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HomeMy WebLinkAboutHousing & Redevelopment Authority Packet 09-22-2022Housing and Redevelopment Authority 1 of 2 September 22, 2022 CITY OF PLYMOUTH AGENDA Regular Housing and Redevelopment Authority September 22, 2022, 7:00 PM 1. CALL TO ORDER 2. PUBLIC FORUM—Individuals may address the HRA about any item not contained on the regular agenda. A maximum of 15 minutes is allotted for the Forum. If the full 15 minutes are not needed for the Forum, the HRA will continue with the agenda. The HRA will take no official action on items discussed at the Forum, with the exception of referral to staff for future report. 3. APPROVE AGENDA —HRA members may add items to the agenda for discussion purposes or staff direction only. The HRA will not normally take official action on items added to the agenda. 4. CONSENT AGENDA —These items are considered to be routine and will be enacted by one motion. There will be no separate discussion of these items unless HRA member or citizen so requests, in which event the item will be removed from the Consent Agenda and placed elsewhere on the agenda. 4.1 HRA Minutes Housing Redevelopment Authority Minutes 08-25-2022 5. PUBLIC HEARINGS 5.1 Proposed Changes to the Housing Chose Voucher (HCV) Administrative Plan and Submission of HUD-50077-CR Proposed HCV Administrative Plan Changes 2022-09 HCV Administrative Plan Changes 9-22-22 HUD-50077-CR 2023 6. NEW BUSINESS 6.1 Discussion: Proposed Moderate-Income Housing Policy DRAFT Moderate-Income Housing Policy 6.2 Tax Increment Housing District 7-10: Sands (Element Project) and Associated Closing Documents HRA Resolution Approving Pledge Agreement 7. UPDATES 7.1 HRA Updates 1 Housing and Redevelopment Authority 2 of 2 September 22, 2022 8. ADJOURNMENT 2 Regular Housing and Redevelopment Authority September 22, 2022 Agenda Number:4.1 To:Housing and Redevelopment Authority Prepared by:Devon Pohlman, Housing and Economic Development Manager Reviewed by:Danette Parr, Community & Economic Development Director Item:HRA Minutes 1. Action Requested: Approve the attached minutes from the HRA meeting held on August 25, 2022 2. Background: NA 3. Budget Impact: NA 4. Attachments: Housing Redevelopment Authority Minutes 08-25-2022 3 MINUTES PLYMOUTH HOUSING AND REDEVELOPMENT AUTHORITY August 25, 2022 MEMBERS PRESENT: Chair Michelle Soderberg; Commissioners James Williams, Wayne Peterson, and Joel Spoonheim; Council Coordinating Rep Jim Davis ABSENT: Lucas Larson, Aqueelah Whitfield, and Ronald Kelner STAFF PRESENT: Housing & Economic Development Manager Devon Pohlman, Housing and Economic Development Coordinator Kenny Niemeyer, and Permit Technician Michelle Bast 1. CALL TO ORDER Chair Soderberg called the Plymouth Housing and Redevelopment Authority meeting to order at 7:01 p.m. 2. PUBLIC FORUM Chair Soderberg opened and closed the Public Forum as there was no one present to speak. 3. APPROVE AGENDA MOTION by Commissioner Peterson, seconded by Commissioner Spoonheim to approve the Agenda. Vote. 4 Ayes. MOTION passed unanimously. 4. CONSENT AGENDA 4.1. Approve proposed minutes from July 21, 2022. MOTION by Commissioner Williams, seconded by Commissioner Spoonheim, to approve the Consent Agenda. Vote. 4 Ayes. MOTION passed unanimously. 5. PUBLIC HEARINGS 5.1 2021 Community Development Block Grant (CDBG) Consolidated Annual Performance and Evaluation Report (CAPER) Notice of Annual Citizen Participation Meeting Housing and Economic Development Manager Pohlman provided an overview of the staff reports discussing the CDBG Program Year 2021 CAPER. She provided information on the outcomes of the Program Year 2021 funding, which included regular CDBG funding and CDBG COVID funding. She noted that for the regular CDBG funds, there is a 15% maximum that can be allocated to public service activities. Two of challenging market conditions the City of Plymouth faced in the 2021 Program Year included continued 4 Draft Minutes Plymouth Housing and Redevelopment Authority August 25, 2022 Page 2 escalation of house prices which makes serving first-time homebuyers with the CDBG income limit requirements a challenge, and continued supply chain constraints which has elongated owner-occupied rehabilitation loan processing times. Commissioner Spoonheim asked the 15% public services cap be explained. Housing and Economic Development Manager Pohlman explained the cap is 15% of the Program Year entitlement dollars, which is the maximum that can be allocated to public services under the regular CDBG program; this cap was eliminated for the time-limited CDBG COVID funding. Commissioner Peterson asked if the public services funding is for organizations, such as PRISM. Commissioner Spoonheim asked if money can be given to organizations not already listed in the Public Services Programs chart. Housing and Economic Development Manager affirmed Commissioner Peterson’s question, highlighting the six subgrantees who have been awarded public services funding in Program Year 2021. She also noted that the CDBG program has certain requirements that must be considered such as the allocation of funds has to be done through the Annual Action Plan (or if changed, through amendment process as outlined in the approved Citizen Participation Plan) and timeliness tests need to be met related to spend-down requirements of the funding. Commissioner Williams asked how long the public process is. Housing and Economic Development Manager Pohlman replied that the Annual Action Plan public comment period is 30 days and the public comment period for the CAPER is 15 days. Commissioner Peterson asked if funds can be rolled over from year to year. Housing and Economic Development Manager Pohlman said that can be an option, though we also have to be attentive to the required timeliness test under the program. Housing and Economic Development Manager Pohlman described the first community land trust homeowner supported by the City of Plymouth through CDBG in Program Year 2021. She said the land trust program has been in Minnesota for a while and that this example is the first one in Plymouth. She went over this example as presented by Homes Within Reach. Commissioner Williams asked if this is a fixed rate mortgage. 5 Draft Minutes Plymouth Housing and Redevelopment Authority August 25, 2022 Page 3 Housing and Economic Development Manager Pohlman replied yes, the mortgage is a 30- year mortgage, and the house is fully rehabbed to make sure the homeowners are given a good start. She informed the board this was a collaborative funding effort involving city, county, and state funds in addition to Metropolitan Council funds. Council Member Davis said if the house is sold there is a shared equity model, and the house will remain affordable. He said the land trust keeps a wait list of people who are interested in purchasing a house. Chair Soderberg said the land trust owns the land, which helps make the home affordable. Housing and Economic Development Manager Pohlman said the City of Minnetonka has made a substantial investment in land trust homes and that the City of Edina has shown an increased interest in the housing model as well given that it can be an effective tool to help preserve affordable homeownership in a community. Council Member Davis asked if this was the same land trust that operates in western Hennepin County. Housing and Economic Development Manager Pohlman answered affirmatively. Chair Soderberg said the house needs to be bought on the open market; the land trust buys the house and the land. Council Member Davis inquired if the house is bought with someone specific in mind. Housing and Economic Development Manager Pohlman replied that some land trust programs administer homebuyer-initiated programs where this is the case. She said more typically the house is bought, rehabbed, and goes to a qualified buyer on the wait list. She informed the board this was the first time Plymouth committed funds to this program. Commissioner Williams asked about the purchase price. Housing and Economic Development Manager Pohlman replied that the home appraised for an amount in the mid-three hundred thousands. Commissioner Williams asked what the homeowner paid for the house. Housing and Economic Development Manager Pohlman said this transaction also involved a First Time Home Buyer loan from the City of Plymouth, but she did not have the loan- level specifics. Housing and Economic Development Manager Pohlman continued providing an overview of CAPER. 6 Draft Minutes Plymouth Housing and Redevelopment Authority August 25, 2022 Page 4 Commissioner Spoonheim asked about performance relative to the goals identified in the CAPER, noting that in some activities the City is behind on the goal benchmark. Commissioner Spoonheim also asked if the goals for CDBG funds are realistic and if the vast majority of funding was used for very low income. Housing and Economic Development Manager Pohlman stated that the CAPER reports on goals over the five-year Consolidated plan period (2020-2024) in addition to the Program Year 2021 goals. She affirmed that serving first-time homebuyers continues to be challenging in the City of Plymouth given the high median home prices in the community and required CDBG program income limits, and that we will continue to need to evaluate how best to serve this segment of the market. She noted that demand for the owner- occupied rehabilitation program continues to be strong, with several homeowners in the current pipeline. Commissioner Peterson asked how many applicants are typical. Housing and Economic Development Coordinator Niemeyer replied for rehab loans there are approximately seven to eight applicants in various phases of the pipeline, including several relatively new applicants. Housing and Economic Development Manager Pohlman stated that the HRA needed to think about how they support first-time homebuyers and who and how they are serving. She said the data shows there has been 17 served with assistance through the state Housing Finance Agency, but we have had limited success serving this segment with the City’s program. She said this is an area for the HRA and the housing staff to continue to think about strategically with respect to how best to serve these needs in a community with relatively high home prices. Commissioner Williams commented that the story about the first-time home buyer assisted with the program of Homes Within Reach is inspirational. Housing and Economic Development Manager Pohlman emphasized how important it is to highlight meaningful ways to serve low- and moderate-income homebuyers and that there are pathways to achieve affordable homeownership. MOTION by Commissioner Peterson, seconded by Commissioner Williams, to approve and present the 2021 CAPER to the City Council prior to submission to the Department of Housing and Urban Development contingent on all public comments received during the open comment period. Vote. 4 Ayes. MOTION passed unanimously. Chair Soderberg opened and closed the public hearing because there was no one present to speak. 7 Draft Minutes Plymouth Housing and Redevelopment Authority August 25, 2022 Page 5 6. NEW BUSINESS 6.1. Program Year 2022 Community Development Block Grant (CDBG) Annual Action Plan allocation. Housing and Economic Development Manager Pohlman gave an overview of the staff report. She reported that HUD requires them to go back out for a 30-day public comment period due to a decrease in the level of federal funding that was received after the first public comment period. She said funding levels were held constant for all proposed activities, with only the owner-occupied rehabilitation activity decreased as a result of the funding reduction. The federal grant was decreased by just slightly more than $11,000. Commissioner Williams asked is that the only issue that was raised. Housing and Economic Development Manager Pohlman answered affirmatively. She said we cannot execute contracts with subgrantees until the grant is approved and that this is an important step in re-submitting the 2022 Annual Action Plan to HUD so that we can receive the Program Year 2022 funding and execute grant agreements. MOTION by Commissioner Peterson, seconded by Commissioner Williams, to adopt the Program Year 2022 CDBG action plan allocation. Vote. 4 Ayes. MOTION passed unanimously. 7. UPDATES HRA Updates Moderate Income Housing Policy – redline Housing and Economic Development Manager Pohlman gave an overview of the staff report. She introduced the Moderate-Income Housing Policy and the changes made for this redline version. She said this revision has been reviewed by legal counsel, the City’s financial advisor, and bond counsel. There have been no material changes to those reviews, though the language was tightened up. She noted that receipt of financial assistance drives the applicability of the policy. She said a notable change to the language in this final draft ensuring that when a development applies to the City for public financial assistance, such as TIF, that application will meet all the processing requirements as stated by this policy. She also discussed the previous recommendation which has been reviewed by the HRA, related to a recommendation to use a third-party entity for compliance for properties subject to the policy program with respect to initial and ongoing rent and income calculations. She also discussed the recommended change to allow a renter’s 8 Draft Minutes Plymouth Housing and Redevelopment Authority August 25, 2022 Page 6 income to increase to a maximum of 140% of AMI, to align with the compliance requirements the Low-Income Housing Tax Credit program has in place. Housing and Economic Development Manager Pohlman provided additional background on the efficacy of using industry-standard compliance requirements, in cases where affordable developments end up with layered financing. Commissioner Peterson stated he worked with the numbers and said if the percentage goes off the annual median income, which in Plymouth $118,200, 60% AMI is $79,000. If they can stay in the apartment until they get to 140% of AMI it appears people can increase their income two and a half times and still stay in affordable housing. He questioned whether this provision allows high-demand rental units to serve those most in need of affordable housing. He said to me that defeats what we are trying to do with affordable housing because it would seem to me that when their income is at 100% AMI they should move into market housing. It does not seem right that somebody could generate their income that much and stay in affordable housing. Commissioner Peterson acknowledged that the implications of having different income limit thresholds in affordable projects could pose issues but underscored how important it is that affordable rental units serve those most in need. Commissioner Williams acknowledged Commissioner Peterson’s concerns and asked how many people are on the waiting list for affordable developments. He also asked for more information about how the name change to Moderate-Income Housing Policy occurred, inquiring whether it was appropriate for staff to rename the policy or if that recommendation should have been brought back to the HRA for further action. Chair Soderberg said the name change came back in a redline version and was discussed with the HRA, based on recommendations provided to the City Manager, Dave Callister and HRA Executive Director, Danette Parr. Commissioner Spoonheim stated the name change was discussed at the meeting two months ago. Commissioner Williams said a lot of community stakeholders took the time to let us know what they thought. He suggested erring on the side of making sure those stakeholders who previously provided comments have an opportunity to review and comment on the version of the policy. Chair Soderberg stated that the policy has been available for stakeholders to review for longer than six months. She said we want to do right for housing; emphasizing that the 9 Draft Minutes Plymouth Housing and Redevelopment Authority August 25, 2022 Page 7 policy is designed to help create rental units affordable to moderate-income households through the creation and incentive of market-rate housing. Commissioner Spoonheim stated it is not market rate. Commissioner Williams said we don’t know what if developers have what they want from the policy. Chair Soderberg reminded the Board the comments have circulated for a significant period. Commissioner Spoonheim replied you have had to work on these issues for a long time. He noted that there have been obstacles to advancing the policy, stating that staff transition really hindered moving forward. The public feedback needed to be shared with the commission; it is not in the public record. He said he remains flummoxed by the language change to the policy. He said I do not see moderate income housing policies elsewhere. He said I see low-income policies that speak to low- and very-low income and the very-low is where we start talking about the tax credits. He noted that he has developed low-income housing using a variety of fund sources and that he believes there are many developers that are not coming to Plymouth because there has not been a clear way to get there. This draft is a step in the right direction but noted that the change to moderate-income does not improve clarity. We are not making it easier; I think we are not doing as much as we could. Housing and Economic Development Manager Pohlman said that with regard to serving low-income versus moderate-income, the proposed policy goal provides clear guidance around affordability expectations for market rate developers working in redevelopment areas given that redevelopment TIF does not have stand-alone affordability requirements. This policy is intended to provide clarity to the developers on City expectations as they relate to affordability levels of housing units in redevelopment areas. Commissioner Spoonheim said in the absence of any policy, that policy would provide the necessary requirements to developers in such instances. He suggested moving forward to direct staff to notify all people who previously provided feedback on the final proposed policy. Chair Soderberg replied affirmatively. Commissioner Williams said he wanted to make sure we bring in the most insight to make sure we have the best policy, noting that the original vision was to advance the policy for City Council action in the fall. 10 Draft Minutes Plymouth Housing and Redevelopment Authority August 25, 2022 Page 8 Commissioner Peterson said we are trying to move into September. Commissioner Spoonheim said we are not getting a low or very low-income housing policy at this point. He emphasized the desirability of existing affordable rental housing developments in Plymouth noting that we have already seen one project change owners in the last 60 days which jeopardizes long-term rental affordability in the community. The absence of a low-income policy is a move in the wrong direction. Commissioner Peterson said the change to Moderate-Income Housing Policy happened two months and it has been consistent with what Housing and Economic Development Manager Pohlman said tonight. He said we are not trying to do an all-encompassing policy; we are trying to address one aspect of housing needed right now. There needs to be an understanding that we are going to work on a low-income policy in the future and that there needs to be work within a timeline. He noted that while he has concerns about the ability for existing tenants to remain in the housing if their incomes increase up to 140% AMI, he is willing to move this forward so long as we turn our attention next to supporting low-income affordability in the city with the support from the City Council and community which is critical to moving forward. Housing and Economic Development Manager Pohlman noted that that it would be possible to revise the policy over time, if the City Council wished to apply it, such as for land use or zoning changes. Commissioner Williams asked if there are any negatives to giving people and stakeholders who previously commented on the policy more time to review. Chair Soderberg noted that she would like to continue to advance the work that has been done to get the policy ready for City Council action, further emphasizing that the policy has been included on the website, in the HRA packets and in the City Council Study Session packet which is available to the public. She asked Commissioner Williams what he is asking. Commissioner Williams said he recommends sending this redline version of policy to community stakeholders who previously commented on the policy, to get their comments because he wants more insight rather than less. Chair Soderberg asked how the HRA will handle dissenting points of view and perspectives. Commissioner Williams said we can be accommodating to work it out the best we can. 11 Draft Minutes Plymouth Housing and Redevelopment Authority August 25, 2022 Page 9 Commissioner Spoonheim recommended that we let stakeholders know this policy is final, that we will be making a final decision in September, and then intend to bring it to Council. He asked how do we want to frame our presentation to let people know the intent of the HRA is to address very low and low income housing if that is not clear within this specific policy, recommending that we should be clear in letting people know we are also very committed to serving low-income residents. Housing and Economic Development Manager Pohlman suggested that we also review the HRA budget and tools available to us including the HRA levy, CDBG funding and pooled TIF. She said we have been working with Ehlers on the pooled TIF funding availability and will be able to share more detail this fall on projected available resources there. Chair Soderberg said we are all committed to low-income housing emphasizing that the Strategic Plan is the comprehensive planning document for the HRA to address a continuum of housing needs, including low-income and moderate-income. Commissioners Spoonheim said Williams said when our other board members are present we can put together a time frame to discuss this document. Chair Soderberg said the Strategic Plan was done before there were mostly new commissioners. She stated we need to go back and revisit the Strategic Plan. She said staff has been working on CAPER reporting and required HUD CDBG program issues. She recommended we look at our budget on a high level this fall to determine what money is coming in and what is going out, also noting that the City Attorney will provide some additional orientation for HRA members. She proposed that we prioritize the October meeting to review the Strategic Plan and also to add items staff has identified as priority workplan items. She suggests the November meeting be used to reprioritize Strategic Plan items. Commissioner Peterson stated his agreement. Chair Soderberg said we underestimated the amount of administrative time it takes. Housing and Economic Development Manager Pohlman said we want to make sure we are keeping up with the federal CDBG requirements and meet expenditure and timeliness expectations for our current funding levels. She noted that federal grant administration is time consuming. Commissioner Williams asked what we are deciding. 12 Draft Minutes Plymouth Housing and Redevelopment Authority August 25, 2022 Page 10 Chair Soderberg said to approve the resolution as proposed and then go to the Council. If it is not approved, it will not go to the Council in September. Housing and Economic Development Manager Pohlman said will be advertising the next meeting as an opportunity for stakeholders to provide comments on the final proposed Moderate-Income Housing Policy. Commissioner Williams said to make it simple and easy for people who previously reviewed. Commissioner Peterson asked about sending a targeted invitation to those that had commented before. Chair Soderberg clarified the groups that previously responded. Commissioner Williams stated there were ten groups that provided comment. Chair Soderberg said it would be easier to encourage them to address their comments via email. Chair Soderberg replied they can come to the meeting, and they can speak if they choose to during the open hearing. Commissioner Peterson said to make a motion to speak or not speak Housing and Economic Development Manager asked about changing the meeting date to September 29th or 28th given scheduling conflicts for a number of HRA members with the September 22nd meeting date. She suggested polling all the commissioners to finalize a date that will work best for the majority. Commissioner Williams asked how quickly we can get the draft out to ten groups. Housing and Economic Development Manager suggested the following week. Commissioner Peterson asked which version to send, the clean copy or the redline. Housing and Economic Development Manager suggested that a redline copy be sent to track changes are viewable. Chair Soderberg said I like a clean copy. Commissioner Williams said send both. 13 Draft Minutes Plymouth Housing and Redevelopment Authority August 25, 2022 Page 11 Housing and Economic Development Manager Pohlman provided an update on the CDBG COVID funding noting that we need to have spent down 80% by next July. She said we have unallocated COVID funding that we need to spend, and it is important to prioritize the needs and meet deadlines. She is working to draft a supplemental CDBG COVID funding RFP with city-priorities for funding that meet eligibility guidelines. Such priorities would likely include providing subsistence payments, such as rental assistance, and supporting food shelves for those who have been economically disadvantaged by COVID-19. PPE and test kits would also likely be an allowable use. She noted several subgrantee partners have fully utilized prior allocations of CDBG COVID funding for these uses. She expects to finalize a draft RFP to release to external partners in September. 8. ADJOURNMENT MOTION by Chair Soderberg, with no objection, to adjourn the meeting at 8:51 p.m. 14 Regular Housing and Redevelopment Authority September 22, 2022 Agenda Number:5.1 To:Housing and Redevelopment Authority Prepared by:Denise Whalen, Support Services Manager Reviewed by:Danette Parr, Community & Economic Development Director Item:Proposed Changes to the Housing Chose Voucher (HCV) Administrative Plan and Submission of HUD-50077-CR 1. Action Requested: Staff recommends that after considering any public comments, the Housing and Redevelopment Authority Board of Commissioners adopt the attached resolution and authorize submission of HUD-50077-CR to Housing and Urban Development (HUD) 2. Background: As a qualified housing agency, Plymouth HRA is required to submit a signed civil rights certification (50077-CR) to the local Housing and Urban Development (HUD) office and hold a public hearing for the Housing Choice Voucher (HCV) Administrative Plan on an annual basis. A public hearing must be held; members of a resident advisory board must have the opportunity to review and comment on the Plan; and, the HRA Board of Commissioners must approve the Plan. As required, a forty-five day notice was published in the Plymouth Sun-Sailor for the public hearing to be held Thursday, September 22, 2022. The proposed changes were submitted to the members of the HRA's HCV Resident Advisory Board for review and comment. Staff received comments from two of the five members. Comments received were clarification of some of the proposed changes and were satisfactorily responded to. The HCV Administration Plan is located on the city's website at https://www.plymouthmn.gov/home/showpublisheddocument/7239/637684239559130000 and HUD Notices which are referenced an be found at https://portal.hud.gov/hudportal/HUD?src=/program_offices/public_indian_housing/publications/n otices. Staff is proposing the following policy changes to the Administrative Plan: -- Chapter 3, 3-I.M. Live-In Aide (Pages 3-8 and 3-9). Revise for clarification purposes. -- Chapter 3, 3-III.D. Screening – Screening for Eligibility (Page 3-20). Revise for current practice. -- Chapter 4, 4-I.B. Applying for Assistance (Page 4-2). Revise for change to online application software. 15 -- Chapter 4, 4-I.D. Placement on the Waiting List – Eligible for Placement on the Waiting List (Page 4-3). Revise for change to online application software. -- Chapter 4, 4-II.F. Updating the Waiting List - Purging the Waiting List and Removal from the Waiting List (Pages 4-6 and 4-7). Revise for change to online application software. -- Chapter 4, 4-III.D. Notification of Selection (Pages 4-10 and 4-11). Revise for change to online application software. -- Chapter 6, 6-I.J. Welfare Assistance (Page 6-19). Correct typo. -- Chapter 12, 12-II.C. Alternatives to Termination of Assistance – Repayment of Family Debts (Page 12-8). Revise for current practice. -- Chapter 12, Exhibit 12-1 – Reporting Changes in Household Income (Page 12-18). To assist HRA in reducing number of families added to new hire report. -- Chapter 17, 17-VII.C. Moves (Page 17-30). Correct typo. -- Chapter 17, Exhibit 17-1 – Project Based Vouchers (Page 17-41). Add exhibit listing all project-based voucher awards. -- Chapter 18, Special Purpose Housing Choice Vouchers – Introduction and VASH Program (Page 18-1 and 18-4). Add award category of VASH vouchers. -- Glossary – Extremely Low Income Family (Page GL-6). Correct typo. 3. Budget Impact: N/A 4. Attachments: Proposed HCV Administrative Plan Changes 2022-09 HCV Administrative Plan Changes 9-22-22 HUD-50077-CR 2023 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 CITY OF PLYMOUTH HRA RESOLUTION 2022-09 A RESOLUTION TO APPROVE THE PROPOSED CHANGES TO THE ADMINISTRATIVE PLAN AND AUTHORIZE SUBMISSION OF 50077 CR TO HOUSING AND URBAN DEVELOPMENT (HUD) WHEREAS, Housing and Redevelopment Authority (HRA) in and for the City of Plymouth, Minnesota operates a Housing Choice Voucher Program; and, WHEREAS, the HRA has established a Resident Advisory Board, the membership of which represents the residents assisted by the HRA; and WHEREAS, the HRA made the proposed changes to the Administrative Plan and all information relevant to the public hearing available for public inspection at least 45 days before the hearing, published a notice that a hearing would be held and conducted a hearing to discuss the proposed changes to the Administrative Plan and invited public comment; and, WHEREAS, the Resident Advisory Board had an opportunity to review and comment on the changes to the policies and programs before implementation by the HRA; and, WHEREAS, the Administrative Plan and all attachments have been and will continue to be available at all times and for public inspection at the primary business office of the HRA and posted on the city’s website; and, WHEREAS, the Plymouth HRA is required to complete and submit a signed 50077 CR, Civil Rights Certification on an annual basis. NOW, THEREFORE, BE IT RESOLVED BY THE HOUSING AND REDEVELOPMENT AUTORITY OF THE CITY OF PLYMOUTH, MINNESOTA, that the public hearing was held and the proposed changes to the Administrative Plan were duly reviewed and approved by the HRA Board to be effective immediately. As such, staff is authorized to submit the Civil Rights Certification, 50077 CR to HUD. Approved this 22rd day of September, 2022 by the Housing and Redevelopment Authority of Plymouth, Minnesota. _________________________________ Lucas Larson, Acting Chair _________________________________ Danette Parr, Executive Director 36 ________________________________________________________________________________________________________________________ Previous version is obsolete Page 1 of 1 form HUD-50077-CR (3/31/2024) Civil Rights Certification (Qualified PHAs) U.S. Department of Housing and Urban Development Office of Public and Indian Housing OMB Approval No. 2577-0226 Expires 3/31/2024 Civil Rights Certification Annual Certification and Board Resolution Acting on behalf of the Board of Commissioners of the Public Housing Agency (PHA) listed below, as its Chairperson or other authorized PHA official if there is no Board of Commissioners, I approve the submission of the 5-Year PHA Plan , hereinafter referred to as” the Plan”, of which this document is a part, and make the following certification and agreements with the Department of Housing and Urban Development (HUD) for the fiscal year beginning January 1, 2022 in which the PHA receives assistance under 42 U.S.C. 1437f and/or 1437g in connection with the mission, goals, and objectives of the public housing agency and implementation thereof: The PHA certifies that it will carry out the public housing program of the agency in conformity with title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d-2000d—4), the Fair Housing Act (42 U.S.C. 3601-19), Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794), title II of the Americans with Disabilities Act (42 U.S.C. 12101 et seq.), and other applicable civil rights requirements and that it will affirmatively further fair housing in the administration of the program. In addition, if it administers a Housing Choice Voucher Program, the PHA certifies that it will administer the program in conformity with the Fair Housing Act, title VI of the Civil Rights Act of 1964, Section 504 of the Rehabilitation Act of 1973, title II of the Americans with Disabilities Act, and other applicable civil rights requirements, and that it will affirmatively further fair housing in the administration of the program. The PHA will affirmatively further fair housing, which means that it will take meaningful actions to further the goals identified in the Assessment of Fair Housing (AFH) conducted in accordance with the requirements of 24 CFR § 5.150 through 5.180, that it will take no action that is materially inconsistent with its obligation to affirmatively further fair housing, and that it will address fair housing issues and contributing factors in its programs, in accordance with 24 CFR § 903.7(o)(3). The PHA will fulfill the requirements at 24 CFR § 903.7(o) and 24 CFR § 903.15(d). Until such time as the PHA is required to submit an AFH, the PHA will fulfill the requirements at 24 CFR § 903.7(o) promulgated prior to August 17, 2015, which means that it examines its programs or proposed programs; identifies any impediments to fair housing choice within those programs; addresses those impediments in a reasonable fashion in view of the resources available; works with local jurisdictions to implement any of the jurisdiction’s initiatives to affirmatively further fair housing that require the PHA’s involvement; and maintains records reflecting these analyses and actions. Plymouth Housing and Redevelopment Authority _______________MN170____________________ PHA Name PHA Number/HA Code I hereby certify that all the statement above, as well as any information provided in the accompaniment herewith, is true and accurate. Warning: HUD will prosecute false claims and statements. Conviction may result in criminal and/or civil penalties. (18 U.S.C. 1001, 1010, 1012; 31 U.S.C. 3729, 3802) Name of Executive Director: Danette Parr Name of Board Acting Chairperson: Lucas Larson Signature Date 9/22/2022 Signature Date 9/22/2022 The United States Department of Housing and Urban Development is authorized to collect the information requested in this form by virtue of Title 12, U.S. Code, Section 1701 et seq., and regulations promulgated thereunder at Title 12, Code of Federal Regulations. Responses to the collection of information are required to obtain a benefit or to retain a benefit. The information requested does not lend itself to confidentiality. The information is collected to ensure that PHAs carry out applicable civil rights requirements. Public reporting burden for this information collection is estimated to average 0.16 hours per response, including the time f or reviewing instructions, searching existing data sources, gathering, and maintaining the data needed, and compl eting and reviewing the collection of information. HUD may not collect this information, and respondents are not required to complete this form, unless it displays a currently valid OMB Control Number. 37 Regular Housing and Redevelopment Authority September 22, 2022 Agenda Number:6.1 To:Housing and Redevelopment Authority Prepared by:Devon Pohlman, Housing and Economic Development Manager Reviewed by:Danette Parr, Community & Economic Development Director Item:Discussion: Proposed Moderate-Income Housing Policy 1. Action Requested: Review any written or verbal comments on the final proposed Moderate-Income Housing Policy. 2. Background: As part of the adoption of the HRA Strategic Plan by the City Council in March, 2021, and after further prioritization and discussion at a joint study session with the City Council and HRA in May, 2022, the City of Plymouth's proposed Moderate-Income Housing Policy is presented in final draft form. Stakeholders engaged in the review of the proposed policy were invited to provide comments on the final draft during a 14-day comment period and/or invited to attend the September 22, 2022 HRA meeting to provide verbal comments. The HRA will review any written comments received or verbal comments during the meeting on September 22. At the time of distribution of this material no comments have been received; any comments that come in subsequent to this time period will be shared with the HRA Board of Commissioners . 3. Budget Impact: As part of the proposed policy, it is recommended that a third-party compliance entity assume responsibility for the ongoing compliance for the required affordable units for the duration of the affordability period. Under this compliance model, the HRA would incur a one-time compliance set up fee. Additional costs associated with ongoing compliance throughout the affordability period are proposed to passed on to the project owner. 4. Attachments: DRAFT Moderate-Income Housing Policy 38 Rev. August 2022 DRAFT Moderate- Income Housing Policy A moderate-income housing policy encourages new developments Developments to make a certain percentage of new housing units affordable. The goal of this policy is to promote high quality housing located throughout the community for a variety of income levels, ages, and household sizes in order to meet the City's goal of preserving and promoting economically diverse housing options within the community. The City recognizes the need to provide affordable housing for a broad range of income levels to maintain a diverse population and attract residents to live or work in the City. This Policy has been created to ensure that a reasonable proportion of each new development Development receiving City financial Financial assistance Assistance include units Units affordable to moderate income households and working families. The requirements set forth in this Policy further the City’s Housing Goals and the City’s Comprehensive Plan to create and preserve affordable housing opportunities. These requirements are intended to provide a structure for participation by both the public and private sectors in the production of affordable housing. I. Definitions Financial Assistance means the use of public funds of, or administered by, the City or any related government entity for any housing Development, including but not limited to: A. City or HRA funds or fee waivers; B. Community Development Block Grant (CDBG); C. Housing Rehabilitation Fund; D. Revenue Bonds (private activity bonds are negotiable); E. Tax Increment Financing (TIF); F. Tax Abatement; and G. Land Write Downs Development means any undertaking to provide housing Units to which Financial Assistance is being provided. Unit means an apartment or a single-family dwelling. II. Applicability and Minimum Project Development Size This Moderate-Income Housing Policy applies to all new and renovated multifamily residential buildings or new for-sale housing receiving City financial assistance, with a minimum of 10 Units. This includes, but is not limited to: 39 Rev. August 2022 Market Rate Multi-Family Development Receiving City Financial Assistance This Policy applies to market rate multi-family residential developments that receive financial assistance from the City and includes: (1) new developments Developments that create at least 10 multi-family dwelling units; or (2) any mixed use building Development that creates at least 10 multi-family dwelling units; or (3) renovation, or reconstruction, remodeling, expansion, or other altercation of an existing building that will contains after completion of such alteration at least 10 multi-family dwelling Units that includes at least 10 dwelling; or (4) any change in use of all or part of an existing building from a non - residential use to a residential use that includes at least 10 dwelling unitsUnits. II.III. Affordable Moderate Income Dwelling Units General requirements To ensure affordability, the City requires that (i) a certain percentage of Units of a Development (ii) is reserved for and leased to individuals or families of moderate-income, and (iii) that the rents for such Units remain affordable for such individuals and families, or, in the case of the sale of a Unit, that the sale price at the time of sale is affordable for such individuals and families. (i) Number of Affordable Units A development Development that is subject to this Policy shall provide a number of affordable moderate-income dwelling units Units equal to at least ten (10%) to twenty percent (20%) of the total number of dwelling uUnits in the developmentDevelopment. The units designated as moderate-income will be subject to the requirements listed below. Calculation of units required. (1) For development of multi-family dwelling units: The required number of affordable moderate-income dwelling units Units is based on the total number of dwelling units Units that are approved by the City. To calculate the number of affordable moderate-income dwelling units Units required in a development the total number of approved dwelling units shall be multiplied by ten percent (10%) or twenty percent (20%) depending on the affordability standard. If the final calculation includes a fraction, the fraction of a unit shall be rounded to the nearest whole number. Properties that are remodeled or expanded will be subject to this policy. Affordable moderate- income dwelling units will be calculated based on the total number of units after renovation or 40 Rev. August 2022 expansion is complete. At least ten percent (10%) or twenty percent (20%) shall be affordable moderate-income, depending on the affordability standard. (ii) Moderate Income Affordability Level The required number of affordable dwelling units Units within a residential project Development subject to this policy shall be reserved for and either leased to or sold to individuals or families who meet a moderate-income eligibility and rent affordability standard for the term of the restriction as follows: (1) Rental ProjectsDevelopments: A. At least twenty percent (20%) of the units Units shall be reserved for an leased to affordable to moderate-income forindividuals or families whose household households income does not exceed at sixty percent (60%) of the Area Median Income (AMI), or A. B. At least ten percent (10%) of the units Units shall be reserved for and leased to individuals and families whose household income does not exceed at available affordable for moderate-income households at fifty percent (50%) of the Area Median Income. (2) For-Sale ProjectsDevelopments: (2) A. At least fifteen percent (15%) of the units Units shall be reserved for and sold to individuals or families whose household income does not exceed affordable for moderate-income households at eighty percent (80%) of the Area Median Income (AMI). (iii) Rent and Sale Price Level Rent and Sale Price Level Rental Unit: The monthly rental price for affordable dwelling units Units shall include rent and utility costs and shall be based on fifty percent (50%) and/or sixty percent (60%) for the Twin Cities metropolitan area that includes Plymouth adjusted for bedroom size and calculated annually by Minnesota Housing for establishing rent limits for the Housing Tax Credit Program. For-Sale ProjectsDevelopments: The qualifying sale price for an owner-occupied affordable dwelling unit Unit shall include property taxes, homeowner’s insurance, principal payment and interest, private mortgage insurance, monthly ground lease, and shall be based on eighty percent (80%) AMI for the metropolitan area that includes Plymouth adjusted for bedroom size and calculated annually by the Department of Housing and Urban Developmentand calculated annually by Minnesota Housing for the Impact Fund program. Period of Affordability In For rental Ddevelopments subject to this Policy, the period of affordability for the affordable dwelling units Units shall be at least twenty-five (25) years. Units of for sale Developments shall be subject to this policy until sold to the moderate-income owner(s). Formatted: Normal, Right: 0.08", Space Before: 0 pt, Line spacing: Multiple 0.96 li, Tab stops: 1.57", Left Formatted: Indent: Left: 1.57", No bullets or numbering Formatted: Indent: Left: 1.08", No bullets or numbering Commented [DP1]: MHFA_1019813 (1).pdf 41 Rev. August 2022 Location of Affordable Dwelling Units Except as otherwise specifically authorized by this Policy, the affordable dwelling units shall be located within the developmentDevelopment. III.IV. Standards for Moderate-Income Rental Units Size and Design of Affordable Moderate-Income Units The size and design of the affordable moderate-income dwelling units Units should be consistent and comparable with the market rate units Units in the project and are subject to the approval of the City. The interior of affordable dwelling units do not need to be identical to the market rate units but if units are smaller than the market rate units with the same number of bedrooms in the development, City approval must be obtained. Exterior/Interior appearance. The exterior materials and design of the affordable moderate-income dwelling units Units in any development Development subject to these regulations shall be indistinguishable in style and quality with the market rate units Units in the developmentDevelopment. The interior finish and quality of construction of the affordable moderate-income dwelling units shall at a minimum be comparable to entry level rental or ownership housing in the City. Construction of the affordable moderate-income dwelling units Units shall be concurrent with construction of market rate dwelling unitsUnits. IV.V. Integration of Affordable Moderate-Income Dwelling Units Distribution of affordable moderate-income housing unitsUnits. The affordable moderate-income dwelling units Units shall be incorporated into the overall project Development unless expressly allowed to be located in a separate building or a different location approved by the City Council. Affordable moderate-income dwelling units Units shall be distributed equally by bedroom size be distributed and throughout the building. Number of bedrooms in the affordable moderate-income unitsUnits. The affordable moderate-income dwelling units Units shall have a number of bedrooms in the approximate proportion as the market rate unitsUnits. The mix of unit Unit types, both bedroom and accessible unitsUnits, of the affordable moderate-income dwelling units Units shall be approved by the City. Tenants Change of Income Moderate-income rental dwelling units Units shall be rented only to income eligible families during the period of affordability. An income eligible family may remain in the affordable moderate-income dwelling unit Unit for additional rental periods as long as the income of the family does not exceed one-hundred twenty fiveforty percent (125140%) of the applicable AMI. If the family income exceeds this amount they must be moved to the first available non- moderate-income affordable unitUnit. V.VI. Alternatives to On-Site Development of Affordable Moderate-Income Dwelling Units This section provides alternatives to the construction of onsite affordable moderate- income dwelling units Units as a way to comply with this Policy. The alternatives are listed Commented [DP2]: Industry standard LIHTC is at 140% 42 Rev. August 2022 in subsection (3), below. (1) The alternatives must be: A. Approved by the City Council, and B. Agreed to by the applicant in an Affordable Housing Performance Agreement. C. Applicant must show the City acceptable documentation that a formal commitment to the proposed alternative is in place. (2) This Section does not apply unless the applicant demonstrates: A. The alternative provides an amount of affordable moderate-income dwelling units Units equivalent or greater to onsite units Units in a way that the City determines better achieves the goals, objectives and policies stated in the Housing Goals and Comprehensive Plan; and B. Will not cause the City to incur any net cost as a result of the alternative compliance mechanism. (3) If the conditions in (2) are met, the City may approve one or more of the following options to providing affordable moderate-income dwelling units Units that are required by this Policy. A. The dedication of existing market rate units Units to permanently affordable moderate-income dwelling units Units that are of equivalent quality and size. Existing dwelling units Units are approved as suitable affordable housing dwelling units through covenants, contractual arrangements, or resale restrictions. B. Offsite construction of affordable dwelling units Units within the City. Offsite construction of units should be located in proximity to public transit service at a site approved by the City. C. Participation in the construction of affordable dwelling units Units by another developer on a different site within the City. D. An alternative proposed by the applicant that directly provides or enables the provision of affordable housing units Units within the City. The alternative must be approved by the City and made a condition of approval of the Affordable Housing Performance Agreement. VI.VII. NON-DISCRIMINATION BASED ON RENT SUBSIDIES: Developments covered by the policy must not discriminate against tenants paying rent with federal, state or local public assistance, including, but not limited to rental assistance, rent supplements, and Housing Choice Vouchers. 43 Rev. August 2022 VII.VIII. Affordable Housing PlanPublic Financial Assistance Application and Agreement (1) Applicability Developments that are subject to this Policy shall include submit an Application for Public Financial Assistance, available at the City, and enter into a Public Assistance AgreementAffordable Housing Plan as described below, which documents . An Affordable Housing Plan describes how the developer complies with each of the applicable requirements of this Policy. (2) Approval The Affordable Housing Plan Public Assistance Agreement shall be approved by the City. (3) Contents. The Affordable Housing PlanPublic Assistance Agreement shall include at least the following: A. General information about the nature and scope of the development subject to these regulations. B. For requests to an alternative to on-site provision of affordable housing, evidence that the proposed alternative will further affordable housing opportunities in the City to an equivalent or greater extent than compliance with the otherwise applicable on-site requirements of this Policy. C. The total number of market rate units Units and affordable dwelling units Units in the development by bedroom size and income threshold. D. The floor plans for the affordable dwelling units showing the number of bedrooms and bathrooms in each unit. E. The approximate square footage of each affordable dwelling unit and average square foot of market rate unit by types. F. Building floor plans and site plans showing the location of each affordable dwelling unit. G.D. The pricing for each affordable ownership dwelling unitUnit. The pricing of each unit shall be determined at time of approval. At time of sale this price may be adjusted if there has been a change in the median income or a change in the formulas used in this ordinance. H.E. Proposed schedule of individual unit Unit development (market rate vs. affordable units). 44 Rev. August 2022 I.F. Documentation and specifications regarding the exterior appearance, materials and finishes of the development for each of the affordable dwelling units illustrating that the appearance of affordable units Units are comparable to the appearance of the market-rate unitsUnits. J.G. Any and all other information that City staff may request to achieve the Council’s affordable housing goals. VIII.IX. Recorded Agreements, Conditions and Restrictions (1) An Public Assistance Agreement Affordable Housing Performance Agreement shall be executed between the City and Developer, in a form approved by the City Attorney, based on the Affordable Housing Plan described in Section VII, which formally sets forth development Development approval and requirements to achieve affordable housing in accordance with this Ppolicy and location criteria. The Public Assistance Agreement shall identify: (1) a. the location, number, type, and size of affordable housing units Units to be constructed; and a.b. income limitations for the affordable Units; and b.c. sales and/or rental terms; occupancy requirements; and c.d. a timetable for completion of the unitsUnits; and d.e. restrictions that will be placed on the units Units to ensure affordability; and e.f. any terms contained in the approval resolution by the City as applicable. (2) The applicant or owner shall execute any and all documents deemed necessary by the City Manager, including, without limitation, a Declaration of rRestrictive covenants Covenants and other related instruments, to ensure the affordability of the affordable housing units Units in accordance with this Policy. (3) The applicant or owner must prepare and record all documents, restrictions, easements, covenants, and/or agreements that are specified by the City as conditions of approval of the application prior to issuance of a building Permit for any development Development subject to this Policy. (4) Documents described above shall be recorded in the Hennepin County Registry of Deeds as appropriate. X. State and Federal Law IX. This Policy is not to be interpreted, nor intended to be in conflict with state or federal law. If any portion of this Policy is determined to be in conflict, state or federal law will control. Many state and federal law programs provide for similar regulations regarding affordability to Project/Developments. In such instances where participation in state or federal law programs providing financial assistance to a Development results in more strict regulations regarding affordability, such Development will be deemed to have met the requirements of this Policy.Definitions Formatted: Left, Indent: Left: 1.1", No bullets or numbering Formatted: Indent: Left: 0.07", No bullets or numbering Formatted: Heading 1, Space Before: 0 pt 45 Rev. August 2022 1. Affordable Dwelling Unit: The required affordable dwelling units within a residential project subject to this policy shall meet an income eligibility and rent affordability standard for the term of the restriction as follows: (1) Rental Projects: A. At least twenty percent (20%) of the units shall be affordable for households at sixty percent (60%) Area Median Income (AMI), or B. At least ten percent (10%) of the units shall be at available affordable for households at fifty percent (50%) Area Median Income. (2) For-Sale Projects: A. At least fifteen percent (15%) of the units shall be affordable for households at eighty percent (80%) Area Median Income (AMI). 2. Financial Assistance: This Moderate-Income Housing Policy applies to all new and renovated multifamily residential buildings receiving City financial assistance. Financial Assistance is defined as funds derived from the City and includes but is not limited to the following: A. City of Plymouth B. Community Development Block Grant (CDBG) C. Housing Rehabilitation Fund D. Revenue Bonds (private activity bonds are negotiable) E. Tax Increment Financing (TIF) F. Tax Abatement G. Housing and Redevelopment Authority (HRA) Funds H. Land Write Downs Affordable Housing Plan: A plan that documents policies and procedures for administering the affordable dwelling units in accordance with the Affordable Housing Performance Agreement. Affordable Housing Performance Agreement: Agreement between the City and the developer which formally sets forth development approval and requirements to achieve Affordable Housing in accordance with this policy. Commented [DP3]: Section is moved to II. Applicability and Minimum Project Development Size Commented [DP4]: This section has been moved to I. at the beginning of the policy. Commented [DP5]: Included in the Public Assistance Agreement 46 Regular Housing and Redevelopment Authority September 22, 2022 Agenda Number:6.2 To:Housing and Redevelopment Authority Prepared by:Devon Pohlman, Housing and Economic Development Manager Reviewed by:Danette Parr, Community & Economic Development Director Item:Tax Increment Housing District 7-10: Sands (Element Project) and Associated Closing Documents 1. Action Requested: Authorize the Housing and Redevelopment Authority (HRA) Executive Director to approve a Pledge Agreement for the Element Project Pertaining to Four Project-Based Section 8 Units 2. Background: Pursuant to Minnesota Statute, Section 469.124 through 469.1333, the City of Plymouth has formed Development District No. 7 and has created within the Development District, Tax Increment Financing District No. 7-10: Sands, and has adopted a tax increment financing plan. The City will reimburse the developer for a portion of the costs of the construction of site improvements incurred by the developer for a total of $459,000. The Development has 61 units for low- and moderate-income households which are subject to a 26-year affordability restriction specific to the TIF financing, in addition to other terms as outlined in the Declaration of Land Use Restrictive Covenants for Low Income Housing Tax Credits recorded for the project. The project owner has entered into a Housing Assistance Payments Contract (Section 8) with the Plymouth HRA. The HRA will make housing assistance payments to the project owner, on behalf of eligible families, for four project-based Section 8 units in the development. These assistance payments will be funded by annual contributions from the Department of Housing and Urban Development. As security for the performance of all obligations of the borrower as it pertains to the loan documents and the Section 8 contracts, the borrower pledges and assigns to the lender (in this case, the Minnesota Housing Finance Agency), and grants the lender a security interest in all rights the borrower may have pertaining to the Section 8 contracts. This pledge agreement requires both the borrower and the lender to sign, and approval by the Plymouth HRA. Staff recommends that the Plymouth HRA Board of Commissioners approve the attached resolution authorizing the HRA Executive Director to approve the pledge agreement for the Element project. 3. Budget Impact: N/A as the TIF District and Housing Assistance Payment Contract have both previously been approved. 47 4. Attachments: HRA Resolution Approving Pledge Agreement 48 HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF PLYMOUTH RESOLUTION NO. 2022- A RESOLUTION APPROVING AND CONSENTING TO A PLEDGE AGREEMENT BY AND BETWEEN THE MINNESOTA HOUSING FINANCE AGENCY AND PLYMOUTH ELEMENT LLC WHEREAS, the City of Plymouth, Minnesota (the “City”) entered into a Development Agreement, dated as of March 1, 2021 (the “Development Agreement”) with Plymouth Element LLC, a Minnesota limited liability company (the “Developer) to assist the Developer with the financing of certain costs in connec tion with the construction of approximately 61 units of low and moderate income housing (the “Project”); and WHEREAS, the Plymouth Housing and Redevelopment Authority (the “HRA”) in and for the City operates a Section 8 Housing Choice Voucher Program; and WHEREAS, pursuant to Section 8 of the United States Housing Act of 1937, the Developer has entered into an Agreement to Enter Into Housing Assistance Payments Contract with the HRA dated February 10, 2021, further identified as Agreement/Contract MN170 (the “AHAP Agreement”), for the benefit of the Project; and WHEREAS, after completion of the Project, as provided in the AHAP Agreement, the Developer entered into a Housing Assistance Payments Contract (the “HAP Contract,” and together with the “AHAP Agreement,” the “Section 8 Contracts”) with the HRA; and WHEREAS, the HRA, as the public housing agency (the “PHA”) will make housing assistance payments (“Assistance Payments”) to the Developer, on behalf of eligible families, for four (4) units in the Project; and WHEREAS, the Minnesota Housing Finance Agency (“MHFA”) made a mortgage loan to the Developer for the Project, and MHFA and the Developer entered into a regulatory agreement, loan agreement, and other related documents (collectively, the “Loan Documents”) and; WHEREAS, as security for the performance of all obligations of the Developer under the Loan Documents, and as security for the performance of all obligations of the Developer under the Section 8 Contracts, MHFA is requiring that the Developer pledge and assign to MHFA and grant MHFA a security interest in all rights that Developer may have or acquire against the HRA as PHA under the Section 8 Contracts (including Borrower’s rights to receive Assistance Payments from the HRA as PHA) pursuant to a Pledge Agreement (the “Pledge Agreement”) by and between the Developer and MHFA, which is attached hereto as Exhibit A; and WHEREAS, the MHFA is requiring the approval and consent of the HRA as PHA to the Pledge Agreement; NOW, THEREFORE, BE IT HEREBY RESOLVED BY THE BOARD OF COMMISSIONERS OF THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF PLYMOUTH, MINNESOTA: 1.01 The Board of Commissioners hereby approves and consents to the Pledge Agreement in substantially the form submitted, and the Chair and Secretary of the Board of the HRA are hereby authorized and directed to execute the Pledge Agreement on behalf of the HRA. 49 1.01 The approval hereby given to the Pledge Agreement includes approval of such additional details therein as may be necessary and appropriate and such modifications thereof, deletions therefrom and additions thereto as may be necessary and appropriate and approved by the HRA officials authorized by this resolution to execute the Pledge Agreement. The execution of the Pledge Agreement shall be conclusive evidence of the approval of the Pledge Agreement in accordance with the terms hereof. APPROVED by the Board of Commissioners on this ___ day of September, 2022. 50 EXHIBIT A PLEDGE AGREEMENT 51 Element, Plymouth MHFA Dev. #8135 Pledge Agreement (HAP) 3/30/2021 (9/12/2017) 1 FOR USE BY FILING OFFICER ONLY Minnesota Housing Finance Agency PLEDGE AGREEMENT THIS PLEDGE AGREEMENT (this “Agreement”) is effective as of the ________ day of _______________, 20___, between Minnesota Housing Finance Agency, a public body corporate and politic of the State of Minnesota (“Lender”), and Plymouth Element, LLC, a Minnesota limited liability company (“Borrower”). RECITALS: A. Borrower is the owner in fee simple of the property described in Exhibit A attached to this Agreement (the “Property”), upon which has been constructed a multifamily housing development for persons and families of low and moderate income, identified as MHFA Development No. 8135 (the “Development”). B. On or prior to the date of this Agreement, Lender made a mortgage loan to Borrower for the Development, secured by the mortgage listed in Exhibit B attached to this Agreement, evidenced by a mortgage note executed by Borrower (the “Note”), and Borrower and Lender entered into a regulatory agreement, loan agreement and other related documents (collectively, the “Loan Documents”). C. Pursuant to Section 8 of the United States Housing Act of 1937, Borrower has entered into an Agreement to Enter Into Housing Assistance Payments Contract with the Plymouth Housing and Redevelopment Authority (the “HRA”) with a date of February 10, 2021, further identified as Agreement/Contract Number MN170 (the “AHAP Agreement”), for the benefit of the Development. 52 Element, Plymouth MHFA Dev. #8135 Pledge Agreement (HAP) 3/30/2021 (9/12/2017) 2 D. After completion of the Development, as provided in the AHAP Agreement, Borrower entered into a Housing Assistance Payments Contract (the “HAP Contract”) with the HRA. The AHAP Agreement and the HAP Contract are collectively the “Section 8 Contracts”. E. The HRA, as the public housing agency (“PHA”), will make housing assistance payments (“Assistance Payments”) to Borrower, on behalf of eligible families, for 4 units in the Development. F. The Assistance Payments from the HRA for the Development will be funded by annual contributions from the United States Department of Housing and Urban Development to the HRA. NOW, THEREFORE, the parties agree as follows: 1. As security for the performance of all obligations of Borrower under the Loan Documents, and as security for the performance of all obligations of Borrower under the Section 8 Contracts, Borrower hereby pledges and assigns to Lender as mortgagee, and grants to Lender a security interest (“Security Interest”) in, all rights that Borrower may have or acquire against the HRA as PHA under the Section 8 Contracts (including Borrower’s rights to receive Assistance Payments from the HRA as PHA). 2. Unless and until Lender has given notice to Borrower that a default has occurred under the Loan Documents, Borrower will exercise all rights under the Section 8 Contracts, including its right to receive Assistance Payments. 3. Lender, after giving notice to Borrower that a default has occurred under the Loan Documents, may, in its sole discretion, exercise any or all of Borrower’s rights and assume all of Borrower’s obligations under the Section 8 Contracts, including the right to receive Assistance Payments. This right of Lender is in addition to, and not in substitution for, any rights that Lender may have under the Loan Documents and any rights that Lender may have as a secured party under the Minnesota Uniform Commercial Code. 4. Borrower hereby covenants to Lender that Borrower will: (a) Not terminate or give notice to terminate the HAP Contract before the end of its 20-year term; (b) Perform all of its obligations and exercise all of its rights under the Section 8 Contracts so as to secure the optimum benefits available; and (c) Not amend or modify the Section 8 Contracts in any way without the written consent of Lender. 53 Element, Plymouth MHFA Dev. #8135 Pledge Agreement (HAP) 3/30/2021 (9/12/2017) 3 5. To aid Lender in enforcing its Security Interest under this Agreement, Borrower agrees that: (a) Lender, and its agents or employees, are empowered as Borrower’s attorney-in- fact, irrevocably while the Note is unpaid, and with power of substitution, to do all acts and things that Lender may deem necessary or expedient to perfect, protect, and enforce Lender’s Security Interest, including, but not limited to: (1) Filing financing statements and other notices under law; (2) Endorsing Borrower’s name on any checks for Assistance Payments that may come into Lender’s possession after any default under the Loan Documents; (3) Subject to the approval of the HRA, executing any assignments or other instruments of transfer with respect to the Section 8 Contracts after any default under the Loan Documents; and (4) Inspecting and auditing the books and records of Borrower. (b) Borrower will execute financing statements whenever requested to do so by Lender. 6. Nothing in the financing documents will be interpreted to modify the Section 8 Housing Assistance Payments (HAP) Contract No. MN170 between Borrower and HRA. 7. Borrower’s pledge and assignment of Borrower’s rights under the Section 8 Contracts, and the security interest Borrower grants to Lender under Paragraph 1 of this Agreement, are limited to amounts payable under the Section 8 Contracts in accordance with the terms of the Section 8 Contracts. 8. This Agreement binds and inures to the benefit of the successors and assigns of the respective parties and may be executed in any number of counterparts, all of which are deemed to be originals and together constitute one and the same instrument. (THE REMAINING PORTION OF THIS PAGE IS INTENTIONALLY LEFT BLANK) 54 Element, Plymouth MHFA Dev. #8135 Pledge Agreement (HAP) 3/30/2021 (9/12/2017) 4 The parties have executed this Agreement as of the day and year first written above. BORROWER: PLYMOUTH ELEMENT, LLC a Minnesota limited liability company By: Plymouth Housing Group II, LLC a Minnesota limited liability company Manager By: James J. Thelen, Secretary/Treasurer STATE OF MINNESOTA ) ) ss. COUNTY OF ) The foregoing instrument was acknowledged before me this _____ day of_____________, 20___, by James J. Thelen, the Secretary/Treasurer of Plymouth Housing Group II, LLC, a Minnesota limited liability company, Manager of Plymouth Element, LLC, a Minnesota limited liability company, on behalf of the limited liability companies. Notary Public 55 Element, Plymouth MHFA Dev. #8135 Pledge Agreement (HAP) 3/30/2021 (9/12/2017) 5 LENDER: MINNESOTA HOUSING FINANCE AGENCY By: _________________________________________ James Lehnhoff Assistant Commissioner, Multifamily STATE OF MINNESOTA ) ) ss. COUNTY OF RAMSEY ) The foregoing instrument was acknowledged before me this ___ day of _________________, 20__, by James Lehnhoff, Assistant Commissioner, Multifamily, of the Minnesota Housing Finance Agency, a public body corporate and politic of the State of Minnesota, on behalf of the agency. __________________________________________ Notary Public 56 Element, Plymouth MHFA Dev. #8135 Pledge Agreement (HAP) 3/30/2021 (9/12/2017) 6 APPROVED: PLYMOUTH HOUSING AND REDEVELOPMENT AUTHORITY By: ______________________________________ Its: ______________________________________ By: ______________________________________ Its: ______________________________________ STATE OF MINNESOTA ) ) ss. COUNTY OF ___________ ) The foregoing instrument was acknowledged before me this ____ day ____________, 20__, by __________________ and ______________________, the ________________ and _________________ respectively, of Plymouth Housing and Redevelopment Authority on behalf of the authority. ______________________________ Notary Public This document was prepared by: Minnesota Housing Finance Agency 400 Wabasha Street North, Suite 400 St. Paul, MN 55102-1109 57 Element, Plymouth MHFA Dev. #8135 Pledge Agreement (HAP) 3/30/2021 (9/12/2017) 7 Exhibit A LEGAL DESCRIPTION Lot 1, Block 1, Crossroads Commons Second Addition, Hennepin County, Minnesota. Torrens Certificate No. 1487979 58 Element, Plymouth MHFA Dev. #8135 Pledge Agreement (HAP) 3/30/2021 (9/12/2017) 8 Exhibit B MORTGAGE 1. HUD Risk Sharing Program Combination Mortgage, Security Agreement, Assignment of Rents and Leases and Fixture Financing Statement, of even date with the document to which this Exhibit is attached, executed and issued by Borrower to Lender, as mortgagee, securing the repayment of a loan in an original principal amount of $5,259,000.00, which document will be recorded in the Office of the Registrar of Titles in and for the County of Hennepin, State of Minnesota. 59 STATE OF MINNESOTA ) COUNTY OF HENNEPIN ) SS. The undersigned, being the duly qualified and appointed Secretary of the Housing and Redevelopment Authority in and for the City of Plymouth, Minnesota, certifies that I compared the foregoing resolution adopted at a meeting of the Board of Commissioners on September ___, 2022 with the original thereof on file in my office, and the same is a correct transcription thereof. WITNESS my hand officially as such Secretary and the Corporate seal of the Authority this ___________day of __________________, 2022. _______________________________________ Secretary 60 Regular Housing and Redevelopment Authority September 22, 2022 Agenda Number:7.1 To:Housing and Redevelopment Authority Prepared by:Devon Pohlman, Housing and Economic Development Manager Reviewed by:Danette Parr, Community & Economic Development Director Item:HRA Updates 1. Action Requested: Reviews updates on upcoming work items and areas of interest. 2. Background: Staff will provide updates on the following: 1. CDBG Program 2. Redevelopment projects of interest 3. Other 3. Budget Impact: NA 4. Attachments: 61