HomeMy WebLinkAbout04-27-2010 Council Work Session Packet Council Work Session
Tuesday, Apri127, 2010, 6:30 p.m.
Orono City Council Chambers
AGENDA
1. CommonBond Discussion—Mike Gaffron/Soren Mattick (30 minutes)
2. Processing Complex Zoning Applications - Start To Finish— Saren Mattick (60 minutes)
3. Comments Regarding Information Updates—Lin Vee (5 minutes)
4. Other Issues of Current Interest
Previous Work Session Topics
April 13, 2010—Minutes Attached
o Pre-meeting Local Board of Review
o Police Department Update
o Engineer's Report
- Lift Station 12 Update(Brown Road North/Old Hwy 12)
- Orono Orchard Road Street Reconstruction Project Update
- State Aid Street CIP Discussion
o Other Issues of Current Interest
o Comments Regarding Information Updates
o CommonBond Discussion
March 23, 2010
o Long Lake Fire Deparhnent Update
o Comp Plan Discussion
0 2485 Dunwoody Avenue Sewer Service Quotation
o Police Matters
o Other Issues of Current Interest
o Comments Regarding Information Updates
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MEMORANDUM
TO: MAYOR AND COUNCIL MEMBERS
FROM: MIKE GAFFRON/SOREN MATTICK
SUBJECT: COMMON BOND DISCUSSION
DATE: APRIL 23, 2010
The following information is attached for reference regarding the CommonBond proposal:
A. History of City of Orono Residential Development Subsidies
B. CommonBond Letter(4/16/10)
C. Financial Review Letter from Gabler Housing Solutions Corporation (4/21/10)
o Development Proforma (4/22/10)
o Minnesota Multifamily Rental Housing Common Application (Submission
Date: 6/16/09)
To: Jessica Loftus, City Administrator
Mayor White& Council
From: Mike Gaffron, Asst. City Administrator/Long Term Strategy�
Date: April 19, 2010
Subject: History of City of Orono Residential Development Subsidies
With very few exceptions, the City of Orono has not historically subsidized private residential
development in the City. This is the case for both residential and non-residential development.
With regards to housing subsidies, the following excerpt from Orono's 1980 Comprehensive
Plan addresses a general policy that has been adhered to fairly rigorously for the past three
decades:
"SUBSIDIZED HOUSING i1NITS
Currently, the City of Orono does not contain any government subsidized housing units. This is
due in part to the lack of, or limited, urban services such as shopping and employment
opportunities, public transportation, medical facilities and limited areas served by central sewer
and water services. According to policies adopted by the Metropolitan Council, communities
located within the 1990 Metropolitan Urban Service Area (MUSA) must consider subsidized
housing as part of their efforts to plan for their share of inetropolitan housing needs. Currently,
only a portion of Orono is included in the present MUSA boundary and that part of Orono is
almost totally developed.
The Metropolitan Council has adopted a subsidized Housing Allocation Plan to help achieve the
goal of increasing locational choice for low and moderate income households throughout the area.
To accomplish this, the Council has determined priority areas to assist in the distribution of
allocated units. Orono, due to its level of services and facilities has been designated a third
priority community and based upon this, has been allocated a modest amount of subsidized units.
On a three year basis (1977-1979) the plan has allocated a numerical goal of 32 units to Orono,
which amounts to ten units per year. It should be noted that based upon an annual average of 50
building permits issued per year in Orono, this would amount to a full 20% of the total building
permits issued per year. Therefore, Orono has instead been focusing housing subsidy funds on
rehabilitation of existing substandard units occupied by low and moderate income persons,
particularly the large number of retired persons occupying one-time cottages."
Fast-forwarding to the City's 2010-2030 CMP `Housing Action Plan' (see attached excerpt), the
City is committing to a variety of ineasures far supporting affordable and lifecycle housing, but
does not commit to direct subsidies.
As you know, the term "subsidy" means more than just the classic Section 8 housing programs
which tend to cause shudders among the populace. Orono has in the past participated in a
number of programs aimed at providing financial assistance and/or grants to low-income
homeowners for maintenance and rehabilitation of the existing housing stock. Fiscal tools
employed by Orono for development and/or preservation of affordable and lifecycle housing
have included:
— Community Development Block Grant(CDBG) Funds
— Minnesota Housing Finance Agency (MHFA) Grants
Development Subsidy History
April 19,2010
Page 2
— Deferral or forgiveness of development fees
— Tax Increment Financing
The use of most of these tools or programs is not a common occurrence in Orono, however. The
relatively few examples of residential development subsidy from City and external sources are
described below.
CDBG Funding Housing rehabilitation funding is provided through the Hennepin
County housing rehabilitation program, which is funded through the CDBG program.
Orono is a member of a group of cities that pool their CDBG funds. Each year,
approximately $100,000 in CDBG funding is allocated to the housing rehabilitation
program which serves households throughout the group of cities on a first-come-first-
served basis. No CDBG money has been expended for projects specifically in Orono
since 2002; prior to that time, funds for rehabilitation projects in Orono were expended
fairly regularly. Jim Graham of Hennepin County indicates that they have sent out two
applications for housing rehab funding to Orono residents this year but those applications
have not been returned as of yet.
Combined Funding Periodically, Orono receives a portion of the pooled CDBG funds
far an affordable housing project specifically in Orono. In 2000, $32,000 of Livable
Communities Act (LCA) grant money (Grant #SG-00-37) from MHFA was added to
other grants from CDBG and Met Council that totaled $131,000. This fund was then
used to provide financial assistance to make three townhomes in the Lake Minnetonka
Woods development (just east of the Navarre fire station) affordable to first-time
homebuyers. The portion of the $32,000 used was $23,600. A refund to MHFA of the
remaining $8,400 was processed in April 2004 to make it available for other affardable
housing proj ects.
DeferraUForgiveness of Development Fees During 2001 the City deferred
approximately $160,000 of Park Dedication Fees and approximately $41,000 of sewer
and water connection fees to assist with the development of the Orono Woods Senior
Housing project on Highway 12 at Brown Road North. This is the only instance of such
a deferral that I am able to identify. See the excerpt from PUD-2B Agreement below. It
should also be noted that the Development Agreement between the Orono HRA and
Orono Woods Senior Housing LLC provides that the City will reimburse itself for these
deferred fees from the tax increment at the end of the 20-year TIF term.
Note: In 2003 the City agreed to grant a rebate of Park Dedication fees for the costs of
construction (but not the land cost or easement cost) of the public trail along Willow
Drive and through the commercial outlots within the Stonebay development, but not
including sidewalks along Kelley Parkway or within the residential development. There
may be other instances where the City has credited a portion of the Park Fees for
developer construction of public trails. I do not consider these rebates as a development
subsidy.
Development Subsidy History
April 19,2010
Page 3
Tax Increment Financing Housing Tax Increment District 1-1 was created during
2001 to provide assistance for the Orono Woods Senior Housing development. The
development receives 90% of the increment on a pay-as-you-go basis for twenty years.
This has resulted in a tax increment return to the developer averaging approximately
$43,000 per year to date. Twelve units (20%) of this 62-unit project were originally
reserved for seniors ages 62 and older with incomes less than 50% of the median
household income; the minimum age was lowered to 55 in 2006 by action of the Orono
HRA at the request of Orono Senior Housing LLC.
Additionally, the City is owner of the land on which this building is constructed, and the
100-year lease to the developer ensures the continued use of this building for senior
housing past the expiration of the 20-year TIF financing program. The following excerpt
from the PUD-2B Development Agreement documents the basis for and conditions of
City ownership of the land:
"15. City Intent and Conditions for Senior Housin� Building. It is the intent of the City
of Orono that the Senior Housing Building be used for the purpose of senior rental
housing for persons age 62 and older for the longest practicable period of time, with
rental priority given to area residents. In order to achieve this intent, the Developer
agrees to the following conditions which are hereby established as part of this PUD
Agreement:
(a) In order to maximize the length of time that the City can exert control over the
use of the Senior Housing for its intended purpose, the City intends to purchase
Lot 2, Block 1, Orono Woods Addition from the Developer prior to the
commencement of construction for the sum of$1.00 (one dollar) and other good
and valuable considerations. The City will then lease said Lot 2 to the
Developer/Building Owner for a period of ninety-nine (99) years, at an annual
rent of$1.00. The lease shall include the following general terms:
l) The lease shall be written to prohibit rental to other than seniors during
the term of the lease.
2) At the end of the 99-year lease term, the City will sell Lot 2 back to the
Developer/Owner for the sum of$1.00.
(b) During the 99 year term of the lease,the building shall be owned and operated by
a non-profit corporation.
(c) During the term of the TIF funding as described in this document, the Developer
shall limit the rental price of 20% of the units per the TIF Agreement, and all 62
units shall be used only for housing of seniors age 62 and older, with rental
preference given to Orono residents, per the terms and conditions of the "Senior
Housing Restriction" and the "Orono Preference Requirement" as stated within
that certain document entitled "Development Agreement Relating to Orono
Development Subsidy History
April 19,2010
Page 4
Woods Apartments (Including Tax Increment Financing District No. 1-1)
Between City of Orono, Orono Housing and Redevelopment Authority and
Orono Senior Housing, LLC' (hereinafter the "Development Agreement").
(d) The City has agreed to defer Sewer and Water Connection Fees in the amount of
$40,838 and Park Dedication Fees in the amount of $161,200 that would
otherwise be due at the time of development of the Senior Housing. Such fees
(hereinafter "deferred improvement costs") shall be payable only in the event that
the Developer violates the "Senior Housing Restriction" as set forth in the
"Development Agreement". In that event such fees shall be immediately due
and payable together with interest on the deferred amounts computed at the rate
of 7% per annum from the date of said "Development Agreement". If there is no
incurred default under section 3.2 of the "Development Agreement" on the date
specified in said Agreement,the fees are forgiven and the City shall look
solely to tax increment from the TIF District for the reimbursement of such fees.
Summary
Other than the use of funding from outside sources such as CDBG, MHFA, and Met Council, the
only instance in which Orono has provided direct subsidization of residential development is for
the Orono Woods Senior Housing Project.
Indirect Subsidies
Orono has indirectly assisted in the reduction of costs of development or redevelopment that in
some cases might be considered as `subsidies' resulting in the ability to make development more
affordable. For instance, Orono regularly grants variances for lot standards on existing
substandard lots where housing stock improvements would otherwise be impossible without
combining two or more small lots. This allows homeowners to make significant improvements to
existing homes while maintaining affordability.
Another example is Stonebay. Although the resulting dwelling units do not meet Met Council's
criteria for affordability, in order to achieve the CMP-guided 6-units-per-acre density the City
Council allowed the relaxation of a number of development requirements including acceptance of
narrow roadways and relaxation of building setback standards.
During 2006-2007 the City approved two RPUD developments - Glendale Cove with lot sizes
averaging 14,000 s.f. where the City's minimum lot size had previously been 1/2 acre; and Orono
Villas, in which side setback standards were reduced from 10' to 5' and lot sizes reduced to below
14,000 s.f. allow for more efficient use of available land. Neither of these developments resulted in
housing that would be considered as meeting affordability criteria.
City Subsidization of Residential Development- Orono Woods Senior Housing (as comparecl to CommonBond request)
Developmei7t Cost Orono Woods- 62 Units Senior Re�ztal Apts. Commo�zBond- 42 Units Re�ztal Townitomes
Ternzs End Cost to Terms Eiid Cost to
Ci Cit
Land cost City Purchase of land fi�om $1.00 Proposed purchase of City land for $1 per $470,000
developer for $1, then lease it back submitted proforma; land has appraised value
to developer for 99 years for$1; use of$470,000
restrictions give City control over
site use to guara��tee rental to sei�iors
only.
TIF 20-Year"I�ax Increment Financing- Orig. est. was Not requested
90% of tax incre►nent returned to $1.8 million;
developer; approximately
$43,000/yr returned in recent years; Current est. is
annual amount dependent on �900,000 over
property valuation, tax class, etc. 20 years
Park Fees $161,200 deferred for 20-year TIF $0 assuming Est 42 units at$3,250/unit= $136,500 to be $0
period, at end of which City reimbursement paid by developer
reimburses itself from future taxes occurs
Sewer& Water Connection $40,838 deferred for 20-year TIF $0 assuming (S&W Connection Charges are payable to City $0
Charges period, at end of which City rein�bursement of Long Lake - not a direct impact on Orono)
reimburses itself from future taxes occurs
Storm Water& Drainage $0 (SW&DT Fee was not in ---- Est. 5.1 acres at$7,000 per acre= $35,700 to $0
Trunk Fee existence at time of development) be paid by developer
Total Cost to City $900,000 $470,000
CMP Part 3C. Housin�Plan
HOUSING ACTION PLAN
Orono's Housing Action Plan is a set of implementation policies designed to
achieve the above stated Housing Goals and Planning Policies.
As has been indicated, the dominant land use in the City of Orono is primarily
that of single-family residential homes. There is very limited industrial-
commercial development or opportunities for employment and shopping within
the City. Orono residents have always relied on the historic town centers in
adjacent communities for shopping as well as employment. The general lack of
commercial and industrial development and the limited availability of city
services such as municipal sewer, water and mass transit will limit the
opportunities for, and make it difficult, if possible at all, to provide opportunities
for the range of housing types required to meet the affordability and lifecycle
goals in many areas of Orono. However, several areas in Orono have been
identified which can provide an adequate level of public services to support the
development of new lifecycle housing opportunities.
A top priority in Orono must be improving the housing conditions of persons
who are presently inadequately housed and eliminating substandard housing.
There are deteriorated and dilapidated housing units located throughout the City.
Most of Orono's urban dwellings have been upgraded from seasonal cabins
through either private or public rehabilitation programs. Others remain in need of
attention. Thus, while pursuing where possible the construction of new life-
cycle and affordable housing units in the City, Orono's Housing Action Plan is
aimed principally at improving the condition of Orono's older homes, both urban
and rural, and improving the housing conditions of Orono's many low, moderate
and fixed income residents.
1. Orono will cooperate with neighboring cities to fulfill area-wide
housing needs. Most apparent is the need of many senior Orono
residents who desire to live in the immediate area, but who cannot find
available senior housing. Orono will actively participate with nearby
municipalities to facilitate the provision of senior housing at locations
that are near to home yet also convenient to necessary shopping,
transportation and medical facilities.
2. Orono will participate in housing rehabilitation subsidy programs.
Many Orono residents, both urban and rural, are occupying older housing
that has code-related structural, safety ar health hazards, substandard
living conditions or energy inefficiencies. They would like to improve
their housing condition and their neighborhood's appearance, but are
unable to because of insufficient income. In many cases, older couples
are forced to choose between heat or food or leaving their place of long
residence. Orono will continue to actively participate in Community
City of Orono Community Management Plan 2008-2030 Page 3G29
CMP Part 3C. Housin�Plan
Development Block Grant and Minnesota Housing Finance Assistance
programs designed to help these citizens meet their very immediate
housing needs.
3. Orono will encourage developers to provide a variety of housing
types and cost ranges. Whenever a multiple family or clustered housing
development is proposed, Orono will actively encourage setting aside a
reasonable number of units for large families and/or for low and
moderate income families. Orono will participate and assist developers in
applications for loan guarantees or other suitable forms of housing
subsidy aids which may be available. Orono will also consider proposals
for lifecycle housing options for sites which have not been guided for
such use, but where such use may be appropriate if developed in a
manner that is sensitive to the surrounding land uses and has the
necessary services available. Such areas may include property that is
currently guided or zoned for more intense uses such as commercial or
industrial, or may include sites adjacent to existing higher intensity uses.
4. Housing construction will be subject to uniform state building code
requirements but will not be burdened with unnecessary zoning
requirements. Orono does not intend to require arbitrary minimum
dwelling sizes or minimum amenity installations as these artificial
standards only drive up the cost of housing while limiting the buyer's
freedom of choice. Zoning standards for lot area and lot density will be
based strictly upon environmental concerns and public facilities
availability. Zoning performance standards will be based upon minimum
health and safety standards such as fire protection and open space
availability. State Building Code performance standards will be enforced
to ensure structurally sound, weather resistant buildings providing
adequate health and safety protection for the future occupant and for the
general public's welfare.
5. Orono will encourage community pride. Private initiative has always
been a characteristic of Orono residents. Programs will be pursued to
encourage continuing maintenance and upkeep of all properties and to
promote the privately financed rehabilitation of older and under-used
properties.
6. Orono will promote energy conservation methods and procedures.
The Building Inspection Department will actively keep abreast of all new
systems and products and will assist all homeowners in auditing and
improving the energy efficiency of their homes. Orono will actively
pursue and advertise all available programs for energy conservation
funding.
City of Orono Community Management Plan 2008-2030 Page 3C-30
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City of Orono �, ��r n � ,:: , � � �� s
27�0 I<elley Parl<way
Crystai Bay, MN 55323 ��.-�H [irli�>,�;,i>u�sle�:art:i 41�
�.� I'aGal, M;�; 551t'? t9i)i?
Apr11 16,2010 r-t;1 z��i 1�7`il� F°l��z„�t�
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Dear Mayor, Council Members and City Stafif, .�,�,���, ;.�„�,n,; �� .;na �
�
ConunonBond Comnlunities(Com�no�lBond) has been worlcing with the City of Ocono to develop much needed quality
affordable housing for residents of Orono and acijaeen�municipalities. CommonBoud, in partnership witl� i�s service
partner-I�i�erfaitli Outr�each Cori�muriiYy Partnecs- is prop�sing the develc�pment of a 42 unit townhome commurtity on the
City's Willow Drive parcel.
The development�vill�rovide t4vo,three, anc�four bedraom townhomes for residents eai��ifig between�Q%and 60%of
the area media�i inco�ne. The proposecl havsing cammur�ity will support the area's need for workfarce l�ousir�g�ld��ill
provide an oppo�-tunit�,�for fainilies to li�ze in qtzaliry affordable housing in the atnenity-►•ich City of Oro�1o,
I CoininoilBozid is requestin�that the cost af'the City laud and fees be no more than$580,000 to ensure tl�e affo�•dability of
the proposed townhome developinent. According to Soi•ei� Mattick, tl�e City's land parcel�ras appraised at$470,OQ0.
The proposed City fees are estimated to be $553,250, broke��� dawn as follows:
a. Rezoning Fces: $5,250
b. Staff Review Costs: $30,000
c. Park Dedication: $136,500($3,250/unit)
d. Orono Stormwater and Drai��a�c: $35,000(�7,000/acre)
e. I.,ong Lake Se�ver Coni�ection: ;h144,900($3,450/unit)
f. Long I.,ake Water Connection: $1 13,400 ($2,700/unit)
g. MCE;S SAC: $88,200($2,]00/unit)
Coimnor�Bond would leave the allocation ofthe�costs between land and City fees to the discretion of tl�e City Cou�lcil and
Staf'('.
Co�mi�oi�iBond res�ectfully submits tl�at tl�ere will be numerous henefits to the City of Orono fi-om this development,
� including:
1. Tliis develo}�me�if will �rovide an exeell�nt quali�y housing choice foi•l�eo�le employed in aaid iiear tl�e City of
Orono.
2. The site is currently vacant,generating no taa revenue. This praposed project�vill generate an cstimated $40,000
of annual ta�►•evenue.
3. The proposed$9,500,000 development tiuill generate both currenY const�ltctio�i and long-tcrm employinent
oppoi-lunities.
4. Residents will be sp�nding nloncy at local Ot�o�no busulesses and contributing to economic growth in the
comulun ity.
5. This comii��u�ity will assist the Cily ul meeting the N1et Council's affordability and density�oals.
We loolc foitivard to continuing to��ork with the Ci�y Council and staf�f on a resolutioi�regarding City fees and land cost.
Please let me lcnow if you need any further i�tformation.
Sincerely,
�`''• 1
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/\�_..�ll_�-�. � �� Y_.��_
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�`JAmanda Novak
Se�lior Project Manager
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GABLER HOUSING SOLUTIONS CORPORATION
"Creating Better Housing Solutions for Better Communities Since 1995"
1904 SELBY AVENUE
SAINT PAUL,Mi1vlvEso'rA 55104-5944
TELEPHONE: 651/917-2200 EMA�L:jim@gablerhousing.com
Apri121, 2009
Ms.Jessica Loftus
Ciry Administrator
City Of Orono
2750 Kelley Parkway
Orono, Minnesota 55356
Re: CommonBond's "Willow Commons" Affordable Housing; Financial Review of
Dear Ms. Loftus:
I have reviewed the materials you sent on "Willow Commons" and, along with Mr.
Steve Stanley, a CPA at Mahoney, Ulbrich, Christiansen, Russ, find it overall a very
feasible and reasonably portrayed affordable housing project. It is further one which
should compete very well with other projects for funds when submitted to the various
funding agencies such as Minnesota Housing (MHFA), Hennepin County and
others. However, before I detail my suggestions, some other comments are in order.
The primary subsidy mechanism for this project is intended to be the Federal Low-
Income Housing Tax Credits (FLIHTC's). Nationally, FLIHTC's are usually the
central method to get private capital into the production of affordable housing.
Clearly, housing efforts that are intended to have limited rents (and thus cash flows,
too) need some other way for for-profit investors to make money and thus Congress
came up with this tax credit as a way to do it. The credits are basically allocated
nationally on a population basis through the State Housing Finance Agencies.
Since you need a for-profit entity to sell the credits usually a Limited Partnership is
ultimately formed and, as is normally the case, I believe CommonBond or some
entity controlled by them will be the Managing General Partner (GP) and the tax
credit investor will be the Limited Partner (LP). Because of the tax credits and other
tax benefits, i.e. depreciation, that a project like this will throw off that the GP can't
normally use, a GP will usually only own .001 percent of the Limited Partnership and
the LP will own the rest. However, the GP will stay in control of the project
operations and is the entity that everyone will look to for IRS compliance and
financial guarantees, etc. —no small items —for the life of the Limited Partnership.
1
When a developer does one of these housing projects, it must commit to an initia115-
year period of affordability and compliance and then additionally commit to another
15-year period, also. This second period is referred to as an "Extended Use" period
and legal documents are signed regarding these two periods binding the developer to
them. Thus, because of these extended �nancial and operating guarantees that must
be made to entice both lenders and an investor to put funds in and to also entice the
developer to develop these projects, the IRS allows for roughly a maximum 15%
Developer Fee. This fee, then, is usually paid out over a two to three year timeframe
based on certain threshold events such as the initial construction closing, the
completion of the construction, the completion of the rent-up to and certification of
eligible tenants and, finally, to the achievement of certain cash flows in the project's
operation. So, first of all, the developer does not get the whole fee right away and,
secondly, that fee doesn't only represent the developer's "profit", but their overhead
(work to get the project to the closing) and up to 30 year's of financial and operating
guarantees. The other good news with a developer like CommonBond, as a long-
term and successful non-profit developer of affordable housing, is that you know
some of the developer fee is also going to further their mission and nothing else.
Detailed observations and suggestions:
1. The project numbers, overall, look good and their request to sell the land to
them for$1.00 fits with the proforma. Based on my experience, the amounts
estimated for other subsidies are already at the high end, and adding up to
several hundred thousand dollars in additional costs will de�nitely damage
the odds of the project getting funded and done. Additionally, this assistance
would help the project rate higher with those funding agencies that
CommonBond will be submitting funding applications to, as will any other
contributions from the City of Orono such as possibly waiving any City fees,
etc.
One other option on the land disposition, besides the long-term lease that's
been discussed, is that you could appraise the land and then deed it to
CommonBond with a mortgage for that appraised value at, say, 0% or 1%
accruing for 30 years. I'd be glad to discuss these options with you in more
detail if you'd like.
2. CommonBond's suggested Developer Fee is only 11.5%, so they've already
lowered it from the maximum 15% they could get by over 20%.
3. The project's mix of units will also help raise this project up in its competition
with others for funds.
4. The reserves appear adequate.
5. The tax credit computation of what equity can be raised is predicated on
Minnesota Housing declaring this project in a "Difficult Development Area",
since the project is not in a distressed or what is normally referred to as a
"Qualified Census Tract" by the IRS. Minnesota Housing has some flexibility
2
in this determination, however if they wouldn't so declare this project as such
it would reduce the amount of tax credit equity that could be raised by some
30% and that would put a significant "hole" in the financial feasibility of it.
6. Other underwriting and financial forecast items that need some attention and
which I would be glad to work with you and CommonBond on further if you'd
like:
a. CommonBond's Operating Expense Amount per room is a bit light
from what is required by Minnesota Housing. Minnesota Housing
requires a minimum amount per room of$982 for Metro Area
Townhouses and CommonBond's Application reflects only $959 per
room. Once this is raised it will diminish the amount of the estimated
mortgage by roughly$100,000 and thus increase the other subsidies
needed a bit. (See attached MHFA Guidelines page.)
b. The construction interest amount seems quite high for normal
purposes and it might be at that level to anticipate funding other
interest, also, for a "bridge loan" for one or more of the subsidies,
including the tax credit equity, however that isn't clear from the
proforma.
c. I have some issues with the "basis" estimates CommonBond has used
for some of the development cost categories for tax credits. Some are a
bit high, but however one that might be a bit low is the City Fees one,
i.e. SAC,WAC, Park, of$580,000; there CommonBond only took
$500,000 into basis and IRS Regulations now provide that city
construction and impact fees are includable in eligible basis. It would
be helpful to know what the $80,000 represents that CommonBond left
out to see if that $80,000 might not now be includable in eligible basis.
Those are the major and some minor points, in summary, about my financial review
of this project. I would lastly point out that CommonBond, in my opinion, is likely
one of the top five affordable housing developers in Minnesota and the Upper
Midwest, so the City of Orono is fortunate to be entertaining a development request
in that respect, I think.
If you have any further questions, please e-mail or call me and I'd be glad to come to
any future meetings you think necessary to discuss this proposal with you, the City
Council and/or its Committees.
Sincerely,
/s/
James F. Gabler
President
3
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1 BR- 30%AMI 3 � 1,053
2 BR-30%AMI 2 $ 411
2 BR-50%AMI 23 $ 750
2 BR-60%AMI 5 $ 919
3 BR-50%AMI 7 $ 856
3 BR-60%AMI 2 $ 464
Total 42 $ 392,952
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i � s ; � ��� ," � a � � : �
,e s
�Rentallncome $ 392,952 $ 9,356
Other Income $ 4,500 $ 107
Vacancy $ (27,507) $ (655)
Total Revenue $ 369,945 $ 8,808
Administration/Mana eme $ 68,724 $ 1,636
Maintenance/0 eratin $ 64,500 $ 1,536
Utilities $ 54,000 $ 1,286
Insurance $ 15,000 $ 357
Pro erty Taxes $ 45,000 $ 1,071
Reserves $ 20,493 $ 488
Services $ 10,000 $ 238
Total Expenses $ 277,717 $ 6,612
°t,� ,.-�:, �,,s
�;��F
�t - - r • ' • • � 4 i
i � •
� � � � Q a� ! ������ � u ■„11���
� � , �. ��
First Mortgage $ 941,209 $ 22,410
Tax Credit Syndication $ 6,310,161 $ 150,242 ital Credits: � 980.600
Hennepin County AHIF/HOP $ 500,000 $ 11,905 ;redit Price: $ 0.64
MHFA Super RFP $ 1,036,825 $ 24,686
� i ' ����,`� ` �€��� $ 221,743
��u, � ���� �:�' � �-s�
Ciry Land $ 1
Miller Land $ 215,000 $ 5,119
Construction $ 6,615,000 $ 157,500
Soft Costs $ 731,000 $' 17,405
Financing Costs $ 547,200 $ 13,029
Developer Fee $ 1,000,000 $ 23,810
Reserves $ 204,994 $ 4,881
1 � 1 ` ' $ 221,743
V.04-20-09 v.3.0
Electronic Application
Minnesota Multifamily Rental Housing Common Application C �
Multifamily Underwriting Division
400 Sibley Street,Sui[e 300 E-mail the completed Multifamily Rental Housing Common MHI�'A I;SE O\Ll'
Sc Paul,MN 55101-1998 Application Form to Minnesota Housing at Date: �
mhfa.app@state.mn.us -•
App.No.:
MULTIFAMILY APPLICATION FORM Dev.No.:
Submission Due Dale 6/16/2009
HTC No.:
This forni is used for multifamily tirst mortgage loan programs,deferred loans and housing tax credits. I�IDO:
Click where apDropnate:
OO Application O Initial Closing ARCH:
HMO:
O Selection O Pre-0ccupancy Round:
O Commitment O Final Closing
I.PROPOSAL RE UEST
A. llEVELOP!1lENT LOCATION:
❑Check if this project will have multiple buildings.
Development Name/Program Name: Willow Commons
Street Address: 340 Willow Drive North I,ongitude: -93.58392
City: Orono Zip: 55356 Counry: Hemiepin [aqtude: 44.98429
B.APPLICATION RE UEST:
Amount of funds requested at this time: Housing Tax Credits Only
Complete Sections Date
Super RFP(Deferted L.oans) $],049,187 I-VIII O NA OO Initial Application/Reservation
"LMIR First Mortgage $1,048,1 19 I-VIII O Carryover
"Housing Tax Credits $1,000,000 I-IX O 8609
Rent Assistance 1-VI❑ ❑Tax Exempt eond Credits
Operating Subsidy I-VII Type of Credits MHFA
MN DEED Allocator MHFA
GO F3onds
Have you also submitted a single family application this round7
*Requires submission of separate application fees. See instruction page. Check(s)enclosed in the amount of:
Have you previously apDlied for and/or received any of the following funds for this development?
O Yes OO No Housing Tax Credits only-check one.
If yes,complete below OO first request
Year Amount Awarded Loan No.
MHFA Single Family Homes RFP O supplemenWl request
MHFA Multifamilv RFP(Deferred)
O repeat request-not selected
MHFA First Mortgage
Proiect Based Rental Assistance
Housino Tax Credits Allocator
C. HOUSLNG AVD POPULATIOJI TYPE
s Cnia in 8 Gnits in p K�:p Units �/LTH[]IutS
Decelo menl '�RFP Units
P Development
Type of Housing and#of units: (Fill in all tl�at apply) Population Targeting: (Fill in all that apply):
Emergency Shelter Tar e[ed General Occu ancy 42 42
Transitional(u to 24 months) Families with Children 12 12 LTH Family
Penn.Rental with Support Services Single HH widi Children 5 � 4
Service Enriched � Indv/Families of Color 5 5
Permanent Rental 42 42 Youth LTH Youth
liousin�Tax Credits 42 42 Single Men
Rental Assistance Single Women
Metro HRA Pro�ect Based 4 4 Near Homeless LTFI Sin le
SL Paul PHA Pro'ect Based Homeless
Minneapolis PHA Project Based Lon Temi Homeless 4 4
IIOPWA(choose t e below) Elderly
Disabled Mental/co�iitive
MHFA Rental Assistancc(choose type below) Chemical dependency
People/families with HIV/AIDS
MHFA Operating Subsidies(choose type below) Physical disability
Developmental disability
Other(specify below) Traumatic Brain Injured
Other(specify below)
MHFAApplication Form RFP/HTC1 1 4/22/2010 428 PM
v.3.0
V.04-20-09
il.DEVELOPMENT TEAM
A. DEVELOPER INFORI�IATION/APPLICANT INFORMATION:
Name(s): CommonBond Communitics
Address: 328 Kellogg Blvd.West
City: Saint Paul State: MN
'Lip Code: 55101
Contact Person: Amanda Novak E-mail: novak(a�commonbond.ora
Telephone: 6�1-290-6213 Fax: 651-291-1003 CcllPhonc: 651-210-3794
The developer must be a legal entity(e.g.partnership,corporation etc.)or individual.
O Developer is current owner and will reWin ownership.
OO Developer is the Project Developer and will be part of the fnal ownership entity
O Developer is the project Developer and will not be part of the final ownership entity. (BrieFly describe the planned praess and timing.)
O Applicant administering program funds.
B. OWNERSHIP/PARTNERSHIP INFORMATION:
HTC Note:-The MHFA reserves[ax credits to the parMership and General ParMers or to the limited liability company.
Reservations are not transferable. Airy change in tlie General Partier status requires MHFA approval.
Name(s): Willow Commons LP Fed.Tax ID No.: TBD (not Social Security number)
Address: 328 Kello�g Bh�d.West State: MN
City: Saint Paul Zip Code: 55101
Contact Person: Ellen Higgins
Telephone: 651-291-1750 Fax: 651-291-1003 E-mail: hiaains(o�commonbond.om
Legal Sta[us of Ow��ership Entiry Limited Partnership Specify if'Other'selected
Notes: MHFA First Mortgage program requires ownership by a single asset entity.
* POHP-requires ownership by public entity
* For HTC Applications refer to Section N.0 of the HTC Procedural Manual
for non-profit qualifications.Requires IRS letters of 501(c)(3)or 501(c)(4)status.
Name of General Partner(s)/Contact Person Cele hone Non-Profit %Ownershi
CommonBond Investment Co oratiou/Ellen Hi ins 651-291-U50 Yes 0.0010%
0.0010%�
C. DEVELOPMENT TEAN1:
Name Contact Phone Fax E-mail
Processing AgenC
Attorney: Faegre and Benson Angela Chrisry 612.766.6833 612.251.7002 achristy@faegre.com
Architect: UrbanWorks Architecture,LLC Tod Elkins 612.4553104 612.4553199 telkins@urbanworks.com
General Contraetor. TBD
Service Provider: Interfaith Outreach Community L.aDonna Hoy 952473-2436 lhoy@iocp.com
Non Profit I,essee:
Management Co.: CommonBond Housing Kurt Keena 651-291-1750 651-291-1003 keena@commonbond.org
LDces an identity of interest exist between ownership Entity and General Contractor?
_ O Yes OO No
r Dces the above entity currently manage the property?
IO Yes Length of I ime: O No OO N/A
�Will the building have an on-site caretaker?
OO Yes O Na
MHFA Application Form RFP/HTC1 2 4/22/2010 428 PM
V.04-20-09 v.3.0
III.DEVELOPMENT INFORMATION
A. ACTIVITY TYPE:
T�'pe of Activit�� (Check all that apply):
❑Acquisition ❑Scattered Site Development
�New Construction ❑Refinance
❑Rehabilitation ❑Conversion/adaptive re-use
❑Demolition ❑Historic Preservation/Renovation
❑SWbilization ❑Preservation of Federally Assisted Housing
❑Ren�l Subsidy (please specify type:(i.e.;Sec 8))
❑Other(Specify)
B. BUILDING INFORMATION:
lbtal Site Area Sq I�t: 220,414 Acres 5.06 Density: 8.30 (uni[s/acre)
Type of Construction: Wood Frame
rChoose one
Year Built New Construetion If existing: I O Occupied O Vacant O NA �
"1'ypes of Structures Type of Number of Number of Number of Gross Const Costs %of TDC
Building Buiidings Stories Dwelling Sq.Feet Costs per Sq.Ft.
(1). Units(DU) (2).
Housin S ace:
New Construction Townhouse 5 3 42 $6,300,000 - 100%
Rehabilitation _ p�
Non-Housin S ace:
Covered Parking - 0%
Administration/Pro ammatic - 0%
Commercial/Other(3) _ p�
TOTALS 5 42 0 $6,300,000 -
(1). Total number ofresidential structures.
(2). Count Basements and Balconies at 1/2 sq.footage.
(3).08ier includes:common space,commercial,congregate dining,day care,etc.
Number of Parking Spaces: Surface Monthly fee
Cocered Monthly fee
TOTAL 0
C. PROPER'I'Y DESCRIPTION:
Site Control:
r Dces Applicant currently mntrol the Droperty/building? Type of Existing Loan:
� O Yes OO No ❑Mortgage
Type of Site Conhol: Letter of Intent
❑ContraR for Deed
Number of buildings currently under control: ❑Other
If Ownership:
Purchase Price of the Property/Building: Date of Purchase: O None
If Purchase is Proposed:
Date of Purchase/Option Agreement: Expiration Date of Purchase/Option Agreement:
If Leased:
Amount of Lease: Term of Lease:
If Tribal land,have approvals been received?
Developments Involving Acquisition(Check all applicable):
❑Buildings acquired or will be acquired from unrelated party
❑Buildings acquired or will be acquired from related party
Existin Subsidies:
*Are any of *Are the *Is the contract for federal *Is the federal assistance at risk of
these funds assisted units at assistance at risk of expiring in 2 loss due ro deterioration of the
Type of Subsidy Type #of Units subject to long risk of years or less,or is the building at capacity of the current
temi use conversion to risk due to physical deterioration? ownership/management entity'?
restrictions? market rents'?
0
MHFA Application Form RFP/HTC1 3 4/22/2010 4:28 PM
V.04-20-09 v.3.0
Electronic Ap�lication
Existin Indebtedness on the Pro erty/Buildin :
Name and Address of Original Loan Interest Term Unpaid Date of Number of Restricted to Loan to be
Lender(s)of Existing L,oans,Subsidies Amount Rate Balance Maturity Restricted Special Paid Off in this
and Grants(secured aud unscecured) Units Populations? Transaction?
TOTAL $0 $0
Unusual Site Features: (Check all that apply):
Floodplain High-tension wires Fill
Steep ravines or grades Rock fomiations Creek,lake,etc.
Near airport Voor drainage High water table
Within 300 feet of railroad Unstable soil IndustriaVenvironmental hazard
Zoning:
rIs the property in compliance with[urrent zoning requirementr?
LO Yes O No
If No,what is die proposed rezonino classification and umeline'? RPUD,rezoning anticipated for May 2010
r Dces the site require annexation adions?
� O Yes OO No
� Duration of the process:
Present Zoning/Classification: Rl-B Max.units/acre: 2.00
r Are there variances,conditional use permits or special use permits required? O Yes O
� No
r ls property in historic district or designated a historic building?
IO Yes OO No
Has the city approved the proposed Parking Plan?
O Yes O No
What is die per unit parking requirement? Garage/unit Surface per uuit
Utility Informa[ion:
Is or will the development be connected to the following:
Municipal Water 6as
OO Yes O No OO Yes O No
Providec City of Orono Provider. Excel
uniapa wer nc
OO Yes O No OO Yes O No
Provider. Ciry oflonglake Provider: Excel
�
O Yes(If yes,state nature,amount and plan for construction) OO No
Planning and DevelopmenL•
Is the proposal consistent/in compliance with one or more of the following? (Check all that apply)
❑Neighborhood or Community Revitalization Plan ❑' Planned Unit Development(PUD) ❑Continuum of Care ❑RHAG Guidelines ❑Interagency Stabilization Group
❑Tax Increment Financing(TIF) �Comprehensive Plan ❑Other(specify):
Jurisdictions/Political Districts:
Census Tract Number 272.01
This project is located in a ❑Qualified Census TraR �Difficult Development Area
State Senate District 33 State House District 33B RHAG Region MHIG
Congressional District 3rd Economic Development Region I 1
MHFA Application Form RFP/HTC1 4 4/22/2010 4:28 PM
V.04-20-09 v.3.0
IV.ESTIMATED ANNUAL INCOME AND EXPENSES
A. HOUSING INCOME
RFP
Unit Proposcd 'Vtondily Gross Total Rooms(#
Type Approx.Size Total Annual Estimated Cost of�
Monthly Rent(Proposed Ren[al Rooms of Uniks x Ren[Limit(% Income Limit(%
(OBR, it of DU (Net Rentable Contract Rent Monthly Utilities Unit T e*
1BR, Sq.Ft.)of Units Contract Rent �#x rent x 12) Paid by Occupant Contract Rent+ Per Unit*•* Rooms Per of AMI) oYAMI) �
2BR, Per Unit Utilities) Unit)
etc.)
2BR 2 $411 $9,864 $I10 $521 4.5 9 30% 50% HTC
2E3R 17 $750 $153,000 $I10 $860 4.5 76.5 50% 60% H'IC
$0 $0 0.0 0
$0 $0 0.0 0
3BR 17 $856 $174,624 $138 $994 6.0 102 50% 60% HTC
3BR 2 $464 $11,136 $138 $602 6.0 12 30% 50% HTC
3BR $0 $0 6.0 0
$0 $0 0.0 0
4BR 4 $930 $44,640 $]64 $1,094 7.0 28 50% 60% HTC
$0 $0 0.0 0
$0 $0 0.0 0
$0 $0 0.0 0
$0 $0 0.0 0
$0 $0 0.0 0
$0 $0 0.0 0
$0 $0 0.0 0
UNITS: 42 TOTAL GRP: $393,264 TOTAL ROOMS: 227.5 *** E�7/SRO.=2.5 rooms
1 BR=3.5 rooms
*[ndicate if: HTC,HOME,Market Rate(MR),Employee Occupied(EO),Owner Occupied(00), z eR=a_s rooms
Project Based Assistance(PBA),Hollman(MHOP),Federally Assisted(FA) 3 BR=S.o rooms
4 BR=7A rooms
Utilities to be paid by Occupant(Exduding Telephone): 5 BR=8.5 rooms
❑Water&Sewer ❑� Heat-T Bed=2.0 rooms
YPe�
❑Hot Water
� Air Conditioning
�Household Electric ❑ Other-Specify:
Source of Utility Allowance Cakulation(HTC code IRS Notice 94-60,Issued 6/96):
OO Public Housing Authority Metro HRA O Other(Speci(y)
O Utiliry Company Ef�cctive Date of Sourcc of Inforniation: 2/1/2009
1. GROSS POTENTIAL RENT:
a. Rental Housing Potential $393,264
b. Parking/Garage Rent Potential
#of surface parking 0 Monthly fee $0
#of covered parking 0 Monthly fee $0 $0
c. Commercial Rent Potential(specify)
d. Miscellaneous Rent Potential(specify)
e. Gross Potential Rent(Total Lines la thru ld) S393,264
2. REN1'AL LOSS:
a.Rental Housing Vacancy
VacancyFactor 7.0% xLinela= $27,528
b. Parking/Garage Vacancy
Vacancy Factor x Line Ib= $0
a Commercial Vacancy
Vacancy Factor x Line Ic= $0
d. Miscellaneous Unrealized Income
e. Employee Rent Credits
f. Out of Service Units
g. Rental Concession Adjustments
h. Bad Debt
i.Total Rental Loss (Total Lines 2a thru 2h) $Z7,5Zg
3. NET RENTAL COLLECTIONS: (Line lc.minus 2i.) $365,736
MHFA Application Form RFP/HTC1 5 4/22/2010 428 PM
V.04-20-09 v.3.0
4. OTHER INCOME:
a. Tenant Fees
b. Other Income
Iaundry Equipment $/DU/Year $0
Odier(Specify): $4,500
c. Total Other Income (Total Lines 4a thru 4d) $4,500
NOTE:FOR HTC ONLY
If there is a separate charge f'or tenant facilities,offices,parking,garages,club house,swimming pool,
storage lockers,etc.,the associated costs are not includcd in cligiblc basis.
5. TOTAL REVENUE (Lines 3 plus 4e.) $370,236
B.ANNUAL OPERATING EXPENSES:
1. AD�IINISTRAT[VE EXPENSES
a. Ad�ertisingandMarketing a. $1,000
b. Management Fee(based on 100%occupancy)
$/UniUMonth Fee: $60.96
%of Total Revenue: 83°/ b. $3Q724
a Legal c. $�00
d. Auditing d. $3,500
e. Telephone e. $1,�00
£ On-Site Management Payroll f. $30,000
g. Other Administration g. $1,500
h. Total Administration(Total Lines la thru lg) $68,724
2. MAINTENANCE EXPENSES
a. Elevaror Maintenance/Contract a.
b. Externiinating b. $1,000
c. Rubbish Removal c. $3,000
d. Other Contract Services d. �2,000
e. Janitor Supplies e. $3,000
E Maintenance Supplies E $3,000
g. Grounds Maintenance g. $4,000
h. Snow Removal h. $3,000
i. Heat&A/C Repair Services i. $I,000
j. General Repair Services j. $5,000
k. PaindDecorating Materials k. $3,000
I. Maintenance&Jan.Payroll I. $20,000
m.Other Maintenance and Operating m. $1,500
n. Odier: n. 515,000
o. Total Maintenance (Total Lines 2a thru 2n) o. $64,500
3. UTILITIES
a. Electricity a. $22,000
b. Water&Sewer b. $20,000
c. Gas and Oil c. $18,000
d. Total Utilities (Total Lines 3a thru 3c) d. $60,000
3.5 UNIQUE OPERATING EXPENSES For Supportive Housing 3.5. $10,000
4. INSURA�CE 4. 515,000
5. TOTAL�IANAGEMENT AND OYEKATING EXPENSES
(Add Lines B.lh,B.2o,B.3d,B3.5 and B.4) �218,224
a.Total:v[gmt and Opera[ing F.apenses Per Unit Per:Vlo.(Line 13.5�Total n Lnits I'_) $433
b.Total Mgmt.and Operatin�Expeuses Per Room Annually (Line B.�/To[al#i Rooms) $959 M&O$/UnidYear=SS 19�.81
6. RESERVES AND ESCROWS
a. Rcal F,state Taxes- $Per Unit $1,071 X#Units- 545,000 ' LIRC PILOT
Current Assessed Market Value
Proposed Market Value after Rehab
Expected LIRC percentage
b. Replacement Reserve-$Per Room $99.00 X#Rooms- $22,523
c. Painting&Dec.Reserve-$/Room X#Rooms= $0 RR and PD Reserves=$22522.50
d. Miscellaneous Reserves-$Per Room X#Rooms= $0 RR and PD Reserves=$53625/Unit
e. Total Reserves&Escrows (Total Lines a thru d) $67,523
7. EFFECTIVE GROSS EXPENSES (Add lines B.5 and B.6e) $285,746
(Total Mgmt.and Operating Bxpenses plus Reserves and Escrows)
8. NET OPERATING INCOME(Line A.S,Total Revenue,minus Line B.7) $84,490
MHFAApplication Form RFP/HTC1 6 4/22/2010 428 PM
v.3.0
V.04-20-09
V.MAXIMUM SUPPORTABI,E MORTGAGE
A. Net Operating Income(Line N.B.8) - (If zero(SO)or minus,skip this section and go to Section VI.) $84,490
B. Debt Coverage Ratio 1.2000
C. Net Operating Income Available for Debt Service
(Net Operating Income divided by Debt Coverage Ratio $70,408
1.Temporary Income
2.Total Net Operating Income Available for Debt Service $7Q408
D. Anoual Debt Service for proposed Subordinated Debt,if any:
Other Amortized Subordinated DebC
L.ender Principal Rate Terni Amortization Annual Debt
Temi Service
MHFA LMIR TIF Loan
MHF.4 LMIR IRP Loan
Total Annual Subordinated Debt Service: V.D $0
G. Total Net Operating Income Available for Debt Service less Total Annual Subordina[ed Debt Service
(Line V.C.2 minus Line V.D) $7Q408
F. Estima[ed Maximum Mor[gage Based on Income Approach:
1. First Mortgage Terms Amortization:
Temi: 15.00 Years Rate: 5.75% Ycars: 30.00 MIP Rate: 0.250%
a) Debt Service Factor 0.070028743 Debt Service Factor with MIP 0.071946063
b) Plus Annual Fee - Type:
c) Total Debt Service Factor o.071946063
2. Maximum Mortgage �978,622
(Net Operadng Income(V.E)divided by Total Debt Service Factor(V.F.I.c)
3. Net Mortgage Loan(Maximum Mortgage divided by 1.04)
(Applies to MHFA lst Mortgage loans only) $940,983
4. Development Cost Escrow(DCE) $37,639
(Maximum Mortga e minus Net Mort a�e Loan)(Line V.F2 minus Line V.F3)
VI.DEVELOPMENT COST
Tax Credits Onlv
A. Acquisition or Retinance Existing Uebt Custs: Sub Towis rowl Cos�s 3o�i�Pv sxsis �o^,o Pv e�sis
l. Acquisition/Refinance
a)Land a. $215.000
b)Existing Structures b.
c)Demolition c.
Total Acquisition/Refinance $5,119 $/DU
2. Special Assessments �.
3. Other(specify:) 3.
4. Total(Lines 1 through 3) 4. $215,000
B. lf New Construction,complete Section#1 below. If Rehabilitation,complete Section#2 below:
*For HTC ONLY:IF a separate fee is charged for use of tl�ese facilities,the associated costs are not included in eligible basis.
For HTC Only:"+"Denotes Intemiediary Costs
l. New Construction
a) Residential $0.00 $/gross sq.ft.= a. $6,300,000 $6,300,000
b) Garages* $0.00 $/stall= b.
c) Accessory Structures* $0.00 $/gross sq.ft.= c.
d) On Site Work $0 $/DU= d.
e) Off Site Work $0 $/DU= e.
�Specify Other. f.
g)Specify Other: g,
h) Net Construction $I SQ000 $/DU= h. $6,300,000
(Total Lines B.l.a.thru B.l.e.)
i) General Requirements 0.00%%of Line B.l.h= i.
j) Builder's General Overhead j.
0.00%%of Line B.l.h=
k) Builder's Profit 0.00%%of Line B.l.h= k.
I) Gross Construction(Contract Amount)
(Total Lines l.h thru Lk) $150,000 $/DU= I. $6,300,000
m) Constructio»Contingency(Minimum 4%,subjec[to MHFA review) m. $315,000 $315,000
n) Total (Lines l.l plus l.m) n. $6,615,000
MHFA Application Form RFP/HTC1 7 4/22/2010 4:28 PM
V.04-20-09 v.3.0
Electronic Aablication
2. Rehabilitation: (if available attach a more detailed scope;otherwise,complete this section).
a)Site work(grading,paving,drainage,]andscape,utilities,etc.) a.
b)Exterior:(includes roof,siding and trim,windows and doors,etc.) b.
c) Garages* $0.00 $/garage= c.
d) Accessory Strucmres* $0.00 $/gross sq.ft.= d.
e)Interior. (includes cabinets,appliances,fixtures,and wall, e.
ceiling,and floor finishes,etc.)
�Mechanical Systems: (includes heating,air conditioning, f.
plumbing,and fixtures,etc.)
g)Electrical Systems: (includes service,wiring,and tix[ures) g.
h)Specify Other: h.
i)Specify Other: i.
j)Net Rehab(Total Line B.2.a thru B.2.i.) j. $0
k)General 0.00% ('%,of Line E3.2.j) k.
Requirements
1)Builder's General 0.00% (%of Line B.2.j) I.
Overhead
m)Builder's Profit 0.00% ('%of Line B.2.j) m.
n)Other- Specify: n.
o)Gross Rehabilitation(Contract Amount) (Total Lines 6.2.j thru B.2.n)
#DIV/0! $/DU= o. $0
p) Construction Contingency(Minimum 7%,subject to MHFA review) p. $0
q) Total Qines 2o plus 2p) q. $0
3. Environmental
a) Abatement Contract a. —�
b) Abatement Contingency(Agency determined) b.�
c) Total (Lines 3a plus 3b) c. $0
C. Soft Costs
1. Professional Fees&Other Soft Costs
a)ArchitecPs Fee-Design(75%of Total)+ a. $212,625 $212,625
b)Architect's Fee-Supervision(25%of Total)+ b. $70,875 $70,875
Total ArchitecPs Fee- $283,500
4.5'%of the total lines F3.1.1+B.2.o-C.I.e-C.Lf
c)Marketing+ c. $8,000
d)Surveys and Soil Borings d. $15,000 $5,000
e)Payment and Performance Bond Premium+(if not included in construction contract) e.
�Building Permit(s)+(if not included in construction contract) f.
g)Sewer-Water Access Charge g.
h)Appraisal Fee+ h. $6,000 $5,000
i)Energy Audit+ i.
j)Em�ironmental Assessment+ j. $1,200 $1,200
k)Cost Certification/Audit+ k. $30,000 $6,000
1)Marke[Study+ 1. $5,500 $5,500
m)Tax Gedit Fees+ m.
n)Compliance Fees+ n. $2,800
o)Furnishings and Equipment o. $50.000 $SQ000
p)Legal Fees+ p. $75,000 $45,000
(Syndication and pemianent financing fees are not allowed in basis.)
q)Relocation Costs+: 9�
rl)O[her Fees-Specify: Soft Cost Contingency rl. $40,000 $20,000
r2)Other Fees-Specify: City Fees(Park,SAC,WAC) r2. $580,000 $500,000
s) Total (Lioes l.a thru l.r) s. $1,097,000
2. Developer's Fee
a)Developer's Fee+ a. $1,00Q000 $1,000,000
1)Deferred Developer's Fee
2)Developer's Fee Available at Closing $1,OOQ000
b)Proeessing Aaent+ b.
c)Other Consultant Fees(included in Dev.Fees)+ �.
d)Od�er(Specify) d.
e)Total Developer's Fees I I.5% e. $1,000,000
%of Line VI.D-Line VI.C.2.e
3. Tax Gedit Syndication Fees
a)Organization Fees+ a. $10,000
b)Bridge Loan+ b.
c)Tax Opinion+ �,
d)Other Fees: d. $30,000
e) Total(Lines 3.a thru 3.d) e. $4Q000
MHFAApplication Form RFP/HTC1 8 4/22/2010 428 PM
v.3.0
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4. Financing Costs
a)Hazard and Liability Insurance a.
b)Construction Int.at+ I months b. $350,000 $100,000
c)Taxes during construction+ c.
d)Agency Inspection Fee(MHFA First Mortgage Only) d. $63,000
(1%of gross construction cost See VI.B.I.)+
e)Other Inspection Fee+ e.
t)MHFA Origination Fee(2%of lst$Sm.then 1%.$25K min.fee.)+ f. $25,000
g)Odier Origination Fee(Pemianent financing fcc not eligible for basis.)+ g. $I5,000 $I5,000
h)Mortgage Insurance Premium+ h.
i)Revenue Bond Premium+ i.
j)Tide and Recording+ j. $18,000 $16,000
k)MHFA DCE(Line V.F.4) k. $37.639
I) Other.Specify 1.
m)Odier:Specify m.
n) Other:Specify n.
o)Total Financing Costs (lines 4.a thru 4.n) o. $508,639
D.Total MortQaQeable Costs(TMC)
(Total of subtotal lines) $225,610 per unit D. $9,475,639
E.Non-MortQaQeable Costs(For example:Syndication Reserves)
a.Specify: Operati�g Reserve(8 mo) 1. $185,144
a.Specify: Replaceme��t Reserve 2. $19,850
a.Specify: 3.
4. $204,994
F.Total Development Cost(TDC) $0.00� $23Q491 F. �9,680,633
(Total lines VI.D and VI.E) Per Sq Ft Per Unit
G.Total Basis for Tax Credits(Sum of 30'%�+70'%PV Basis) G. S8,667,200 $0 $8,667,200
H.Totallntermediar��Costs H. 51,893,000 19.5�5%
VII.FUNDING REQUIREMENTS:
A. Capital Sources of Funding: 11a�imum\iurt�;a�c 9;978,622 Adj factor **Chcck to includc in Ilouain�;Tax Credit
Celculated Ga� (Y;2,673) ($2,621) IF["CC)�'a�calculatiun �tIi1�A t'�SI?ON7.A'
Name of Source Terni Rate Amount Per Unit Commi[[ed? HTC Ga *` Financing'I'ype Program Pay Oui Order
I LMIR IstMortgage $1,048,119 $24,955 ❑Yes ❑Yes 1�
_,,.,__..._,.
� General Parmer Cash ❑Yes �
3 SyndicationProceeds* DeferredProc-> $6,600,000 $157,143 ❑O Yes .�
4 HennepinCountyFlOME $500,000 $11,905 ❑Yes ❑Yes 2
5 MFIPASuperRFP $1,049,187 $24,981 ❑Yes ❑Yes 3
6 City land Douation ❑Yes ❑Yes 5
7 IOCP Donation $150,000 $3,571 �Yes ❑Yes �
8 CDBG $250,000 $5,952 �Yes ❑Yes �
9 DeferredDeveloperFee $86,000 $2,048 �YeS ❑Yes �
1� ❑Yes ❑Yes
9
11 ❑Yes ❑Yes
10
lZ ❑Yes ❑Yes
11
13 ❑Yes ❑Yes ]Z
14 ❑Yes ❑Yes 73
l5 ❑Yes ❑Yes 14
:�O"I'IN B;�L:1�CE Total oTPermanent Financing $9,683,306 $230,555
*HOUSING TAX CREDIT ONLY:List syndication proceeds from historic credits separately.
'"*HOUS[NG TAX CREDIT ONLY:Check yes for sources of financing which must be included in the HTC equity gap calculation.
B.Non-Capital Sources of Fundin
Type of Source Name of Source Temi #of Units Amount $per Unit
$0
$0
$0
$0
Total Non-Capital Financing 0 $0 $0
C.Effec[ive Ra[e of all Minnesota Housing's financing,blending amortizing and deferred loan rates
D. Other Requirements
1. Working Capital Escrow(3%of MHFA Net Mortgage)*
MHFA lstmortgageonly $Zg,229
2. Rent Up Escrow (3%of MHFA Net Mortgage)*
MHFA 1 st mortgage only with unoccupied building $28,229
3. Insurance Escrow(MHFA determines$)for MHFA 1 st Mortgage
4. Other-List
5. Other-List
*Can be Cash or Letter of Credit.
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E. Maximum Allowable Return on Gquity
(15%of owner cash,Line VII.A2,plus I S%of syndication proceeds Line VII.A.3,
plus 1.5%of(TMC,Line VI.D.,minus Developer Fee,Line VI.C.2.e.)) $1,117,135
F. Other Conditions:
G.Regulatory Cost Avoidance/Cost Reduction
1.Regulatory Incentive-The following worksheet must be completed
foreach projectthatincludes Reoulatorylncentives
which reduce the cost of producing affordable housing.
Incentive Cost Savings Total Cost
Per Unit Savin s
2.Local Contributions-Value of donations that do not appear as a Cunding source. Sources must be
listed below for inclusion in HTC scoring for L,ocal Contributions.Includes land donation,in-kind
contributions and donations of labor,materials,serviccs,etc.
Source Contact Type Value of
Donation
VIIL AFFIRMATIVE ACTION REQUIREMENT
The Minnesota Human Ri�hts Act states that any person or organizalion having 40 or more employees in the last 12 months in[he Statc
of Minnesota and involved in any transaction of$100,000 or more with state agency must have Affimiative Action Plan approved by the
State Department of Human Rights. Therefore, no applications for$]00,000 or more will be accepted unless they include eidier:
A. A Certificate of Compliance from the State Deparmient of Human Rights(For information call 651-296-5663)
(for organizations with 40 or more employees);or
B. A uotarized statement stating that the applying organization has had less than 40 employees in the State
of Minnesota in the last 12 mondis.
C. Provide inforniation on how you intend to make opportunities available for women-owned or minority-
owned business enterprises.
This application is submitted by the undersio ed widi the full knowledge and consen[of the governing body and is accurate in all details,to
die undersigned's best knowled�e.
Signature Dale
The Minnesota Housing Finance Agency does not discriminate on the basis of race,color,national origin,sex,religion,age,or disabiliry
in employment or die provision of services.
Equal Opportunity Housing and Equal Oppor[unity Emplo}ment
Comments
Email the completed Minnesota Multifamily Rental Housing Common Application Form
to MHFA at mhfa.app@state.mn.us.
The MHFA will accept only one copy of the completed final Application Form. Do not
IF YOU ARE NOT REQUESTING TAX CREDITS send incomplete or preliminary Application Forms.
STOP AT THIS POINT. The Application Form that is e-mailed to the MHFA must be identical to the original
signed Application Form submitted to the MHFA.
Minnesota Multifamily Rental Housing Common Application forms will not be accepted
after 5:00 pm on the application submission date.
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IX.HO[ISING TAX CRFDIT/APPLICATION
NOTE: Do not attempt to complete this application without reading the MHFA Tax Credit Procedural
Manual,and Sec[ion 42 of Internal Revenue Code. An incomple[e Form RFP/HTGl will not be accepted
and will be returned to the a IicanUdevelo er.
A. SET-ASIDE OF HOUSING CREDIT RE UESTED:
Please check the apDropriate set-aside. (HDS Ranking GrouDs)(Nonprofts must sign application):
*Qualifying Non-Profit must matcrially participate in
O Greater MN For-proft O Greater MN Non-profit* O Rural Development/Small Project ownership/management of the development in a
O Metro For-profit O Metro Nomproft* O Tax Exempt Bond manner meeting requiremcnts of Sea469(h)of IRS Code.
Requires IRS letters of�Ol(c)(3)or 501(c)(4)sta[us
or appropriate equivalent designation appro��al from the IRS.
B. TYPE OF HOUSING CREDIT RE UESTED:
❑Newly constructed and not federally subsidized ❑Newly constructed and federally subsidized ❑Not federally subsidized by reason of 40-50 rule under Sec.42(I)(2)(e)
❑RehabiliWtion expenditures not federally subsidized ❑Rehabilitation expenditures federally subsidized ❑Allocation subject to non profit set aside under sec.42(h)(5)
❑Existing building
C. MINIMUM SET ASIDE:
At this time the owner"irrevocably"elects one of the minimum set aside requirements stated by
Section 42 of the[nternal Revenue Code
Check one only
O 20°h of the unitr serving households at 50%of the area median
O 40%of the uniks serving households at 60%of the area median
D. ESTIMATED PROJECT APPLICABLE FRACTION DETERMINATION:
1.Complete the section below for tenant facilities/amenities:
Included in
Common Space-Non unit Sq Ft Fcc
Basis'?
Parking/Garages
Storage Lockers
Club House
Swimming Pool
Communitv Service Facility
Oftice
Other
2.Completc the section below for Applicable Fractio»:
I e of Residential Rental Units #of Units S .Ft.
A. HTC Low Income Units 50 50,000
B. Market Rate Units/non HTC units
C. TO"CAL#HTC LOR'INCOME+MARKET RATE 50 50,000
D. Unit and Area Fractions(A.divided b C.) 100.00% 100.00%
E. APPWCABLE FRACTIOiY(lesser of unit 100.00%
or area fraction Line D above
E. Employee/Common Space Units*
G. Total#and sq R of Units 50 50,000
*A fulltime resident manager's or caretakers unit is considered an employee/common space unit and must not be included in the vumerator or denominator
for calculating the applicable fraction.
Use d�e applicable fraction in number IX.D.2.E above when calculating qualified basis in number IX.H below.
At placed-in-service,calculation of the actual credit amount and compliance monitonng is done on a building-by-building basis and will be based
on the targeted applicable fraction set forth on die Building Map.
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E. AC [JISITION/REI�ABILITATION:
L Total Rehabilitation Expense(Line VI.B.2.q) $0
2. Lowest avg.rehabilitation attributable qualified basis per low income uniWldg. (in 5.below,you must complete details for all buildings)
3. Average rehabilitation expense per low income unit per project $0
4. Adjusted basis x 20%_ $0
Rehabilitation expenditures must equal the greater of:
-An average of$6,000 in qualified basis per low income unit for a building increased annually by a cost of living adjustment per Section 42(e)(3)(d).;or
-An amount that is not less than 20 percent of the adjusted basis of the building as determined pursuant to Section 42(e)(3);
-and-
-Average at least$5,000 per unit(Minnesota Statutes Section 462A221,Subdivision 5)'.
'In Greater Minnesota and Qualified preservation projects,the$5,000/uniUproject is not applicable.
5.Com lete the followina:
1 2 3 4 5 6 7 8
Number of Years Average
Date of Actual/Proposed rehabilitation
Da[e of Date of Original Be[ween Placed In Is 10 year rule
Address of Building Substantia] Date of a[tributable
(one line per building) Rehabili[ation by Acquisition by Certificate of Rehabilita[ion by Service(Later of viola[ed for this qualified basis per
Seller Occupancy column 2,3,or 4) project?
Seller Applicant and Rehabilitation �o�+'�ncome unit
for this building
Total Buildings 0
6.If less than 10 years since last placed in service,is the projec[eligible for a waiver from the Secretary of U.S.Department of the Treasury.
O Yes O No O N/A Due to Section 42(d)(6)
If 10 year rule is violated,actual or proposed waiver date'?
7.Arc any of the buildings owner-occupied single family dwelli»gs'?
b'.OTHER BAS[S CONSIDERATIONS:
1. Is this project using HOME funding?
O Yes O No
If the project is using HOME funding elect one of the following:
O Interest rate will equal or exceed the applicable Federal rate. O N/A
O 4%credit
O Subtrad from basis
O Set aside 40%of the unitr acupied by tenantr whose income is 50%or less of AMI
O For high cost area. Set aside 25%of the unitr occupied by tenants whose income is 50%or less AMI
O HOME funds to be used for land only
2. Will any of the project financing be treated as or considered to be a Federal grant,tax-exempt obligation(Code Sec.103)or a below market Federal loan?
O Yes O No
If yes,complete the followi�g: lf yes,complete the following:
Source of funds Source of funds
Amount Amount
If yes,elect one of the following oDtions If yes,elect one of the following options
ONA ONA
O 4%credit O 4%credit
O Subtract from basis O Subtract from basis
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3.Will the developmen[basis indude a mmmunity service facility? E I
O Yes O No
If yes,all the following conditions must be met:
*project located in Qualified Census Tract
*eligible basis of die facility canno[exceed(a)25%of so much of the eligibile basis of the project as does no[exceed
$15,000,000 plus(b)]0%of so much of the eligible basis of[he project as is not taken into account under(a). See Sec
42(�)(4)(C)(�),(��),(iii)
*facility must be desi�iated to serve primarily individuals including tenants and non-tenants with incomes of 60%AMI or less.
G.TAX EXEMYT BOA'D FINANCING:
Are Wx exempt bonds to be issued?
O Yes O No Note: Applican[s requesting tax credils in conjunetion
with tax credit bond financing must complete and submit to MHFA
If yes,complete the following: all documents required in the MHFA Housing Tax Credit Qualified Allocation Plan
Article 9.
Total Aggrega[e Basis
Total tax exempt bonds
Name of bond issuer
Date of allocation of bond volume cap
H.DETERMINATION OF TAX CREDIT:
I. "Cax Credit Basis Calculation COMPLLTE POR TAX CREDITS
30%PV �0%PV
Basis Basis
A.TOTAL BASIS(Section VI.G) A. �o �s,e6�,zoo
Less portion of federal grant used to finance qualifying
development costs. List Grants:
Name Amount
Tota1 �o
Less amount of nonqualitied nonrecourse financing
Less nonqualifying units of higher quality
Less nonqualifying excess portion of higher quality uni[s
Less Historic Tax Credit(Residential Portion Only)
SI'EC1;11.:A"1"i'1;A"I'IOV!t! B.TOTAL EL[GIBLE BASIS B. $o �a,667,zoo
Portion of above Basis 30% 70%
NOT ELIGIBLE High Cost Adjushnent So S2,wo,�w
�O�Hlgh Co5[AdJ. (ICapplicable,check QuxliGed Census Tract or DDA box in Section III.0)
Total Eligible Basis Adjusted for the High Cost $o $t t,25�,360
Multiplied by the Applicable Fraction(Section IX.D) i_0000 i.00po
C.TOTAL QUALIFIED BASIS C. So 00 5i i,ze�,3eo 0o SI t,267,3eo.00
Multiplied by the Applicable Percentage 9.00i
U.TAX CREDIT POTENTIAL FOR PROJECT D. so 0o Si,ma,oez ao
E.ANNUAL TAX CREDITS REQUESTED THIS APPLICATION E. �t,ota,o6z
(Sum of 30%&70%PV Basis Columns)
PLEASE NOTE: The actual amount of credit for the project is deterniined by the housing credit agency at each evaluation stage.
If the project is eligible for Historic Tax Credit include a complete breakdown of the deterniination of eligible basis for the
Historic Credit with the application.
If die Project's basis has been adjusted because it is in a high cost or qualified census tract,the subsequent deduction for item(s)
to remove them from basis must be adjusted by multiplying the amount by 130% (This does not apply to Historic Tax Credits.)
High cosUqualified census tract adjusMient cannot be made to the acquisition basis of an acquisition/rehab type project.
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2.Tax Credit Equity Gap Calculation
A i 1 Sources from funding requirements VII.A.sources of funding.
Source Amount
To add or remove an entry from
this table,check or uncheck the associated
box labeled"HTC Gap"in the Sources of Funding table
Section VILA located below cell I611.
a. Total Sources of Funds above $0.00
b. Total DevelopmentCosts $9,680,633.00 (Section VI.F.)
c. Funding Gap $9,680,633.00 (a minus b)
d. Equity Factor(0.0000)= 0.6600
e. 10 Year Credit Gap $14,667,625.76(c divided by d)
f. Annual Credit Gap $1,466,763 (e divided by 10)
g. Annual Basis Credit $1,014,062 (from l.E)
Maximum Tax Credit Allowed-MHFA BOARD WAIVER REQUIRED $1,014,062 ([I�e lower of line f or line g above.)
❑Requesting waiver of limit.
MHFA Approved Maximum Tax Credit $780,000
Credit Amount Previousl)'Allocated and/or reserved:
Maximum Credit Requested A'I"I'HIS TIIb1G: �L000.000 S 1,000,000 Ytanual Max Cre
1. TAk CREDIT SYNDICATION:
Tax Credit Sy��dication(Pro��ide as much inforn�ation as is available at time of application.)
1. W ill the Tax Credits be offered to investors'7
If no,attach a description explaining how the tax benefits will be used and how that will benefit the project.
[f yes,answer each of the following:
�Type of offering
❑Public ❑Private
Number of Annual Pay-[n Periods
First Pay-in Year
Interest Rate
Pay-in Antount Describe the structure of syudication proeeeds pay Resene Requirements Description
in
�0 $0 Total
HTC Syndication costs will be evaluated along with other project costa Pleasc list all estimated or actual cost of syndication associated with the project.
2.Ten Year Gross Tax Credits* $10,000,000 (*ProjecPs annual tax credit amount multiplied by 10.)
3.Gross Syndication Proceeds** $6,60Q000 ("Gross Syndication Proceeds entered on Sources Tables (VII.A.3),cell F614,see also cell M999).
4. Equity Fac[or(Line 3.divided by Line 2.) 0.6600
*Gross S}mdication Proceeds means all syndication proceeds with the exception of'upper tier transaction costs not charged to or paid to the development.
5. Does this project qualify for historic rehabilitation Gedits'?
If yes,answer each of the following:
What is the credit amounY?
Estimated Proceeds?
Proposed Syndicators or Equity Sources:
Name(s): Address: City / State: Zip Code: Contact Person: Telephone: Fax:
TBD
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�J. Statement and CertiFcation of ApplicanUOwner �
Individually,or as die general parmer(s)or officers of the applicant entity(hereinafrer referred to as"Owner"),we are familiar with the provisions of the
Tax Refom�Act of 1986 and subsequent revisions with respect to the Low Income Housing Tax Gedit(HTC),and to the best of our knowledge and belief,
the applicant entiry has complied,or will comply widi all of the requirements which are prerequisite to issuance of the HTC by Minnesota Housing
Finance Agency(Minnesota Housing). We understand that die HTC Program will be governed and controlled by rules and regulations issued
by the Internal Revenue Service(IRS). We also understand that we must comply with the Minnesota Statutes 462A and Housing Tax Credit Program
Procedural Manual and Allocation Plan of Minnesota Housing concerning Low-Income Housing Tax Credits.
1(We)hereby make applica[ion to Minneso[a Housing for allocation of HTC. The undersigned hereby acknowledges that the making of an allocation
by Minnesota Housing does not warrant that the project is deemed qualified to receive such allocation. [(We)agree d�at neither Minnesota
Housing nor any of its directors,officers,employees,and agents will not be held responsible or liable for any representations made to die undersigned
or its investors relating to the HTC. I(We)assume the risk of all damages,losses,costs,and expenses related diereto and agree to indemnify
and save harniless Minnesota Housing or a�ry of its directors,officers,employees,and agen[s against any and all claims,suits,losses,damages,costs,and expenses
of any kind and of any na[ure that the Minnesota Housing may hereinafter suffer,incur,or pay arising out of its decision concerning the application for HTC
or the use of the infomiation concerning the HTC Program.
I(We)also understand and agree that Minnesota Housing has made no representations about the effect of the tax credit upon my(our)taxes
or that of any other person connected with this project.
I(we)understand and agree that
(1)The infomiation requested on this application and any attachments hereto are being collected to detemiine eligibiliry of the project under Section 42.
(2)Minnesota Housing may request additional inforniation in order to evaluate this application.
(3)An applicant who fails to complete all infomiation requested will not be eligible for a reservation of HTC.
(4)Certain provisions of Internal Revenue Code(IRC)Section 42 and regulations thereunder and Minnesota Statute Chapter 462A may change
and as a result of said change may require the submission of additional documentation to Minnesota Housing.
(5)Infom�ation requested in this application is public data which is accessible to die public pursuant to Mimiesota Statutes,Chapter 13.
1(We)hereby certify that the infomiation contained in this application is true,correct and complete. I(We)understand that any misrepresentations
and/or fraudulent inforniation made in tl�is application may result in the tern�ination of HTC by Mi�mesota Housing and may bar me(us)and
related parties from future program participation,and reporting of such misrepresentation and fraudulent infomiation to the IRS.
SiQnature of General Partner
by:
of:
its:
Print name
of sio iatory,
Date
The foregoing instrument was acknowledged before me this day of__ ,20 ,
by _,the
_ _ — --
(name) (title)
of a
(Name of corporation) �
Notary Public
SiQnature of Nonprofit Partner(iT applicable)
by:
of:
its:
Print name
of signatory,
Date
The foregoing instrument was acknowledged before me this day of__ _,20 ,
bY �the
(name) _ _ (title)—��-- —
of _ a .
(Naine of corporation) �
Notary Public
Email the completed Minnesota Multifamily Renlal Housing Common Applicalion to MHFA at mhfa.app@state.mn.us.
The MHFA will accept only one copy of the completed final Multifamily Application Form. Do not send incomplete or preliminary Application Forms.
The Minnesota Mulfifamily Rental Housing Common Application that is emailed to the MHFA must be identical to ihe original signed Application Form submitted to the MHFA..
Minnesota Multifamily Rental Housing Common Application forms will not be accepted after 5:00 pm on ihe application submission tlate.
MHFA Application Form RFP/HTC1 15 4/22/2010 4:28 PM
���
MEMORANDUM
TO: MAYOR AND COUNCIL MEMBERS
FROM: LIN VEE, CITY CLERK
SUBJECT: COMMENTS REGARDING INFORMATION UPDATES
DATE: APRIL 22, 2010
Attached is the Information Update memo from April 16 for reference if Council wishes to
discuss any of these items.
MEMORANDUM
TO: MAYOR AND COUNCIL MEMBERS
FROM: ORONO MANAGEMENT TEAM
SUBJECT: INFORMATION UPDATE
DATE: APRIL 16, 2010
• The following special event permits are attached and have been issued:
o Gear West Duathlon— Sunday,May 23, 2010
o Kallas' Family Party—Saturday, June 19, 2010
o Wedding Reception—Saturday, July 31, 2010
o Tour de Tonka—Saturday, August 7, 2010
• In February, Orono was awarded$9200 from the Hennepin County 2010 Waste Abatement Incentive
Fund Program to be used for arganics recycling. The Organics Committee has met to discuss options
for promoting organics recycling and is developing an online survey to obtain information that wi11 be
helpful in determining effective methods to promote participation in organics recycling. A city-wide
mailing is planned for early May to announce the survey.
• The energy audit was done on the public works building this week. The administration/police/council
will be scheduled soon. The geothermal engineering feasibility study is almost complete. The�ndings
of these studies will be presented at an upcoming council work session. (LO)
• Staff was approached by the Long Lake Chamber of Commerce to review the directional signs that
will be placed in Orono on County Road 6. The signs will be similar to the sign depicted in the
attachments and will direct commuters to Long Lake. The design and placement meet county
standards.
• Common Bond has provided the attached letter stating their request to pay no more than $580,000
total in land acquisition and city fees. As you will note, the anticipated fees are $553,250 and the
appraisal land value is $470,000. Separately,but also related to Common Bond, the staff in Orono
and Long Lake have received a number of phone calls regarding the site plan review for the
upcoming Planning Commission meeting on Monday night.
• Flowers/plant will be sent to Ron Steffenhagen at the hospital.
• Additional attachments:
o Metro Cities News—April 13, 2010
o Friday Fax, a legislative update from League of Minnesota Cities—Apri19, 2010
o Friday Fax,a legislative update from League of Minnesota Cities—April 16, 2010
The City of O��ono complies with the Minnesota Data Practices and Open Meeting Law. The recipients of this
electronic file are asked not to "Forward"or "Reply to All"concerning information contained in this email.
�.�s'�-.�
��
���,�
� :�pril �'6. �010
�. �..
c ► T v o F
LONG LAKE
City of Orono
2750 Kelley Parkway
Crystal Bay, MN 55323
RE: Comments Re�ardin� Orono 2030 Comprehensive Plan
To W'hom it May Concern,
The City of Long Lake would like to make the following formal comments regarding the
City of Orono 2030 Comprehensive Plan:
l. We object to the re-guiding of the properties that immediately abut the City of Long Lake
western border area immediately south of the TH 12 Bypass to Watertown Road from
the previous single family residential use at a density of 2-3 dwelling units to up to 15
units per acre of inedium and high density mulitifamily use. We believe that there is no
effective transition from the City of Long Lake R-1 single family residential zoning to
the proposed higher density mu(tifamily housing re-guiding.
2. We question the availability of water to this higher density area. The supply of City of
Long Lake municipal water to the re-guided higher density housing units is contingent
upon the City of Long Lake making a determination that there is sufficient capacity in
the City of Long Lake water system to expand in this area.
3. Holbrook Park is a City of Long Lake public facility. We believe the proximity of re-
guided additional housing units to the park will impact the park with expanded use and
greater maintenance costs. We are not aware of any methods being discussed in the 2030
Comprehensive Plan to mitigate such impact.
4. Finally, a housing buildout of Outlet A, Wildfire Addition, would preclude any sort of
expanded institutional use immediately adjacent to the existing Willow Fire Station No.
1. We are not aware of any planned expanded use at this time,just making the
observation that it would not even be a future consideration with this 2030
Comprehensive Plan Update.
Sincerely,
.,�/� :
Terrance R. Post
Long Lake City Administrator
cc: Metropolitan Council
450 Virginia Avenue•P.O. Box 606 •Long Lake,Minnesota 55356• 952-473-6961 •952-476-9622(fax) •http://www.ci.long-lake.mn.us
. . '
� � ��l ;�` /
/i�����t! '`'� 1-���'�.�
` �-l��� �7,h=r � "
���Q���'�'� p�� �.
��.,,.,o c�t c,�q/�l���wn�.:r�r,�-a,
AGREEMENT
This is an Agaement between�the City of Long Lake,Mimlesota(Long Lake) and the
City of Orono, Minnesota(Orono), collectively called the Parties(the Parties), on certain matters
with respect to the joint development of a fire station situated within the City of Orono.
WHE�2EAS, the Parties have entered into a previous Agreement on August 8, 2001
(Settlement Agreement}for the joint construction, ownership and operation of a new fire station;
and
WHEREAS,pursuant to the Agreement of August 8, 2001, the Parties have agreed to
purchase property in Orono for the new fire station site. The fire station site is a portion of a
larger parcel legally described as Lot 1, Block 1, Willowfire Addition (the "Parcel"); and
WHEREAS, certain matters have arisen with respect to the development of this Parcel
which the Parties desire to resolve and memorialize as an enforceable Agreement;
NOW, THEREFORE,Long Lake and Orono, for good and valuable consideration,
receipt of which is mutually aclrnowledged, do agree as follows:
1. The Parties agree that the Parcel will be served by a public raad which will •
provide access to the fire station and to the outlot created to the east of the fire station. The
public road is shown on the attached Exhibit A. The construction c�st of this road wi11 be funded
from the joint fire station account, as created by the Agreement of August 8, 2001. The �re
station account will be reimbursed for SO%of the construction cost of the road,plus interest at
the annual rate of 4%, when the outlot to the east of the fire station is develaped.
2. The Minnesota Deparkment of Transportation has agreed to pay the full cost of
providing a sewer line to seive the fire station. The sewer will cross the Parce3 approximately as
shown on Exhibit A. The Parties agree that the sewer luie may be built to specifications which
provide for �•eater sewer line depth than the sewer Iine for which the Mimiesota Department of
Transportation has agreed to pay. The Parties estimate the additional expense of the deeper
sewer line to be approximately$70,000.00. Orono agrees to pay the additional cosfs.
3. The Parties a�ree that permanent utility easements will be provided over Long
La.ke and Orono utilities as shown on the final plat.
HC26DS4/4707/26i54974.v1 2/2612002 page 1 of 3
4. Long Lake agrees that it will provide 350 units of sewer capacity to serve other
properties in Orono as and when the properties connect to the sewer line. The properties that
connect to this sewer line wiil be treated in the same way as other properties in Orano that have
connected�to Long Lake sewer lines. Long Lake wi11 charge a connection fee of$3,450 per unit,
which includes a Metro SAC charge of$1,200, to connect to the sewer system. This fee is
consistent with the 2002 Fee Schedule as adopted by the City Council. The Orono properties that
coruzect to the Long Lalce sewer Iine will not pay any other one-tune or on-going fees. Long
Lake will receive a credit from the MCES for the sewer flow from the Orono properties, and
Orono will be charged by MCEB for tlus flov��. Orono shall be respansible for maintenance of all
of the laterals and service taps and Long Lake shall be responsible for the maintenance of the
primary system.
5. The Minncsota Department of Transportation has agreed to pay the full cost of
constructing a watex line to serve the fire station. Tbe water line will cross the Parcel
approximately as shown by Exhibit A. The Parties agree that the waterline is available to serve
fhe outlot on the parcel as shown on Exhibit A. Long Lake will charge a connection fee of
$2,700 per unit for residential properties to coiu-iect to the water systezn. This fee is consistent
with the 2002 Fee Schedule as adopted by t11e City Cotmcil. Long Lake agees to provide water
service to this lot and charge a quarterly water service fee consistent with the rates established by
the City Council for properties outside of the City of Long Lake. Long Lake also agrees that if
there is sufficient capacity in the Long Lake water system, and water service is requested,water
service will be made available to the properties in Orono on the east side of Willow Drive
between Watertown Road and the new Highway 12, to the properties in the Hackberry
neighborhood that ciurently receive sewer service through Lang Lake, and to the properties on
Woodhaven Drive. These properties would be charged a connection fee and quarterly water
service fee consistent with the Fee Schedule as adopted by the Long Lake City Council at the
time of the connection. Long Lake shall meter water service with a large capacity main line
meter. Orono shall be responsible for maintenance of aIl of the laterals and seivice taps and
Long L�ilce shall be responsible for the maintenance of the primary system.
6. The Paalies agree that the Parcel has been platted as shown in Exhibit A, and that
�e autlot will be under the sole ownership and control of the city of Chono. The Parties agree
that the fire station sits on approximately 2.04 acres of land as shown Uy the plat,that the right of
way for the public road seiving the fire station is approximateIy.42 acres, and that the wetland
mitigation area a.nd storm water ponding area provided for the fire station is approximately.68
acz-es. The Parties agree that this configuration is consistent with the Agreement of August 8,
2001, in whicb the Parties determined that the fn•e station site will be"approximately three
acres."
HC26DS4/47D7/2655q974.v12/26/2002 Page 2 of 3
7. The Parties agree that the joint f�re station accoiult created by the Agreement of
August 8, 2001, will pay for 50% of the costs of plariing the Parcel, including engineering costs
of the survey and plat. Orono agrees that it will pay the other 50%.
8. The Parties agree that the actual costs of the building pernlit and pian review fees,
and storm sewer trunlc fees will be paid to Orono from the joint fire station account.
9. The Parties agree that the City of Long Lake will purchase and carry builder's risk
insurance on the new Fire Station building during the construction of the new Fire Station. The
cost of the builder's rislc insurance wiIl be paid from the Joint Fire Station Account.
10. The Parties agree that this Agreement is a binding obligation, accepted by the
resolution of each City council. The Parties agree that this Agreement may be enforced by Che
injunctive order of a court of competent jurisdiction.
Approved by the cities of Orono and Long Lake on this day of April, 2002.
CITY OF ORONO
C�
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Ron Moorse, City Administrator
CITY OF LONG LAI�
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� Michelle E. Morse, City Administrator
HC26DS4/4707/26554974.v1 2/26/2002 Page 3 of 3 .
ORONO CITY COUNCIL MEETING
MONDAY, SEPTEMBER 9, 2002
*8a. Miscellaneous Equipment—Fire Station
White moved, and Nygard seconded to approve the purchase of miscellaneous
equipment submitted on August 27, 2002 for the Long Lake fire station in the
amount of$18,960.00, and to authorize the expenditure from the Joint Fire Station
account.
Vote: Ayes 4, Nays 0.
"' �' *9. Fire Station Site Agreement
White moved, and Nygard seconded, to approve the Fire Station Site Agreement,
and to authorize the City Administrator to sign the agreement.
Vote: Ayes 4, Nays 0.
*10. Mn/DOT Request for Right of Entry for Highway 12 Project
White moved, and Nygard seconded, to approve the Temporary Permit to Construct
at no cost to Mn/DOT.
Vote: Ayes 4, Nays 0.
*11. Police Department Vehicle Replacement
White moved, and Nygard seconded, to approve the conversion of a forfeited 2001
Ford F-150 to the police department fleet as a community service officer vehicle.
Vote: Ayes 4, Nays 0.
*12. Request to Dispose of 1997 Crown Victoria Squad Car
White moved, and Nygard seconded, to approve the disposal of Squad #184 through
sealed bid process.
Vote: Ayes 4, Nays 0.
*13. Metropolitan Airports Commission Assistance Agreement
White moved, and Nygard seconded, to approve the assistance agreement for Orono
Police Officers to provide security for the Metropolitan Airports Commission at the
Minneapolis-St. Paul International Airport.
Vote: Ayes 4, Nays 0.
9
R����
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D4VE FRETLAND & VAN VALKENBURG ��n, 241p
LAURA K.FRETLAND PROFESSIONAL�IMITED LIABILIIY PARTNERSHIP PARALEGAL �
PAUL D.DOV£ * ATTORNEYS AT LAW LAURA J.LINS
JAhfE VAN VALKENBURG 5881 CEDAR LAKE ROAD
MINNEAPOL3S,MINNESOTA 55418-1492
413 SOUTH RUM RIVER DRIVE,SUITE 6
OF COUNSEL PRINCETON,MN 55371
952-545-900D 763-389-2214
RICHARD J.SCHIEFFER FAX: 952-545•1793 FAX: 763-389-5506
DAMIEN F.70VEN FAX 952-542-9210
800-343-4545
"CER7IFIED AS A REAI PROPERTY LAW 235 HASSAN STREET SE
SPECIALIST BY THE MINNESOTA STATE HUTCfiINSON,MN 55350
BARASSQCIATION E-MAII DFW�DFWIAW.COM 320-587-6239
WNNJ.OFWUIW.COM
FAX:320-587-4096
March 29, 2010
Ron Olson, Finance Director
City of Orono
P.O. Box 66
Crystaf Bay, MN 55323
RE: Availabili#y of Utilities in Outlot A, Wiilowfire Additian
Our �ile Na. 13565-09001
Dear Mr. Olson:
You have reguested an opinion on the availability of utilities (sanitary sewer and water
service) in Ou�lot A of Wilfowfire Addition iri connection with a proposed development in
tfiat area by Common Bond Communities, a non-profit arganization specializing in
affordable housing and related services. In connection with your request, I have
reviewed a document entitled "Agreement" which is undated but which in a marginal
note indicates the Agreement was approved by the Orono City Council on September 9,
2002. This Agreement addresses provision of sanitary sewer and water services either
through or by the City Qf Long Lake to various locations within #he City of Orona. The
Agreement also refers ta a previous agreem�nt dated August 8, 2001, the "Settlement
F�greement", which I have also reviewed.
The first three numbered paragraphs of fhe Agreement deal with the constructian of a
public road, sewer and water to serve Lot 1, B1ock 1, Willowfire Addition upon which the
Cities of Long Lake and Orono constructed a fire station.
Paragraph 4 of the Agreement provides that Long Lake, "will provicle 350 units of sewer
capacity to serve other properties in Orono." Given the context of the Agreement, this
means 350 singie famify dwelling equivalent connections to serve any property in the
City of Orono other than Lot 1; Block 1, Willowfire Addition. It is clear that some or all of
these sewer connections would be available #o Outlot A, Willowfire Addition.
Paragraph 4 goes onto determine the connection charge of $3,450.00 per unit which
applies to each of the 350 units. Although Paragraph 4 also makes reference #o the
2002 fee schedule adopted by the (I presume) Long Lake City Council, my reading of
this document indicates that the connection charge of $3,450.00 applies to each of the
350 units regardless of the time of connection. This opinian is supported by the fact that
March 29, 2010
Page 2
in other parts of the Agreement, cer�ain connection charges for water service will be
based on the connection charges in effect at fhe time of connection, A well-established
rule of contract interpretation is that where one part of a contract provides for a
connection fee updated to the time of connection, if the drafter of the contract intended
other connection charges to be updated, that same language would appear throughout
the contract. Therefore, it is my opinion that the 350 sewer connections referrec! to in
Paragraph 4 of the Agreement should pay a connectian charge of $3,450.00 per unit
regardless of the amount wFtich may stated in the current fee schedule of the City of
Long Lake. This conclusion is supported by Paragraph 2 of the Agreement which
provides that MnDOT paid the full cost of the sewer line and therefore Long Lake has
no capital expenditure to recoup. In addition, Paragraph 4 of the Agreement requires
Orono to pay the Metropolitan Council directly for the treatment of the effluent from the
350 units of capacity as they come online,
Paragraph 5 of the Agreement notes that MnDOT also paid the full cost of constructing
the water line to serve the fire station and that the water iine is available fo serve the
Outlot A as shown on the attached plat of Wiifowfire Addition. There appears to be no
possible argument that the water fine constructed on the easement crossing Outlot A is
not intended to serve Outlot A.
Paragraph 5 uses the same Eanguage as Paragraph 4 in establishing a $2,700.00
connection charge for residential properties to connect to the water system. !t would be
consistent with the entire Agreement to conclude that "residen#ial properties" means a
single-family dwelling unit or equivalent. As we have seen in the previous discussion,
there is no support for the proposition that the $2,700.00 connection charge can be
updated. This conclusion is suppo�ted by the fact that there is no capita{ expenditure for
Long Lake to recoup through connection charges and by the fact that a user fee will be
charged to Orano for the water usage,
Paragraph 5 goes on to state that if L.ong Lake has sufficient water capacity, water
service would be made available to certain generally identified neighborhaods other
than Outlot A, V�Jill�wrire iHddition. These neighborhoods woufd be paying bath a
connection charge and a user fee, both of which are consistent with the Long Lake fee
schedule in effect at the time connection is made t� #he system.
If you have further questions regarding this contract, please contact me.
Sincerely,
DOVE �RETLAND VAN VALKENBURG, PLLP
Richard J. Schieffer
RJS:rb
4/22/2010
CommonBond Communities
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Orono City Council
Committee of the Whole
April 13, 2010, 6:30 p.m.
Orono City Council Chambers
Present: Mayor Jim White, Council Members Cynthia Bremer, Doug Franchot, Lili McMillan and Jim Murphy;
City Administrator Jessica Loftus, Police Chief Correy Farniok, Assistant City Administrator for Long-
Term Strategy Mike Gaffron, Finance Director Ron Olson, Public Works Supervisors Don DeBaere and
Scott Oberaigner, Planning and Zoning Coordinator Melanie Curtis, City Clerk Lin Vee, City Engineer
Tom Kellogg and City Attorney Soren Mattick
1. Pre-meeting Local Board of Review
• Nate Stulc, Hennepin County Assessor, reviewed the 2010 Assessment/2009 Sales data booklets.
• Council discussed the current format for the Local Board of Review vs. an Open Book meeting. Council
was in favor of obtaining additional information for consideration of an Open Book meeting in 2011. If a
decision is made to change to the Open Book meeting format, Hennepin County must be notified by
December. Residents will also need to be notified.
2. Police Department Update
• Chief Farniok reported on his experiences while attending the National FBI Academy and other issues
which are being addressed by the Police Department.
3. Engineer's Report
• Lift Station 12 Update (Brown Road North/Old Hwy 12)
o Council discussed the potential repair/replacement of Lift Station 12 and directed the City Engineer to
move forward with pressure testing.
• Orono Orchard Road Street Reconstruction Project Update
o City Engineer Kellogg reported that Met Council is interested in upgrading their portion of the sewer
system as part of the Orono Orchard Road Street Reconstruction Project, which is scheduled for 2012.
Council discussed the possibility of moving this street project up to 2011.
o Council directed Bonestroo to continue discussions with Met Council regarding an agreement to
participate with the city in the Orono Orchard Road Street Reconstruction Project.
• State Aid Street CIP Discussion
o Updated numbers for the Capital Improvement Plan were provided and discussion of the project
schedule ensued. Although Watertown Road is scheduled for improvements in 2011, Old Crystal Bay
Road is in worse condition. Council agreed to observe road conditions as they drive around the city
and continue discussion of the CIP schedule.
o Council directed staff to investigate the costs to purchase an asphalt milling machine.
4. Other Issues of Current Interest
• None
5. Comments Regarding Information Updates
• None
6. CommonBond Discussion
• City Attorney Mattick presented information on issues related to the CommonBond proposal. Council
continued with discussion of the proposed project, including land values and timelines.
• Council recommended that CommonBond submit a written purchasing proposal for Council
consideration.
Page 1 of 1