061625 HRA Complete PacketREGULAR HOUSING AND REDEVELOPMENT AUTHORITY MEETING
RICHFIELD MUNICIPAL CENTER, COUNCIL CHAMBERS
JUNE 16, 2025
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 Housing and Redevelopment Authority Work Session of May 19, 2025; and the Regular
Housing and Redevelopment Authority meeting of May 19, 2025.
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.Acceptance of the Housing Program Evaluation final report.
Staff Report No. 15
B.Consideration of the approval of Program Guidelines for the Woodlawn Terrace Cooperative New
Manufactured Home Purchase Program.
Staff Report No. 16
3.Consideration of items, if any, removed from Consent Calendar
PUBLIC HEARINGS
4.Consideration of a Contract for Private Redevelopment with Penn Station Apartments LLLP and sale of land for
the development of 42 units of affordable housing at 6501-25 Penn Avenue South.
Staff Report No. 17
RESOLUTIONS
5.Consideration of a resolution authorizing the Executive Director to change Deferred Loans to a 15 year term.
Staff Report No. 18
HRA DISCUSSION ITEMS
6.HRA Discussion Items
E X E C U T IV E D IR E C TO R R E P O R T
7.E xecutive D irector's Report
C LAIMS
8.C laims
9.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
Work Session Meeting
May 19, 2025
Chair Vrieze Daniels called the meeting to order at 6:00 PM in the Bartholomew Room.
HRA Present: Erin Vrieze Daniels, Chair; Sean Hayford Oleary; Gordon Hanson; John Young.
HRA Absent: Mary Supple
Staff Present: Melissa Poehlman, Executive Director; Julie Urban, Assistant Community
Development Director; Hilary Lovelace, Housing Specialist; and Michelle Friedrich,
City Clerk.
ITEM #1 PRESENTATION ON THE RESULTS OF THE EVALUATION OF THE HOUSING
AND REDEVELOMENT AUTHORITY’S HOUSING PROGRAMS
Chair Vrieze Daniels introduced Assistant Community Development Director Urban, to present the
Housing and Redevelopment Authority (HRA) housing programs. Assistant Community Development
Director Urban noted Housing Specialist Hilary Lovelace was also presenting. Staff provided an overview
of the HRA housing programs which included evaluation of programs, goals and policy review, and
expenditures within programs. Staff reviewed summary findings and noted adaptability of programs to
market changes and conditions, increasing impact within programs, sustained and tentative revenue
sources, and fund balances.
The HRA and staff discussed housing program priorities, noted the importance of the first-time homebuyer
program and post purchase resource assistance, discussed administrative program updates within the fix-
up program regarding interest rates and median area income, and noted the remodeling and conservation
program as an attractive resource for potential buyers. The HRA and staff discussed future tracking of
projects to ensure housing program projects are completed, and reviewed escrow collection in cases
where projects are not initiated or completed. Staff noted revisions to programs as discussed would be
presented as a final version in June.
ITEM #2 ADJOURNMENT
This meeting was adjourned by unanimous consent at 6:51 p.m.
Date Approved: June 16, 2025
Erin Vrieze Daniels
HRA Chair
Michelle Friedrich Melissa Poehlman
City Clerk Executive Director
CALL TO ORDER
HOUSING AND REDEVELOPMENT
AUTHORITY MEETING MINUTES
Richfield, Minnesota
Regular Meeting
May 19, 2025
Chair Vrieze Daniels called the meeting to order at 7:00 PM in the Council Chambers.
HRA Present: Erin Vrieze Daniels, Chair; Sean Hayford Oleary; Gordon Hanson; John Young.
HRA Absent: Mary Supple
Staff Present: Melissa Poehlman, Executive Director; Julie Urban, Assistant Community
Development Director, Jan Youngquist, Economic Development Manager;
Michelle Friedrich, City Clerk.
OPEN FORUM
Chair Vrieze Daniels gave instructions on how to participate in the open forum. No residents participated in
the open forum opportunity.
APPROVAL OF THE MINUTES
MOTION: made by Hanson, seconded by Young to approve the minutes of the Regular Housing and
Redevelopment Authority meeting of April 21, 2025, as presented.
Motion carried: 4-0
ITEM #1 APPROVAL OF THE AGENDA
MOTION: made by Hayford Oleary, seconded by Young to approve the agenda as presented.
Motion carried: 4-0
ITEM #2 CONSENT CALENDAR
Executive Director Poehlman presented the consent calendar item.
A. Consideration of an amended resolution authorizing submittal of a grant application to Hennepin
County for environmental cleanup of contaminated soils and asbestos at 6501 and 6525 Penn
Avenue South. Staff Report No. 12
HRA RESOLUTION NO. 1507 RESOLUTION AUTHORIZING JO COMPANIES LLC TO APPLY
FOR AN ENVIRONMENTAL RESPONSE FUND CLEANUP GRANT FROM HENNEPIN
COUNTY.
CALL TO ORDER
HRA Meeting Minutes May 19, 2025
MOTION: made by Young, seconded by Hanson, to approve the consent calendar as presented.
Motion carried: 4-0
ITEM #3 CONSIDERATION OF ITEMS, IF ANY, REMOVED FROM THE CONSENT
CALENDAR
None.
ITEM #4 PUBLIC HEARING AUTHORIZING SALE OF OUTLOT A, WEXLERS SECOND
ADDITION
Economic Development Manager Youngquist presented Staff Report 13 and noted the Housing and
Redevelopment Authority (HRA) owned Outlot A at Richfield Parkway and 66th Street, a remnant parcel
from the 2008 roundabout project. Economic Development Manager Youngquist noted the irregularly
shaped property is not suitable for standalone development. Economic Development Manager Youngquist
noted the adjacent property owner is available for questions.
Chair Vrieze Daniels opened the public hearing to authorize the sale of Outlot A, Wexlers Second
Addition. No residents participated in the public hearing.
MOTION: made by Hayford Oleary, seconded by Young, to close the public hearing.
Motion carries: 4-0
HRA and staff discussed and clarified the remaining easement across the parcel.
HRA RESOLUTION NO. 1508 AUTHORIZING RESOLUTION AUTHORIZING THE SALE OF
OUTLOT A, WEXLERS SECOND ADDITION TO PROFESSIONAL DENTAL PROPERTIES
LLC.
MOTION: made by Young, seconded by Hanson to adopt a resolution authorizing the sale of Outlot A,
Wexlers Second Addition to Professional Dental Properties, LLC, authorize execution of a purchase
agreement between Housing and Redevelopment Authority and Professional Dental Properties, LLC, and
authorize execution of an agreement granting permanent roadway, drainage and utility easements to the
City of Richfield on Outlot A, Wexlers Second Addition.
Motion carried: 4-0
ITEM #5
OTHER BUSINESS
Consider a request for the settlement of a Transformation Loan issued to Kathleen Brogan and Mark
Lauer at 6733 11th Avenue South. Staff Report 14.
Assistant Community Development Director Urban presented Staff Report 14 and reviewed the
transformation loan issued from the HRA to complete an addition to 6733 11th Avenue South.
HRA asked for further context by staff regarding existing loan balances and discretion of prorated amounts
and how the basis is calculated to offer forgiveness, or requirement of portion of the loan to be repaid.
Staff explained loan forgiveness decisions are based on the financial details shown in the home sale
settlement statement and cited an example of a seller being at a deficit at closing, where full forgiveness
may be considered, and is common during the foreclosure crisis. Staff explained in the current case,
without clear financial hardship, a prorated repayment might be appropriate. The HRA informally
supported the option of requiring a specific repayment amount to reflect one year remaining on the loan
term, suggesting it sets a fair precedent while acknowledging the homeowner’s long-term compliance.
Staff clarified that repaid funds from older HRA-originated loans are returned to the rehab loan repayment
HRA Meeting Minutes May 19, 2025
fund and support programs like the Fix-Up Fund, the Advisor Program, and the Home Energy Squad.
MOTION: made by Hayford Oleary, seconded by Hanson to authorize staff to proceed with Option 2,
requiring the homeowner to pay a prorated repayment amount of $281.50.
Motion carried: 4-0
ITEM #6 HRA DISCUSSION ITEMS
None.
ITEM #7 EXECUTIVE DIRECTOR REPORT
Executive Director Poehlman noted upcoming dates include a joint work session scheduled for June 10
with the City Council and Planning Commission to review a preliminary redevelopment proposal for the
American Legion site at 6:00 pm, the State of Community event on June 11 from 4:30-7:00 pm, and a
work session scheduled for June 24 to discuss the vacant parcel att the Lyndale Gardens site.
ITEM #8 CLAIMS
MOTION: made by Hanson, seconded by Hayford Oleary, that the following claims be approved:
U.S. BANK 5/19/2025
HRA Checks #37232-37249 $56,284.01
Section 8 Checks #136732-136809 $212,276.68
TOTAL $268,560.69
Motion carried: 4-0
ITEM #8 ADJOURNMENT
This meeting was adjourned by unanimous consent at 7:16 p.m.
Date Approved: June 16, 2025
Erin Vrieze Daniels
HRA Chair
Michelle Friedrich Melissa Poehlman
City Clerk Executive Director
AGENDA SECTION: Consent Calendar
AGENDA ITEM # 2.A.
STAFF REPORT NO. 15
HOUSING AND REDEVELOPMENT AUTHORITY
MEETING
6/16/2025
Julie Urban, Asst. Community Development DirectorREPORT PREPARED BY:
EXECUTIVE DIRE CTOR RE VIEW: Melissa Poehlman, Executive Director
6/10/2025
ITEM FOR COUNCIL CONSIDERATION:
Acceptance of the Housing Program Evaluation final report.
EXECUTIVE SUMMARY:
Over the past several months, Housing and Redevelopment Authority (HRA) staff evaluated the HRA's
housing programs. Staff presented a draft of the report at the May work session, covering the following
components:
Housing Goals and Needs: A review of the various goals and housing needs that guide the HRA’s
housing efforts and how different programs seek to address and meet those needs. Goals and needs
have been collected from City planning and strategic documents and community voices.
Financial Picture: A detailed look at expenditures and revenues, showing where funds are focused by
both type of activity and by need, and identifying the resources available through 2030.
Summary Findings: A summary of the most salient points and conclusions drawn from the evaluation.
Program Summaries: A deep-dive into nine different housing programs, looking primarily at the last 10
years. Findings, Things to Think About, and Next Steps are highlighted for each program.
Work Plan: The Next Steps in the Program Summaries become a work plan for 2025-2027.
HRA members expressed support for programs that invest in our housing stock, especially those that leverage
outside investment, providing continued assistance to first-time homebuyers, regularly tracking program
progress, and making adjustments to programs as market conditions change. The report will provide a work
plan for housing staff over the next two to three years.
RECOMMENDED ACTION:
By motion: Accept the final report of the Housing Program Evaluation.
BASIS OF RECOMMENDATION:
A.HISTORICAL CONTEXT
Current housing market realities (e.g., high interest rates, rising costs, shortage of housing) and a changing
funding landscape create both challenges and opportunities as the HRA seeks to meet the housing needs of
the community. These factors, along with the City's Strategic Plan goals, led staff to conduct an evaluation of
the HRA's housing programs and housing-dedicated funding in order to create a plan for future housing work.
B.EQUITABLE OR STRATEGIC CONSIDERATIONS OR IMPACTS
The Strategic Plan lays out several desired outcomes that help to guide the HRA's work in housing and are
considered in this evaluation:
Maintain Richfield as an affordable place to live.
Diversify the tax base.
Prioritize climate resilience.
Reduce racial inequities and barriers for traditionally excluded groups.
C.POLICIES (resolutions, ordinances, regulations, statutes, exc):
Several documents provide guidance for the HRA's work in housing, including the Strategic Plan,
Comprehensive Plan, Inclusionary Housing Policy, and the Affordable Housing Trust Fund adopted
priorities.
D.CRITICAL TIMING ISSUES:
There is no specific deadline for adopting the final report; however, staff would like to begin
incorporating the report findings into the HRA and Economic Development Authority budgets, which are
being developed in June.
E.FINANCIAL IMPACT:
The Evaluation provides a picture of the financial resources available for housing initiatives through
2030.
F.LEGAL CONSIDERATION:
NA
ALTERNATIVE RECOMMENDATION(S):
Decide not to accept the final report, and direct staff to do additional work.
PRINCIPAL PARTIES EXPECTED AT MEETING:
NA
ATTACHMENTS:
Description Type
Housing Program Evaluation - 2025 Exhibit
1 | Page June 2025
Housing Program Evaluation
Richfield Housing and Redevelopment Authority and
Economic Development Authority
HRA/EDA Housing Programs: Background
The Richfield Housing and Redevelopment Authority (HRA) has provided resources to
support the community’s housing stock and its residents since its inception in 1974. Over
the years, programs have focused on both rehabilitation and new construction,
homeownership and rental housing opportunities, and served residents across the
spectrum of income levels and in varying stages and situations of life.
The HRA’s housing program history began with a focus on housing rehabilitation and
scattered-site affordable new construction. In the 1990s and into the 2000s, new housing
programs were created that focused on diversifying the housing stock and replacing
housing (and population) lost to airport expansion, road projects, and commercial
redevelopment (which was undertaken to diversify the tax base). The aging of the housing
stock and the need to maintain it also became more of a focus in the late 1990s. As
housing prices increased in the 2000s, it became more and more difficult to cost-
effectively continue those housing programs, until in 2009, the housing “bubble” burst,
and the HRA shifted its attention to addressing the housing foreclosure crisis and aiding in
the market recovery.
Just as the market was returning to more typical conditions, in 2016, the community
experienced the loss of 698 Naturally Occurring Affordable Housing (NOAH) apartments as
the Crossroads Apartments became The Concierge and a significant number of low-
income and vulnerable residents were displaced. In response, city leaders prioritized the
needs of residents who rent their housing and the housing needs of low-income residents.
At the same time, new priorities began to emerge and were interwoven into HRA housing
efforts including: climate change, the negative impacts of systemic racism in the housing
market, the needs of people with disabilities, and a re-thinking of zoning regulations to
encourage “missing middle” housing options. To meet these and other community
priorities, the Economic Development Authority (EDA) was created in 2017, and EDA levy
funds became available for economic development and housing programs.
The HRA/EDA’s focus pivoted to emergency rental assistance during the COVID-19
pandemic, and program effectiveness was impacted by supply-chain impacts, rising
2 | Page June 2025
HOUSING PROGRAM EVALUATION
construction costs, rising interest rates, rising housing prices, and a state-wide shortage of
housing. These challenges continue today, and combined with changing funding streams
are re-shaping the HRA’s housing programs moving forward.
Consistent throughout the HRA’s 50 years has been a recognition of the value of the
community’s housing stock, and the need to preserve and improve it for generations to
come.
Housing Program Evaluation
Current housing market realities and the changing funding landscape create both
challenges and opportunities as the HRA seeks to meet the housing needs of the
community. These challenges and opportunities, along with the following factors, have
propelled and shaped this evaluation of the HRA’s housing programs:
In 2021, the State Legislature approved special legislation that allows the HRA to
transfer pooled tax increment to its Affordable Housing Trust Fund, releasing
significant funding that can be used for meeting housing needs.
In 2023, the City Council adopted a Strategic Plan that includes a goal to maintain
Richfield as an affordable place to live. Other tangential housing goals in the
Strategic Plan include diversifying the tax base, reducing racial inequities and
barriers for traditionally excluded groups, and making climate resilience a priority.
In 2023, the State Legislature created a metro-area sales tax that provides a
dedicated source of revenue to cities, Local Affordable Housing Aid (LAHA), to
develop and preserve affordable housing.
In 2026, the City will no longer receive a direct allocation of Community
Development Block Grant (CDBG) funds (approx. $180,000 annually), which has
been used to fund housing rehabilitation and affordable homeownership programs
since the late 1970s.
These factors provide both challenges and opportunities to guide HRA housing activities
over the next six years. The Evaluation includes the following components:
Housing Goals and Needs: A review of the various goals and housing needs,
collected from City planning and strategic documents and community voices, that
guide the HRA’s housing efforts and how different programs seek to address and
meet those needs.
Financial Picture: A detailed look at expenditures, showing where funds are focused
by both type of activity and by need.
3 | Page June 2025
HOUSING PROGRAM EVALUATION
Summary Findings: A summary of the most salient points and conclusions drawn
from the evaluation.
Program Summaries: A deep-dive into nine different housing programs, looking
primarily at the last 10 years. Findings, Things to Think About, and Next Steps are
highlighted for each program.
Work Plan: The Next Steps in the Program Summaries become a work plan for 2025-
2027.
Note: The Evaluation does not do a “deep-dive” into either the Housing Choice Voucher or Kids@Home
rental assistance programs, although the local funding dedicated to Kids@Home is included in the
expenditures analysis. The primary focus of the evaluation is the HRA’s ongoing housing programs; therefore,
the use of funds for NOAH preservation and funds committed from the Affordable Housing Trust Fund to new
rental housing is only included in the expenditure analysis.
4 | Page June 2025
HOUSING PROGRAM EVALUATION
Goals and Needs
Need Why? Where? Definition
Housing Maintenance Long-time goal; mentioned in nearly
all guiding documents
Physical work to support the
longevity and livability of all
dwellings
Cultural Diversity & Close-Knit
Community
Included in description of the Urban
Hometown
Welcoming differences and
building strong inter-cultural
connections among neighbors,
buildings with community spaces
Diversifying our Tax Base Diversifying Tax Base included in
Strategic Plan, discussed in recent
4d discussions. Maintaining a
diversity of housing types and price
ranges.
Making sure that our tax capacity
can support future needs, like
multifamily rehab and city
infrastructure
Meeting Current Low-Income
Resident Needs
Decades-long city commitments to
this goal
Direct assistance and loans for
immediate issues and housing
stability
Ending Racial Disparities Included in Strategic Plan Creating opportunities to correct
decades of disinvestment and
exclusion
Accessible Housing Stock City commitments to this goal;
prioritizing this in our program
criteria
Creating and adapting homes to
support people with disabilities to
live full lives, including ramps,
proximity to/space for care
teams/family, and accessible
spaces
Building Type Diversity Comprehensive Plan, lifecycle
housing
Diversify our postwar rambler
housing stock to provide housing
choices throughout life cycle.
Climate Action/Renewable
Energy Transition
Climate Action Plan, energy costs
are part of housing stability
Helping property and homeowners
prepare to shift to renewable and
energy efficiency mechanicals and
reduce energy cost burden
Affordable Housing Creation Strategic Plan names goal to meet
Met Council expected growth need
Creating affordable housing by
building new, purchasing/investing
and subsidizing, and subsidizing
housing of those with low incomes
Housing Affordability
Preservation
Maintaining a diversity of housing
types and price ranges
Preserving affordable housing that
exists in our community through
financial support and land trusts
Housing Affordability Mix/
Emerging Needs
Strategic Plan names goal to meet
Met Council expected growth need.
Maintaining a diversity of housing
types and price ranges
Providing appropriately priced
housing for households at all
income levels and sizes as incomes
and financial realities change
Programs and Goals/Needs Matrix
X– program meets need; P- program could potentially meet need; ? – unknown)
Richfield Rediscovered New Home First Time Homebuyer Home Energy Squad Deferred Loan Fix Up Loan Transformation Loan Advisor Programs Rental Assistance Apartment Remodeling NOAH Rental Preservation New Affordable Rental Housing Housing Maintenance X X X X X X X
Cultural Diversity & Close-Knit
Community P P P X X P
Diversifying our Tax Base X P; rehab P X X X X
Affordability: Meeting Current
Low-Income Resident Needs X X X X X ? X P X X
Equity: Ending Racial
Disparities ? ? X X X X
Accessible Housing Stock X X X X P X P X
Building Type Diversity X X (ADUs) X
Climate Action/Renewable
Energy Transition X P P X P X P P P P X
Affordable Housing Creation X X X
Housing Affordability
Preservation X X X X P X X X
Housing Affordability Mix/
Emerging Needs X X X
Matrix of Programs by Affordability
7 | Page June 2025
HOUSING PROGRAM EVALUATION
Expenditures
Based on current programming, the anticipated spending on Housing Programs from
2025-2030 is $5.2 million.
An additional $2 million has been committed to NOAH Preservation and proposed
affordable rental new construction.
Adding local rental assistance through the EDA’s Kids@Home program brings total
housing expenditures to over $8 million, which will serve an estimated 2,055
households over the six-year period.
PROGRAM
EXPENDITURES
2025-2030 # UNITS
First-time Homebuyer $1,200,000 66
Deferred Loans $80,000 3
Land Trust Acquisition Rehab $1,040,000 12
NOAH Rehab $800,000 434
Transformation Loans $840,000 42
Advisor Programs $126,000 510
Fix-Up Loans $240,000 48
Home Energy Squad $30,000 522
Substandard Acquisitions: RR/NH $900,000 6
SUBTOTAL $5,256,000 1,643
NOAH Preservation* $1,570,000 236
Affordable Rental NC** $500,000 80
Rental Assistance*** $834,000 138
TOTAL $8,160,000 2,055
*Does not include the value of the 4d(1) tax classification granted to the preservation of three NOAH properties.
**Does not include value of reduced land sale price.
***Line item represents the local Kids@Home rental assistance only. An additional $2 million in federal funds is
dedicated to providing rental assistance to approximately 300 households annually, and beginning in 2026,
approximately $500,000 in State funds will provide rental assistance to up to 55 additional households annually.
8 | Page June 2025
HOUSING PROGRAM EVALUATION
The largest housing program expenditure is for NOAH preservation (19%), followed by the
First-time Homebuyer Program (15%), acquisition/rehab through the land trust (13%), and
new construction through Richfield Rediscovered and the New Home Program (11%).
Green: Rental Programs
Orange: Low-Income Homeownership Programs
Blue: Homeowner Programs (all Income Levels)
Purple: New Construction Owner-Occupied Homes
9 | Page June 2025
HOUSING PROGRAM EVALUATION
Breaking down expenditures by high-level goals (with some programs and therefore
expenditures working toward multiple goals):
• $5 million is dedicated to preserving affordability;
• $2 million maintains the housing stock, and
• approximately $2 million increases the tax base.
$- $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000
Maintaining Affordability
Maintaining the Housing Stock
Diversifying the Housing Stock
Equity - Disparity Reduction
Climate Action
Diversifying the tax base
Expenditures by Goal
10 | Page June 2025
HOUSING PROGRAM EVALUATION
The largest amount of funding is spent on affordable homeownership ($2.16 million),
followed by rehabilitation ($2.11 million), and rental preservation ($1.57 million).
*Rental preservation does not include value of 4d(1) tax classification.
*Affordable Rental NC does not include the value of reduced land sale price.
$900,000
$2,160,000
$2,116,000
$500,000
$1,570,000
$834,000
Expenditures by Activity
Blight Removal + Homeownership NC
Affordable Homeownership
Rehab
Rental New Construction
Rental Preservation
Rental Assistance
11 | Page June 2025
HOUSING PROGRAM EVALUATION
Summary Findings
Positive Results
HRA programs address a range of community
needs with the greatest resources focused on
maintaining affordability.
Several programs demonstrate clear success in
terms of number served, use of funds, impact,
and investment leveraged.
80% of 61 First-time
Homebuyer loans were made to
households of color.
Transformation Loans
leveraged an investment eight
times the HRA’s expenditures.
Richfield Rediscovered
leveraged an increase in the tax
base six times the investment.
Potential
Some programs have lower than expected
participation. Further exploration of the causes and
additional marketing efforts (and in some cases
focused marketing) is warranted.
Some programs likely have greater needs than
resources currently available. Further exploration of
the need is warranted and could be part of the
Comprehensive Plan update (or a precursor to).
There are funds available for potential new and/or
expanded programming. We need to decide on
priorities, identify unmet needs, administrative
capacity, and possible partners.
Underutilized
Advisor programs
Apartment Remodeling
Home Energy Squad
Greater Needs
Deferred Loan
Apartment Remodeling
Fix-Up Fund Interest Rate
Write-Down
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HOUSING PROGRAM EVALUATION
Program Administration
There is a long “to-do” list relating to program-administration. We will need to
prioritize and assess our capacity for making changes.
We should track who we’re serving across all programs (where practical), develop
metrics for each program, and track annually how well we’re meeting community
needs.
Adaptability
We cannot change the housing market through our
programs. There are many external factors out of our
control, but we can respond to market changes. We
should review programs annually and adjust
programs (and possibly priorities) as market
conditions change.
Some programs can be refined to use funds most
efficiently and where need is greatest.
The uncertainty over the Deferred Loan Program (and
future of CDBG) is a concern. We may need to be
prepared to find (or advocate for) a replacement.
Adjust to Market
First-time Homebuyer
Fix-Up Fund Interest Rate
Write-Down
Target Funds
Transformation Loan
Apartment Remodeling
Increase Impact
Where possible, we should seek to
embed multiple goals within all
programs, and pair programs to meet
multiple goals.
For programs where multiple goals are
already incentivized, explore ways to
increase usage.
New Home affordability + rehab
First-Time Homebuyer affordable
homeownership + rehab
Loan Programs + Home Energy Squad
Advisor Programs + Loan Programs
Apartment Remodeling rehab + energy
efficiency + accessibility
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HOUSING PROGRAM EVALUATION
Revenue Picture
The funding picture is positive for the next six
years, but the amount of pooled TIF begins to
decline in 2026.
Ongoing programming is supported by
sustained revenue sources of LAHA and EDA
levy funds.
$396,000 of Rehab Loan Program existing and
anticipated repayments are funding Fix-Up
Fund, Home Energy Squad, and Advisor
Programs. There are sufficient funds to cover
these programs through 2029 and then HRA
Levy (source of funds prior to 2024) will need to
be tapped to continue the programs.
Projected Revenue (2025-2030):
Sustained
$2.2 million EDA levy
$2.5 million LAHA
One-Time
$396,000 Rehab Loan
repayments
$825,000 Affordable Housing
Trust Fund
$194,000 Apartment
Remodeling Loan repayments
$172,000 CDBG (anticipated)
Potential Funding Opportunities
There are several potential one-time,
flexible revenue sources that could
provide up to $317,500 in funding.
Outside organizations offer funding
opportunities annually through
competitive RFPs. We should explore
possible projects as capacity allows.
$225,000 State Match (applied)
$232,000 New Home Program
repayments
$100,000 (est.) in forfeited Point of
Sale Escrow funds
Hennepin County CDBG
Minnesota Housing RFP
Met Council LIHIA
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HOUSING PROGRAM EVALUATION
HRA Funding Opportunities
Assuming current programming levels, there is $225,000 available annually for
new/replacement/expanded affordable housing programming.
$200,000 in HRA levy funds could be directed annually towards housing programs
from 2025-2030.
Assuming we continue current programming, there will be approximately $3.9 million
($657,000/year) in pooled TIF available through 2030 that may be used for housing
activities and/or commercial-related activities. Possible uses include blighted
commercial and residential acquisition/removal, residential acquisition/rehab,
commercial incentives, NOAH preservation/rehab, affordable multi-family new
construction.
Impending deadlines will impact decisions on how we can spend this money, and
action at the Legislature this session could alter the deadlines. In 2026, these
deadlines will be settled, and the HRA’s financial consultant will provide an updated
financial accounting of the amount of funding available for various activities.
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HOUSING PROGRAM EVALUATION
Program Summaries
First-Time Homebuyer
New Home Program
Advisor Programs
Home Energy Squad
Deferred Loan
Fix-Up Fund
Transformation Loan
Richfield Rediscovered
Apartment Remodeling
Housing Program Evaluation| New Home Program June 2025
New Home Program
The HRA has supported affordable homeownership opportunities through the New Home
Program since its inception in the 1970s, serving households earning below 80% of the
Area Median Income. The program has shifted between acquisition/rehabilitation to new
construction as opportunities have been available.
Most recently, the program has focused on acquisition/rehabilitation with long-term
affordability using the land trust model where the land trust retains ownership of the land
and sells the structure to a qualified buyer.
In the past, affordability gaps were covered by the HRA with a second mortgage that was
due and payable upon the sale of the property or after 30 years. In 2023, the HRA
authorized the Executive Director to forgive the mortgages when they reach maturity.
Repayment proceeds have accumulated over time.
Funding Source: CDBG, Affordable Housing Trust Fund, Pooled TIF
G OALS & O BJECTIVES: Maintaining Affordability and Maintain and Improve
the Housing Stock
Provide long-term, affordable homeownership opportunities to low and
moderate-income households and improve and maintain the housing stock when
possible.
Findings
The average HRA cost of new construction has been
less than acquisition/rehabilitation due to greater
partner resources and some low-cost, vacant lot
opportunities.
The acquisition/rehabilitation model has allowed the
HRA to continue offering affordable homeownership
opportunities as opportunities for new construction
have declined, and the land trust model provides for
long-term affordability, spreading the costs over 99-
year lease term.
$232,000 in repayments from the program’s second
mortgages have accumulated in an HRA fund, which
can be redirected back into this or another program.
Quick Stats (2015-2024)
Total New Homes: 10
Average Net HRA Cost:
$87,000
Total Acq/Rehab Homes: 9
Average Net HRA Cost:
$94,000
Remaining 2nd Mortgages: 9
Foreclosure Rate (second
mortgages): 14% (7)
Housing Program Evaluation| New Home Program June 2025
In recent years, the Program has been geographically dispersed:
0
1
2
3
4
5
6
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
New Home: Affordable Homeownership
New Construction Acq/Rehab
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
New Home Program: Average Subsidy
New Construction Acq/Rehab
Housing Program Evaluation| New Home Program June 2025
Things to Think About
The last two HWR homes have been almost move-in ready. A secondary goal of the
program has always been to improve the housing stock and increase livability. Should
we encourage HWR to focus on homes in need of rehab? Do they have the capacity?
The past few years, HWR has only been about to acquire and rehabilitate one home
per year and budgeted funds have gone unused.
At subsidies around $80,000 per unit, is the Program the most cost-effective way to
provide affordable home ownership opportunities?
NEXT STEPS
1. Send out targeted mailings to homes below a certain valuation with information
about how to sell to WHAHLT/Habitat etc.
2. Consider alternatives to meeting goals of affordable homeownership and improving
affordable housing stock (e.g., re-start First-Time Advantage program).
3. Explore new partnerships to increase capacity beyond one home per year.
4. Explore what other cities are doing for long-term affordable homeownership.
A Richfield home was in poor condition and had been vacant for some time.
Family members struggled to find a buyer willing to take on such a large
project but were able to connect with the local land trust, Homes Within
Reach (HWR). After a major remodel, a new homeowner moved in: “When I
found out about HWR after unsuccessfully looking for a home that I could
afford, I was ecstatic! They helped me all along the way through a lengthy
process and enabled me to finally own a home.”
Housing Program Evaluation | Advisor Programs June 2025
Remodeling Advisor and
Architectural Consultation Programs
The Remodeling Advisor program began in the 1990s. Staff saw a need to help educate and
inspire homeowners wanting to improve their homes. The program allows residents to sign
up for a free visit with a Remodeling Advisor who can help troubleshoot or prioritize home
improvements and give advice about how to accomplish remodeling goals. The Advisor
service is currently provided by the Center for Energy and Environment (CEE).
Given the success of the Remodeling Advisor program, the Architectural Consultation
began in 2011 with the goal of providing design advice for residents looking to complete
larger scale remodeling projects. Residents can sign up for a discounted consultation visit
with a participating architect.
Funding Source: HRA levy, loan repayments
G OALS & O BJECTIVES: Maintain the Housing Stock
M aintain and invest in the housing stock and help people stay in Richfield.
Findings
Programs are utilized at a similar rate on
average but vary from year to year.
Participation declined during the peak
years of the pandemic and has only
gradually increased.
Both programs are utilized throughout
the community.
Quick Stats
Total Remodeling Advisor visits since
2017: 213
Average per year: 27
Total Architectural Consultations
since 2015: 290
Average per year: 29
30 residents who utilized an advisor
program have gone on to receive a city
loan (Transformation, Fix Up,
Deferred)
Housing Program Evaluation | Advisor Programs June 2025
Things to Think About
We believe intuitively and anecdotally that there is value in both programs as both
serve different remodeling needs, but information on effectiveness is lacking (e.g.,
how many visits lead to remodeling?).
Neither program has been fully expending the amount budgeted. Why aren’t more
households using the programs? Are there barriers? Would increased marketing
increase usage? Could the services be offered in Spanish to increase usage?
NEXT STEPS
1. Create better guidance for residents trying to decide which program will best fit their
needs.
2. Explore ways to increase outreach in order ensure that programs are being utilized by
those who need them and funds are fully utilized.
3. Communicate regularly with the Advisor to better track needs and to increase use of
City financing programs.
4. Explore efficient ways to track effectiveness of programs given limited staff capacity.
Before After
A Richfield family used an architectural consultation to start the design
process of remodeling the attic bedroom to include a home workspace and a
bathroom. This home had been in the family since it was built in 1952. The
third-generation owners were excited to invest in the home and make it an
updated space to raise the next generation of their family.
Housing Program Evaluation | Advisor Programs June 2025
Green = Remodeling Visits; Red = Architectural Advisor Visits
Housing Program Evaluation | Home Energy Squad June 2025
Home Energy Squad
Home Energy Squad is a service offered by the Center for Energy and the Environment
(CEE) that is a comprehensive, easy-to-use, one-stop energy-efficiency program that helps
homeowners reduce energy bills. The HRA pays $50 for a typical visit, and $100 for a low-
income owner visit. After an in-home assessment by CEE staff, energy-saving materials are
installed and residents are provided with a report outlining home improvements, their
rough costs, and the impact on energy savings for the household. The City has been
partnering with CEE on this program since 2013.
Funding Source: HRA Levy; Loan Repayments
G OALS & O BJECTIVES: Climate Resilience, Maintain Affordability, Reduce
High Energy Burden
Reduce our community’s energy use and lower residents’ energy cost
burden.
Quick Stats (2013-2024)
1,000 home visits completed
50 Low Income homeowners served since this option became available in 2016
Findings
After a peak of high interest and participation in the first year, visits have hovered
between 50 and 100 each year.
0
50
100
150
200
250
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Home Energy Squad Loans Per Year
Housing Program Evaluation | Home Energy Squad June 2025
A smaller percentage of low-income homeowners were served in 2024.
Things to Think About
This is a partnership, and currently we don’t ask CEE to collect demographic information
about households they serve. This leaves us with a blind spot to whether or not this
program is reaching across language and culture barriers.
NEXT STEPS
1. Cross-promote when people call for assistance with maintenance projects.
2. Focus marketing on low-income homeowners.
3. Consider culturally-relevant promotion of the program.
25%
26%12%
0
10
20
30
40
50
60
70
80
90
2022 2023 2024
Low-Income Households Served As Share of All Households
Served By Year
Reg Low Income
Housing Program Evaluation | Deferred Loan Program June 2025
Deferred Loan Program
The Deferred Loan Program offers no-interest deferred loans up to $30,000 for housing
maintenance and repair projects to homeowners earning less than 80% of the Area Median
Income (AMI), prioritizing those earning less than 50% AMI. The loan is repaid upon the sale
of the home or forgiven after 30 years. The Program began in 1984 and was administered
in-house until 2004 when administration was transferred to Hennepin County.
Funding Source: Community Development Block Grant (CDBG)
G OALS & O BJECTIVES: Maintain & Improve the Housing Stock and Maintain
Richfield as an Affordable Place to Live
Provide no-cost financial assistance to low-income homeowners to repair and
maintain their homes.
Findings
The transition to County administration in
2005 has resulted in fewer loans being
processed. The fewer loans is also a result of
less funding as CDBG funding levels have
declined.
A significant number of repayments have
helped to sustain the Program.
A small number of loans (7%) have been lost
to foreclosure/settlement/forgiveness
($440,000).
45% of loans since 2019 have been used for
emergency repairs (e.g., sewer back-ups,
water damage, furnaces).
Quick Stats (1984-2024)
Total # of loans: 479
Total Amount Loaned: $6 million
Total Repaid: 272
Total Amount Recycled: $2.47 mil
Total # Matured: 29
Since 2019
Households over 65: 48%
Families w/ Children: 20%
BIPOC Households: 20%
The Program helps families, including the working family with children who
struggled to make ends meet but was able to replace windows, siding, and insulation,
thereby improving energy-efficiency. And the Program enables older residents to stay
in their homes, including the elderly widow on a fixed income who was able to make
accessibility improvements.
Housing Program Evaluation | Deferred Loan Program June 2025
Things to Think About
Beginning in 2026, Richfield homeowners will be part of an all-suburban County
Program, which could result in reduced service and local input. As of 2024, there
were 2,003 households on the all-suburban waiting list, 110 of them Richfield
residents.
Richfield is currently the only community with a 30-year loan term. Beginning in 2026,
all repayments will be returned to Hennepin County for the all-suburban pool of
funds, so more Richfield homeowners will be replenishing the pool of funds than
homeowners in other communities. There are currently 133 open loans, 58 of which
are older than 15 years ($1.1 million).
There is significant uncertainty regarding the future of federal funding, which could
negatively impact the Program.
NEXT STEPS
1. Quantify and prioritize the need for the program (e.g., 1,200 low-income homeowners
are cost-burdened).
2. Consider forgiving all Richfield loans older than 15 years (58 loans).
3. Plan for the possibility that the needs of Richfield homeowners will not be met by the
all-suburban pool. Consider and advocate for options if federal funding is reduced or
eliminated.
4. Identify potential new partners to provide rehab loans for our lowest-income
homeowners.
5. Encourage Hennepin County to create a separate emergency loan program and
explore the creation of a local emergency loan program.
I
Housing Program Evaluation | Deferred Loan Program June 2025
Housing Program Evaluation | Fix-Up Fund Interest Rate Write-Down June 2025
Community Fix-Up Fund
Interest Rate Write-Down Program
Minnesota Housing’s Community Fix-Up Fund (CFUL) offers low-interest home
improvement loans to moderate-income homeowners. The HRA buys down the CFUL
interest rate to three percent for homeowners earning less than 115% of the Area Median
Income.
The Program dates to 2011 and was originally a partnership of multiple cities and included
matching write-down funds through Minnesota Housing. The HRA began partnering with
the Center for Energy and the Environment to administer the Program in 2017.
Loan amounts range from $2,000-$35,000 with terms up to 20 years depending on the loan
amount. The CFUL interest rate is currently 7.5%.
The Program ran out of funds in 2023 and 2024 leading the HRA to increase the budget from
$25,000 to $40,000 and reduce the maximum loan amount from $50,000 to $35,000.
Funding Source: HRA Levy; Loan Repayments (2024)
G OALS & O BJECTIVES: Maintain and Improve the Housing Stock
Encourage and leverage improvements to the housing stock by offering a low-
cost financial incentive to moderate-income homeowners.
Findings
Three out of ten CFUL recipients in the past two
years also participated in the Transformation Loan
Program (3 out of 13 Transformation loans in the
past two years).
The amount of per loan subsidy increased
significantly in 2024 as interest rates rose ($4,700
to $9,100).
From 2019-2024, homeowners primarily financed
quality of life improvements rather than health
and safety projects.
Quick Stats (2012-2024)
Total Loans: 77
Total Loans since 2018: 22
HRA Funding: $232,000
Amount Leveraged: $1.56 million
Housing Program Evaluation | Fix-Up Fund Interest Rate Write-Down June 2025
1
3
5
7
9
11
13
$-
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Community Fix Up Fund
HRA Write-Down -Loan Amounts -Number of Loans By Year
Loan Amount HRA Write down # of loans
Housing Program Evaluation | Fix-Up Fund Interest Rate Write-Down June 2025
Things to Think About
If more moderate-income Transformation Loan applicants are depending on this
funding to finance their projects, we may want to reconsider the maximum loan
amount.
You can get a lot of impact with a little funding for this type of work (a “leverage ratio”
of 6.73). With the interest rates and costs of maintenance rising, we’ve seen these
funds get depleted much faster than normal. Is the Program meeting the need? Is this
an area to increase HRA investment?
The program did not operate in 2021-2022 when the CFUL interest rate was
especially low. Should the written-down interest rate increase when interest rates are
higher? The rate is currently 7.5% (up from 4.5% in 2022, 5.75% in 2023, and 6.25% in
2024).
NEXT STEPS
1. Track dual use of Fix-Up Fund and Transformation Loan. Revisit maximum loan
amount if the close relationship continues.
2. Explore adjusting the interest rate write-down amount as CFUL interest rates vary.
3. Consider increasing the Program budget for 2026.
4. Explore other possible sources of funds to match HRA funding.
Housing Program Evaluation | Transformation Loan Program June 2025
Transformation Loan Program
The Transformation Loan Program began in 1994 and provides loans up to $25,000 towards value-
added (i.e., transformative) home improvements with a minimum project cost of $50,000. The loan
is a no -interest, deferred loan that covers up to 15% of the total project costs, forgiven after 30
years. Additional incentives are available for projects that include an ADU, accessible
improvements, and energy-efficien cy improvements.
Funding Source: EDA Levy
G OALS & O BJECTIVES: Diversify the Housing Stock and Increase the Tax
Base
I mprove and maintain an aging housing stock by providing financial and technical
assistance to homeowners so they may make home improvements and undertake
expansions to accommodate their housing needs.
Findings
Overall, loan recipients tend to stay in their homes. For
loans over 5 years old, the average loan age is 13 years
old and there have only been 2 foreclosures since the
program began.
Quick Stats (since 2015)
53 Loans
Average of 5.3 loans
per year
Average Loan
Amount: $18,506
Total Expenditures:
$983,342
Total Amount
Leveraged:
$8,156,379
Housing Program Evaluation | Transformation Loan Program June 2025
Project expenses went up A LOT in 2024, and loan contributions may not be as
impactful for larger projects.
Average loan amounts have increased.
Housing Program Evaluation | Transformation Loan Program June 2025
While loans have been more heavily concentrated on the west side of the City since
the program’s inception, over the last 10 years the loans have been more dispersed:
Things to Think About
The program has been primarily focused on diversifying the housing stock and
increasing the tax base, but we could look for ways to focus the program on more
modest-income households.
As project costs increase, our loan contributions are less of an incentive especially
for higher income households.
A family is finishing their basement in order to create a space for their aging
parents to live. Upgrades include a bedroom, living area, accessible bathroom
and chairlift.
A retired contractor is building an Accessory Dwelling Unit for his disabled adult
daughter so that she can stay close by for support while maintaining some
independence.
Housing Program Evaluation | Transformation Loan Program June 2025
NEXT STEPS
1. Staff will analyze the effectiveness of incentives implemented in 2023 for projects
that included an ADU, accessibility upgrades, energy efficient features, or duplex
conversion.
2. In 2025 staff began tracking the demographics of applicants (household size,
race/ethnicity, income level). We will look at the demographic data collected from
this round and see if there are any major takeaways.
3. We will explore ways to refine the program such as adding income limits, priority
application periods, shorter loan-term requiring repayment for higher income
households, etc.
Before After
Housing Program Evaluation | Richfield Rediscovered June 2025
Richfield Rediscovered
The Richfield Rediscovered Program began in 1990 providing opportunities for the construction
of new, market-rate homes . The HRA either purchases a substandard home and makes the vacant
lot available for new construction, or it provides a $50,000 credit to an individual purchasing a
substandard home and replacing it with a new home. The new home must meet size, design, and
price minimums established by the HRA, and more recently, the Program has offered incentives for
energy-efficiency, universal design, and “missing middle” housing types. The most recent “era” of
the Program began in 2010 as the housing market began recovering from the foreclosure crisis.
Funding Source: Pooled Tax Increment in the Housing & Redevelopment Fund
G OALS & O BJECTIVES: Diversify the Housing Stock & Increase the Tax Base
Remove blighted homes and diversify the housing stock through the construction
of larger, modern housing options.
Findings
For every $1.00 in net expenditures, there was
an average $6.13 increase in finished home
value.
From 2010-2024, there was a 10-unit increase in
density.
The average subsidy and the ratio of value to
cost was slightly higher for the Credit Program
($39,000 and 7.87) than the Lot Sale Program
($43,000 and 5.65).
The Program has been declining in recent years
as home prices of even substandard homes
have increased significantly.
Quick Stats (2010-2024)
# of Homes Built: 50
Total Subsidy: $2.11 million
Average Home Value: $404,000
Total Increase in Home Value:
$12.99 million
Average Value to Cost Ratio: 6.13
The HRA purchased a tax-forfeited property, which had been vacant, neglected,
and off the tax rolls for over five years following the death of the elderly owner. A
local family worked with a builder to design and construct their dream home to
meet the needs of their growing family. The property went from a tax value of zero
to its current tax value of $ 573,000.
Housing Program Evaluation | Richfield Rediscovered June 2025
Things to Think About
The Program is less active because there are fewer substandard homes available,
and the primary source of funding is declining and demand has increased (e.g., being
used to purchase substandard commercial properties).
There are still substandard homes where removal is the optimal choice (e.g., Code
Enforcement troubled properties, early “cabins” and “garage homes”); however, the
cost of even these homes is making the Program less economically viable.
There are two vacant lots remaining, and efforts to construct “missing middle”
homes on the properties have been financially challenging. Additional HRA subsidy
may be required to accomplish this goal.
NEXT STEPS
1. In 2025, continue to market the remaining two lots for “missing middle” housing,
considering reduced lot price, and search for new partners.
2. In 2026, if no duplexes are moving forward, reconsider the goals for the lots.
3. Identify remaining substandard homes to determine the number of future
opportunities. May want to reconsider “appetite” for amount of subsidy considered
given potential for increasing tax base.
Housing Program Evaluation | Richfield Rediscovered June 2025
0
1
2
3
4
5
6
7
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Richfield Rediscovered: Market-Rate New Construction
Lots Credits
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
RR: Total Home Value Increase v. Net Expenditures
Value Increase Subsidy
Housing Program Evaluation | Apartment Remodeling Loan Program June 2025
Apartment Remodeling Program
The Apartment Remodeling Program (ARP) was created in 2018 and offers 15-year, no-
interest, forgivable deferred loans to rental housing properties with 4+ units. Loans of up to
$10,000 per unit ($50,000 maximum per building) provide funds for maintenance and
improvements to buildings that charge rents at or below 60% of the Area Median Income
(AMI). A 1:1 match from the property owner is required. The Program was modified in 2023
to provide additional incentives for energy-efficiency and accessibility improvements and
to allow rental property with 1-3 units to apply from August–December, if funds remain. In
2024, the Center for Energy and Environment took over administration of the Program.
Funding Source: Economic Development Authority Levy
G OALS & O BJECTIVES: Maintain & Improve the Housing Stock and Maintain
Richfield as an Affordable Place to Live
Encourage investment in the City’s aging apartments, focus on buildings that
charge rents less than 60% of the AMI.
Findings
The Program has been underutilized (75% of
budgeted funds used).
Given the age of the rental housing stock and
observations from Housing Inspectors, there
is a significant need for the Program.
Small buildings (10-17 units) have been the
primary users of the Program.
Windows, roofs, and parking lots have
accounted for a majority of the (58%) funds
spent.
Quick Stats
Total # of loans: 14
Total Amount Loaned: $523,892
Total Budgeted: $700,000
Additional Investment Leveraged:
$611,000
Energy-Efficiency Incentive: $10,000
The owner of an 11-unit building read about the program on a flyer that was
inserted into the rental license renewal mailing. She had taken over
management of the building her father built and took advantage of the loan
opportunity to upgrade exterior doors, paint, and repair siding and window wrap.
Housing Program Evaluation | Apartment Remodeling Loan Program June 2025
Things to Think About
To truly address the maintenance and improvement needs of the community’s
apartments will likely require a significantly larger investment.
Many buildings are owned by long-time owners without mortgages and any turnover
leads to increased rents as new owners require mortgages to finance the purchase
and frequently have a backlog of improvement needs to address.
NEXT STEPS
1. Create a plan for increasing utilization of the program through outreach and
marketing.
2. Create a plan for increasing the use of the energy-efficiency and accessibility
incentives.
3. Assess the total need for improvements and the risk of building turnover and loss of
affordability.
4. Explore/advocate for options for financing improvements at other levels of
government. Consider focusing local resources on smaller buildings.
5. $55,000 of a $100,000 grant remains to be spent. The focus of the grant program has
been to improve units of long-time tenants. Evaluate merging the grant funds into the
loan program to get the funds spent.
6. Standardize the process for collecting loan data.
Housing Program Evaluation | Apartment Remodeling Loan Program June 2025
Apartment Remodeling: Types of Improvements
Windows Roofs Security/fob system
Parking lots Doors Siding and Painting
Misc. and Code items Carpeting HVAC
Insulation
16 | Page June 2025
HOUSING PROGRAM EVALUATION
Next Steps
Timing Program Task
FTH-DPA Offer post-purchase resources to new homeowners.
Ongoing FTH-DPA Continually evaluate the role of our downpayment assistance
in relation to other downpayment resources available.
FTH-DPA Evaluate whether allowing stacking with first generation loans
is worth the risk to serve lower income households.
FTH-DPA Consider funding levels and more selective criteria based on
market cycle factors like interest rates (e.g., only Richfield
renters).
Fix-Up Fund Track dual use of Fix-Up Fund and Transformation Loan.
Revisit maximum loan amount if the close relationship
continues.
Q2 2025 Fix-Up Fund Explore adjusting the interest rate write-down amount as
CFUL interest rates vary.
Q2 2025 Fix-Up Fund Consider increasing the Program budget for 2026.
2026 Fix-Up Fund Explore possible other sources of funds to match HRA
funding.
2026 HES Cross-promote when people call for assistance with
maintenance projects.
2026 HES Focus marketing on low-income homeowners.
2026 HES Consider culturally-relevant promotion of the program.
17 | Page June 2025
HOUSING PROGRAM EVALUATION
Timing Program Task
2026 New Home
Program
Send out targeted mailings to homes below a certain
valuation with information about how to sell to
WHAHLT/Habitat etc.
2026 New Home
Program
Consider alternatives to meeting goals of affordable
homeownership and improving affordable housing stock (e.g.,
re-start First-Time Advantage program).
2026 New Home
Program
Explore new partnerships to increase capacity beyond one
home per year.
2026 New Home
Program
Explore what other cities are doing for long-term affordable
homeownership.
Advisors Create better guidance for residents trying to decide which
program will best fit their needs.
Advisors Explore ways to increase outreach in order to ensure that
programs are being utilized by those who need them and
funds are fully utilized.
Advisors Communicate regularly with the Advisor to better track needs
and to increase use of City financing programs.
Advisors Explore efficient ways to track effectiveness of programs
given limited staff capacity.
Begin
Q4 2025
Transformation Analyze the effectiveness of incentives implemented in 2023
for projects that included an ADU, accessibility upgrades,
energy efficient features, or duplex conversion.
Q4 2025 Transformation In 2025 we began tracking the demographics of applicants
(household size, race/ethnicity, income level). We will look at
the demographic data collected from this round and see if
there are any major takeaways.
18 | Page June 2025
HOUSING PROGRAM EVALUATION
Timing Program Task
Transformation Explore ways to refine the program such as adding income
limits, priority application periods, shorter loan-term
requiring repayment for higher income households, etc.
Q4 2025 ARP Create a plan for increasing utilization of the program through
outreach and marketing.
Q3 2025 ARP Create a plan for increasing the use of the energy-efficiency
and accessibility incentives.
2026 ARP Assess the total need for improvements and the risk of
building turnover and loss of affordability.
Q4 2025 ARP Explore/advocate for options for financing improvements at
other levels of government. Consider focusing local
resources on smaller buildings.
2026 ARP $55,000 of a $100,000 grant remains to be spent. The focus of
the grant program has been to improve units of long-time
tenants. Evaluate merging the grant funds into the loan
program to get the funds spent.
Q4 2025 ARP Standardize the process for collecting loan data.
Q4 2025 Deferred Loan Quantify and prioritize the need for the program (e.g., 1,200
low-income homeowners are cost-burdened).
Q2 2025 Deferred Loan Consider forgiving all Richfield loans older than 15 years (57
loans).
Q4 2025 Deferred Loan Plan for the possibility that the needs of Richfield
homeowners will not be met by the all-suburban pool.
Consider and advocate for options if federal funding is
reduced or eliminated.
Q3-4 2025 Deferred Loan Identify potential new partners to provide rehab loans for our
lowest-income homeowners.
19 | Page June 2025
HOUSING PROGRAM EVALUATION
Timing Program Task
Q2-3 2025 RR In 2025, continue to market the remaining two lots for
“missing middle” housing, considering reduced lot price, and
search for new partners.
Q1 2026 RR In 2026, if no duplexes are moving forward, reconsider the
goals for the lots.
2026 RR Identify remaining substandard homes to determine the
number of future opportunities. May want to reconsider
“appetite” for amount of subsidy considered given potential
for increasing tax base.
Q4 2025 -
Q1 2026
New Initiatives Explore creation of “code enforcement” and/or Point of Sale
rehab loan program.
Q4 2025-Q1
2026
New Initiatives Create a plan for accessing outside funding sources.
2025-2026 New Initiatives Assess housing needs and priorities and explore potential
programs for utilizing available LAHA and HRA levy funding.
20 | Page June 2025
HOUSING PROGRAM EVALUATION
Appendix A: Selected Goals from Guiding Documents
Strategic Plan
• Increased Tax Base (New Housing Units, # and Net Increase)
• Maintain Richfield as an affordable place to Live (housing cost burden,
housing unit affordability)
• Diverse Inclusive and Thriving Hometown (Reduction in homeownership
disparity)
Climate Action Plan
• Promote Renewable Energy Installation and Purchasing (rental property
owners and homeowners)
• Encourage Sustainable Design & Building Practices
• Reduce Waste Generated & Promote Responsible Disposal
Comprehensive Plan
• Urban Hometown Definition: "quality housing"
• Urban Hometown Definition: "cultural diversity"
• Goal: Maintain and enhance Richfield’s commitment to housing
maintenance, rehabilitation and redevelopment, resulting in an attractive,
desirable and prosperous community
• Goal: Provide a full range of housing choices that meet residents’ needs at
every stage of their lives and ensure a healthy balance of housing types that
meet the needs of a diverse population with diverse needs. (related:
Maintaining a diversity of housing types and price ranges.)
• Sustainability & Energy Goal: Install solar panels or similar energy sources
on public buildings and encourage owners of businesses and private
property owners to do the same
• Framework: Strengthening and enhancing the low- density residential areas
of the community
• Framework: Emphasizing sustainability as a measure to ensure the future
economic, environmental and social health of the community
• Community Engagement: more housing options, value affordability
21 | Page June 2025
HOUSING PROGRAM EVALUATION
Appendix B: Census Data Richfield 2020 Race and Ethnicity
Hispanic or Latino 18.4%
White alone 59.0%
Black or African American alone 9.7%
Asian alone 6.6%
American Indian and Alaska Native
alone 0.5%
Other, more than one race 5.7%
Richfield Financial Characteristics of Households Units With or Without a Mortgage
ACS 2023 (Table S2507)
income in last 12 months HH w/ Mtg HH w/o Mtg
Less than $10,000 73 10% 63 6%
$10,000 to $24,999 180 26% 309 29%
$25,000 to $34,999 98 14% 365 35%
$35,000 to $49,999 346 50% 312 30%
Sum of Households 697 1049 Count of HHs not paying
30% or more of income 19 531
percent paying <30% of
income on housing 3% 51%
Nearly all low-income households with a mortgage are cost-burdened, about half of low-income
households without a mortgage are cost-burdened. Cost-burdened households are more likely to
experience difficulty affording basic living necessities. Most of these 1,700 homes owned in Richfield
qualify for assistance in our programs. Richfield Renters Gross Rent as a Percentage of Household Income
ACS 2023 (Table B25070)
Less than 20% 29%
20 to 29 Percent 27%
30 to 39 Percent 13%
Greater than 40% 29%
22 | Page June 2025
HOUSING PROGRAM EVALUATION Richfield Renter Cost Burden by Annual Income
Gross Rent as a percentage of Household Income by Annual Income
ACS 2023 (Table B25074)
$10,000
to $19,999:
$20,000
to $34,999:
$35,000
to $49,999:
$50,000
to $74,999:
$75,000
to $99,999:
$100,000
or more:
Less than 20% 5% 5% 2% 12% 53% 83%
20 to 29 Percent 11% 5% 26% 47% 39% 15%
30 to 39 Percent 6% 21% 27% 20% 5% 0%
Greater than 40% 75% 69% 43% 21% 3% 2%
AGENDA SECTION:Consent Calendar
AGENDA ITEM #2.B.
STAFF REPORT NO. 16
HOUSING AND REDEVELOPMENT AUTHORITY
MEETING
6/16/2025
Celeste McDermott/Hilary Lovelace, Housing SpecialistsREPORT PREPARED BY:
EXECUTIVE DIRE CTOR RE VIEW:
ITEM FOR COUNCIL CONSIDERATION:
Consideration of the approval of Program Guidelines for the Woodlawn Terrace Cooperative New
Manufactured Home Purchase Program.
EXECUTIVE SUMMARY:
Woodlawn Terrace is a manufactured home community offering affordable homeownership opportunities
located at 7421 Lyndale Avenue South. In order to further promote affordable housing opportunities to low and
moderate income buyers, the Housing and Redevelopment Authority (HRA) applied for and was awarded
Local Housing Improvement Account (LHIA) funds from the Metropolitan Council for a Woodlawn Terrace
Cooperative New Manufactured Home Purchase Program (WTCHPP). The Woodlawn Terrace Cooperative
(WTC) has partnered with Home Source Inc, a licensed manufactured home dealer and real estate agency
based in the Twin Cities Metro area, to bring in new units to fill the park. The WTCHPP will be aimed at
households earning no more than 80% of the Area Median Income (AMI) and will provide no-interest,
deferred loans of up to $36,750 to use towards the purchase of a new manufactured home in Woodlawn
Terrace.
Over the past four years, HRA staff met with representatives from the WTC, HomeSource Inc, and
NorthCountry Cooperative Foundation during the development of the WTCHPP Guidelines. More recently,
HRA staff have begun collaborating with NeighborWorks Home Partners to make sure that our program
compliments their new and favorable lending product for manufactured homeownership. Terms provided in the
WTCHPP Guidelines include that the loans will be forgiven on a pro-rated basis over a 15-year period, or
forgiven if sold to another income qualified buyer before the 15-year period. The loan products available for
manufactured homes are structured differently than single family home mortgages. They usually have higher
interest rates and shorter loan periods which result in higher monthly payments than you would see for a
traditional mortgage of an equal amount. The WTCHPP will help ensure that monthly payments on the new
homes being added in Woodlawn Terrace remain affordable for low and moderate income buyers.
RECOMMENDED ACTION:
By motion: Approve Program Guidelines for the Woodlawn Terrace Cooperative New Manufactured
Home Purchase Program.
BASIS OF RECOMMENDATION:
A.HISTORICAL CONTEXT
With the assistance of NorthCountry Cooperative Foundation, the residents of Woodlawn Terrace
formed the WTC in 2021 in order to purchase the underlying property. This allowed the residents to own
Melissa Poehlman, Executive Director
6/11/2025
the land they live on as a Cooperative and will ensure that the park can remain a long term source of
affordable housing.
The HRA has approved funds for upgrading utilities and making improvements to rental units located in
Woodlawn Terrace. The WTC now has access to Richfield drinking water and has completed work on
internal streets.
The WTC is seeking to add new units to Woodlawn Terrace. The WTC plans to increase the total
number of units to 70, offering an opportunity for additional households to purchase homes and ensure
the financial security of the cooperative for years to come.
The demand for purchase assistance is great, as buyers struggle to meet rising home prices without
taxing their monthly spending.
Staff began discussions about this potential program in 2021 and has since met with various
stakeholders and partners to develop the WTCHPP Guidelines and administration.
Recently, NeighborWorks Home Partners has begun offering a new lending product for manufactured
home buyers, Prime Path, that can be paired with the proposed WTCHPP.
B.EQUITABLE OR STRATEGIC CONSIDERATIONS OR IMPACTS
The WTCHPP furthers equity goals by providing a path to affordable home ownership for low-income
households.
The WTCHPP supports the 2023-2027 Strategic Plan outcome of maintaining Richfield as an
affordable place to live.
C.POLICIES (resolutions, ordinances, regulations, statutes, exc):
Support for Woodlawn Terrace furthers the Comprehensive Plan goal to provide a full range of housing
choices that meets residents' needs at every stage of their lives and to ensure a healthy balance of
housing types that meets the needs of a diverse population with diverse needs.
D.CRITICAL TIMING ISSUES:
WTC is currently marketing units for sale. The WTCHPP will be available to low and moderate income
buyers at Woodlawn Terrace.
NeighborWorks Home Partners has begun accepting applications for their Prime Path Program and is
currently working with a buyer who will need additional assistance in order to close on the home.
E.FINANCIAL IMPACT:
The HRA was awarded $192,000 in LHIA funds, which has been used on demolition of abandoned
units ($12,000) and will provide funding for lot preparation and affordability gap assistance through the
WTCHPP.
Funds will be distributed in the form of a no-interest loan to buyers that will be forgiven on a pro-rated
basis over 15 years.
Loans will be fully forgiven if resold to income-qualified buyer before 15 year term. Unlike in other first-
time homebuyer programs with stick-built homes where the City has tried to recapture some value in a
sale before the loan term is up, manufactured homes historically have not appreciated in value, so a
subsequent buyer is unlikely to gain any financial benefit from any further resale of the home.
Maximum individual loan amount is $36,750 and is based on affordability gap. Funds are available to
fund three to four units.
F.LEGAL CONSIDERATION:
The owners of the manufactured housing units do not individually own the land underneath the unit, so the
HRA will secure its loan by filing a lien against the unit's title.
The HRA Attorney will approve final documents.
ALTERNATIVE RECOMMENDATION(S):
Approve the WTCHPP with changes.
Do not approve the WTCHPP.
PRINCIPAL PARTIES EXPECTED AT MEETING:
N/A
ATTACHMENTS:
Description Type
WTCHPP Program Guidelines Backup Material
Richfield Housing & Redevelopment Authority
Woodlawn Terrace Cooperative
New Manufactured Home Purchase Program
(WTCHPP)
Program Guidelines
June 2025
A. Purpose
The purpose of the Woodlawn Terrace Cooperative New Manufactured
Home Purchase Program (WTCHPP) is to provide affordability gap
assistance to income-qualified buyers of three-bedroom manufactured
homes located in the Woodlawn Terrace Cooperative (WTC).
B. Eligibility
Persons desiring to move into the Woodlawn Terrace Cooperative will be
eligible, provided that:
1.The applicant's total gross household income, as verified by
Home Source and the Richfield Housing & Redevelopment
Authority (HRA) Housing Specialist is less than 80% of the Twin
Cities Area Median Income.
2.The applicant contributes a minimum of $1,000 of their own
funds toward the purchase of the unit.
3.The applicant has completed a manufactured home buyers’
course.
4.The applicant qualifies for primary financing for the purchase of
a new home.
5.Housing Ratio: The total regular housing expenses of the
applicant (e.g., regular housing expenses, assistance from the
WTCHPP, fixed debt, and lot rent) are more than twenty-five
percent (25%) of the applicant’s gross income.
6. Debt-to-Income Ratio: The total amount of all debt (e.g.,
housing debt, car loans, student loans) does not exceed fifty
percent (50%) of gross income. Exceptions may be made by
the HRA Executive Director in cases with extenuating
circumstances.
Richfield Housing & Redevelopment Authority
C. Form of Assistance
Set-up costs for a replacement home. The WTCHPP will assist eligible
applicants in covering the costs of setting up a replacement home,
including unit lot prep, utility connections, piers, transport, permits,
anchoring, steps, and skirting installation. This assistance will be
provided to eligible applicants as a deferred, no-interest loan, to be
forgiven if the applicant owns and occupies the unit for at least
fifteen (15) years from the date the assistance is provided. This loan
will be secured by a lien on the home according to terms established
in the Note and Manufactured Home Security Agreement (Exhibit A).
If the Buyer sells the unit before the end of the fifteen-year period, the
loan will be due and payable at a pro-rated amount. The loan will be
forgiven if the Buyer sells the home to an income-qualified buyer. At
the end of fifteen years, the loan is forgiven.
D. Process
1.A Buyer submits an application to Home Source to purchase a
WTC three-bedroom home.
2.Buyer completes a “Program Introduction” call with a Richfield
Housing Specialist.
3.Buyer completes a homebuyer workshop.
4.Buyer identifies a lender and pre-qualifies for a primary loan.
5.Buyer submits WTCHPP loan application and required income
documentation.
6.Housing Specialist reviews loan application and verifies Buyer
income. Income must be at or below 80% of the Twin Cities Area
Median Income (AMI), as adjusted for family size.
7.HomeSource verifies that Buyer qualifies for a primary loan to
purchase the unit.
8.If applicant qualifies, Housing Specialist provides a pre-approval
letter.
9.Lender submits additional required documentation.
10.Once application is complete and meets all program
requirements, Housing Specialist provides a loan commitment
letter.
11.Buyer closes on principal loan.
12.Buyer closes on HRA loan.
13.Buyer provides title to the HRA, and the HRA provides loan funds to
HomeSource.
Richfield Housing & Redevelopment Authority
E. Limits of Assistance
The maximum amount of assistance provided to a single applicant shall
be $36,750. Assistance to any applicant shall be no more than is required
to cover the actual costs described in Section C.
F. Income Requirements
Applicants must not have a gross annual income that exceeds the
maximum income limits which are revised annually to reflect the current
year’s maximum income limits. Income is calculated using prior year tax
returns and verified by most recent paystubs. Gross assets (post-closing)
must not exceed $25,000, excluding retirement savings. For information on
calculating income, please contact a Richfield Housing Specialist.
Income Limits as of April 1, 2025
Household Size Total Household
Income Limit
1 $72,950
2 $83,400
3 $93,800
4 $104,200
5 $112,550
6 $120,900
7 $129,750
DRAFT
Exhibit A
RICHFIELD HOUSING AND REDEVELOPMENT AUTHORITY
WOODLAWN TERRACE NEW MANUFACTURED HOME PROGRAM
NOTE AND MANUFACTURED HOME SECURITY AGREEMENT
THIS AGREEMENT, made and entered into this day of , 20 , by and between
_____________________ (hereinafter referred to as "Borrower"), and the Housing and Redevelopment
Authority in and for the City of Richfield, a Minnesota body corporate and politic (hereinafter referred
to as "Lender").
WHEREAS, the Lender, received a Local Housing Incentives Account grant (the “LHIA
grant”) from the Metropolitan Council to provide affordability assistance loans to buyers of new
manufactured homes in the Woodlawn Terrace Manufactured Home Park (the “Park”); and
WHEREAS, the Borrower has applied for a loan under said LHIA grant to purchase the
following described personal property (the “Personal Property”):
Manufactured Home Type: Make: Year:
Vehicle ID#: Title #:
WHEREAS, Lender has paid Dollars ($ ) on Borrower's behalf as a no-interest loan
(hereinafter referred to as "Loan") for purchase of the Personal Property, the receipt and sufficiency of
which is hereby acknowledged by Borrower, and
WHEREAS, the Borrower meets the requirement of the LHIA grant to have an income no
greater than 80% of the Area Median Income, and therefore the Borrower qualifies for the no-interest
Loan for purchase of the Personal Property, the receipt and sufficiency of which is hereby
acknowledged by Borrower, and
WHEREAS, Borrower and Lender desire to set forth herein the provision for Borrower's
repayment of the Loan, and to provide for securing said repayment.
NOW, THEREFORE, in consideration of said Loan and in accordance with Minnesota Statutes,
the parties hereto do hereby agree as follows:
1. This Note shall be forgiven in part for each full year following the date of this Note that
(a) the Personal Property is not sold or transferred; (b) the Personal Property remains the primary place
of residence of the Borrower; (c) the Personal Property remains located within the Park, and (d) there is
no default under this Note, or any other liens filed against the Property. A pro-rated percentage of the
principal loan amount due shall be forgiven by the Lender if the Borrower is not otherwise in default of
any of his or her obligations under this Note.
This Note shall be forgiven in its entirety fifteen years after the date of this Note if, for a period of
fifteen years: (a) the Personal Property is not sold or transferred; (b) the Personal Property remains the
primary place of residence of the Borrower; (c) the Personal Property remains located within the Park,
and (d) there is no default under this Note, the any other liens filed against the Property.
DRAFT
This Note shall be forgiven before fifteen years at the time the Personal Property is sold, transferred or
otherwise conveyed to a party who is a qualifying purchaser. For the purpose of this document, a
qualifying purchaser shall have a family income that does not exceed 80 percent of the median income
of the Twin Cities metropolitan area, as determined by the Lender and meets all requirements of the
Woodlawn Terrace Cooperative New Manufactured Home Program.
2. Repayment of the Loan as required under the terms of paragraph 1 shall be made to
Lender on the 30th day following any of the occurrences referred to in paragraph 1 or on such later date
or dates as Lender, in its sole discretion, may designate to the Borrower in writing.
3. As security for the Borrower's covenant and obligation for repayment as provided in
paragraph 1, and subject to the terms and conditions of this Agreement, Borrower hereby grants, and the
Lender shall and hereby does have, a lien on the Personal Property described above in the full amount
necessary to satisfy such repayment obligation and the cost, including reasonable attorney's fees, of
collecting the same.
4. Promptly after any of the occurrences described in paragraph 1 within fifteen years of
the date of the Loan as set forth above, Borrower, or his/her heirs, executors, or representatives, shall
give Lender notice thereof.
5. In the event Borrower or his/her heirs, executors, or representative shall fail or refuse to
make the payment of the Loan within said thirty (30) day period or later date if so designated by Lender
in writing as set forth above, the Borrower confers upon the Lender the option of declaring all sums
then owing by the Borrower immediately due and payable without notice and hereby authorizes and
empowers the Lender to take all actions legally available to collect all sums owing under this
Agreement, including sale of the personal property, and out of the monies arising from such sale to
retain all sums secured hereby, together with all legal costs and charges of such foreclosure and the
maximum attorney's fee permitted by law, which costs, charges and fees the Borrower herein agrees to
pay. Lender's rights to foreclose the Mortgage set forth herein shall be in addition to any other
remedies available to Lender at law or in equity in the event of a default, including the right to bring
an action against Borrower personally based on Borrower's contractual obligation to pay the Loan
set forth in paragraph 2 hereof.
6. Additional conditions:
(a) The Borrower understands and agrees to keep the Personal Property in good
condition and make any needed repairs.
(b) The Borrower understands and agrees to keep the Personal Property insured during
the Term of the Loan.
(c) The Borrower agrees to follow all terms and conditions of the lease or rental
agreement of the Park.
7. The Borrower and Lender further covenant and agree as follows:
DRAFT
(a) Borrower shall be furnished a conformed copy of this Agreement at the time of
execution.
(b) In addition to any notice required under applicable law to be given in another
manner, (i) any notice of the Borrower provided for in this Agreement shall be given
by mailing such notice by certified mail addressed to the Borrower at the address of
the new manufactured home, or at such other address as the Borrower may designate
by notice in writing to the Lender as provided herein, and (ii) any notice to the
Lender shall be given by certified mail, return receipt requested, to Lender at the
following address: Richfield HRA, 6700 Portland Avenue South, Richfield, MN
55423, Attn: Executive Director, or to such Borrower as provided herein. Any
notice provided for in this Agreement shall be deemed to have been given to
Borrower or Lender when given in the manner designated herein.
8. The Mortgage lien created by this Agreement shall terminate and shall be of no further
force or effect in the event Borrower or his/her heirs, executors, or representatives are not in default of
any of the covenants or agreements contained herein, and Lender has not, on or before the
day of , 20 :
(a) Commenced an action in the manner provided by statute for the foreclosure of
the Mortgage.
(b) Filed for record a notice of said action, or a power of attorney to foreclose
mortgage, or a lis pendens referring to the same.
Lender may, in its sole discretion, extend said termination date of said lien by filing for record,
on or before said termination date, an agreement with Borrower or his/her heirs, executors, or
representatives evidencing such extension.
9. This Agreement shall inure to the benefit and of and be binding upon the parties hereto
and their respective heirs, executors, representatives, successors and assigns.
10. Joint and Several. In the event the Borrower as described above consists of two or more individuals or entities, all such individuals or entities shall be considered jointly and severally liable for the obligations of the Borrower set forth herein.
DRAFT
IN TESTIMONY WHEREOF, the Borrower(s) hereto have executed this Agreement.
________________
Borrower
STATE OF MINNESOTA )
) ss.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this ____day of ______________,
20__ by ___________________________________________________.
Notary Public
DRAFT
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD,
MINNESOTA
By
Its Chair
By
Its Executive Director
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this day of __________, 20___, by
_____________________________, the Chair of the Housing and Redevelopment Authority in and for the
City of Richfield, Minnesota, a public body corporate and politic under the laws of the State of Minnesota, on
behalf of the Authority.
Notary Public
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this day of __________, 20___, by
_____________________________, the Executive Director of the Housing and Redevelopment Authority in
and for the City of Richfield, Minnesota, a public body corporate and politic under the laws of the State of
Minnesota, on behalf of the Authority.
Notary Public
This Instrument was drafted by:
Richfield HRA
6700 Portland Ave S
Richfield, MN 55423
AGENDA SECTION:PUBLIC HEARINGS
AGENDA ITEM #4.
STAFF REPORT NO. 17
HOUSING AND REDEVELOPMENT AUTHORITY
MEETING
6/16/2025
Julie Urban, Asst. Community Development DirectorREPORT PREPARED BY:
EXECUTIVE DIRE CTOR RE VIEW:
ITEM FOR COUNCIL CONSIDERATION:
Consideration of a Contract for Private Redevelopment with Penn Station Apartments LLLP and sale
of land for the development of 42 units of affordable housing at 6501-25 Penn Avenue South.
EXECUTIVE SUMMARY:
In 2024, the Housing and Redevelopment Authority (HRA) approved a Preliminary Development Agreement
(Agreement) with JO Companies, LLC and its affiliates (Developer) for the development of affordable housing
on HRA-owned property located at 6501 and 6525 Penn Avenue South (Development). In the Agreement, the
HRA agreed to consider financial assistance for the project in an amount up to $1.485 million by selling the
Redevelopment Property to the Developer at a reduced cost of $500,000 (a 2024 Broker Price Opinion
determined the value of the property to be $1.5 million) and to provide financial assistance from the Affordable
Housing Trust Fund in an amount up to $485,000.
In December 2024, the Developer received an award of federal Low Income Housing Tax Credits
(LIHTC) and other assistance to finance the Development. The Developer is now asking the HRA
to approve the sale of the land and financial assistance through a Contract for Private
Redevelopment (Contract) with the Developer's affiliate, Penn Station Apartments, LLLP (Penn
Station).
Staff is recommending that the HRA provide the level of assistance contemplated in the Agreement; however,
we recommend doing so solely through a reduced land price of one dollar. This allows the HRA to assist the
property while reserving funds in the Housing Trust Fund for future programs and projects where the HRA
does not own the property and have the value of land to contribute.
The proposed Development meets several housing goals of the City by providing a mix of bedroom sizes at
various affordability levels, including deeply affordable units, accessible units for people with disabilities, and
housing with supportive services. The project also revitalizes a blighted corner of Penn Avenue.
The mix of affordability includes 16 units affordable at 30% of the Area Median Income (AMI), 18 units
affordable at 50% of the AMI, and 8 units affordable at 60% of the AMI. Thirteen of the units will receive
rental assistance along with housing supportive services through Simpson Housing Services. Some of those
units will serve people with disabilities and others formerly homeless households. The project provides a mix of
one (8), two (22), three (8), and four (4) bedroom units. The affordability levels will be preserved for forty
years.
The City Council approved land use approvals for the project on June 10th.
Melissa Poehlman, Executive Director
6/12/2025
RECOMMENDED ACTION:
Conduct and close a public hearing and by motion:
1. Adopt a resolution approving a Contract for Private Redevelopment authorizing the sale of Housing
and Redevelopment Authority owned property located at 6501-6525 Penn Avenue South to Penn
Station Apartments, LLLP for the development of 42 units of affordable housing;
2. Authorize the Executive Director and HRA Attorney to approve any administrative, non-substantive
changes to the Contract and Declaration of Restrictive Covenants, and
3. Authorize the Chair and Executive Director to execute any subordination agreements required by
the principal lender(s).
BASIS OF RECOMMENDATION:
A.HISTORICAL CONTEXT
The HRA purchased the property at 6501 Penn Avenue South in 2019 and the adjacent tax-forfeited
property at 6525 Penn Avenue South in 2024.
The Development consists of a five-story building with 42 housing units and 34 underground and 14
surface parking spaces. The affordability mix would include 15 units affordable to households earning up
to 30% of the Area Median Income (AMI), 18 units affordable at 50% of the AMI, and 7 units affordable
at 60% of the AMI. Two units will be ADA-accessible with roll-in showers.
On June 17, 2024, the HRA approved a Preliminary Development Agreement and on July 9, 2024,
approved an amendment to that Agreement. Under the terms of the Amended Agreement, the HRA
agreed to work with the Developer to consider financial assistance in the amount of up to
$1.485 million in the form of a grant or loan from the Affordable Housing Trust Fund (Trust
Fund) and/or a reduced price for the land. The Preliminary Agreement was extended on
February 18, 2025.
On June 10, 2025, the City Council approved land use entitlements for the project.
B.EQUITABLE OR STRATEGIC CONSIDERATIONS OR IMPACTS
The proposed affordable housing Development provides an opportunity for the construction of
accessible housing units, units with a larger number of bedrooms for families with children, and housing
units affordable to households earning 30% of the AMI.
The proposed affordable housing Development helps to meet the Strategic Plan goal to maintain
Richfield as an affordable place to live.
The project will meet stringent energy-efficiency standards required by Minnesota Housing, helping to
further the City's sustainability goals.
C.POLICIES (resolutions, ordinances, regulations, statutes, exc):
The project exceeds the City's Inclusionary Housing Policy, which requires at least 20%
of the units receiving financial assistance from the City be affordable at 60% of the AMI
and to provide three percent of the units as fully accessible or five percent as Type A.
The development of 16 units of housing affordable at 30% of the AMI helps the City to
meet its share of deeply affordable housing (66 units) as determined by the Metropolitan
Council.
D.CRITICAL TIMING ISSUES:
The Agreement expires on August 31, 2025.
The Developer anticipates closing on financing this Fall, with construction to begin soon after. The
construction will be completed in late 2026.
The HRA purchased 6525 Penn Avenue South in July of 2024 through the tax forfeiture process. In
order to provide clear title, the HRA has been seeking a proceedings subsequent from the District
Court. That process has been working through the Examiner of Title's Office and is expected to be
resolved in early July. The Contract requires the HRA to produce a title commitment within 60 days of
approving the Contract (August 15).
E.FINANCIAL IMPACT:
The Development pro forma was reviewed by the HRA's financial consultant who determined that the
Development demonstrated a need for financial assistance from the HRA.
In the Preliminary Agreement, the HRA authorized a contribution of up to $1.485 million, writing down
the cost of land to $500,000 and contributing $485,000 from the Trust Fund (the 2024 Broker Price
Opinion valued the land at $1.5 million).
Instead of contributing a partial land write-down and a contribution from the Trust Fund, staff and the
HRA's financial consultant recommend that the assistance take the form of only a land write-down to one
dollar. Funds for the purchase and demolition of the properties came from three different Tax Increment
Financing (TIF) districts, two of which are decertified. If the HRA were to receive any sales proceeds,
the funds would be returned to the TIF districts. In the case of the decertified districts, the funds would
need to be returned to Hennepin County to be divided among all taxing jurisdictions.
The HRA's actual costs for acquisition, demolition, legal, and holding expenses of the properties has
been approximately $970,000.
An As-Is Land Value appraisal conducted in May of 2025 values the land at $370,000, taking into
consideration the cost of demolition and site clean-up. The Developer's Lender is requesting that the
As-Is Land Value be the value referenced in the Contract.
F.LEGAL CONSIDERATION:
The HRA Attorney prepared the Contract.
A Declaration of Restrictive Covenants will be filed against the property for a term of 40 years.
The HRA Attorney and Executive Director would review and approve any additional administrative, non-
substantive changes to the Contract and Declaration that a lender or investor may require.
The HRA Attorney will approve the form of any subordination documents the primary lender may
require.
ALTERNATIVE RECOMMENDATION(S):
1.Decide not to approve the Contract for Private Redevelopment with Penn Station Apartments, LLLP.
2.Decide to sell the land to Penn Station Apartments, LLLP for a different price.
PRINCIPAL PARTIES EXPECTED AT MEETING:
NA
ATTACHMENTS:
Description Type
Resolution Resolution Letter
Renderings Backup Material
Elevations Backup Material
Floor Plans Backup Material
Site Plan Backup Material
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD, MINNESOTA
RESOLUTION NO. 1509
RESOLUTION APPROVING A CONTRACT FOR PRIVATE REDEVELOPMENT
AGREEMENT WITH PENN STATION APARTMENTS LLLP
WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield,
Minnesota (the “Authority”) was created pursuant to Minnesota Statutes, Sections 469.001
through 469.047, as amended, and was authorized to transact business and exercise its powers
by a resolution of the City Council of the City of Richfield, Minnesota (the “City”); and
WHEREAS, the “Authority” owns the real property located at 6501 and 6525 Penn
Avenue South in the City of Richfield, Minnesota (the “City”); and
WHEREAS, JO Companies, LLC, a Minnesota limited liability company, or one of its
wholly owned affiliates (collectively, the “Redeveloper”), proposed to purchase the real property
located at 6501 Penn Avenue South and 6525 Penn Avenue South (collectively, the
“Redevelopment Property”) and construct thereon a multifamily housing project consisting of 42
affordable housing units and approximately 34 underground and 14 surface parking spaces (the
“Project”); and
WHEREAS, on June 17, 2024, the Board of Commissioners of the Authority (the
“Board”) approved a Preliminary Redevelopment Agreement (the “Preliminary Agreement”)
between the Authority and the Redeveloper, which sets forth the Redeveloper’s intentions and
the conditions under which the Redeveloper will undertake the Project, and approved an
Amendment to the Preliminary Agreement on July 9, 2024, updating the total amount of financial
assistance and again on February 18, 2025, extending the Preliminary Agreement deadline;
and
WHEREAS, the Developer is requesting Board approval of a Contract for Private
Redevelopment (the “Contract”) establishing the terms whereby the Authority will sell the
Redevelopment Property to the Redeveloper’s affiliate, Penn Station Apartments, LLLP, a
limited liability limited partnership; and
WHEREAS, after reviewing the need for financial assistance for the Project and finding
that the project meets the housing goals and priorities of the city by providing deeply affordable
units, large bedroom size units, units for people with disabilities, and housing with supportive
services; and
WHEREAS, on June 16, 2025, the Board held a public hearing regarding the sale of the
Redevelopment Property following publication of a legal notice on June 5, 2025; and
WHEREAS, the Board has reviewed the requests and finds that the Contract for Private
Redevelopment terms are in the best interest of the City and its residents; 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 Contract for Private Redevelopment is hereby approved.
2
2. The Chair and Executive Director are hereby authorized to execute and deliver
any and all documents deemed necessary to carry out the intentions of this resolution and the
Contract.
.
Adopted by the Housing and Redevelopment Authority in and for the City of Richfield,
Minnesota this 16th day of June, 2025.
Erin Vrieze Daniels, Chair
Sean Hayford Oleary, Secretary
RC125-399 (JAE)
955888v4
4930-8286-1644.3
Draft
June __, 2025
CONTRACT
FOR
PRIVATE REDEVELOPMENT
between
HOUSING AND REDEVELOPMENT AUTHORITY IN AND
FOR THE CITY OF RICHFIELD, MINNESOTA
PENN STATION APARTMENTS LLLP
Dated ___________, 2025
This document was drafted by:
Kutak Rock LLP (JAE)
60 South Sixth Street, Suite 3400
Minneapolis, Minnesota 55402
Telephone: 612-334-5000
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4930-8286-1644.3
TABLE OF CONTENTS
Page
PREAMBLE ................................................................................................................................................... 1
ARTICLE I
Definitions
Section 1.1. Definitions ................................................................................................................................. 2
ARTICLE II
Representations and Warranties
Section 2.1. Representations by the Authority .............................................................................................. 4
Section 2.2. Representations by the Redeveloper ......................................................................................... 4
ARTICLE III
Property Acquisition; Financing
Section 3.1. Status of Redevelopment Property ........................................................................................... 6
Section 3.2. Environmental Conditions ........................................................................................................ 6
Section 3.3. Grant .......................................................................................................................................... 7
Section 3.4. Payment of Administrative Costs ............................................................................................. 8
Section 3.5. Exception to Business Subsidy Act .......................................................................................... 8
Section 3.6. Records ...................................................................................................................................... 8
ARTICLE IV
Construction of Minimum Improvements
Section 4.1. Construction of Minimum Improvements ................................................................................ 9
Section 4.2. Construction Plans .................................................................................................................... 9
Section 4.3. Commencement and Completion of Construction ................................................................... 9
Section 4.4. Certificate of Completion .......................................................................................................... 9
Section 4.5. Affordability Covenants .......................................................................................................... 10
Section 4.6. Affordable Housing Reporting ............................................................................................... 10
Section 4.7. Notice of Sale of Minimum Assessments ............................................................................... 10
ARTICLE V
Insurance
Section 5.1. Insurance ................................................................................................................................. 11
Section 5.2. Subordination .......................................................................................................................... 12
ARTICLE VI
Financing
Section 6.1. Mortgage Financing ................................................................................................................ 13
Section 6.2. Modification; Subordination ................................................................................................... 13
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ARTICLE VII
Prohibitions Against Assignment and Transfer; Indemnification
Section 7.1. Representation as to Development.......................................................................................... 14
Section 7.2. Prohibition Against Redeveloper’s Transfer of Property and Assignment of
Agreement ............................................................................................................................... 14
Section 7.3. Release and Indemnification Covenants ................................................................................. 15
ARTICLE VIII
Events of Default
Section 8.1. Events of Default ..................................................................................................................... 16
Section 8.2. Remedies on Default ............................................................................................................... 16
Section 8.3. No Remedy Exclusive ............................................................................................................. 17
Section 8.4. No Additional Waiver Implied by One Waiver ...................................................................... 17
Section 8.5. Attorneys’ Fees and Costs....................................................................................................... 18
Section 8.6. No Additional Waiver Implied by One Waiver ...................................................................... 18
Section 8.7. Attorneys’ Fees and Costs....................................................................................................... 18
ARTICLE IX
Additional Provisions
Section 9.1. Conflict of Interests; Authority Representatives Not Individually Liable.............................. 19
Section 9.2. Equal Employment Opportunity ............................................................................................. 19
Section 9.3. Restrictions on Use ................................................................................................................. 19
Section 9.4. Provisions Not Merged with Deed .......................................................................................... 19
Section 9.5. Titles of Articles and Sections ................................................................................................ 19
Section 9.6. Notices and Demands ............................................................................................................. 19
Section 9.7. Counterparts ............................................................................................................................ 20
Section 9.8. Recording ................................................................................................................................ 20
Section 9.9. Amendment ............................................................................................................................. 20
Section 9.10. Memorandum of Understanding ............................................................................................. 20
Section 9.11. Preliminary Development Agreement .................................................................................... 20
SIGNATURES ................................................................................................................................................ S-1
EXHIBIT A Redevelopment Property ....................................................................................................... A-1
EXHIBIT B Form of Certificate of Completion ...................................................................................... B-1
EXHIBIT C Form of Declaration of Restrictive Covenants ..................................................................... C-1
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4930-8286-1644.3
CONTRACT FOR PRIVATE REDEVELOPMENT
THIS CONTRACT FOR PRIVATE REDEVELOPMENT, made as of the ___ day of __________,
2025 (the “Agreement”), is between the HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR
THE CITY OF RICHFIELD, MINNESOTA, a public body corporate and politic under the laws of the State
of Minnesota (the “Authority”), PENN STATION APARTMENTS LLLP, a Minnesota limited liability
limited partnership (the “Redeveloper”).
WITNESSETH:
WHEREAS, the Authority was created pursuant to Minnesota Statutes, Sections 469.001 through
469.047, as amended (the “HRA Act”), and was authorized to transact business and exercise its powers by a
resolution of the City Council of the City of Richfield, Minnesota (the “City”); and
WHEREAS, the Authority has undertaken a program to promote redevelopment and development of
land that is underused or underutilized within the City, and in this connection the Authority administers a
redevelopment project known as the Richfield Redevelopment Project (the “Redevelopment Project”) pursuant
to the HRA Act; and
WHEREAS, pursuant to the HRA Act, the Authority is authorized to acquire real property, or interests
therein, and to undertake certain activities to facilitate the redevelopment of real property by private enterprise
and promote the redevelopment within the City; and
WHEREAS, the Redeveloper proposes to acquire from the Authority certain property within the
Redevelopment Project located at 6501-6525 Penn Avenue South in the City (the “Redevelopment Property”)
and construct thereon a multifamily housing project consisting of approximately 42 affordable housing units
(the “Minimum Improvements”); and
WHEREAS, in order to achieve the objectives of the redevelopment plan for the Redevelopment
Project and make the Minimum Improvements economically feasible for the Redeveloper to construct, the
Authority is prepared to sell the Redevelopment Property to the Redeveloper for $1.00; and
WHEREAS, the Authority believes that the redevelopment to be performed pursuant to this
Agreement, and fulfillment generally of this Agreement, are in the vital and best interests of the City and the
health, safety, morals, and welfare of its residents, and in accord with the public purposes and provisions of the
applicable State of Minnesota and local laws and requirements under which the Redevelopment Project has
been undertaken and is being assisted.
NOW, THEREFORE, in consideration of the premises and the mutual obligations of the parties hereto,
each of them does hereby covenant and agree with the other as follows:
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ARTICLE I
Definitions
Section 1.1. Definitions. In this Agreement, unless a different meaning clearly appears from the
context, the following terms have the following meanings:
“Agreement” means this Contract for Private Redevelopment, as the same may be from time to time
modified, amended, or supplemented.
“Authority” means the Housing and Redevelopment Authority in and for the City of Richfield,
Minnesota.
“Authority Representative” means the Executive Director of the Authority.
“Board” means the Board of Commissioners of the Authority.
“Business Subsidy Act” means Minnesota Statutes, Sections 116J.993 to 116J.995, as amended.
“Certificate of Completion” means the certification provided to the Redeveloper pursuant to
Section 4.4 hereof and set forth in EXHIBIT B.
“City” means the City of Richfield, Minnesota.
“City Council” means the City Council of the City.
“Closing” has the meaning provided in Section 3.2(d) hereof.
“Code” means the Internal Revenue Code of 1986, as amended.
“Construction Plans” means the plans, specifications, drawings and related documents for the
construction work to be performed by the Redeveloper on the Redevelopment Property, including the
Minimum Improvements, which (a) shall be as detailed as the plans, specifications, drawings and related
documents which are submitted to the appropriate building officials of the City; and (b) shall include at least
the following: (1) site plan, (2) foundation plan, (3) floor plan for each floor, (4) cross-sections of each (length
and width), (5) elevations (all sides, including a building materials schedule), (6) landscape and grading plan,
and (7) such other plans or supplements to the foregoing plans as the City may reasonably request to allow it
to ascertain the nature and quality of the proposed construction work.
“County” means Hennepin County, Minnesota.
“Declaration” means the Declaration of Restrictive Covenants in substantially the form set forth in
EXHIBIT C attached hereto.
“Event of Default” means an action by the Redeveloper listed in Article XIII hereof.
“HRA Act” means Minnesota Statutes, Sections 469.001 through 469.047, as amended.
“Limited Partner” means U.S. Bancorp Community Development Corporation, a Minnesota
corporation, its successors and or assigns.
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“Housing Support” means the housing support funds from the County for the 13 units in the Project
that shall be occupied or available for occupancy by persons or families whose income does not exceed 30%
of the Median Income.
“Minimum Improvements” means a multifamily housing project consisting of approximately 40
affordable housing units.
“Preliminary Redevelopment Agreement” means the Preliminary Redevelopment Agreement, dated
June 17, 2024, as amended on July 9, 2024 and February 18, 2025, between the Authority and the Redeveloper
(as an affiliate, successor, or assign of JO Companies, LLC).
“Redeveloper” means Penn Station Apartments LLLP, a Minnesota limited liability limited
partnership, or its permitted successors and assigns.
“Redevelopment Plan” means the Redevelopment Plan for the Redevelopment Project approved and
adopted by the Board and the City Council.
“Redevelopment Project” means the Richfield Redevelopment Project.
“Redevelopment Property” means the real property described in EXHIBIT A.
“State” means the State of Minnesota.
“Termination Date” means the date of termination of the “Qualified Project Period” as defined in the
Declaration.
“Unavoidable Delays” means delays beyond the reasonable control of the party seeking to be excused
as a result thereof which are the direct result of strikes, other labor troubles, prolonged adverse weather or acts
of God, fire or other casualty to the Minimum Improvements, litigation commenced by third parties which, by
injunction or other similar judicial action, or by the exercise of reasonable discretion, directly results in delays,
or acts of any federal, state or local governmental unit (other than the Authority in exercising its rights under
this Agreement) which directly result in delays, war, invasion, rebellion, revolution, insurrection, riots or civil
war, or unavailability or shortage of supply of construction materials or construction labor, other than by reason
of non-payment of costs of the same, or discovery of unknown hazardous materials, other concealed site
condition or delays of contractors due to such discovery.
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4930-8286-1644.3
ARTICLE II
Representations and Warranties
Section 2.1. Representations by the Authority. The Authority makes the following representations as
the basis for the undertaking on its part herein contained:
(a) The Authority is a housing and redevelopment authority organized and existing under the laws
of the State. Under the provisions of the HRA Act, the Authority has the power to enter into this Agreement
and carry out its obligations hereunder, and execution of this Agreement has been duly, properly and validly
authorized by the Authority.
(b) The Authority proposes to assist in financing certain costs necessary to facilitate the
construction of the Minimum Improvements in accordance with the terms of this Agreement to further the
objectives of the Redevelopment Plan and provide supportive housing units that are needed within the City.
(c) The Authority finds that the Minimum Improvements are necessary to alleviate a shortage of,
and maintain existing supplies of, decent, safe, and sanitary housing in the City.
(d) The execution, delivery and performance of this Agreement and of any other documents or
instruments required pursuant to this Agreement by the Authority, and consummation of the transactions
contemplated therein and the fulfillment of the terms thereof, do not and will not conflict with or constitute a
breach of or default under any existing (i) indenture, mortgage, deed of trust or other agreement or instrument
to which the Authority is a party or by which the Authority or any of its property is or may be bound; or
(ii) legislative act, constitution or other proceedings establishing or relating to the establishment of the
Authority or its officers or its resolutions.
(e) There is not pending, nor to the best of the Authority’s knowledge is there threatened, any suit,
action or proceeding against the Authority before any court, arbitrator, administrative agency or other
governmental authority that materially and adversely affects the validity of any of the transactions contemplated
hereby, the ability of the Authority to perform its obligations hereunder, or the validity or enforcement of this
Agreement.
(f) No commissioner of the Board or officer of the Authority has either a direct or indirect
financial interest in this Agreement, nor will any commissioner or officer benefit financially from this
Agreement within the meaning of Section 469.009 of the HRA Act.
Section 2.2. Representations by the Redeveloper. The Redeveloper represents and warrants that:
(a) The Redeveloper will obtain or cause to be obtained is a limited liability limited partnership
duly organized and in good standing under the laws of the State, is duly authorized to transact business within
the State, and has the power to enter into this Agreement.
(b) The Redeveloper will construct the Minimum Improvements in accordance with the terms of
this Agreement, the Redevelopment Plan, and all local, State, and federal laws and regulations (including, but
not limited to, environmental, zoning, building code, labor, and public health laws and regulations).
(c) The Redeveloper has received no notice or communication from any local, State or federal
official that the activities of the Redeveloper or the Authority in or on the Redevelopment Property may be or
will be in violation of any environmental law or regulation (other than those notices or communications of
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4930-8286-1644.3
which the Authority is aware). The Redeveloper is aware of no facts the existence of which would cause it to
be in violation of or give any person a valid claim under any local, State, or federal environmental law,
regulation, or review procedure.
(d) The Redeveloper will obtain, in a timely manner, all required permits, licenses and approvals,
and will meet, in a timely manner, all requirements of all applicable local, State, and federal laws and
regulations which must be obtained or met before the Minimum Improvements may be lawfully constructed.
(e) Neither the execution and delivery of this Agreement, the consummation of the transactions
contemplated hereby, nor the fulfillment of or compliance with the terms and conditions of this Agreement is
prevented, limited by or conflicts with or results in a breach of, the terms, conditions or provisions of any
corporate restriction or any evidences of indebtedness, agreement or instrument of whatever nature to which
the Redeveloper is now a party or by which it is bound, or constitutes a default under any of the foregoing.
(f) The proposed development hereunder would not occur but for the financial assistance being
provided by the Authority hereunder.
(g) The Redeveloper shall promptly advise the Authority in writing of all litigation or claims
affecting any part of the Minimum Improvements and all written complaints and charges made by any
governmental authority materially affecting the Minimum Improvements or materially affecting Redeveloper
or its business which may delay or require changes in construction of the Minimum Improvements.
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4930-8286-1644.3
ARTICLE III
Property Acquisition; Financing
Section 3.1. Status of Redevelopment Property. The Authority currently owns the Redevelopment
Property and shall convey the Redevelopment Property to the Redeveloper pursuant to the provisions of
Section 3.2 hereof.
Section 3.2. Conveyance of Redevelopment Property.
(a) The Authority will convey the Redevelopment Property to the Redeveloper via a quit claim
deed. The Redevelopment Property will be conveyed “as-is” and “where-is.” The conveyance of the
Redevelopment Property to the Redeveloper is contingent on the Board conducting a public hearing and
approving the sale of the Redevelopment Property to the Redeveloper in accordance with Section 469.029 of
the HRA Act. Within sixty (60) days following execution of this Agreement, the Authority will provide the
Redeveloper with a commitment for title insurance from a title insurance company acceptable to the
Redeveloper (the “Title Company”). The Redeveloper will be responsible for reimbursing the Authority for
the cost of preparation of the commitment for title insurance. The Redeveloper shall pay for the cost of
obtaining a policy of title insurance.
(b) Within sixty (60) days after the Redeveloper’s receipt of the title commitment, the
Redeveloper may give the Authority written notice of any alleged defect(s) in the marketability of the
Authority’s actual and/or record title to the Redevelopment Property, or any portion thereof (the “Objections”)
and request that the Authority make the Authority’s title marketable or conforming. The Redeveloper’s failure
to object to defects in the marketability of Authority’s title to the Redevelopment Property, in writing, within
the time period set forth above or at any time prior to Closing, shall be deemed a waiver of the Redeveloper’s
right to require the Authority to cure such defects. If the Redeveloper notifies the Authority of Objections
within the time period set forth above, the Authority shall use good faith efforts to make the Authority’s actual
and record title to the Redevelopment Property marketable. The Authority shall have up to forty-five (45) days
from the Authority’s receipt of the Redeveloper’s Objections to use good faith efforts to make the Authority’s
actual and record title to the Redevelopment Property marketable. In no event will the Authority be required
to expend more than $1,000 in its good faith efforts to make the Authority’s actual and record title to the
Redevelopment Property marketable. If the Authority makes the Authority’s title marketable within the forty-
five (45) day period, the Authority shall notify the Redeveloper, in writing, and the parties shall close pursuant
to the terms of this Agreement. If the Authority is unable to make title marketable within the forty-five (45)
day period, the Redeveloper may either (i) terminate this Agreement by delivering written notice of termination
to the Authority; or (ii) notify the Authority that the Redeveloper waives the Redeveloper’s Objections. If the
Redeveloper waives the Redeveloper’s Objections, the matters giving rise to such Objections shall be deemed
a permitted encumbrance and the parties shall otherwise perform their obligations under this Agreement. The
Authority shall have no obligation to take any action to clear defects in the title to the Redevelopment Property
other than the good faith efforts described above.
(c) Without limitation, the Redeveloper is responsible for satisfying itself as to matters such as
contamination, soils and soil stability, title and survey. The Authority shall have no obligation to cure any
defect or other matter, but agrees to cooperate, at no cost or expense to it, in any efforts by the Redeveloper to
achieve such a cure.
(d) On the date the Redevelopment Property is conveyed to the Redeveloper (the “Closing”), the
Authority will execute and deliver to the Redeveloper the following, in form and content reasonably acceptable
to the Redeveloper:
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(i) a quit claim deed conveying the Redevelopment Property to the Redeveloper;
(ii) a non-foreign affidavit, properly executed, containing such information as is required
by Section 1445(b)(2) of the Internal Revenue Code and its regulations;
(iii) a standard form Seller’s Affidavit;
(iv) if required, a well certificate in the form required by law;
(v) any affidavits and disclosures required by law pertaining to private sewage treatment
systems; and
(vi) any affidavits, certificates, or other documents that may be required under applicable
law and/or that are reasonably determined by the Redeveloper or the Title Company to be necessary
to transfer the Redevelopment Property to the Redeveloper and to evidence that the Authority has duly
authorized the transactions contemplated hereby.
(e) The Redeveloper acknowledges that the Authority will be conveying the Redevelopment
Property to the Redeveloper for a purchase price of $1.00 (the “Redevelopment Property Purchase Price”). The
fair market value of the Redevelopment Property is $370,000.00; therefore, the Redevelopment Property
Purchase Price represents a land write-down in the amount of $$369,999.00.
(f) Prior to the conveyance of the Redevelopment Property to the Redeveloper having delivered
to the Authority a list of all sources of funding to be used to develop the Minimum Improvements and evidence
of the total costs of developing the Minimum Improvements, in a form reasonably satisfactory to the Authority.
(g) The Closing will not take place until the Redeveloper (i) has obtained all necessary land use
approvals from the City; (ii) has received tax credits through the Minnesota Housing Finance Agency, proceeds
of the HOME award, or other financing from the Minnesota Housing Finance Agency; and (iii) has executed
the Declaration in substantially the form set forth in EXHIBIT C attached hereto. The Redeveloper applied for
tax credits in July 2024 and was awarded credits from the Minnesota Housing Finance Agency in the amount
of $2,240,115 in December 2024. .
(h) In the event that the Redeveloper does not receive tax credits and/or other financing sufficient
to build the Minimum Improvements by February 1, 2026, unless extended by mutual agreement of the parties,
this Agreement will terminate and be of no further force and effect, and the parties will be relieved of any further
obligations hereunder.
Section 3.3. [Reserved].
Section 3.4. Payment of Administrative Costs. Pursuant to the Preliminary Redevelopment
Agreement, the Redeveloper has deposited with the Authority $10,000 to pay Administrative Costs related to
the Preliminary Redevelopment Agreement. “Administrative Costs” are defined as $2,000 in Authority staff
costs, along with all out-of-pocket costs incurred by the Authority (including without limitation reasonable
attorney and consultant costs of the Authority), all attributable to or incurred in connection with the negotiation
and preparation of this Agreement and other documents and agreements in connection with the redevelopment
of the Redevelopment Property, and not previously paid by Redeveloper. At the Redeveloper’s request, but no
more often than monthly, the Authority will provide the Redeveloper with a written report including invoices,
time sheets or other comparable evidence of expenditures for Administrative Costs and the outstanding balance
of funds deposited. At any time the deposit drops below $1,000, the Redeveloper shall replenish the deposit to
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4930-8286-1644.3
the full $10,000 within thirty (30) days after receipt of written notice thereof from the Authority. If at any time
the Authority determines that the deposit is insufficient to pay Administrative Costs, the Redeveloper is
obligated to pay such shortfall within fifteen (15) days after receipt of a written notice from the Authority
containing evidence of the unpaid costs. If Administrative Costs incurred, and reasonably anticipated to be
incurred, are less than the deposit by the Redeveloper, the Authority shall return to the Redeveloper any funds
not anticipated to be needed.
Section 3.5. Exception to Business Subsidy Act. The parties agree and understand that the purpose of
the Authority’s financial assistance to the Redeveloper is to facilitate development of housing and is not a
“business subsidy” within the meaning of the Business Subsidy Act.
Section 3.6. Records. The Authority and its representatives shall have the right at all reasonable times
after reasonable notice to inspect, examine and copy all books and records of the Redeveloper relating to the
Minimum Improvements and the costs for which the Redeveloper has been reimbursed.
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ARTICLE IV
Construction of Minimum Improvements
Section 4.1. Construction of Minimum Improvements. Following the conveyance of the
Redevelopment Property to the Redeveloper, the Redeveloper agrees that it will construct the Minimum
Improvements on the Redevelopment Property substantially in accordance with the Construction Plans as
approved pursuant to Section 4.2 hereof, and at all times prior to the Termination Date, the Redeveloper will
operate and maintain, preserve, and keep the Minimum Improvements or cause such improvements to be
maintained, preserved, and kept with the appurtenances and every part and parcel thereof, in good repair and
condition. The Authority shall have no obligation to operate or maintain the Minimum Improvements.
Section 4.2. Construction Plans. Before commencement of construction of the Minimum
Improvements, the Redeveloper shall obtain all the necessary planning approvals from the City’s Planning
Division.
Section 4.3. Commencement and Completion of Construction. Subject to Unavoidable Delays, the
Redeveloper will commence the construction of the Minimum Improvements by February 1, 2026, and
substantially complete construction of the Minimum Improvements by July 1, 2027. Construction is considered
to be commenced upon the beginning of physical improvements beyond grading. All work with respect to the
Minimum Improvements to be constructed or provided by the Redeveloper on the Redevelopment Property
shall be in substantial conformity with the Construction Plans as submitted by the Redeveloper and approved
by the Authority. The Executive Director of the Authority is authorized to extend the dates of commencement
of construction and completion of construction set forth in this Section.
The Redeveloper agrees for itself, its successors and assigns, and every successor in interest to the
Redevelopment Property, or any part thereof, that the Redeveloper, and such successors and assigns, shall
promptly begin and diligently prosecute to completion the development of the Minimum Improvements.
Section 4.4. Certificate of Completion.
(a) No later than 30 days after completion of the Minimum Improvements in accordance with
those provisions of this Agreement relating solely to the obligations of the Redeveloper to construct the
Minimum Improvements (including the dates for beginning and completion thereof), the Authority
Representative will furnish the Redeveloper with a Certificate of Completion shown in EXHIBIT B hereof;
provided, however, that prior to the issuance of the Certificate of Completion, the Redeveloper must provide
the Authority with evidence satisfactory to the Authority Representative (including lien waivers) that all
contractors, subcontractors, and project laborers have been paid or have waived such rights by executed lien
waiver.
(b) If the Authority Representative shall refuse or fail to provide any certification in accordance
with the provisions of this Section, the Authority Representative shall, within thirty (30) days after written
request by the Redeveloper, provide the Redeveloper with a written statement, indicating in adequate detail in
what respects the Redeveloper has failed to complete the Minimum Improvements in accordance with the
provisions of this Agreement, or is otherwise in default, and what measures or acts will be necessary, in the
opinion of the Authority, for the Redeveloper to take or perform in order to obtain such certification.
(c) Regardless of whether a Certificate of Completion is issued by the Authority, the construction
of the Minimum Improvements shall be deemed to be complete upon issuance of a certificate of occupancy by
the City.
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Section 4.5. The Redeveloper agrees that at all times from initial occupancy of the Minimum
Improvements through the Termination Date,
(a) Thirteen (13) families whose income is thirty percent (30%) or less of the area median gross
income as that figure is determined and announced from time to time by HUD, as adjusted for family size
(“Median Income”) and rents (including utilities paid by tenant) for such units shall not exceed 30% of 30% of
Median Income, provided, however, that for said thirteen (13) units, if the Housing Support is reduced or
eliminated, 13 of such units may be occupied or available for occupancy by persons or families whose income
does not exceed 50% of the Median Income;
(b) Eighteen (18) of the units within the Minimum Improvements shall be reserved for occupancy
by individuals and families whose income is fifty percent (50% or less of Median Income, and rents (including
(including utilities paid by tenant) for such units, if the Housing Support is reduced or eliminated, such units
may be occupied or available for occupancy by persons or families whose income does not exceed 60% of the
Median Income;
(c) Three of the units within the Minimum Improvements shall be reserved for occupancy by
individuals and families whose income is sixty percent (60%) or less of Median Income, and rents (including
utilities paid by tenant) for such units shall not exceed 30% of 30% of Median Income; and
(d) Eight (8) of the units within the Minimum Improvements shall be reserved for occupancy by
individuals whose income is 60% or less of Median Income.
The Redeveloper and the Authority shall execute the Declaration and record such agreement against
the Redevelopment Property.
Each of the 42 units will satisfy the income requirements for a qualified residential rental project as
defined in Section 142(d) of the Code.]
During the term of the Declaration, the Redeveloper shall not adopt any policies that the Redeveloper
knows or should know prohibit or in any way exclude rental to tenants holding certificates/vouchers under
Section 8 of the United States Housing Act of 1937, as amended, codified as 42 U.S.C. Sections 1401 et seq.,
or its successor because of such prospective tenant’s status as such a certificate/voucher holder. Additionally,
the Redeveloper shall not adopt policies that the Redeveloper knows or should know will have the effect of
making it difficult for tenants holding certificates/vouchers under Section 8 of the United States Housing Act
of 1937, as amended, codified as 42 U.S.C. Sections 1401 et seq., or its successor, to rent units within the
Minimum Improvements (for example, policies that require income of more than two times the rent to be paid
for a unit). The Redeveloper covenants and agrees to comply with the City’s Inclusionary Housing Policy.
Section 4.6. Affordable Housing Reporting. No later than April 1 of each year commencing on the
April 1 first following the issuance of the Certificate of Completion, the Redeveloper shall provide a report to
the Authority evidencing that the Redeveloper complied with the income affordability covenants set forth in
Section 4.5 hereof during the previous calendar year. The income affordability reporting shall be on the form
entitled “Tenant Income Certification” from the Minnesota Housing Finance Agency (MHFA HTC Form 14),
or if unavailable, any similar form. The Authority may require the Redeveloper to provide additional
information reasonably necessary to assess the accuracy of such certification. Unless earlier excused by the
Authority, the Redeveloper shall send affordable housing reports to the Authority until the Termination Date.
It is the intention of the parties hereto that if tax-exempt revenue obligations are issued by the City or
the Authority for the benefit of the Redeveloper, the annual report required under this Section may be used to
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satisfy the reporting requirements under a regulatory agreement between the City or the Authority, the
Redeveloper, and the trustee for such tax-exempt revenue obligations.
Section 4.7. Notice of Sale of Minimum Improvements. In consideration of the financial assistance
provided pursuant to Article III hereof, the Redeveloper agrees to provide the Authority with at least ninety
(90) days’ notice of any sale of the Minimum Improvements.
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ARTICLE V
Insurance
Section 5.1. Insurance.
(a) The Redeveloper will provide and maintain at all times during the process of constructing the
Minimum Improvements an All Risk Broad Form Basis Insurance Policy and, from time to time during that
period, at the request of the Authority, furnish the Authority with proof of payment of premiums on policies
covering the following:
(i) builder’s risk insurance, written on the so-called “Builder’s Risk – Completed Value
Basis,” in an amount equal to one hundred percent (100%) of the insurable value of the Minimum
Improvements at the date of completion, and with coverage available in nonreporting form on the so-
called “all risk” form of policy; the interest of the Authority shall be protected in accordance with a
clause in form and content satisfactory to the Authority;
(ii) comprehensive general liability insurance (including operations, contingent liability,
operations of subcontractors, completed operations and contractual liability insurance) together with a
Protective Liability Policy with limits against bodily injury and property damage of not less than
$2,000,000 for each occurrence (to accomplish the above-required limits, an umbrella excess liability
policy may be used); the Authority shall be listed as an additional insured on the policy; and
(iii) workers’ compensation insurance, with statutory coverage.
(b) Upon completion of construction of the Minimum Improvements and prior to the Termination
Date, the Redeveloper shall maintain, or cause to be maintained, at its cost and expense, and from time to time
at the request of the Authority shall furnish proof of the payment of premiums on, insurance as follows:
(i) insurance against loss and/or damage to the Minimum Improvements under a policy
or policies covering such risks as are ordinarily insured against by similar businesses;
(ii) comprehensive general public liability insurance, including personal injury liability
(with employee exclusion deleted), against liability for injuries to persons and/or property, in the
minimum amount for each occurrence and for each year of $2,000,000, and shall be endorsed to show
the Authority as an additional insured; and
(iii) such other insurance, including workers’ compensation insurance respecting all
employees, if any, of the Redeveloper, in such amount as is customarily carried by like organizations
engaged in like activities of comparable size and liability exposure; provided that the Redeveloper may
be self-insured with respect to all or any part of its liability for workers’ compensation.
(c) All insurance required in this Article V shall be taken out and maintained in responsible
insurance companies selected by the Redeveloper which are authorized under the laws of the State to assume
the risks covered thereby. Upon request, the Redeveloper will deposit annually with the Authority policies
evidencing all such insurance, or a certificate or certificates or binders of the respective insurers stating that
such insurance is in force and effect. Unless otherwise provided in this Article V each policy shall contain a
provision that the insurer shall not cancel nor modify it in such a way as to reduce the coverage provided below
the amounts required herein without giving written notice to the Redeveloper and the Authority at least thirty
(30) days before the cancellation or modification becomes effective. In lieu of separate policies, the
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Redeveloper may maintain a single policy, blanket or umbrella policies, or a combination thereof, having the
coverage required herein, in which event the Redeveloper shall deposit with the Authority a certificate or
certificates of the respective insurers as to the amount of coverage in force upon the Minimum Improvements.
(d) The Redeveloper agrees to notify the Authority immediately in the case of damage exceeding
$200,000, or destruction of, the Minimum Improvements or any portion thereof resulting from fire or other
casualty. In such event the Redeveloper will forthwith repair, reconstruct and restore the Minimum
Improvements to substantially the same or an improved condition or value as it existed prior to the event
causing such damage and, to the extent necessary to accomplish such repair, reconstruction and restoration, the
Redeveloper will apply the net proceeds of any insurance relating to such damage received by the Redeveloper
to the payment or reimbursement of the costs thereof.
The Redeveloper shall complete the repair, reconstruction, and restoration of the Minimum
Improvements, whether or not the net proceeds of insurance received by the Redeveloper for such purposes are
sufficient to pay for the same. Any net proceeds remaining after completion of such repairs, construction, and
restoration shall be the property of the Redeveloper.
(e) The Redeveloper and the Authority agree that all of the insurance provisions set forth in this
Article V shall terminate upon the Termination Date.
Section 5.2. Subordination. Notwithstanding anything to the contrary contained in this Article V, the
rights of the Authority with respect to the receipt and application of any proceeds of insurance shall, in all
respects, be subject and subordinate to the rights of any lender under a Mortgage approved pursuant to
Article VI hereof.
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ARTICLE VI
Financing
Section 6.1. Mortgage Financing.
(a) Before commencement of construction of the Minimum Improvements, the Redeveloper shall
submit to the Authority evidence of one or more commitments for financing which, together with committed
equity for such construction, is sufficient for payment of the Minimum Improvements. Such commitments
may be submitted as short-term financing, long-term mortgage financing, a bridge loan with a long-term take-
out financing commitment, or any combination of the foregoing.
(b) If the Authority finds that the financing is sufficiently committed and adequate in amount to
pay the costs specified in subsection (a) above, then the Authority shall notify the Redeveloper in writing of its
approval. Such approval shall not be unreasonably withheld and either approval or rejection shall be given
within thirty (30) days from the date when the Authority is provided the evidence of financing. A failure by
the Authority to respond to such evidence of financing shall be deemed to constitute an approval hereunder. If
the Authority rejects the evidence of financing as inadequate, it shall do so in writing specifying the basis for
the rejection. In any event the Redeveloper shall submit adequate evidence of financing within thirty (30) days
after such rejection.
Section 6.2. Modification; Subordination. In order to facilitate the Redeveloper obtaining financing
for the development of the Minimum Improvements, the Authority agrees to subordinate its rights under this
Agreement to the holder of any Mortgage securing construction or permanent financing, under terms and
conditions reasonably acceptable to the Authority. If a separate agreement to subordinate this Agreement is
required by any lender, the agreement must be approved by the Board. The Authority hereby agrees to
subordinate its rights under this Agreement to financing provided by Greater Minnesota Housing Fund to the
Redeveloper in the approximate amount of $14,700,000.00 secured by a first mortgage lien against the
Redevelopment Property.
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ARTICLE VII
Prohibitions Against Assignment and Transfer; Indemnification
Section 7.1. Representation as to Development. The Redeveloper represents and agrees that its
purchase of the Redevelopment Property, and its other undertakings pursuant to this Agreement, are, and will
be used, for the purpose of development of the Redevelopment Property and not for speculation in land holding.
Section 7.2. Prohibition Against Redeveloper’s Transfer of Property and Assignment of Agreement.
The Redeveloper represents and agrees that until the Termination Date:
(a) Except only by way of security for, and only for, the purpose of obtaining financing necessary
to enable the Redeveloper or any successor in interest to the Redevelopment Property, or any part thereof, to
perform its obligations with respect to making the Minimum Improvements under this Agreement, and any
other purpose authorized by this Agreement, the Redeveloper has not made or created and will not make or
create or suffer to be made or created any total or partial sale, assignment, conveyance, or lease, or any trust or
power, or transfer in any other mode or form of or with respect to this Agreement or the Redevelopment
Property or any part thereof or any interest therein, or any contract or agreement to do any of the same, except
for a purchase option and right of first refusal in favor of, without the prior written approval of the Authority,
the Redeveloper remains liable and bound by this Agreement in which event the Authority’s approval is not
required. Any such transfer shall be subject to the provisions of this Agreement. Notwithstanding the
foregoing, the Authority agrees that exercise of that certain purchase option for the Redevelopment in favor of
an Affiliate of the General Partner shall be a permitted transfer.
(b) Prior to the issuance of the Certificate of Completion, in the event the Redeveloper, upon
transfer or assignment of the Redevelopment Property seeks to be released from its obligations under this
Agreement, the Authority shall be entitled to require, except as otherwise provided in this Agreement, as
conditions to any such release that:
(i) Any proposed transferee shall have the qualifications and financial responsibility, in
the reasonable judgment of the Authority, necessary and adequate to fulfill the obligations undertaken
in this Agreement by the Redeveloper.
(ii) Any proposed transferee, by instrument in writing reasonably satisfactory to the
Authority and in form recordable among the land records, shall, for itself and its successors and assigns,
and expressly for the benefit of the Authority, have expressly assumed all of the obligations of the
Redeveloper under this Agreement and agreed to be subject to all the conditions and restrictions to
which the Redeveloper is subject; provided, however, that the fact that any transferee of, or any other
successor in interest whatsoever to, the Redevelopment Property, or any part thereof, shall not, for
whatever reason, have assumed such obligations or so agreed, and shall not (unless and only to the
extent otherwise specifically provided in this Agreement or agreed to in writing by the Authority)
deprive the Authority of any rights or remedies or controls with respect to the Redevelopment Property
or any part thereof or the construction of the Minimum Improvements; it being the intent of the parties
as expressed in this Agreement that (to the fullest extent permitted at law and in equity and excepting
only in the manner and to the extent specifically provided otherwise in this Agreement) no transfer of,
or change with respect to, ownership in the Redevelopment Property or any part thereof, or any interest
therein, however consummated or occurring, and whether voluntary or involuntary, shall operate,
legally or practically, to deprive or limit the Authority of or with respect to any rights or remedies on
controls provided in or resulting from this Agreement with respect to the Minimum Improvements that
the Authority would have had, had there been no such transfer or change. In the absence of specific
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written agreement by the Authority to the contrary, no such transfer or approval by the Authority
thereof shall be deemed to relieve the Redeveloper or any other party bound in any way by this
Agreement or otherwise with respect to the construction of the Minimum Improvements, from any of
its obligations with respect thereto.
(iii) Any and all instruments and other legal documents involved in effecting the transfer
of any interest in this Agreement or the Redevelopment Property governed by this Article VIII, shall
be in a form reasonably satisfactory to the Authority.
(iv) Notwithstanding the foregoing, in the event of a loan default, GMHF as the
construction/bridge lender or any lien holder related to future refinancings shall be able to foreclose its
Mortgage secured by the Redevelopment Property or enforce its Assignment of Capital Contributions
and General Partner Interest without Authority consent. Any subsequent transfer by GMHF would be
subject to the terms of the Agreement.
In the event the foregoing conditions are satisfied then the Redeveloper shall be released from its obligation
under this Agreement.
After issuance of the Certificate of Completion for the Minimum Improvements, the Redeveloper may
transfer or assign the Redevelopment Property or the Redeveloper’s interest in this Agreement if it obtains the
prior written consent of the Authority (which consent will not be unreasonably withheld, conditioned, or
delayed) and the transferee or assignee is bound by all the Redeveloper’s obligations hereunder. The
Redeveloper shall submit to the Authority written evidence of any such transfer or assignment, including the
transferee or assignee’s express assumption of the Redeveloper’s obligations under this Agreement. If the
Redeveloper fails to provide such evidence of transfer and assumption, the Redeveloper shall remain bound by
all its obligations under this Agreement.
Nothing contained in this Section shall prohibit the Redeveloper from (i) entering into leases with
tenants in the ordinary course of business, or (ii) entering into easements or other agreements necessary for the
construction of the Minimum Improvements, or (iii) admitting or removing limited partners or transferring
direct or indirect limited partner interests in the Redeveloper, or minority interest in the general partner of the
Redeveloper, or admitting or removing partners in accordance with the applicable organizational documents.
Section 7.3. Release and Indemnification Covenants.
(a) The Redeveloper covenants and agrees that the Authority and its governing body members,
officers, agents, servants and employees thereof shall not be liable for and agree to indemnify and hold harmless
the Authority and its respective governing body members, officers, agents, servants and employees thereof
against any loss or damage to property or any injury to or death of any person occurring at or about or resulting
from any defect in the Minimum Improvements.
(b) Except for any willful misrepresentation, gross negligence or any willful or wanton
misconduct of the Authority, or its governing body members, officers, agents or employees, the Redeveloper
agrees to protect and defend the Authority and its governing body members, officers, agents, servants and
employees thereof, now or forever, and further agrees to hold the aforesaid harmless from any claim, demand,
suit, action or other proceeding whatsoever by any person or entity whatsoever arising or purportedly arising
from this Agreement, or the transactions contemplated hereby or the acquisition, construction, installation,
ownership, maintenance and operation of the Minimum Improvements. As to any willful misrepresentation,
gross negligence or any willful or wanton misconduct of the Authority, or its governing body members,
officers, agents or employees, the Authority agrees to protect and defend the Redeveloper, its officers, agents,
servants and employees and hold the same harmless from any such proceedings.
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(c) The Authority and its governing body members, officers, agents, servants and employees
thereof shall not be liable for any damage or injury to the persons or property of the Redeveloper or their
officers, agents, servants or employees or any other person who may be about the Redevelopment Property or
Minimum Improvements due to any act of gross negligence or intentional misconduct of any person.
(d) All covenants, stipulations, promises, agreements and obligations of the Authority contained
herein shall be deemed to be the covenants, stipulations, promises, agreements and obligations of the Authority
and not of any governing body member, officer, agent, servant or employee of the Authority in the individual
capacity thereof.
ARTICLE VIII
Events of Default
Section 8.1. Events of Default. The following will be “Events of Default” under this Agreement and
the term “Event of Default” means, whenever it is used in this Agreement, any one or more of the following
events, after the non-defaulting party provides sixty (60) days’ written notice to the defaulting party of the
event, but only if the event has not been cured within said sixty (60) days or, if the event is by its nature incurable
within sixty (60) days, the defaulting party does not, within the sixty (60) day period, provide assurances
reasonably satisfactory to the party providing notice of default that the event will be cured and will be cured as
soon as reasonably possible:
(a) failure by the Redeveloper or the Authority to observe or perform any covenant, condition,
obligation, or agreement on its part to be observed or performed under this Agreement; or
(b) if the Redeveloper:
(i) files any petition in bankruptcy or for any reorganization, arrangement, composition,
readjustment, liquidation, dissolution, or similar relief under the United States Bankruptcy Act or under
any similar federal or State law;
(ii) makes an assignment for benefit of its creditors;
(iii) fails to pay real estate taxes on the Redevelopment Property or the Minimum
Improvements as they become due;
(iv) admits in writing its inability to pay its debts generally as they become due;
(v) is adjudicated a bankrupt or insolvent;
(vi) fails to comply with labor laws; or
(vii) fails to comply with the Declaration.
Section 8.2. Event of Default. Notwithstanding anything to the contrary set forth in this Agreement,
the Authority agrees in the event of default by Redeveloper, the Authority shall provide the Limited Partner
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with written notice of such default at the address set forth in Section 9.6 below. The Limited Partner shall have
the right, but not the obligation to cure an Event of Default by Redeveloper under this Agreement.
The Authority will allow the Limited Partner up to thirty (30) days after delivery of such notice of
default to cure any non-monetary default under this Agreement and sixty (60) days after delivery of such notice
of default cannot be cured in such sixty (60) days, the Authority will allow the Limited Partner additional time
as reasonably necessary to cure such default provided the Limited Partner has commenced to cure such default
within the original sixty (60) days, the Authority will allow the Limited Partner additional time as reasonably
necessary to cure such default provided the Limited Partner has continuously proceeding to cure such default.
The Authority agrees to accept any cure by the Limited Partner as if such cure were made by the Redeveloper.
Section 8.3. Remedies on Default. Whenever any Event of Default referred to in Section 8.1 hereof
occurs, the non-defaulting party may exercise its rights under this Section 8.2 after providing thirty (30) days’
written notice to the defaulting party of the Event of Default, but only if the Event of Default has not been cured
within said thirty (30) days or, if the Event of Default is by its nature incurable within thirty (30) days, the
defaulting party does not provide assurances reasonably satisfactory to the non-defaulting party that the Event
of Default will be cured and will be cured as soon as reasonably possible:
(a) suspend its performance under this Agreement until it receives assurances that the defaulting
party will cure its default and continue its performance under this Agreement;
(b) cancel and rescind or terminate this Agreement; or
(c) take whatever action, including legal, equitable or administrative action, which may appear
necessary or desirable to collect any payments due under this Agreement, or to enforce performance and
observance of any obligation, agreement, or covenant under this Agreement.
Section 8.4. Revesting Title in Authority Upon Happening of Event Subsequent to Conveyance to
Redeveloper. In the event that subsequent to conveyance of the Redevelopment Property to the Redeveloper,
subject to Unavoidable Delays, the Redeveloper fails to commence construction of the Minimum
Improvements by the dates specified in Section 4.3 hereof, is not cured within ninety (90) days after written
notice from the Authority to the Redeveloper to do so, then the Authority shall have the right to re-enter and
take possession of the Redevelopment Property and to terminate and revest in the Authority the Redevelopment
Property, it being the intent of this provision, together with other provisions of this Agreement, that the
conveyance of the Redevelopment Property to the Redeveloper shall be made upon, and that the deeds shall
contain a condition subsequent to the effect that in the event of any default on the part of the Redeveloper to
commence construction of the Minimum Improvements by the dates specified in Section 4.3 hereof and failure
on the part of the Redeveloper to commence construction of the Minimum Improvements by the dates specified
in Section 4.3 hereof and failure on the part of the Redeveloper to remedy, end, or abrogate such default within
ninety (90) days after written notice from the Authority, the Authority at its option may declare a termination
in favor of the Authority of the title, and of all the rights and interests in and to the Redevelopment Property
and that such title and all rights and interests of the Redeveloper, and any assigns or successors in interest to
and in the Redevelopment Property, shall revert to the Authority, as applicable, but only if the events stated in
this Section have not been cured within the time periods provided above. The rights of the Authority under
this Section shall be subordinate to any mortgage financing pursuant to Section 6.2. The Authority agrees that
prior to exercising its rights under this Section, it will provide the Limited Partner the opportunity to cure, in
its sole option, as provided in Section 8.1 above.
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Section 8.5. Resale of Reacquired Property; Disposition of Proceeds. Upon the revesting in the
Authority of title to and/or possession of the Redevelopment Property, the Authority shall, pursuant to its
responsibilities under law, use its best efforts to sell the Redevelopment Property and in such manner as the
Authority to a qualified and responsible party or parties (as determined by the Authority) who will assume the
obligation of making or completing the Minimum Improvements or such other improvements in its stead as
shall be satisfactory to the Authority in accordance with the uses specified for the Redevelopment Property in
this Agreement. During any time while the Authority has title to and/or possession of a parcel of property
obtained by reverter, the Authority will not disturb the rights of any tenants under any leases encumbering such
parcel. Upon resale of the Redevelopment Property, the proceeds thereof shall be applied:
(a) first, to reimburse the Authority for all costs and expenses incurred by it, including but not
limited to salaries of personnel, in connection with the recapture, management, and resale of the Redevelopment
Property (but less any income derived by the Authority from the property or part thereof in connection with
such management); all taxes, assessments, and water and sewer charges with respect to the Redevelopment
Property or part thereof (or, in the event the Redevelopment Property is exempt from taxation or assessment or
such charge during the period of ownership thereof by the Authority, an amount, if paid, equal to such taxes,
assessments, or charges (as determined by the Authority assessing official) as would have been payable if the
Redevelopment Property were not so exempt); any payments made or necessary to be made to discharge any
encumbrances or liens existing on the Redevelopment Property, or part thereof at the time of revesting of title
thereto in the Authority, or to discharge or prevent from attaching or being made any subsequent encumbrances
or liens due to obligations, defaults or acts of the Redeveloper, its successors or transferees; any expenditures
made or obligations incurred with respect to the making or completion of the subject improvements or any part
thereof on the Redevelopment Property; and any amounts otherwise owing the Authority by the Redeveloper
and its successor or transferee; and
(b) second, to reimburse the Redeveloper, its successor or transferee, up to the amount equal to
the portion of the Redevelopment Property Purchase Price paid by the Redeveloper under Section 3.2 hereof
and the amount actually invested by it in making any of the subject improvements on the Redevelopment
Property or part thereof, including any related costs related to acquisition and development of the
Redevelopment Property, less any gains or income withdrawn or made by it from this Agreement or the
Redevelopment Property.
Any balance remaining after such reimbursements shall be retained by the Authority as its property.
Section 8.6. No Remedy Exclusive. No remedy herein conferred upon or reserved to the Authority
or the Redeveloper is intended to be exclusive of any other available remedy or remedies, but each and every
such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or
now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power
accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but
any such right and power may be exercised from time to time and as often as may be deemed expedient. In
order to entitle the Authority to exercise any remedy reserved to it, it shall not be necessary to give notice, other
than the notices already required in Section 8.2 hereof.
Section 8.7. No Additional Waiver Implied by One Waiver. In the event any agreement contained in
this Agreement should be breached by either party and thereafter waived by the other party, such waiver shall
be limited to the particular breach so waived and shall not be deemed to waive any other concurrent, previous
or subsequent breach hereunder.
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Section 8.8. Attorneys’ Fees and Costs. Whenever any Event of Default occurs and if the Authority
employs attorneys or incur other expenses for the collection of payments due or to become due or for the
enforcement of performance or observance of any obligation or agreement on the part of the Redeveloper under
this Agreement, and the Authority prevails in the action, the Redeveloper agrees that it will, within ten (10)
days of written demand by the Authority, pay to the Authority the reasonable fees of the attorneys and the other
expenses so incurred by the Authority.
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ARTICLE IX
Additional Provisions
Section 9.1. Conflict of Interests; Authority Representatives Not Individually Liable. The Authority
and the Redeveloper, to the best of their respective knowledge, represent and agree that no member, official,
or employee of the Authority shall have any personal interest, direct or indirect, in this Agreement, nor shall
any such member, official, or employee participate in any decision relating to this Agreement which affects his
or her personal interests or the interests of any corporation, partnership, or association in which he or she is,
directly or indirectly, interested. No member, official, or employee of the Authority shall be personally liable
to the Redeveloper, or any successor in interest, in the event of any default or breach by the Authority or County
or for any amount which may become due to the Redeveloper or successor or on any obligations under the
terms of this Agreement.
Section 9.2. Equal Employment Opportunity. The Redeveloper, for itself and its successors and
assigns, agrees that during the construction of the Minimum Improvements provided for in this Agreement it
will comply with all applicable federal, State, and local equal employment and non-discrimination laws and
regulations.
Section 9.3. Restrictions on Use. The Redeveloper agrees that, prior to the Termination Date, the
Redeveloper, and such successors and assigns, shall use the Redevelopment Property solely for the
development of affordable housing in accordance with the terms of this Agreement, including the affordability
requirements set forth in Section 4.5 hereof, and shall not discriminate upon the basis of race, color, creed, sex
or national origin in the sale, lease, or rental or in the use or occupancy of the Redevelopment Property or any
improvements erected or to be erected thereon, or any part thereof.
Section 9.4. Provisions Not Merged With Deed. None of the provisions of this Agreement are
intended to or shall be merged by reason of any deed transferring any interest in the Redevelopment Property
and any such deed shall not be deemed to affect or impair the provisions and covenants of this Agreement.
Section 9.5. Titles of Articles and Sections. Any titles of the several parts, Articles, and Sections of
this Agreement are inserted for convenience of reference only and shall be disregarded in construing or
interpreting any of its provisions.
Section 9.6. Notices and Demands. Except as otherwise expressly provided in this Agreement, a
notice, demand, or other communication under this Agreement by either party to the other shall be sufficiently
given or delivered if it is dispatched by registered or certified mail, postage prepaid, return receipt requested,
or delivered personally; and
(a) in the case of the Redeveloper, is addressed to or delivered personally to the Redeveloper at
510 Brunson Street, Suite 100, Saint Paul, MN 55130, Attn: Johnny Opara, President & CEO;
(b) in the case of the Authority, is addressed to or delivered personally to the Authority at
6700 Portland Avenue South, Richfield, MN 55423, Attn: Community Development Director;
(c) The Authority shall provide the Limited Partner written notice of any notice provided to
Redeveloper at U.S. Bancorp Impact Finance, c/o U.S. Bancorp Community Development Corporation, 505
North Seventh Street, 10th Floor, Mail Code: SL-MO-T10F, St. Louis, Missouri 63101, Project No. 31031 Attn:
Director of LIHTC Asset Management with a copy to Kutak Rock LLP, 1650 Farnam Street, Omaha, NE
68102 Attn: Jill Goldstein
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(d) The Authority shall provide GMHF written notice of any notice provided to Redeveloper at
Greater Minnesota Housing Fund, 2550 University Avenue West, Suite 201-S, St. Paul, MN 55114.
or at such other address with respect to either such party as that party may, from time to time, designate in
writing and forward to the other as provided in this Section.
Section 9.7. Counterparts. This Agreement may be executed in any number of counterparts, each of
which shall constitute one and the same instrument.
Section 9.8. Recording. The Authority may record a memorandum of this Agreement and any
amendments thereto with the County Recorder and/or Registrar of Titles of the County, as the case may be.
The Redeveloper shall pay all costs for recording.
Section 9.9. Amendment. This Agreement may be amended only by written agreement executed by
the Authority and the Redeveloper.
Section 9.10. Interpretation; Concurrence. The language in this Agreement shall be construed simply
according to its generally understood meaning, and not strictly for or against any party and no interpretation
shall be affected by which party drafted any part of this Agreement. By executing this Agreement, the parties
acknowledge that they (a) enter into and execute this Agreement knowingly, voluntarily and willingly of their
own volition with such consultation with legal counsel as they deem appropriate; (b) have had a sufficient
amount of time to consider this Agreement’s terms and conditions, and to consult an attorney before signing
this Agreement; (c) have read this Agreement, understand all of its terms, appreciate the significance of those
terms and have made the decision to accept them as stated herein; and (d) have not relied upon any
representation or statement not set forth herein.
Section 9.11. Preliminary Redevelopment Agreement. On the date of this Agreement, the Preliminary
Redevelopment Agreement shall terminate.
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IN WITNESS WHEREOF, the Authority and the Redeveloper have caused this Contract for Private
Redevelopment to be duly executed in their respective name and behalf, as of the date and year first written
above.
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD,
MINNESOTA
By
Its Chair
By
Its Executive Director
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this _____ day of __________, 2025, by Erin
Vrieze Daniels, the Chair of the Housing and Redevelopment Authority in and for the City of Richfield,
Minnesota, a public body corporate and politic under the laws of the State of Minnesota, on behalf of the
Authority.
Notary Public
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this _____ day of __________, 2025, by
Melissa Poehlman, the Executive Director of the Housing and Redevelopment Authority in and for the City of
Richfield, Minnesota, a public body corporate and politic under the laws of the State of Minnesota, on behalf
of the Authority.
Notary Public
S-2
4930-8286-1644.3
Execution page of the Redeveloper to the Contract for Private Redevelopment, dated the date and year first
written above.
PENN STATION APARTMENTS LLLP
a Minnesota limited liability limited partnership
By Penn Station Apartments LLC,
a Minnesota limited liability company
Its General Partner
By: JO Companies, LLC,
a Minnesota limited liability company
Its Sole Member
__________________________________
By Johnny Opara
Its Manager
STATE OF MINNESOTA )
) SS.
COUNTY OF _____________ )
The foregoing instrument was acknowledged before me this _____ day of __________, 2025, by
Johnny Opara, the Manager of JO Companies, LLC, a Minnesota limited liability company, the Sole Member
of Penn Station Apartments LLC, a Minnesota limited liability company of Penn Station Apartments LLLP, a
Minnesota limited liability limited partnership, on behalf of the Redeveloper.
Notary Public
A-1
4930-8286-1644.3
EXHIBIT A
REDEVELOPMENT PROPERTY
[Insert legal description]
4930-8286-1644.3 B-1
EXHIBIT B
FORM OF CERTIFICATE OF COMPLETION
The undersigned hereby certifies that Penn Station Apartments LLLP, a Minnesota limited liability
limited partnership (the “Redeveloper”), has fully complied with its obligations under Articles III and IV of the
Contract for Private Redevelopment, dated ________________, 2025 (the “Agreement”), between the Housing
and Redevelopment Authority in and for the City of Richfield, Minnesota and the Redeveloper, recorded in the
office of [County Recorder] [Registrar of Titles] of Hennepin County, Minnesota on ______________, 2025,
as document number __________________, with respect to construction of the Minimum Improvements in
accordance with Article IV of the Agreement, and that the Redeveloper is released and forever discharged
from its obligations with respect to construction of the Minimum Improvements under Articles III and IV
of the Agreement.
Dated: _______________, 20___.
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD,
MINNESOTA
By
Its Executive Director
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this _______________, 20__, by
_________________, the Executive Director of the Housing and Redevelopment Authority in and for the City
of Richfield, Minnesota, on behalf of the Authority.
Notary Public
This document was drafted by:
Kutak Rock LLP (JAE)
60 South Sixth Street, Suite 3400
Minneapolis, Minnesota 55402
Telephone: 612-334-5000
4930-8286-1644.3 C-1
EXHIBIT C
FORM OF DECLARATION OF RESTRICTIVE COVENANTS
THIS DECLARATION OF RESTRICTIVE COVENANTS, made as of the _____ day of
_______________, 2025 (the “Declaration”), is by PENN STATION APARTMENTS LLLP, a Minnesota
limited liability limited partnership (the “Redeveloper”), in favor of the HOUSING AND
REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA, a public
body corporate and politic under the laws of the State of Minnesota (the “Authority”).
RECITALS:
WHEREAS, the Authority intends to convey the real property located at 6501-6525 Penn Avenue
South, Richfield, Minnesota, and legally described in EXHIBIT A attached hereto (the “Redevelopment
Property”) to the Redeveloper under a Contract for Private Development of even date herewith (the
“Contract”) between the Authority and the Redeveloper; and
WHEREAS, pursuant to the Contract, the Redeveloper will construct a multifamily housing project
consisting of approximately 40 affordable housing units and (the “Project”) on the Redevelopment Property,
and to cause compliance with certain affordability covenants described in Section 4.5 of the Contract; and
WHEREAS, the Redeveloper shall convey the Minimum Improvements to the Redeveloper; and
WHEREAS, Section 4.5 of the Contract requires that the Redeveloper cause to be executed an
instrument in recordable form substantially reflecting the covenants set forth in Section 4.5 of the Contract; and
WHEREAS, the Redeveloper intends, declares, and covenants that the restrictive covenants set forth
herein will be and are covenants running with the Redevelopment Property for the term described herein and
binding upon all subsequent owners of the Redevelopment Property for the term described herein, and are not
merely personal covenants of the Redeveloper; and
WHEREAS, capitalized terms in this Declaration have the meaning provided in the Contract unless
otherwise defined herein.
NOW, THEREFORE, in consideration of the promises and covenants hereinafter set forth, and of
other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Redeveloper
agrees as follows:
1. Term of Restrictions.
(a) Occupancy and Rental Restrictions. The term of the Occupancy Restrictions set forth in
Section 3 hereof will commence on the date a certificate of occupancy is received from the City of Richfield,
Minnesota (the “City”) for all affordable rental units on the Redevelopment Property (the “Rental Housing
Units”). The period from commencement to termination is the “Qualified Project Period.”
(b) Termination of Declaration. This Declaration will terminate upon the date that is forty (40)
years after the commencement of the Qualified Project Period.
4930-8286-1644.3 C-2
(c) Removal from Real Estate Records. Upon termination of this Declaration, the Authority will,
upon request by the Redeveloper or its assigns, file any document appropriate to remove this Declaration from
the real estate records of Hennepin County, Minnesota.
2. Project Restrictions.
(a) the Redeveloper represents, warrants, and covenants that:
(i) All leases of Rental Housing Units to Qualifying Tenants (as defined in
Section 3(a)(i) hereof) will contain clauses, among others, wherein each individual lessee:
(1) certifies the accuracy of the statements made in its application and Eligibility
Certification (as defined in Section 3(a)(ii) hereof); and
(2) agrees that the family income at the time the lease is executed will be deemed
substantial and material obligation of the lessee’s tenancy, that the lessee will comply
promptly with all requests for income and other information relevant to determining low or
moderate income status from the Redeveloper or the Authority, and that the lessee’s failure or
refusal to comply with a request for information with respect thereto will be deemed a
violation of a substantial obligation of the lessee’s tenancy.
(ii) Upon reasonable prior written notice, the Redeveloper will permit any duly
authorized representative of the Authority to inspect the books and records of the Redeveloper
pertaining to the income of Qualifying Tenants residing in the Project.
3. Occupancy Restrictions.
(a) Tenant Income Provisions. The Redeveloper represents, warrants, and covenants that:
(i) Qualifying Tenants. From the commencement of the Qualified Project Period, all of
the housing units (the “Rental Housing Units”) shall be occupied (or treated as occupied as provided
herein) or held vacant and available for occupancy by Qualifying Tenants. Qualifying Tenants shall
mean one or more occupants of a unit who are determined from time to time by the Redeveloper to
have combined adjusted income that meets the following:
(a) Thirteen (13) families whose income is thirty percent (30%) or less of the area median gross income
as that figure is determined and announced from time to time by HUD, as adjusted for family size (“Median
Income”) and rents (including utilities paid by tenant) for such units shall not exceed 30% of 30% of Median
Income, provided, however, that for said thirteen (13) units, if the Housing Support is reduced or eliminated,
13 of such units may be occupied or available for occupancy by persons or families whose income does not
exceed 50% of the Median Income;
(b) Eighteen (18) of the units within the Minimum Improvements shall be reserved for occupancy
by individuals and families whose income is fifty percent (50% or less of Median Income, and rents (including
(including utilities paid by tenant) for such units, if the Housing Support is reduced or eliminated, such units
may be occupied or available for occupancy by persons or families whose income does not exceed 60% of the
Median Income;
(c) Three of the units within the Minimum Improvements shall be reserved for occupancy by
individuals and families whose income is sixty percent (60%) or less of Median Income, and rents (including
utilities paid by tenant) for such units shall not exceed 30% of 30% of Median Income; and
4930-8286-1644.3 C-3
(d) Eight (8) of the units within the Minimum Improvements shall be reserved for occupancy by
individuals whose income is 60% or less of Median Income.
For purposes of this definition, the occupants of a residential unit will not be deemed to be
Qualifying Tenants if all the occupants of such residential unit at any time are “students,” as defined
in Section 151(c)(4) of the Internal Revenue Code of 1986, as amended (the “Code”), not entitled to
an exemption under the Code. The determination of whether an individual or family is of low or
moderate income will be made at the time the tenancy commences and on an ongoing basis thereafter,
determined at least annually. If during their tenancy a Qualifying Tenant’s income exceeds one
hundred forty percent (140%) of the maximum income qualifying as low or moderate income for a
family of its size, the next available unit (determined in accordance with the Code and applicable
regulations) (the “Next Available Unit Rule”) must be leased to a Qualifying Tenant or held vacant
and available for occupancy by a Qualifying Tenant. If the Next Available Unit Rule is violated, the
Rental Housing Unit will not continue to be treated as a Qualifying Unit. If any rental unit is
determined not to be a Qualifying Tenant, Owner shall have one hundred eighty (180) days to have
the unit become a Qualifying Unit.
(ii) Certification of Tenant Eligibility. As a condition to initial and continuing
occupancy, each person who is intended to be a Qualifying Tenant will be required annually to sign
and deliver to the Redeveloper a Certification of Tenant Eligibility substantially in the form attached
hereto as EXHIBIT B, or in any other form as may be approved by the Authority (the “Eligibility
Certification”), in which the prospective Qualifying Tenant certifies as to qualifying as low or
moderate income. In addition, the person will be required to provide whatever other information,
documents, or certifications are deemed necessary by the Authority to substantiate the Eligibility
Certification, on an ongoing annual basis, and to verify that the tenant continues to be a Qualifying
Tenant within the meaning of Section 3(a) hereof. Eligibility Certifications will be maintained on file
by the Redeveloper with respect to each Qualifying Tenant who resides in a Rental Housing Unit or
resided therein during the immediately preceding calendar year.
(iii) Lease. The form of lease to be utilized by the Redeveloper in renting any Rental
Housing Units to any person who is intended to be a Qualifying Tenant will provide for termination
of the lease and consent by the person to immediate eviction for failure to qualify as a Qualifying
Tenant as a result of any material misrepresentation made by the person with respect to the Eligibility
Certification.
(iv) Annual Report. The Redeveloper covenants and agrees that during the term of this
Declaration, it will prepare and submit to the Authority on or before April 1 of each year, a certificate
substantially in the form of EXHIBIT C hereto, executed by the Redeveloper, (a) identifying the
tenancies and the dates of occupancy (or vacancy) for all Qualifying Tenants in the Project, including
the percentage of the Rental Housing Units which were occupied by Qualifying Tenants (or held vacant
and available for occupancy by Qualifying Tenants) at all times during the year preceding the date of
the certificate; (b) describing all transfers or other changes in ownership of the Project or any interest
therein; and (c) stating, that to the best knowledge of the person executing the certificate after due
inquiry, all the Rental Housing Units were rented or available for rental on a continuous basis during
the year to members of the general public and that the Redeveloper was not otherwise in default under
this Declaration during the year. In the event of a casualty, any damaged units shall be deemed to be
Qualifying Units provided that the Redeveloper promptly commences and completes restoration of the
Minimum Improvements.
(v) Notice of Non-Compliance. The Redeveloper will immediately notify the Authority
if at any time during the term of this Declaration the Rental Housing Units are not occupied or available
for occupancy as required by the terms of this Declaration.
4930-8286-1644.3 C-4
(b) Section 8 Housing. During the term of this Declaration, the Redeveloper shall not adopt any
policies that the Redeveloper knows or should know will prohibit or in any way exclude rental to tenants
holding certificates/vouchers under Section 8 of the United States Housing Act of 1937, as amended, codified
as 42 U.S.C. Sections 1401 et seq., or its successor because of such prospective tenant’s status as such a
certificate/voucher holder. Additionally, the Redeveloper shall not adopt policies that the Redeveloper knows
or should know will have the effect of making it difficult for tenants holding certificates/vouchers under Section
8 of the United States Housing Act of 1937, as amended, codified as 42 U.S.C. Sections 1401 et seq., or its
successor, to rent units within the Minimum Improvements (for example, policies that require income of more
than two times the rent to be paid for a unit).
(c) Compliance with City’s Inclusionary Housing Policy. The Redeveloper covenants and agrees
to comply with the City’s Inclusionary Housing Policy.
4. Transfer Restrictions. The Redeveloper covenants and agrees that the Redeveloper will cause
or require as a condition precedent to any conveyance, transfer, assignment, or any other disposition of the
Project prior to the termination of the Rental Restrictions and Occupancy Restrictions provided herein (the
“Transfer”) that the transferee of the Project pursuant to the Transfer assume in writing, in a form acceptable
to the Authority, all duties and obligations of the Redeveloper under this Declaration, including this Section 4,
in the event of a subsequent Transfer by the transferee prior to expiration of the Rental Restrictions and
Occupancy Restrictions provided herein (the “Assumption Agreement”). The Redeveloper will deliver the
Assumption Agreement to the Authority prior to the Transfer.
5. Notice of Sale. In consideration of the financial assistance provided to the Redeveloper
pursuant to Article IV of the Contract, the Redeveloper agrees to provide the Authority with at least ninety (90)
days’ notice of any sale of the Project.
6. Enforcement.
(a) The Redeveloper will permit, during normal business hours and upon reasonable prior written
notice, any duly authorized representative of the Authority to inspect any books and records of the Redeveloper
regarding the Project with respect to the incomes of Qualifying Tenants.
(b) The Redeveloper will submit any other information, documents or certifications requested by
the Authority which the Authority deems reasonably necessary to substantial the Redeveloper’s continuing
compliance with the provisions specified in this Declaration.
(c) The Redeveloper acknowledges that the primary purpose for requiring compliance by the
Redeveloper with the restrictions provided in this Declaration is to ensure compliance of the property with the
housing affordability covenants set forth in Section 4.5 of the Contract, and by reason thereof, the Redeveloper,
in consideration for assistance provided by the Authority under the Contract that makes possible the
construction of the Project on the Redevelopment Property, hereby agrees and consents that the Authority will
be entitled, for any breach of the provisions of this Declaration, and in addition to all other remedies provided
by law or in equity, to enforce specific performance by the Redeveloper of its obligations under this Declaration
in a state court of competent jurisdiction. The Redeveloper hereby further specifically acknowledges that the
Authority cannot be adequately compensated by monetary damages in the event of any default hereunder.
(d) The Redeveloper understands and acknowledges that, in addition to any remedy set forth
herein for failure to comply with the restrictions set forth in this Declaration, the Authority may exercise any
remedy available to it under Article IX of the Contract.
4930-8286-1644.3 C-5
7. Indemnification. The Redeveloper hereby indemnifies, and agrees to defend and hold
harmless the Authority and its members, officers, and agents from and against all liabilities, losses, damages,
costs, expenses (including attorneys’ fees and expenses), causes of action, suits, allegations, claims, demands,
and judgments of any nature arising from the consequences of a legal or administrative proceeding or action
brought against them, or any of them, on account of any failure by the Redeveloper to comply with the terms
of this Declaration, or on account of any representation or warranty of the Redeveloper contained herein being
untrue.
8. Agent of the Authority. The Authority will have the right to appoint an agent to carry out any
of its duties and obligations hereunder, and will inform the Redeveloper of any agency appointment by written
notice.
9. Severability. The invalidity of any clause, part or provision of this Declaration will not affect
the validity of the remaining portions thereof.
10. Notices. All notices to be given pursuant to this Declaration must be in writing and will be
deemed given when mailed by certified or registered mail, return receipt requested, to the parties hereto at the
addresses set forth below, or to any other place as a party may from time to time designate in writing. The
Redeveloper and the Authority may, by notice given hereunder, designate any further or different addresses to
which subsequent notices, certificates, or other communications are sent. The initial addresses for notices and
other communications are as follows:
To the Authority: Housing and Redevelopment Authority
in and for the City of Richfield, Minnesota
6700 Portland Avenue South
Richfield, MN 55423
Attn: Community Development Director
To the Redeveloper: Penn Station Apartments LLLP
510 Brunson Street, Suite 100
Saint Paul, MN 55130
Attn: Johnny Opara, President & CEO
11. Governing Law. This Declaration is governed by the laws of the State of Minnesota and,
where applicable, the laws of the United States of America.
12. Attorneys’ Fees. In case any action at law or in equity, including an action for declaratory
relief, is brought against the Redeveloper to enforce the provisions of this Declaration, the Redeveloper agrees
to pay the reasonable attorneys’ fees and other reasonable expenses paid or incurred by the Authority in
connection with the action.
13. Declaration Binding. This Declaration and the covenants contained herein will run with the
real property comprising the Project and will bind the Redeveloper and its successors and assigns and all
subsequent owners of the Project or any interest therein, and the benefits will inure to the Authority and its
successors and assigns for the term of this Declaration as provided in Section 1(b) hereof.
14. Tax Credits. The Redeveloper has applied for, and was awarded, housing tax credits from the
Minnesota Housing Finance Agency. If the Redeveloper receives the housing tax credits, it may submit the
report it provides to the U.S. Department of Housing and Urban Development instead of completing the forms
attached as EXHIBITS B and C to this Declaration of Restrictive Covenants.
4930-8286-1644.3 C-6
(The remainder of this page is intentionally left blank.)
4930-8286-1644.3 C-7
IN WITNESS WHEREOF, the Redeveloper has caused this Declaration of Restrictive Covenants
to be signed by its duly authorized representative as of the date and year first written above.
PENN STATION APARTMENTS LLLP
By
Its
STATE OF MINNESOTA )
) SS.
COUNTY OF _____________ )
The foregoing instrument was acknowledged before me this ____ day of __________, 2025, by
_________________________________, the _____________________________ of Penn Station
Apartments LLLP, a Minnesota limited liability limited partnership, on behalf of the Redeveloper.
Notary Public
This document was drafted by:
Kutak Rock LLP (JAE)
60 South Sixth Street, Suite 3400
Minneapolis, Minnesota 55402
Telephone: 612-334-5000
4930-8286-1644.3 C-8
This Declaration of Restrictive Covenants is acknowledged and consented to by:
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD,
MINNESOTA
By
Its Chair
By
Its Executive Director
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this ____ day of __________, 2025, by Erin
Vrieze Daniels, the Chair of the Housing and Redevelopment Authority in and for the City of Richfield,
Minnesota, a public body corporate and politic under the laws of the State of Minnesota, on behalf of the
Authority.
Notary Public
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this ____ day of __________, 2025, by
Melissa Poehlman, the Executive Director of the Housing and Redevelopment Authority in and for the City of
Richfield, Minnesota, a public body corporate and politic under the laws of the State of Minnesota, on behalf
of the Authority.
Notary Public
4930-8286-1644.3 C-9
EXHIBIT A TO DECLARATION OF RESTRICTIVE COVENANTS
LEGAL DESCRIPTION OF REDEVELOPMENT PROPERTY
[Insert legal description]
4930-8286-1644.3 C-10
EXHIBIT B TO DECLARATION OF RESTRICTIVE COVENANTS
CERTIFICATION OF TENANT ELIGIBILITY
Certification of Tenant Eligibility
(INCOME COMPUTATION AND CERTIFICATION)
(TO BE COMPLETED THE FIRST YEAR OF RESIDENCY ONLY)
Project: ____________________ Penn Avenue South, Richfield, Minnesota
Redeveloper: Penn Station Apartments LLLP
Unit Type: ______ [___ BR]
1. I/We, the undersigned, being first duly sworn, state that I/we have read and answered fully,
frankly and personally each of the following questions for all persons (including minors) who are to occupy
the unit in the above apartment development for which application is made, all of whom are listed below:
Name of
Members of the
Household
Relationship
To Head of
Household
Age
Place of
Employment
_____________ _____________ ___ _________________
_____________ _____________ ___ _________________
_____________ _____________ ___ _________________
_____________ _____________ ___ _________________
_____________ _____________ ___ _________________
Income Computation
2. The anticipated income of all the above persons during the 12-month period beginning this
date,
(a) including all wages and salaries, overtime pay, commissions, fees, tips and bonuses
before payroll deductions; net income from the operation of a business or profession or from the rental
of real or personal property (without deducting expenditures for business expansion or amortization of
capital indebtedness); interest and dividends; the full amount of periodic payments received from
social security, annuities, insurance policies, retirement funds, pensions, disability or death benefits
and other similar types of periodic receipts; payments in lieu of earnings, such as unemployment and
disability compensation, worker’s compensation and severance pay; the maximum amount of public
assistance available to the above persons; periodic and determinable allowances, such as alimony and
child support payments and regular contributions and gifts received from persons not residing in the
dwelling; and all regular pay, special pay and allowances of a member of the Armed Forces (whether
or not living in the dwelling) who is the head of the household or spouse; but
(b) excluding casual, sporadic or irregular gifts; amounts which are specifically for or in
reimbursement of medical expenses; lump sum additions to family assets, such as inheritances,
insurance payments (including payments under health and accident insurance and workmen’s
compensation), capital gains and settlement for personal or property losses; amounts of educational
4930-8286-1644.3 C-11
scholarships paid directly to the student or the educational institution, and amounts paid by the
government to a veteran for use in meeting the costs of tuition, fees, books and equipment, but in either
case only to the extent used for these types of purposes; special pay to a serviceman head of a family
who is away from home and exposed to hostile fire; relocation payments under Title II of the Uniform
Relocation Assistance and Real Property Acquisition Policies Act of 1970; foster child care payments;
the value of coupon allotments for the purchase of food pursuant to the Food Stamp Act of 1964 which
is in excess of the amount actually charged for the allotments; and payments received pursuant to
participation in ACTION volunteer programs, is as follows: $_____________.
3. If any of the persons described above (or whose income or contributions was included in item
2) has any savings, bonds, equity in real property or other form of capital investment, provide:
(a) the total value of all such assets owned by all such persons: $____________;
(b) the amount of income expected to be derived from such assets in the 12 month period
commencing this date: $_______________; and
(c) the amount of such income which is included in income listed in item 2:
$__________.
4. (a) Will all of the persons listed in item 1 above be or have they been full-time students
during five calendar months of this calendar year at an educational institution (other than a
correspondence school) with regular faculty and students?
Yes _________________ No ________________
(b) Is any such person (other than nonresident aliens) married and eligible to file a joint
federal income tax return?
Yes _________________ No ________________
THE UNDERSIGNED HEREBY CERTIFY THAT THE INFORMATION SET FORTH ABOVE
IS TRUE AND CORRECT. THE UNDERSIGNED ACKNOWLEDGE THAT THE LEASE FOR THE
UNIT TO BE OCCUPIED BY THE UNDERSIGNED WILL BE CANCELLED UPON 10 DAYS WRITTEN
NOTICE IF ANY OF THE INFORMATION ABOVE IS NOT TRUE AND CORRECT.
Head of Household
Spouse
4930-8286-1644.3 C-12
FOR COMPLETION BY REDEVELOPER
(OR ITS MANAGER) ONLY
1. Calculation of Eligible Tenant Income:
(a) Enter amount entered for entire household in 2 above: $__________
(b) If the amount entered in 3(a) above is greater than $5,000, enter the greater of (i) the
amount entered in 3(b) less the amount entered in 3(c) or (ii) 10% of the amount entered in 3(a):
$__________
(c) TOTAL ELIGIBLE INCOME (Line 1(a) plus Line 1(b)): $__________
2. The amount entered in 1(c) is less than or equal to [30%] [50%] of median income for the area
in which the Project is located, as defined in the Declaration. [30%] [50%] is necessary for status as a
“Qualifying Tenant” under Section 3(a) of the Declaration.
3. Rent:
(a) The rent for the unit is $________________.
(b) The amount entered in 3(a) is less than or equal to the maximum rent permitted under
the Declaration.
4. Number of apartment unit assigned: ___________.
5. This apartment unit was ____ was not ____ last occupied for a period of at least 31 consecutive
days by persons whose aggregate anticipated annual income as certified in the above manner upon their initial
occupancy of the apartment unit was less than or equal to [30%] [50%] of Median Income in the area.
6. Check as applicable: _______ Applicant qualifies as a Qualifying Tenant (tenants of at least
________ units must meet), or ____ Applicant otherwise qualifies to rent a unit.
THE UNDERSIGNED HEREBY CERTIFIES THAT THEY HAVE NO KNOWLEDGE OF ANY FACTS
WHICH WOULD CAUSE THEM TO BELIEVE THAT ANY OF THE INFORMATION PROVIDED BY
THE TENANT MAY BE UNTRUE OR INCORRECT.
PENN STATION APARTMENTS LLLP
By
Its
4930-8286-1644.3 C-13
EXHIBIT C TO DECLARATION OF RESTRICTIVE COVENANTS
CERTIFICATE OF CONTINUING PROGRAM COMPLIANCE
(PROVIDED EACH YEAR OF RESIDENCY)
Certificate of
Continuing Program Compliance
Date: ___________________
The following information with respect to the multifamily housing development located at
__________________ Penn Avenue South, Richfield, Minnesota (the “Project”), is being provided by Penn
Station Apartments LLLP, a Minnesota limited liability limited partnership (the “Redeveloper”), to the Housing
and Redevelopment Authority in and for the City of Richfield, Minnesota (the “Authority”), pursuant to that
certain Declaration of Restrictive Covenants, dated ___________, 2025 (the “Declaration”), with respect to the
Project:
(A) The total number of residential units which are available for occupancy is
___________. The total number of these units occupied is _________________.
(B) The following residential units (identified by unit number) are currently occupied by
“Qualifying Tenants,” as the term is defined in the Declaration (for a total of ____units):
[Studio] Units: _____________
[____ BR Units]: _____________
(C) The following residential units which are included in (B) above, have been re-
designated as units for Qualifying Tenants since _______________, 20___, the date on which the last
“Certificate of Continuing Program Compliance” was filed with the Authority by the Redeveloper:
Unit
Number
Previous Designation
of Unit (if any)
Replacing
Unit Number
___________ _________________ _________________
___________ _________________ _________________
4930-8286-1644.3 C-14
(D) The following residential units are considered to be occupied by Qualifying Tenants
based on the information set forth below:
Unit
Number
Name of Tenant
Number of
Persons
Residing in
the Unit
Number of
Bedrooms
Total Adjusted
Gross Income
Date of Initial
Occupancy
Rent
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
[etc.]
(E) The Redeveloper has obtained a “Certification of Tenant Eligibility,” in the form
provided as EXHIBIT B to the Declaration, from each Tenant named in (D) above, and each such
Certificate is being maintained by the Redeveloper in its records with respect to the Project. Attached
hereto is the most recent “Certification of Tenant Eligibility” for each Tenant named in (D) above who
signed such a Certification since ______________, 20___, the date on which the last “Certificate of
Continuing Program Compliance” was filed with the Authority by the Redeveloper.
(F) In renting the residential units in the Project, the Redeveloper has not given preference
to any particular group or class of persons (except for persons who qualify as Qualifying Tenants); and
none of the units listed in (D) above have been rented for occupancy entirely by students, no one of
which is entitled to file a joint return for federal income tax purposes. All of the residential units in the
Project have been rented pursuant to a written lease, and the term of each lease is at least twelve (12)
months.
(G) The information provided in this “Certificate of Continuing Program Compliance” is
accurate and complete, and no matters have come to the attention of the Redeveloper which would
indicate that any of the information provided herein, or in any “Certification of Tenant Eligibility”
obtained from the Tenants named herein, is inaccurate or incomplete in any respect.
(H) The Project is in continuing compliance with the Declaration.
(I) The Redeveloper certifies that as of the date hereof at least ______ of the residential
dwelling units in the Project are occupied or held open for occupancy by Qualifying Tenants, as
defined and provided in the Declaration.
4930-8286-1644.3 C-15
(J) The rental levels for each Qualifying Tenant comply with the maximum permitted
under the Declaration.
IN WITNESS WHEREOF, I have hereunto affixed my signature, on behalf of the Redeveloper, on
____________________, 20___.
PENN STATION APARTMENTS LLLP
By
Its
D E S I G N
G R O U P
Autodesk Docs://45359-24130 JO Properties Penn
Station/45329-24130_6501 Penn Ave_R23.rvt
JO Companies - Penn Station Apartments | NORTHWEST CORNER RENDERING
Richfield, MN | 05/14/25 | 45359-24130
D E S I G N
G R O U P
Autodesk Docs://45359-24130 JO Properties Penn
Station/45329-24130_6501 Penn Ave_R23.rvt
JO Companies - Penn Station Apartments | SOUTHWEST CORNER RENDERING
Richfield, MN | 05/14/25 | 45359-24130
FIRST LEVEL
100'-0"
SECOND LEVEL
111'-8 1/8"
THIRD LEVEL
122'-4"
ROOF LEVEL
154'-0 5/8"
FOURTH LEVEL
132'-11 7/8"
FIFTH LEVEL
143'-7 3/4"56'-6 5/8"FIBER CEMENT SIDING
BRICK
METAL PANEL METAL BLADE BUILDING
SIGNAGE
PREFINISHED STOREFRONT
SYSTEM AT LEVEL 1
FIRST LEVEL
100'-0"
SECOND LEVEL
111'-8 1/8"
THIRD LEVEL
122'-4"
ROOF LEVEL
154'-0 5/8"
FOURTH LEVEL
132'-11 7/8"
FIFTH LEVEL
143'-7 3/4"
LOWER LEVEL
88'-1"56'-6 5/8"FIBER CEMENT SIDING
BRICK
METAL PANEL
PREFINISHED ALUMINUM BALCONY
FIBER CEMENT PANEL
PREFINISHED STOREFRONT
SYSTEM AT LEVEL 1
METAL PANEL
D E S I G N
G R O U P
Autodesk Docs://45359-24130 JO Properties Penn
Station/45329-24130_6501 Penn Ave_R23.rvt
JO Companies - Penn Station Apartments | OVERALL ELEVATIONS
Richfield, MN | 05/14/25 | 45359-24130
1/8" = 1'-0"
NORTH ELEVATION
1/8" = 1'-0"
WEST ELEVATION
MATERIAL CALCULATION SCHEDULE
MATERIAL AREA (SF) PERCENTAGE (%)
WEST
BRICK 3484.52 25.59%
FIBER CEMENT 1789.29 13.14%
GLAZING 3075.62 22.59%
METAL PANEL 5266.07 38.68%
13615.5 100.00%
MATERIAL CALCULATION SCHEDULE
MATERIAL AREA (SF) PERCENTAGE (%)
NORTH
BRICK 426.79 11.78%
FIBER CEMENT 705.11 19.46%
GLAZING 686.83 18.96%
METAL PANEL 1804.31 49.80%
3623.04 100.00%
FIRST LEVEL
100'-0"
SECOND LEVEL
111'-8 1/8"
THIRD LEVEL
122'-4"
ROOF LEVEL
154'-0 5/8"
FOURTH LEVEL
132'-11 7/8"
FIFTH LEVEL
143'-7 3/4"
LOWER LEVEL
88'-1"59'-5 5/8"FIBER CEMENT PANEL
BRICK FIBER CEMENT PANEL
BRICK
PREFINISHED ALUMINUM
BALCONY
11'-11"71'-4 5/8"FIRST LEVEL
100'-0"
SECOND LEVEL
111'-8 1/8"
THIRD LEVEL
122'-4"
ROOF LEVEL
154'-0 5/8"
FOURTH LEVEL
132'-11 7/8"
FIFTH LEVEL
143'-7 3/4"
LOWER LEVEL
88'-1"56'-6 5/8"FIBER CEMENT SIDINGBRICKMETAL PANEL
11'-11"68'-5 5/8"D E S I G N
G R O U P
Autodesk Docs://45359-24130 JO Properties Penn
Station/45329-24130_6501 Penn Ave_R23.rvt
JO Companies - Penn Station Apartments | OVERALL ELEVATIONS
Richfield, MN | 05/14/25 | 45359-24130
1/8" = 1'-0"
EAST ELEVATION
1/8" = 1'-0"
SOUTH ELEVATION
MATERIAL CALCULATION SCHEDULE
MATERIAL AREA (SF) PERCENTAGE (%)
EAST
BRICK 2038.97 16.13%
FIBER CEMENT 7950.58 62.88%
GLAZING 2654 20.99%
12643.55 100.00%
MATERIAL CALCULATION SCHEDULE
MATERIAL AREA (SF) PERCENTAGE (%)
SOUTH
BRICK 2630.61 62.45%
FIBER CEMENT 975.46 23.16%
GLAZING 606 14.39%
4212.07 100.00%
107 SF
ELEV
76 SF
ELEV LOBBY
192 SF
STAIR B
188 SF
STAIR A
229 SF
ELECTRICAL
232 SF
WATER
304 SF
TRASH
11,756 SF
PARKING
19'-0"24'-0"19'-0"
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
45 44 43 42 41 40 39 38 37 33 32 3136 35 3446
EV EV EV
EVEV
WALL MOUNTED HANGING BIKE RACKS,
1 PER STANDARD STALL, 30 TOTAL
201'-0"63'-4"201'-0"63'-4"5% SLOPE
232'-2 5/8"5'-2"1,388 SF
UNIT C1
1,360 SF
UNIT C1
1,035 SF
UNIT B2.3
963 SF
UNIT B2.1
993 SF
UNIT B2.2
994 SF
FAMILY PLAY ROOM512 SF
FITNESS
328 SF
STORAGE UNITS
414 SF
BUSINESS CENTER
83 SF
TLT
177 SF
STAIR A
181 SF
STAIR B
77 SF
ELEV
70 SF
TRASH
1,078 SF
CORRIDOR
326 SF
STAFF OFFICES
81 SF
MAINT
491 SF
BIKE STORAGE
103 SF
MAIL
134 SF
VESTIBULE
688 SF
LOBBY
44'-3" 8'-7 1/8" 148'-5 5/8"
201'-3 3/4"63'-3 5/8"34'-4 3/8"11'-6 1/2"93'-8 7/8"17'-5"44'-3"63'-3 5/8"2'-6 3/8"15'-0 3/4"1'-0"681 SF
LOUNGE
120 SF
STORAGE
D E S I G N
G R O U P
Autodesk Docs://45359-24130 JO Properties Penn
Station/45329-24130_6501 Penn Ave_R23.rvt
JO Companies - Penn Station Apartments | OVERALL FLOOR PLANS
Richfield, MN | 05/14/25 | 45359-24130
NORTH
NORTH
3/32" = 1'-0"
LOWER LEVEL
3/32" = 1'-0"
FIRST LEVEL
0'10'-8"5'-4" 21'-4"
0'10'-8"5'-4" 21'-4"
70 SF
TRASH
84 SF
ELEC
77 SF
ELEV
174 SF
STAIR B
1,218 SF
CORRIDOR
1,381 SF
UNIT C1
1,360 SF
UNIT C1
969 SF
UNIT B2
963 SF
UNIT B2.1
993 SF
UNIT B2.2 (TYPE A)
707 SF
UNIT A1
761 SF
UNIT A2
1,007 SF
UNIT B1
1,352 SF
UNIT D1
177 SF
STAIR A
148'-5 5/8"8'-7 1/8"44'-3"63'-3 5/8"34'-5 5/8"11'-5 1/4"93'-8 7/8"17'-5"44'-3"
201'-3 3/4"63'-3 5/8"1'-0"2'-6 3/8"15'-0 3/4"OPEN TO
BELOW
120 SF
STORAGE
707 SF
UNIT A1
761 SF
UNIT A2
1,007 SF
UNIT B1
1,352 SF
UNIT D1
969 SF
UNIT B2
963 SF
UNIT B2.1
993 SF
UNIT B2.2
993 SF
UNIT B2.2
1,381 SF
UNIT C1
1,360 SF
UNIT C1
77 SF
ELEV
174 SF
STAIR B
177 SF
STAIR A
1,222 SF
CORRIDOR
70 SF
TRASH
84 SF
ELEC
148'-5 5/8"8'-7 1/8"44'-3"63'-3 5/8"34'-5 5/8"11'-5 1/4"93'-8 7/8"17'-5"44'-3"
201'-3 3/4"63'-3 5/8"15'-0 3/4"2'-6 3/8"1'-0"120 SF
STORAGE
D E S I G N
G R O U P
Autodesk Docs://45359-24130 JO Properties Penn
Station/45329-24130_6501 Penn Ave_R23.rvt
JO Companies - Penn Station Apartments | OVERALL FLOOR PLANS
Richfield, MN | 05/14/25 | 45359-24130
3/32" = 1'-0"
SECOND FLOOR
3/32" = 1'-0"
THIRD FLOOR
NORTH
NORTH
0'10'-8"5'-4" 21'-4"
0'10'-8"5'-4" 21'-4"
1,007 SF
UNIT B1
1,352 SF
UNIT D1
761 SF
UNIT A2
707 SF
UNIT A1
969 SF
UNIT B2
963 SF
UNIT B2.1
993 SF
UNIT B2.2
993 SF
UNIT B2.2
70 SF
TRASH
84 SF
ELEC
77 SF
ELEV
174 SF
STAIR B
177 SF
STAIR A
1,124 SF
CORRIDOR
9'-1 1/4" 148'-5 5/8"14'-7"46'-2 1/4"2'-6 3/8"17'-11 1/8" 93'-8 7/8" 11'-5 1/4" 34'-5 5/8"63'-3 5/8"157'-6 7/8"
127 SF
STORAGE 1'-0"1,222 SF
CORRIDOR
177 SF
STAIR A
1,007 SF
UNIT B1
969 SF
UNIT B2
963 SF
UNIT B2.1
993 SF
UNIT B2.2
993 SF
UNIT B2.2
707 SF
UNIT A1
761 SF
UNIT A2
1,352 SF
UNIT D1 (TYPE A)
1,381 SF
UNIT C1
1,360 SF
UNIT C1
84 SF
ELEC
174 SF
STAIR B
77 SF
ELEV
70 SF
TRASH
120 SF
STORAGE
45'-2 1/2" 16'-11 1/4" 93'-8 7/8" 11'-5 1/4" 34'-5 5/8"
201'-9 1/2"64'-3 1/8"44'-8 3/4" 8'-7 1/8" 148'-5 5/8"63'-3 5/8"1'-0"2'-6 3/8"15'-0 3/4"D E S I G N
G R O U P
Autodesk Docs://45359-24130 JO Properties Penn
Station/45329-24130_6501 Penn Ave_R23.rvt
JO Companies - Penn Station Apartments | OVERALL FLOOR PLANS
Richfield, MN | 05/14/25 | 45359-24130
NORTH
3/32" = 1'-0"
FIFTH LEVEL
0'10'-8"5'-4" 21'-4"
3/32" = 1'-0"
FOURTH LEVEL
NORTH
0'10'-8"5'-4" 21'-4"
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OH OH OH OH OH OH OH OH OH OH OH
G G G G G G G G G G G G GPENN AVENUE S65TH STREET W(C.R. NO. 32)SCXXXXXXXXXXXXXXXXXXXXXXXXXXXXX12SCALE IN FEET0H:20 4041352>>>>KEYNOTESB-612 CONCRETE CURB AND GUTTER. REFER TO DETAIL 1/C-501.B-624 CONCRETE CURB AND GUTTER. REFER TO DETAIL 2/C-501.ASPHALT PAVEMENT. MATCH IN-PLACE BITUMINOUS SECTION.ASPHALT PAVEMENT. REFER TO DETAIL 3/C-501.CURB TAPER. REFER TO DETAIL 4/C-501.CONCRETE SIDEWALK. REFER TO DETAIL 5/C-501PARKING STRIPING.CONCRETE DRIVE APPROACH. REFER TO DETAIL 6/C-501CONCRETE PAVEMENT. REFER TO DETAIL 5/C-501RETAINING WALLCONCRETE STEPS, (4) 6-INCH RISERS.ALUMINUM FENCE1234567891011121. REFER TO ARCHITECTURAL AND/OR STRUCTURAL PLANS FOR ACTUAL BUILDING DIMENSIONS,STOOP AND RAMP DETAILS.2. THE CONTRACTOR SHALL CONSTRUCT ALL PAVEMENTS TO CONFORM WITH THE CORRECT LINESAND FINISHED GRADES AS INDICATED ON THE PLANS AND TO MATCH EXISTING PAVEMENT GRADESAT TIE-IN POINTS. NO PONDING OF WATER WILL BE ALLOWED.3. SAW ALL CONCRETE CONSTRUCTION JOINTS, CLEAN THEM OF DEBRIS, BLOW THEM DRY ANDIMMEDIATELY SEAL WITH JOINT SEALANT.4. REINFORCE ODD SHAPED PAVING PANELS WITH #3 BARS AT 24" EACH WAY. AN ODD SHAPEDPANEL IS CONSIDERED TO BE ONE IN WHICH THE SLAB TAPERS TO A SHARP ANGLE WHEN THELENGTH TO WIDTH RATIO EXCEEDS 3 TO 1 OR WHEN A SLAB IS NEITHER SQUARE NORRECTANGULAR.5. PARKING QUANTITIES:9'X19' STANDARD STALLS - 14ADA PARKING STALLS - 0TOTAL PARKING STALLS -14SITE PLAN NOTES
AGENDA SECTION: RESOLUTIONS
AGENDA ITEM # 5.
STAFF REPORT NO. 18
HOUSING AND REDEVELOPMENT AUTHORITY
MEETING
6/16/2025
Hilary Lovelace, Housing SpecialistREPORT PREPARE D BY:
EXECUTIVE DIRECTOR REVIEW: Melissa Poehlman, Executive Director
6/11/2025
ITEM FOR COUNCIL CONSIDERATION:
Consideration of a resolution authorizing the Executive Director to change Deferred Loans to a 15
year term.
EXECUTIVE SUMMARY:
The Deferred Loan Program (Program) offers no-interest deferred loans up to $30,000 for housing
maintenance and repair projects to homeowners earning less than 80% of the Area Median Income (AMI),
prioritizing those earning less than 50% AMI. The loan is repaid upon the sale of the home or forgiven after
30 years. The Program in its current form began in 1984 and was administered in-house until 2004 when it
was transferred to Hennepin County. At the conclusion of the 30-year term, the loan is forgiven.
Historically, funding for this Program came from federal dollars, passed through Hennepin County to local
governments, that if repaid, would be returned to the City and used to meet other housing needs. Hennepin
County has decided to move to a new all-suburban County Program model of federal funds use where more
programs are operated at the County rather than local government levels. As part of these changes, any
repayments to loans would be returned to the County for use at their discretion from the all-suburban pool,
and not necessarily recirculated to benefit City residents.
Richfield is the only city in Hennepin County that maintained a 30-year repayment period for these loan
funds. Adjusting to a 15-year repayment period and forgiving the loans of homeowners who have made it past
15 years into their 30-year term will bring the City into similarity with neighbors and reduce staff time spent on
servicing subordination and forgiveness requests.
Staff recommends that the Housing and Redevelopment Authority (HRA) allow the forgiveness of the 57 loans
older than 15 years, that total more than a million dollars, in order to keep the benefit of these funds with local
residents.
RECOMMENDED ACTION:
By Motion: Adopt a resolution authorizing the Executive Director to change the term for Deferred
Loans to 15 years, and forgive all loans older than 15 years.
BASIS OF RECOMMENDATION:
A.HISTORICAL CONTEXT
Beginning in 2026, Richfield homeowners will be part of an all-suburban County Program, all
repayments will be returned to Hennepin County for the all-suburban pool of funds.
From 1984 through 2024, 479 loans were made to qualified homebuyers under the Program.
In 2005, the Program was transitioned to County administration. Fewer loans have been processed
since then, in part due to less Community Development Block Grant (CDBG) funding.
Over the course of the program, more than $2.47 million of the funds have been recycled back into the
P rogram from repayments
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
Residents and loan recipients with vulnerable identities, including mental and physical disability, are
more likely to receive deferred loans.
F orgiving loans older than 15 years removes the burden of applying for forgiveness or for subordination
if the need should arise.
C .P OL IC IE S (resolutions, ordinances, regulations, statutes, exc):
The modification would be consistent with other neighboring C ity programs that have a 15-year term for
these loans.
The proposed modification was identified through the Housing P rograms E valuation conducted in the
first part of 2025 and discussed at the May 19 work session.
D .C R IT IC AL T IMIN G IS S U E S:
In 2026 all repayments will return to the all-suburban pool of funds.
S everal of the remaining loans are actively requesting forgiveness and subordination.
E .F IN AN C IAL IMPAC T:
The primary source of funding for the P rogram has been federal C D B G funds. There is no requirement
that the funds be repaid.
The 57 loans more than 15 years into their 30-year term total more than a million dollars.
F.L E GAL C ON S ID E R AT ION:
Hennepin C ounty is aware of this intention and supports this decision.
The primary source of funding for the P rogram has been federal C D B G funds. There is no requirement
that the funds be repaid.
ALTE R N AT IV E R E C O MME N D ATIO N(S):
Do not adopt the proposed resolution and allow any future repayments to potentially serve other Hennepin
County cities.
P R IN C IPAL PAR TIE S E X P E C TE D AT ME E TIN G:
N/A
AT TAC H ME N T S:
D escription Type
Resolution D eferred L oans 15 Years 061625 Resolution L etter
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD, MINNESOTA
RESOLUTION NO. 1510
RESOLUTION CHANGING LOAN TERM OF DEFERRED LOAN TO FIFTEEN YEARS
WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield,
Minnesota (the “Authority”) began administering the Deferred Loan Program in the 1984 for Richfield
homeowners with an income of 80% of area median income or less (the "Loan Program") to make loans
for housing maintenance and repair projects; and
WHEREAS, the interest-free Deferred Loan Program has been in effect since 1984, and the loans
provided by the Loan Program have loan terms of 30 years; and
WHEREAS, in 2004, Hennepin County began administering the Deferred Loan Program on
behalf of the Authority as part of an all-suburban Hennepin County loan program but with loan terms,
funding allocations, and loan repayments kept separate for each city; and
WHEREAS, beginning in 2026, all cities’ Loan Programs will be combined into one Loan
Program with terms and funding decisions determined by Hennepin County; and
WHEREAS, all other Hennepin County cities currently have loan terms of 15 years; and
WHEREAS, changing the loan term of Richfield loans to 15 years would make the terms
consistent with those of other cities in the combined Loan Program; and
WHEREAS, there are 57 Authority loans that are currently older than 15 years, and forgiving
those loans would be consistent with the terms applied to loans in other cities; 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.Deferred Loans issued from this date forward will have a loan term of 15 years.
2.The Authority Chair and Executive Director are hereby authorized to execute satisfactions
for Deferred Loans over 15 years old.
Adopted by the Housing and Redevelopment Authority in and for the City of Richfield,
Minnesota this 16th day of June, 2025.
Erin Vrieze Daniels, Chair
ATTEST:
Sean Hayford Oleary, Secretary