were used to provide gift cards to participating homeowners and for marketing expenses. State law
requires the Housing and Redevelopment Authority (HRA) to accept the funds by resolution.
Grants were provided by:
Mitlyng Design + Architecture
WJL Consults LLC
E.J. Hansen, AIA and Knutson Custom Remodelers
Steve Schneeberger of Keller Williams Realty
RECOMMENDED ACTION:
By motion: Approve a resolution allowing the acceptance of monetary support solicited for the 2024
Tour of Remodeled Homes.
BASIS OF RECOMMENDATION:
A.HISTORICAL CONTEXT
The Tour was held on October 5, 2024. Four homes were open to the public from 1:00 to 5:00 p.m.
Approximately 330 people attended the Tour to learn about the remodeling projects from the
homeowners and sponsors. Information about HRA housing programs, and how various projects impact
a home’s value, was also provided.
Sponsors participated in the Tour and provided $350 to be a Tour sponsor. They were present at the
Tour and their names and logos were part of marketing materials. Mitlyng Design + Architecture, WJL
Consults LLC, E.J. Hansen, AIA, Knutson Custom Remodelers, Steve Schneeberger of Keller
Williams Realty participated this year for a total of $1,400.
The funds were used to defray marketing expenses for the Tour and to provide gift cards to the four
homeowners for participating.
B.EQUITABLE OR STRATEGIC CONSIDERATIONS OR IMPACTS
While accepting donations doesn’t address the Strategic Plan priorities directly, promoting the Tour
furthers the Comprehensive Plan goals to maintain and enhance the City’s housing stock and to provide
a full range of housing choices.
C.POLICIES (resolutions, ordinances, regulations, statutes, exc):
The Tour was part of the HRA’s housing marketing plan that was adopted in 2014. The Tour highlighted
investment in the local housing stock and offered information on the HRA’s remodeling programs,
including the Transformation Loan Program.
D.CRITICAL TIMING ISSUES:
A resolution accepting the donations needs to be passed before the end of the 2024 calendar year.
E.FINANCIAL IMPACT:
The HRA received $1,400 total in donations towards Tour expenses.
F.LEGAL CONSIDERATION:
Minnesota Statute 465.03 requires that every acceptance of a grant or devise of real or personal
property on terms prescribed by the donor be made by resolution.
ALTERNATIVE RECOMMENDATION(S):
Direct staff to return the donations to the donors.
PRINCIPAL PARTIES EXPECTED AT MEETING:
N/A
ATTACHMENTS:
Description Type
Resolution Accepting Donations Resolution Letter
RESOLUTION NO. 1491
RESOLUTION AUTHORIZING RICHFIELD COMMUNITY DEVELOPMENT
DEPARTMENT TO ACCEPT DONATIONS FROM THE LISTED BUSINESSES FOR
DESIGNATED USES
WHEREAS, the Community Development Department received checks from the
following for the 2024 Renovation Celebration: Tour of Remodeled Homes;
Mitlyng Design + Architecture
WJL Consults LLC
E.J. Hansen, AIA
Knutson Custom Remodelers
Steve Schneeberger of Keller Williams Realty
and,
WHEREAS, Minnesota Statute requires every acceptance of a grant or devise of
real or personal property on terms prescribed by the donor be made by resolution; and,
WHEREAS, the donated funds will be used towards the designated events
sponsored by the Community Development Department.
NOW, THEREFORE, BE IT RESOLVED that the Director of Community
Development will accept and distribute the donations as specified.
Adopted by the Housing and Redevelopment Authority in and for the City of
Richfield, Minnesota this 18th day of November, 2024.
__________________________
Erin Vrieze Daniels, Chair
ATTEST:
___________________
Sean Hayford Oleary, Secretary
Checks Received
2024
Business Name Amount of Donation Designation
Mitlyng Design +
Architecture
$350.00
(used for gift cards and
marketing expenses)
Remodeled Home Tour
WJL Consults LLC $350.00
(used for gift cards and
marketing expenses)
Remodeled Home Tour
E.J. Hansen, AIA and
Knutson Custom
Remodelers
$350.00
(used for gift cards and
marketing expenses)
Remodeled Home Tour
Steve Schneeberger of
Keller Williams Realty
$350.00
(used for gift cards and
marketing expenses)
Remodeled Home Tour
Total: $1,400
AGENDA SECTION:Consent Calendar
AGENDA ITEM #2.B.
STAFF REPORT NO. 22
HOUSING AND REDEVELOPMENT AUTHORITY
MEETING
11/18/2024
Sam Crosby, Planner IIREPORT PREPARED BY:
EXECUTIVE DIRECTOR REVIEW: Melissa Poehlman, Executive Director
11/12/2024
ITEM FOR COUNCIL CONSIDERATION:
Consideration of a resolution authorizing the execution of the First Amendment to the Declaration of
Covenants, Restrictions, and Easements Between the Housing and Redevelopment Authority and
Brixmor for the property at 140 - 66th Street West.
EXECUTIVE SUMMARY:
The former Rainbow Foods building has been closed for six years. In September, the City approved a
Conditional Use Permit (CUP) for a new grocery store to occupy the vacant building. The CUP requires that
the site be brought up to current code to the extent possible. Among the proposed changes are improvements
to the problematic on-site circulation patterns. The Declaration of Covenants, Restrictions and
Easements (Declaration) for the property includes a clause that requires the Housing and
Redevelopment Authority's (HRA) approval for any changes to the parking configuration on the
property, the requirement can be found at the bottom of section 3. This was a requirement at the
time (1991) because the City had originally provided financing for the project (36% of the $9 million
cost of site assembly and construction).
The financing has long since expired and the HRA no longer has an interest in the parking lot configuration.
Therefore, the current property owner, Brixmor, is requesting that the Declaration be amended to remove the
requirement for HRA approval of changes to the parking layout. Staff concurs with this request.
RECOMMENDED ACTION:
By motion: Approve a resolution authorizing the execution of the First Amendment to the Declaration
of Covenants, Restrictions, and Easements Between the Housing and Redevelopment Authority and
Brixmor.
BASIS OF RECOMMENDATION:
A.HISTORICAL CONTEXT
The subject site was originally developed in 1966.
The covenants were established in 1991, and the former Rainbow Foods building on the site was
constructed in 1992.
Rainbow Foods closed in 2018 and the CUP approval expired a year later. The building has sat vacant
for the past six years.
In September of this year, the City approved a new CUP to re-tenant the building with a different grocer,
which required reconfiguration of the parking lot layout.
B.EQUITABLE OR STRATEGIC CONSIDERATIONS OR IMPACTS
None. This is a housekeeping item.
C .P OL IC IE S (resolutions, ordinances, regulations, statutes, exc):
None
D .C R IT IC AL T IMIN G IS S U E S:
The C UP requires that the changes to the D eclaration be approved by the HRA prior to issuance of
construction permits. B rixmor has not yet submitted application for construction permits.
E .F IN AN C IAL IMPAC T:
None
F.L E GAL C ON S ID E R AT ION:
The A mendment to the D eclaration was drafted by the C ity A ttorney.
Once the A mendment to the D eclaration is executed, it must be recorded by the applicant.
ALTE R N AT IV E R E C O MME N D ATIO N(S):
Do not approve the resolution authorizing the execution of the First Amendment to the Declaration of
Covenants, Restrictions, and Easements Between the HRA and Brixmor. This would continue the
requirement that Brixmor petition the HRA every time it wants to make changes to it's parking lot.
P R IN C IPAL PAR TIE S E X P E C TE D AT ME E TIN G:
None
AT TAC H ME N T S:
D escription Type
D raft Resolution of A pproval Resolution L etter
F irst A mendment to the D eclaration of C ovenants C ontract/A greement
A pplicant's Request L etter B ackup Material
Original D eclaration of C ovenants B ackup Material
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD, MINNESOTA
RESOLUTION NO. 1492
RESOLUTION APPROVING THE EXECUTION OF THE FRIST AMENDMENT DECLARATION OF
COVENANTS, RESTRICTIONS, AND EASEMENTS BETWEEN
THE HRA OF THE CITY OF RICHFIELD
AND BRIXMOR SPE 1 LLC
WHEREAS, on July 31, 1991, the HRA and Bradley Real Estate Trust (“Bradley”), as
predecessor in interest to Brixmor, entered into a Declaration of Covenants, Restrictions and
Easements (the “Original Declaration”) and, whereby the HRA and Bradley set forth certain
restrictions for a project related to the financing and redevelopment of certain property within
the City of Richfield; and
WHEREAS, the Original Declaration set forth that no owner of all or part of the Property
may change the parking configurations within the Common Area without the prior written
consent of the HRA; and
WHEREAS, the financing for the redevelopment of the property has long since expired
and the HRA no longer has an interest in the parking configuration; and
WHEREAS, Brixmor has requested that the HRA amend the Original Declaration to
remove the HRA approval requirement of such changes to the Common Area;
NOW, THEREFORE, BE IT RESOLVED, by the Board of Commissioners of the Housing
and Redevelopment Authority in and for the City of Richfield, Minnesota as follows:
1.The “First Amendment to the Declaration of Covenants, Restrictions and
Easements between the HRA of the City of Richfield and Brixmor SPE 1 LLC” presented to the
Board and on file with the staff of the Authority is hereby in all respects approved, subject to
modifications that do not alter the substance of the transaction and that are approved by the Chair
and Executive Director; provided that execution of such document by such officials shall be
conclusive evidence of approval.
2.The Chair and Executive Director are hereby authorized to execute the First
Amendment to the Declaration of Covenants, Restrictions, and Easements on behalf of the
Authority and to carry out the Authority’s obligations thereunder.
3.Brixmor shall record the First Amendment to the Declaration of Covenants,
Restrictions, and Easements with the County and provide proof of having done so to the City.
Adopted by the Housing and Redevelopment Authority in and for the City of Richfield,
Minnesota this 18th day of November, 2024.
Erin Vrieze Daniels, Chair
Sean Hayford Oleary, Secretary
DOCSOPEN\RC145\768\977764.v2-9/23/24
FIRST AMENDMENT TO
DECLARATION OF COVENANTS, RESTRICTIONS, AND EASEMENTS
BETWEEN
THE HOUSING AND REDEVELOPMENT AUTHORITY OF THE CITY OF RICHFIELD
AND
BRIXMOR SPE 1 LLC
November 18, 2024
This document drafted by:
Kennedy & Graven, Chartered
150 South 5th St., Ste 700
Minneapolis, MN 55402-1299
Telephone: (612) 337-9300
DOCSOPEN\RC145\768\977764.v2-9/23/24
THIS FIRST AMENDMENT TO DECLARATION OF COVENANTS,
RESTRICTIONS, AND EASEMENTS (the “First Amendment”) is made and entered into this
18th day of November, 2024, between the Housing and Redevelopment Authority of the City of
Richfield, a Minnesota body corporate and politic (“HRA”), and BRIXMOR SPE 1 LLC
(“Brixmor”), a Delaware limited liability company.
RECITALS
WHEREAS, on July 31, 1991, the HRA and Bradley Real Estate Trust (“Bradley”), as
predecessor in interest to Brixmor, entered into that certain Declaration of Covenants, Restrictions
and Easements (the “Original Declaration”) and, whereby the HRA and Bradley set forth certain
restrictions for a project related to the financing and redevelopment of certain property within the
City of Richfield; and
WHREAS, the Original Declaration was recorded on August 7, 1991, as Document No.
5811593 in the Hennepin County Recorder’s Office on the property described on Exhibit A
attached hereto; and
WHEREAS, the Original Declaration set forth that no owner of all or part of the Property
may change the parking configurations within the Common Area without the prior written consent
of the HRA; and
WHEREAS, the HRA no longer has an interest in changes made to the parking
configuration within the Common Area; and
WHEREAS, Brixmor has requested and the HRA agrees to amend the Original
Declaration to remove the HRA approval requirement of such changes to the Common Area as
provided herein;
NOW, THEREFORE, in consideration of the promises and the mutual obligations of the
parties hereto, each of them does hereby covenant and agree with the other as follows:
1.The Recitals are incorporated into this First Amendment.
2.Any capitalized terms used herein but not otherwise defined shall have the
meanings assigned to such terms in the Original Declaration. Any references to the
“Declaration” or “this Declaration” in the Original Declaration shall refer to the
Original Declaration as amended by this First Amendment.
3.Paragraph 3 of the Original Declaration is hereby amended to delete the following:
“Furthermore, no owner of all or part of the Property may make changes in the
parking configurations contained in the Common Area, as shown on the Site Plan,
without the prior written consent of the HRA, which consent will not be
unreasonably withheld, such obligation to run with the Property for the sole benefit
of the HRA and to be enforceable solely by the HRA.”
4.This First Amendment shall be effective as of the date hereof.
2
DOCSOPEN\RC145\768\977764.v2-9/23/24
5.Except as hereby amended, all other terms and conditions of the Original
Declaration shall remain in full force and effect.
S-1
DOCSOPEN\RC145\768\977764.v2-9/23/24
IN WITNESS WHEREOF, the City and the Developer have caused this First Amendment
to be duly executed in their names and on their behalf, all on or as of the date first above written.
HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY
OF RICHFIELD
By
Erin Vrieze Daniels
It’s Chair
By
Melissa Poehlman
It’s Executive Director
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this ___ day of __________, 2024,
by Erin Vrieze Daniels, the Chair of the City of Richfield Housing and Redevelopment Authority, on
behalf of the Housing and Redevelopment Authority.
Notary Public
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this ___ day of __________, 2024,
by Melissa Poehlman, the Executive Director of the City of Richfield Housing and Redevelopment
Authority, on behalf of the Housing and Redevelopment Authority.
Notary Public
S-2
DOCSOPEN\RC145\768\977764.v2-9/23/24
BRIXMOR SPE 1 LLC
By
Its
STATE OF _____________ )
) SS.
COUNTY OF ___________ )
The foregoing instrument was acknowledged before me this ___ day of __________, 2024,
by _______________________, the _____________________ of BRIXMOR SPE 1 LLC, a
Delaware limited liability company, on behalf of the company.
Notary Public
DOCSOPEN\RC145\768\977764.v2-9/23/24
EXHIBIT A
Legal Description
AND
AND
November 6, 2024
Ms. Samantha Crosby
6700 Portland Avenue
Richfield MN 55423
(612) 861-9776
scrosby@richfieldmn.gov
RE: First Amendment to Declaration of Covenants, Restrictions, and Easements (the “First
Amendment”)
To Whom It May Concern:
The purpose of this letter is to formally request to amend the Declaration of Covenants,
Restrictions, and Easements (the “First Amendment”).
BRIXMOR SPE 1 LLC, a Delaware limited liability company (“Brixmor”) is requesting that the
Housing and Redevelopment Authority of the City of Richfield, a Minnesota body corporate and
politic (“HRA”) amend the Original Declaration to remove the HRA approval requirement of
changes to the parking configuration within the Common Area of the Richfield Hub Shopping
Center, as provided therein.
Sincerely,
Rich Dippolito
VP, Re/Development
(847)562-4101
Rich.Dippolito@brixmor.com
AGENDA SECTION: Consent Calendar
AGENDA ITEM # 2.C.
STAFF REPORT NO. 23
HOUSING AND REDEVELOPMENT AUTHORITY
MEETING
11/18/2024
Lynnette Chambers, Multifamily Housing CoordinatorREPORT PREPARED BY:
EXECUTIVE DIRE CTOR RE VIEW: Melissa Poehlman, Executive Director
11/7/2024
ITEM FOR COUNCIL CONSIDERATION:
Consideration of the updated Richfield Housing and Redevelopment Authority Administrative Plan to
conform with the new Housing Opportunity Through Modernization Act final ruling under the Section 8
Housing Choice Voucher Program.
EXECUTIVE SUMMARY:
The Housing Opportunity Through Modernization Act (HOTMA) is a law that was signed into effect on July 29, 2016, and made changes to the United States Housing Act of 1937. HOTMA's
purpose is to modernize and streamline housing policies in the United States.
The U.S. Department of Housing and Urban Development (HUD) finalized HOTMA rulemaking in 2023.
The final rule required housing authorities to implement changes to the Section 8 Housing Choice
Voucher Program (Section 8 Program). In accordance with these changes, housing authorities must
update their current Administrative Plans.
Some of the changes made by HOTMA include:
Income calculation: Changes to how annual household income is calculated.
Net family assets: Changes to how net family assets are defined.
Income reviews: Changes to the frequency of income reviews and the threshold for conducting Interim
Reexaminations.
Hardship relief: Provisions for deductions related to childcare, health care, and attendant care.
Mandatory deductions: Increases the elderly/disabled family deduction
Self-certification of assets: Allows owners to self-certify net assets if they are estimated to be $50,000
or less.
The complete 2024 Admin Plan can be found here, or on the Section 8
webpage: https://richfieldmn.gov/departments/community_development/section_8/index.php.
RECOMMENDED ACTION:
By motion: Approve updated changes to the Richfield Housing and Redevelopment Authority
Administrative Plan to ensure the Richfield Housing and Redevelopment Authority is in compliance
with the new Housing Opportunity Through Modernization Act changes.
BASIS OF RECOMMENDATION:
A.HISTORICAL CONTEXT
In the past, when HUD has made regulatory changes Richfield Housing and Redevelopment Authority (HRA)
has updated the A dministrative P lan to remain in compliance with those changes.
B .E QU ITAB L E OR S T R AT E GIC C ON S ID E R AT ION S OR IMPAC T S
A dministering the S ection 8 P rogram supports the S trategic P lan initiative to maintain Richfield as an
affordable place to live.
The S ection 8 P rogram is a tenant-based rent assistance program that serves families who have annual
incomes at 50% of A rea Median Income or less, many of whom are elderly/disabled (31%), have minor
children (28%), and/or are B lack, Indigenous and P eople of C olor (B IP O C ) (69%).
C .P OL IC IE S (resolutions, ordinances, regulations, statutes, exc):
On S eptember 29, 2023 HUD issued Notice P IH 2023-27 adjusting compliance date for the HOTMA
changes to become effective J anuary 1, 2025. In accordance with these changes, housing authorities
must update their current A dministrative P lans.
D .C R IT IC AL T IMIN G IS S U E S:
HUD Notice P IH 2023-27 requires housing authorities to become compliant with the new HOTMA
changes effective J anuary 1, 2025. These changes require the HRA to update the current
A dministrative P lan.
E .F IN AN C IAL IMPAC T:
The HRA has four contracts for administrative and rent assistance funds with HUD .
A nnually, the HRA receives approximately $1,411,270 for rental assistance payments and $175,460 for
administrative payments. A current A dministrative P lan is a requirement of these contracts.
F.L E GAL C ON S ID E R AT ION:
HUD is requiring that housing authorities make these changes.
ALTE R N AT IV E R E C O MME N D ATIO N(S):
Do not approve changes to the HRA Administrative Plan.
P R IN C IPAL PAR TIE S E X P E C TE D AT ME E TIN G:
NA
AGENDA SECTION:RESOLUTIONS
AGENDA ITEM #4.
STAFF REPORT NO. 24
HOUSING AND REDEVELOPMENT AUTHORITY
MEETING
11/18/2024
Celeste McDermott, Housing SpecialistREPORT PREPARED BY:
EXECUTIVE DIRE CTOR RE VIEW: Melissa Poehlman, Executive Director
ITEM FOR COUNCIL CONSIDERATION:
Consideration of a Housing and Redevelopment Authority Loan Forgiveness Policy.
EXECUTIVE SUMMARY:
The Housing and Redevelopment Authority (HRA) has a loan portfolio of over 375 loans, many with terms
extending up to 30 years. Many of these loans are part of programs designed to assist low and moderate
income residents. As a result, there have been instances where homeowners have requested loan settlement
or forgiveness due to financial hardships, such as mortgage foreclosure. Under the current process, requests
for loan settlement or forgiveness must be presented at a public HRA meeting.
Staff is recommending the approval of a Loan Forgiveness Policy (Policy) that would grant the HRA
Executive Director the authority to approve the forgiveness or settlement of HRA loans in cases of financial
hardship. This Policy will prevent the need to publicly disclose personal hardships at HRA meetings and will
allow staff to handle requests more efficiently, particularly in time-sensitive situations. The HRA may still need
to review cases where the nature of the hardship is unclear or requires further clarification before approval.
The proposed Policy would enable the HRA Executive Director to forgive or accept a settlement amount from
previous loan recipients under the following circumstances:
mortgage foreclosure;
the total debt secured by the property, including the HRA lien and all superior mortgages, exceeds
100% of the documented market value of the property and the borrower does not have the financial
means to pay off the debt;
the borrower needs to move due to medical or safety reasons, and does not have the financial means
to pay off the HRA mortgage; or
the borrower is deceased and the heirs do not have the financial means to pay off the HRA mortgage.
RECOMMENDED ACTION:
By motion: Adopt a resolution approving the proposed Housing and Redevelopment Authority Loan
Forgiveness Policy.
BASIS OF RECOMMENDATION:
A.HISTORICAL CONTEXT
Since 2018, there have been six requests for loan settlement or forgiveness. All of these requests have
been for deferred loans.
B.EQUITABLE OR STRATEGIC CONSIDERATIONS OR IMPACTS
11/13/2024
Residents and loan recipients with vulnerable identities, including mental and physical disabilities, are
more likely to request loan forgiveness from deferred loans. Showing up to a public, recorded meeting
while the case for their loan forgiveness is made is an uncomfortable and possibly traumatic experience.
Allowing staff to handle some very clear cases administratively reduces the unnecessary stress of the
situation.
C.POLICIES (resolutions, ordinances, regulations, statutes, exc):
For most HRA loans, the entire loan amount is due and payable if the property is sold or transferred
before the end of the loan term.
The current practice for loan settlement or forgiveness requires that appeals be brought to an HRA
meeting.
The Subordination Policy allows for the HRA Executive Director to approve subordination requests
under circumstances outlined in the Subordination Policy. The proposed Loan Forgiveness Policy
would give the HRA Executive Director similar authority.
D.CRITICAL TIMING ISSUES:
In hardship cases, homeowners often need to quickly sell their property due to financial or medical
reasons. Waiting for the next available HRA meeting to request loan forgiveness may jeopardize the
sale of the property.
E.FINANCIAL IMPACT:
While loan repayments are used to fund existing programs, HRA loan programs do not rely on
repayments as a primary funding source.
Deferred loans were funded using federal Community Development Block Grant (CDBG) funds.
CDBG funds will no longer be under local control beginning in 2026, so repayments of deferred loans
may not go back to Richfield loan programs in future. There is no federal requirement that CDBG funds
be repaid.
The Executive Director currently has the authority to approve contracts up to $50,000. Any loan
forgiveness approved by the Executive Director would also be under this limit.
The proposed fee to process a forgiveness request would be the same as the existing settlement fee of
$125.
F.LEGAL CONSIDERATION:
The Policy has been reviewed the HRA attorney.
ALTERNATIVE RECOMMENDATION(S):
1.Do not approve the proposed Policy.
2.Modify and approve the proposed Policy.
PRINCIPAL PARTIES EXPECTED AT MEETING:
N/A
ATTACHMENTS:
Description Type
Resolution Resolution Letter
Loan Forgiveness Policy Backup Material
2024 Fee Schedule Backup Material
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD, MINNESOTA
RESOLUTION NO. 1493
RESOLUTION ADOPTING LOAN FORGIVENESS POLICY
WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield,
Minnesota (the “Authority”) administers several housing programs for property owners and offers
deferred loans (“HRA Loan”) which are secured with a note and a mortgage filed against the property;
and
WHEREAS, each of the loans becomes due upon various occurrences, including the payment in
full of a first mortgage, the date the property is sold, transferred or otherwise conveyed, the property is
rented, leased, unoccupied or assigned, a default under the first mortgage, the mortgage is satisfied or
assigned, or the property owner does not occupy the home for more than one year; and
WHEREAS, property owners sometimes face financial hardships and may have insufficient
funds to repay their HRA Loan in full; and
WHEREAS, as the HRA Loans become due, several homeowners have asked for modifications
of their HRA Loan note and/or security agreement and several of those requests have been granted; and
WHEREAS, Authority staff request the flexibility to respond to property owner requests related
to their HRA Loans when each mortgage is due and financial hardship is present; and
NOW, THEREFORE, BE IT RESOLVED, by the Board of Commissioners of the Housing and
Redevelopment Authority in and for the City of Richfield, Minnesota as follows:
1.The Executive Director is hereby authorized to review and execute modifications to HRA
Loan notes and security agreements, which may include but is not limited to forgiveness, extensions of time
to pay the loan, and/or reduction in the repayment amount in cases of financial hardship.
Adopted by the Housing and Redevelopment Authority in and for the City of Richfield,
Minnesota this 18th day of November, 2024.
Erin Vrieze Daniels, Chair
ATTEST:
Sean Hayford Oleary, Secretary
RICHFIELD HOUSING AND REDEVELOPMENT AUTHORITY
LOAN FORGIVENESS POLICY
EFFECTIVE NOVEMBER 2024
Loan Forgiveness
Richfield Housing and Redevelopment Authority (HRA) loan recipients requesting the forgiveness of part
or all of the interest of the HRA in real property must submit a Loan Forgiveness Request Form, the
required supporting documentation, and a processing fee. Forms are available upon request from HRA
staff by emailing HouseSpecialist@richfieldmn.gov or calling 612-861-9778. Requests will not be
considered until all documents and the processing fee have been received.
Required Documents
The following information must be submitted with the Loan Forgiveness Request Form:
1.A typed letter dated and signed by the homeowner or representative, stating the
reason for the requested loan forgiveness.
2.A copy of the current appraisal (dated within six months of application) or other
evidence of market value of the property that is acceptable to the HRA.
3.A copy of current title work (must indicate all debt against the property).
4.Explanation of any debts to be paid off at the time of sale, along with supporting
documentation (if applicable).
5.Estimated closing costs/settlement statement, where applicable.
6.Copy of purchase agreement
7.Settlement Statement (HUD-1)
8.Documentation of all debts owed and proposed settlement amounts
9.Status of any settlement requests to superior mortgage holder
10.Additional documentation may be required.
Evaluation Criteria
The Richfield HRA Executive Director will consider partial or full forgiveness of the HRA mortgage interest
on a case-by-case basis where there is a documented hardship on the part of the borrower. Some
examples that could be considered hardships include:
1.Mortgage foreclosure
2.The total debt secured by the property, including the HRA lien and all superior
mortgages, exceeds 100% of the documented market value of the property and
the borrower does not have the financial means to pay off the debt after the sale
of the home.
3.The borrower needs to sell due to medical or safety reasons and does not have
the financial means to pay off the HRA mortgage after the sale of the home.
4.The borrower is deceased, and the heirs do not have the financial means to pay
off the HRA mortgage after the sale of the home.
The Executive Director, at their discretion, may refer a request for forgiveness or settlement to the HRA
Board. Any loan in excess of $50,000 will automatically be referred to the HRA Board.
Appeal Process
If a Loan Forgiveness application is denied by the Executive Director, the applicant may request an
appeal in writing. The HRA will consider appeals at their regular monthly meeting. The HRA meets on the
third Monday of each month, and all information must be submitted to staff at least 10 days prior to the
meeting.
Fees
The fee for a loan forgiveness request is established by the HRA. An additional fee is required for an
appeal to the HRA and is non-refundable.
Processing
Loan forgiveness requests will be processed by HRA staff, who will submit the request with a
recommendation for action, to the Executive Director. The Executive Director has the authority to grant a
partial or full loan forgiveness request when, based on his or her discretion, the request is reasonable
based on the criteria set forth in this Policy. The Executive Director may request review and final decision
by the HRA. Requests for loan forgiveness should be submitted 30 days prior to the date the forgiveness
is needed. Exceptions may be made on a case-by-case basis.
Satisfactions
When a loan made by the HRA is forgiven or settled, a document satisfying the lien will be prepared by
the HRA and delivered to the borrower for recording. The borrower is responsible for recordi ng the
satisfaction with Hennepin County.
Richfield Housing & Redevelopment Authority
Economic Development Authority
2024 Housing Program Fees
Program/ITEM Fee
Subordination $165
Administrative Change/Second Copy $40
Loan Amendment $150
Loan Settlement or Forgiveness Request $125
Mortgage Satisfaction/Release Filing, upon request $100
Apartment Remodeling Loan Application* (EDA) $350
Transformation Loan Application* (EDA) $350
Richfield Rediscovered Lot Sale Application* (HRA) $625
Richfield Rediscovered Credit Application* (HRA) $625
Down Payment Assistance (HRA) $100
*Plus any applicable filing fees
Fees may be waived or modified due to financial hardship at the discretion of the HRA Executive
Director.