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HomeMy WebLinkAboutHousing & Redevelopment Authority Packet 10-26-2023Housing and Redevelopment Authority 1 of 1 October 26, 2023 CITY OF PLYMOUTH AGENDA Regular Housing and Redevelopment Authority October 26, 2023, 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 09-28-2023 5. PUBLIC HEARINGS 6. NEW BUSINESS 6.1 Discussion and Recommendations for an Inclusionary Housing Policy Draft Inclusionary Housing Policy (10-26-2023).pdf 7. UPDATES 7.1 Staff Updates HRA Updates (October 2023) Sketch_Layout (Prudential) 8. ADJOURNMENT 1 Regular Housing and Redevelopment Authority October 26, 2023 Agenda Number:4.1 To:Dave Callister, City Manager Prepared by:Grant Fernelius, Community and Economic Development Director Reviewed by: Item:HRA Minutes 1. Action Requested: Staff recommends approval of the September 28, 2023 HRA Minutes. 2. Background: The September 28, 2023 minutes are attached. 3. Budget Impact: N/A 4. Attachments: Housing & Redevelopment Authority Minutes 09-28-2023 2 DRAFT MINUTES PLYMOUTH HOUSING AND REDEVELOPMENT AUTHORITY September 28, 2023 MEMBERS PRESENT: Chairman Michelle Soderberg, Commissioners Wayne Peterson, James Williams, Joel Spoonheim and Kim Vohs (arrived at approximately 7:10 PM). ABSENT: Commissioner Ronald Kelner STAFF PRESENT: HRA Executive Director Grant Fernelius, Housing Manager Steven Schmidt, and Permit Technician Michelle Bast OTHERS PRESENT: Mayor Jeffry Wosje, Jody Boedigheimer of Grace Management 1. CALL TO ORDER Chair Soderberg called the Plymouth Housing and Redevelopment Authority meeting to order at 7:00 p.m. 2. PUBLIC FORUM Chair Soderberg opened and closed the Public Forum as there was no one present to speak. 3. APPROVE AGENDA Chair Soderberg requested to add an item 6.1, Elect Secretary. MOTION by Chair Soderberg, seconded by Commissioner Williams, to add item 6.1, Elect Secretary, to the agenda. Vote. 4 Ayes. MOTION passed unanimously. MOTION by Commissioner Williams, seconded by Commissioner Peterson, to approve the agenda as amended. Vote. 4 Ayes. MOTION passed unanimously. 4. CONSENT AGENDA 4.1. Approve HRA Meeting Minutes for August 24, 2023. 4.2. Plymouth Towne Square. Accept Monthly Housing Reports. 4.3. Vicksburg Crossing. Accept Monthly Housing/Marketing Reports. MOTION by Commissioner Williams, seconded by Commissioner Peterson, to approve the consent agenda. Vote. 4 Ayes. MOTION passed unanimously. 5. PUBLIC HEARINGS 5.1. Public Hearing Regarding Inclusionary Housing Policy 3 Draft Minutes Plymouth Housing and Redevelopment Authority September 28, 2023 Page 2 HRA Executive Director Fernelius presented an overview of the staff report. Commissioner Peterson asked and received confirmation from staff that while some items are not proposed to be added into the policy, they could still be addressed in a case by case basis when they work through the details of a project. He agreed with that process. Commissioner Spoonheim commented that it appears that most cities are using discretionary zoning as a trigger and asked for clarification on whether staff supports that as a tool. HRA Executive Director Fernelius replied that he is not advocating one way or the other for that provision. He commented that if there were a 100 percent market rate project that were coming forward which required a PUD, rezoning, or reguiding, but does not require any financial assistance, that would trigger the policy if discretionary zoning were used as a trigger, and then would also trigger a need for financial assistance. He stated that if they are going to require affordable units because of discretionary zoning, they would also need to understand that will trigger a need for financial assistance. Commissioner Spoonheim commented that he would have a different interpretation and believed that a waiver or exemption could be requested that would resolve that issue. He noted that it would create an opportunity for that conversation to ensure the needs of the community are being reviewed. He noted that there are also external resources through the state and other funding opportunities that would not require the city to always provide the financial assistance. Commissioner Vohs commented that he shares the opinion of Commissioner Spoonheim related to zoning. He commented that if the requirement is made up front requiring the affordable units to remain for a period of time, developers would know that. He commented that often those types of development projects are refinanced around 15 years. HRA Executive Director Fernelius clarified that the 25 years referenced in the policy would mean that if a developer is subject to this policy, they would enter into the agreement to provide a percentage of affordable units for 25 years. He noted that the 25-year period aligns with other assistance that can be provided for these types of projects. He commented that there could then be additional discussions with each developer after that time to determine if that project would remain affordable after that time. Commissioner Williams asked what most cities are doing for their time period and the rationale behind those decisions. HRA Executive Director Fernelius replied that a 25-year period is consistent among cities. Chair Soderberg commented that she reviewed regulations of other cities and agreed that 25 years was a common length of time. Commissioner Williams referenced language related to the tenant’s change of income and asked what would occur if there are no market rate apartments available in the complex. 4 Draft Minutes Plymouth Housing and Redevelopment Authority September 28, 2023 Page 3 HRA Executive Director Fernelius replied that the goal of the provision would be to allow that tenant to move to a market rate unit within the development if their income exceeded the maximum level. Chair Soderberg replied that the language does state that the tenant would be moved to the first available market rate unit, therefore they would not be displaced if a unit were not yet available. Commissioner Vohs commented that developers creating affordable housing have most likely made a commitment to have a certain number of affordable units in return for funding they receive and therefore are familiar with the process of moving tenants if their income exceeds the standards. He commented that if there is not a market rate apartment is not available, the developer will often let the tenant remain. He did not believe that language needed to be included in the policy as other regulations would guide that process for the developer. Chair Soderberg opened the public hearing. Chair Soderberg introduced Igor Rudenko, 5372 Empire Lane North. He stated that he moved to Plymouth because of the great quality of life and the great schools. He commented that he was concerned when he became aware of this issue and therefore is present to speak on behalf of a group of about 2,200 Eastern European residents and business owners. He expressed concern with a potential increase in crime and the increased burden this would place on city services. He expressed a concern with the safety of his family while at the park. He believed that once the developer has built the project their responsibility would be done and the burden for maintenance would be placed on the city. He commented that all the comparison cities selected were within Hennepin County and believed that a broader search should be done. He also believed that the city should wait to participate in this type of program. He suggested conducting a referendum to determine if the residents would like affordable housing. Chair Soderberg introduced Tony Kuechle 15985 55th Avenue N, who stated he is not speaking for or against affordable housing tonight. He is a private developer of market rate units and wanted to provide his insight. In his experience these types of policies can provide benefit to both parties, but they need to be concise. He stated the cost of design for a market rate project is typically $300,000 per unit and therefore would not want it to be discretionary that affordable units could be required as that could be the factor that would make a project not feasible. He commented on additional funding recently approved by the state that the city will have access to. He spoke about conflicts between zoning and the Comprehensive Plan. He was concerned with some of the triggers currently included such as outside funding, PUD or zoning changes, infrastructure improvements, and park dedication. He said there are very limited funding sources. He provided additional explanation on how the debt is matched to the income source for the project and described a scenario that if fire causes reconstruction of a unit, or units, that could then seem to trigger affordable housing and could put a developer into default on their loan. He referenced the income targets and stated that as written, this would require financial assistance on any project that includes affordable housing. He noted that would also become discretionary as he is not sure of the financial packet until they are further into the development process. He agreed 5 Draft Minutes Plymouth Housing and Redevelopment Authority September 28, 2023 Page 4 that 25 years is a standard term for affordable units. He referenced the language related to interior/exterior appearance of the affordable units and commented that the language seems to be in conflict between the two paragraphs. He believes the affordable units should be mixed throughout the different bedroom options. He commented the city should create a clear and enforceable standard. He stated the change in income is a standard clause and explained how that process typically works. He did not believe a separate agreement would be required and that these standards could be included in a development agreement or TIF agreement. He suggested the annual audit be kept as simple as possible. He referenced the suggestion that an exemption be used for a market rate project and noted that he would not want to spend the money developing plans only to find out he would not receive an exemption. Commissioner Vohs asked the name of the company the resident works for. Mr. Kuechle replied that he is with Doran Companies. He commented that they are currently working on a project in Plymouth that includes affordable units and received TIF funds. Chair Soderberg introduced Linda Ferguson, 3803 Minnesota Lane North. She said she lives within walking distance and has confidence in the city council. She stated she would like to share the things they enjoy in Plymouth with others and does not equate being poor with criminal activity. She recognized the concern relating to who owns or is responsible for a project after 25 years and requested clarification. She asked how many buildings would be proposed and where those projects would be located as she did not find that information to be clear. Chair Soderberg replied this is a policy for future projects. She commented the city would not be responsible after 25 years but there had been previous discussion about the city having the first right of refusal, should a developer want to sell after 25 years. She noted that language was not included in the draft policy. Chair Soderberg introduced Mandy Rhead, 14915 32nd Avenue North, who stated that she lives in walkable distance to the city center. She shared a concern with safety when the population increases in the city center area. She inquired if there are plans to increase funding for the police and fire departments if more residents are added to this area. She asked if the affordable units would be offered only to citizens or whether the units would be offered to immigrants. HRA Executive Director Fernelius commented that issue is not addressed in this type of policy and is not something the city would weigh in on. Chair Soderberg introduced Bob Swanson, 9915 25th Avenue North. He stated he has been a resident for 30 years. He said he is in favor of affordable housing. He commented that his church has been studying this issue for two years and it is clear there is a need for affordable housing in Plymouth as residents making a decent wage cannot afford housing in this community. He commented that four or five years ago the city supported Cranberry Ridge, which has been an excellent addition to the community and has operated well. He asked others to limit their fear and embrace affordable housing as it enriches the community. 6 Draft Minutes Plymouth Housing and Redevelopment Authority September 28, 2023 Page 5 Chair Soderberg introduced Russ Simpson, 3665 Urbandale Lane North, who thanked the HRA for considering this policy. He stated this is a vibrant community, but the housing is not extensive in terms of options. He noted people want housing that is affordable for their children or in retirement. He stated affordable housing also provides a place for people to live that work in the community. He commented on the lack of zoning in New England where he is originally from that leads to problems. He commented that the city does a remarkable job maintaining this community. Chair Soderberg introduced Marcos Ayala, 3890 Harbor Lane North. He stated they live a few blocks away and wanted to provide their support for affordable housing. He said his family previously lived in Willow Woods Estates and their children attended Wayzata Public Schools. He commented that he and his wife now own a business and, while they did not always live in affordable housing, it was a step in their journey that allowed them to be successful. He heard the concerns related to crime and commented that they did not experience issues with crime. He hopes the HRA will consider the affordable housing policy as it does help people. Chair Soderberg closed the public hearing. MOTION by Commissioner Peterson, seconded by Commissioner Spoonheim, to move to committee of the whole for 15 minutes for the purpose of having a discussion on this topic. Vote. 5 Ayes. MOTION passed unanimously. Commissioner Peterson provided some grammatic suggestions that he felt would make the language clearer. Chair Soderberg commented that including affordable or inclusionary is helpful for developers and is a common term used by the cities she reviewed. Commissioner Williams asked if there is a definition of inclusionary. HRA Executive Director Fernelius replied in the affordable housing industry, inclusionary is a common term and describes the essence of what a city is attempting to do in providing more housing options. He noted that word was also part of the previous policy and had been removed for some reason; it was reinserted because it is in alignment with the goals of the policy and is commonly used by municipalities. Commissioner Peterson suggested deleting the first sentence and provided proposed changes to the second paragraph to include units affordable to those below AMI. Commissioner Vohs commented that he agrees with the changes but would keep inclusionary in the policy title. Chair Soderberg expressed concern with the other city assistance paragraph. She noted examples were provided tonight from the developer that could trigger this policy. She said if someone was asking for something big the policy would be triggered but struggled to reason the necessity of 7 Draft Minutes Plymouth Housing and Redevelopment Authority September 28, 2023 Page 6 triggering the policy for smaller things that could come up such as eliminating three parking stalls or constructing a required turn lane. Commissioner Vohs commented the developer that spoke was talking about changes he was paying for and believed those would not trigger the policy. He understood that the policy would be triggered if assistance were requested for those items. He noted his experience in the area of affordable housing and stated that there should be a line drawn so that every little thing does not trigger the policy. He commented that under other city assistance there are items such as a comprehensive plan amendment that would be a large change and should trigger the policy, while smaller items or items that involve outside entities should not trigger the policy. Chair Soderberg asked staff for clarification. HRA Executive Director Fernelius commented that this language was provided by ODC and discussed at the last meeting. He commented this essentially include most actions that involve discretionary action by the city. He suggested the commission have a discussion on where it is collectively on whether affordable housing should be required when a developer is not requesting financial assistance. He stated that once that position is known, staff could finesse the language. Commissioner Peterson asked Commissioner Spoonheim to recap his reason for including this list in the motion at the last meeting. Commissioner Spoonheim commented he has considered the feedback from the developer about the need for conciseness. He noted that the absence of this policy is creating confusion for developers and is also creating a barrier for developers to receive appropriate funding. He stated the discretionary triggers for other cities are more condensed in terms of zoning changes rather than all the items listed in the draft. He agreed that the smaller items should not be triggering this policy. He believed there should be discretionary triggers but should be more focused, narrowing down to the zoning related items. MOTION by Commissioner Peterson, seconded by Commissioner Williams to extend committee of the whole for an additional 15 minutes for the purpose of having a discussion on this topic. Vote. 5 Ayes. MOTION passed unanimously. Commissioner Williams stated that when he reviewed this, he was concerned about waiving exceptions to environmental considerations. He stated perhaps additional language could be added that would provide environmental protections for a waiver. Commissioner Vohs agreed there should be some restrictions but also supports the comments of Commissioner Spoonheim to better focus the discretionary triggers. Commissioner Spoonheim clarified that he would keep A, C and D for the discretionary triggers. Commissioners Vohs and Peterson agreed. 8 Draft Minutes Plymouth Housing and Redevelopment Authority September 28, 2023 Page 7 Chair Soderberg also agreed but would want to acknowledge this could potentially trigger a need for city assistance. Commissioner Spoonheim disagreed and stated that would not trigger affordable housing but a conversation to determine whether it would be feasible to add affordable housing to a project. He noted there could then be a discussion of the tools the city has in terms of funding for affordable housing, if that were appropriate. He noted significant funding for affordable housing would not be provided by the city but by the state. Commissioner Williams also agreed with the suggestions to limit the discretionary triggers to A, C, and D. Chair Soderberg asked how language suggestions and typos could be addressed. HRA Executive Director Fernelius commented that staff could clean up that language. Commissioner Peterson provided additional grammatical suggestions. Chair Soderberg also provided grammatical suggestions. Commissioner Spoonheim provided some grammatical suggestions. He asked if redevelopment would trigger the policy as that could remove older, more affordable housing units to make way for newer, more expensive housing. He asked if an older building with affordable housing is torn down would that trigger the policy. Commission Peterson said if the project is market rate the policy would not be triggered. Commissioner Vohs said policy is triggered if city assistance is sought. Chair Soderberg mentioned NOAH (Naturally Occurring Affordable Housing) housing and said that needs to be addressed. MOTION by Commissioner Vohs, seconded by Commissioner Williams, to extend the committee of the whole for an additional 10 minutes for the purpose of having a discussion on this topic. Vote. 5 Ayes. MOTION passed unanimously. Commissioner Spoonheim used the example where older buildings are sold and torn down, which displaces families. He noted those are examples of naturally occurring affordable housing (NOAH) that were redeveloped into market rate buildings and the families that are displaced have no where to go. He commented that ten percent of seniors in this community live on under $15,000 per year. He commented that demolition of naturally occurring affordable housing without replacement should be addressed. HRA Executive Director Fernelius understood the point but believed that the group is wandering into territory that would require legal guidance. He stated if that scenario described were to 9 Draft Minutes Plymouth Housing and Redevelopment Authority September 28, 2023 Page 8 happen, there would most likely be a zoning or land use request that would trigger the policy but there would then be a legal question related to legal use of the property. He stated that staff could bring back legal input on that issue for the next meeting. Commissioner Williams asked why the definition of units does not include triplexes or fourplexes. HRA Executive Director Fernelius commented that clarifying language could be added. Commissioner Vohs commented he also does not think this policy and the requirement for affordable housing would cost the city money. He commented there is often thought to be a correlation between affordable housing and crime. He stated that a number of studies have been done to disprove that thought. He then provided some suggested language changes and provided an example of where he believes the policy could be an overreach involving outside funding. He also noted in the case that those outside funding sources are secured, that will require a local funding contribution from the city, which would also trigger the policy and therefore the statement is redundant. Commissioner Spoonheim agreed with the suggestions of Commissioner Vohs to strike H and I from financial assistance. Chair Soderberg commented that staff will incorporate the changes and suggestions, and this will be revisited at the next meeting. Commissioner Spoonheim commented on the input received from a resident related to safety in the neighborhood and wanted to address that comment. He acknowledged the comments received about city center. He stated the density proposed in city center is not part of this discussion and is not something the HRA can act on. He commented that Plymouth residents want more restaurants and services and the reason those are not coming is because more residents are needed to attract developers. He noted that density is not related to crime. He thanked the residents for providing input tonight. Commissioner Vohs commented that most cities have people leaving to work in other places, whereas Plymouth has more people coming to work here but they cannot afford to live here. Mayor Wosje said before COVID there were over 60,000 jobs in the city where people were coming to work but now more people are working remotely, there are about 54,000 people coming to work here. He stated there is a lot of manufacturing in Plymouth with people making $30 to $35 per hour. He noted that people can purchase the same size home in a different community for a lesser price than Plymouth and therefore choose to live somewhere else. Met Council has conducted a study showing that the highway 55 corridor has the highest reverse commute between Corcoran, Medina and Plymouth where people travel to jobs in Plymouth and Golden Valley. 6. NEW BUSINESS 10 Draft Minutes Plymouth Housing and Redevelopment Authority September 28, 2023 Page 9 6.1. Elect Secretary Chair Soderberg asked if anyone was interested in the position. Commissioner Vohs volunteered. MOTION by Chair Soderberg, seconded by Commissioner Peterson, to elect Commissioner Vohs as Secretary of the HRA. Vote. 5 Ayes. MOTION passed unanimously. 7. UPDATES Commissioner Vohs commented that he would like the HRA to stay informed on housing related development requests. Chair Soderberg confirmed that is the intent of this agenda item. Commissioner Vohs referenced the sun valley mobile home park, which is a form of affordable housing, and provided input on some review he had done of that park. He stated that perhaps there could be outreach to advise the residents about funds that could be available to rehabilitate that housing stock. Commissioner Williams stated that he would be interested in a list of projects that are occurring or on the horizon so that they could stay informed. HRA Executive Director Fernelius confirmed that he could put together that type of list to share with the HRA. He then introduced the newest member of staff, Housing Manager Steven Schmidt. He reviewed his verbal update to the group. 8. ADJOURNMENT MOTION by Chair Soderberg, with no objection, to adjourn the meeting at 9:09 p.m. 11 Regular Housing and Redevelopment Authority October 26, 2023 Agenda Number:6.1 To:Housing and Redevelopment Authority Prepared by:Grant Fernelius, Community and Economic Development Director Reviewed by:Grant Fernelius, Community and Economic Development Director Item:Discussion and Recommendations for an Inclusionary Housing Policy 1. Action Requested: Staff is requesting that the HRA discuss and then make a recommendation to the City Council on adoption of an Inclusionary Housing Policy. 2. Background: In 2022, the HRA discussed a proposed policy to encourage the development of additional affordable housing in the city. The policy was formulated with the help of several different stakeholder groups and discussed by the HRA at their July, August and September 2022 meetings. At the September 2022 meeting the HRA ultimately chose to delay action on the policy to a future date. The item was on hold until June 2023 when the HRA requested to bring the policy back for further discussion. At the August 24, 2023 meeting the HRA reviewed the 2022 draft moderate income policy and requested several changes. The board also requested that a public hearing be held at the September meeting to review the policy and allow for public input. At the September 28, 2023 meeting, the HRA reviewed the policy once again and conducted a public hearing. A total of 7 residents testified at the hearing. The comments received are reflected in the meeting minutes. The HRA suggested the following changes: 1) Clean-up minor grammatical errors throughout the document and revise the introductory paragraphs that had several redundant statements about the purpose of the policy. Those changes have been incorporated. 2) Reduce or limit the type of discretionary actions that would trigger the policy to those impacting the Comprehensive Plan; zoning or land use policies/ordinances; or the use of Planned Unit Developments (PUD) to approve a project. Staff reviewed the draft policy with the city attorney and based his guidance, the policy for discretionary actions should be limited to Planned Unit Development (PUD). The city does have a relatively higher amount of discretion when it comes to PUD's and often times there are negotiations that take place achieve various land use and comp plan goals. There is less discretion on other zoning matters and its important to avoid a challenge that the city is overreaching legally on what it can require through housing policy. 12 3) The policy should clarify what happens in situations when an existing apartment building or Naturally Occurring Affordable Housing (NOAH) is demolished or substantially rehabilitated and existing tenants are displaced. Staff did revise the policy to include existing apartments that undergo substantial rehab or are demolished, but only if city assistance is provided or discretionary decisions are made. Staff does not believe the policy should be a deterrent to reinvestment in existing housing stock. 4) The policy should be expanded to include triplexes and fourplexes. Those housing types have been added to the definitions section of the policy. 5) With regard to City Assistance, the policy should remove outside funding sources that already include affordable housing requirements. The previous draft referenced a program from the Federal Home Loan Bank, as well as federal, state, county and Met Council funding. The board felt it was unnecessary to add those programs since many already include some element of housing affordability. Those references were deleted. Lastly, there was a question raised after the meeting about whether the policy applies to new single-family developments. The existing language was confusing because it referenced single-family housing in various places but was not included in the list of eligible projects. Staff believes this was an oversight and has clarified that the policy applies to any new residential developments of 10 or more units. Staff has also invited the city attorney (Soren Mattick) to attend and help answer questions the HRA may have about the topic. 3. Budget Impact: Previous staff reports suggest that the city could incur some costs for compliance activities related to this policy. Those impacts will need to be considered as part of any future implementation. 4. Attachments: Draft Inclusionary Housing Policy (10-26-2023).pdf 13 1 Inclusionary Housing Policy (HRA Packet: 10/26/2023) 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 residential Development receiving City financial assistance or requesting Planned Unit Development (PUD) approval include units affordable to low and moderate income households (generally defined as 30% to 80% of Area Median Income). The requirements set forth in this Policy further the City’s Housing Goals and the Comprehensive Plan to create and preserve affordable housing opportunities. I. Definitions 1. City Financial Assistance: The use of public funds of, or administered by, the City for any new residential 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; G. Land Write Downs; 2. Discretionary Actions: A decision or action that the City has the authority to take, or request from or make application to other governmental entities to take, that without such action, a proposed development or project would not be possible to be accomplished. Such decisions or actions include, the adoption of or changes, modifications, amendments, exceptions or waivers to: A. Planned Unit Development (PUD) 3. Unit(s): Apartment, housing condominium, townhome, duplex, triplex, fourplex or a single-family dwelling. 4. Development: Any undertaking to provide residential dwelling Units to which requests for City Financial Assistance or other Discretionary Actions are made of the City. II. Applicability and Minimum Development Size This Inclusionary Housing Policy applies to all new residential Developments and some existing multi-family dwellings that receive either City Assistance or a Discretionary Action and meet the 14 2 following thresholds: (1) new Developments that create at least 10 dwelling Units; or (2) reconstruction, expansion or demolition an existing residential multi-family building that will contain after completion of such alteration at least 10 dwelling Units, (3) 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 Units. III. Affordable Dwelling Units General requirements To ensure affordability, the City requires that (i) a certain percentage of Units in a Development are reserved for and leased or sold to individuals or families of low or moderate-income as described in this section, and (ii) 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 that is subject to this Policy shall provide a number of affordable dwelling Units equal to the percentages cited below, times the total number of Units in the Development. The required number of affordable dwelling Units is based on the total number of dwelling Units that are approved by the City. If the final calculation includes a fraction, the fraction shall be rounded to the nearest whole number. (ii) Income Targets The required number of affordable dwelling Units within a residential Development subject to this policy shall be reserved for and either leased to or sold to individuals or families who meet the income thresholds as outlined below . The Developer can select the level of affordability that is appropriate for their project: (1) Rental Developments: A. At least twenty percent (20%) of the Units shall be reserved for and leased to individuals or families whose household income does not exceed sixty percent (60%) of the Area Median Income (AMI); or B. At least ten percent (10%) of the Units shall be reserved for and leased to individuals and families whose household income does not exceed fifty percent (50%) of the Area Median Income; or C. At least five percent (5%) of the Units shall be reserved for and leased to individuals or families whose household income does not exceed thirty 15 3 percent (30%) of the Area Median Income (AMI). (2) For-Sale Developments: A. At least fifteen percent (15%) of the Units shall be reserved for and sold to individuals or families whose household income does not exceed eighty percent (80%) of the Area Median Income (AMI). (iii) Rent and Sale Price Levels Rental Unit: The monthly rental price for affordable dwelling Units shall include rent and utility costs and shall be based on the applicable Area Median Income (AMI) for the Twin Cities metropolitan area adjusted for bedroom size and calculated annually by Minnesota Housing for establishing rent limits for the Housing Tax Credit Program. For-Sale Developments: The qualifying sale price for an owner-occupied affordable dwelling Unit shall be based on the applicable amount affordable to household or individual at 80% Area Median Income (AMI) for the metropolitan area and calculated annually by Minnesota Housing for the Impact Fund program. Period of Affordability For rental Developments subject to this Policy, the period of affordability for the affordable dwelling Units shall be twenty-five (25) years. Units of for sale Developments shall be subject to this policy until sold to the income eligible owner(s). Standards for Affordable Rental Units Size and Design of Affordable Units The size and design of the affordable dwelling Units should be consistent and comparable with the market rate Units in the project and are subject to the approval of the City. Exterior/Interior Appearance. The exterior materials and design of the affordable dwelling Units in any Development subject to these regulations shall be indistinguishable in style and quality with the market rate Units in the Development. The interior finish and quality of construction of the affordable dwelling units shall at a minimum be comparable to entry level rental or ownership housing in the City. Construction of the affordable dwelling Units shall be concurrent with construction of market rate dwelling Units. IV. Integration of Affordable Dwelling Units Distribution of affordable housing Units. The affordable dwelling Units shall be incorporated into the overall Development unless expressly allowed to be located in a separate building or a different location approved by the City Council. Affordable dwelling Units shall be distributed equally by bedroom size and throughout the building. 16 4 Number of bedrooms in the affordable Units. The affordable dwelling Units shall have a number of bedrooms in the approximate proportion as the market rate Units unless the developer demonstrates the need for a different proportion based upon a documented need for such units within the City . The mix of Unit types, both bedroom and accessible Units, of the affordable dwelling Units shall be approved by the City. Tenants Change of Income Affordable rental dwelling Units shall be rented only to income eligible families during the period of affordability. An income eligible family may remain in the affordable dwelling Unit for additional rental periods as long as the income of the family does not exceed one-hundred forty percent (140%) of the applicable AMI. If the family income exceeds this amount they must be moved to the first available market rate Unit that meets their household size. V. Alternatives to On-Site Development of Affordable Dwelling Units This section provides alternatives to the construction of onsite affordable dwelling Units as a way to comply with this Policy. The alternatives are listed in subsection (3), below. (1) The alternatives must be: A. Approved by the City Council, and B. Agreed to by the applicant in a separate 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 equivalent or greater to onsite 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 that are required by this Policy. A. The dedication of existing market rate Units to permanently affordable moderate-income dwelling Units that are of equivalent quality and size. Existing dwelling Units are approved as suitable affordable housing dwelling units through covenants, contractual arrangements, or resale restrictions. 17 5 B. Offsite construction of affordable dwelling 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 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 within the City. VI. 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. VII. Housing Performance Agreement (1) Applicability Developments that are subject to this Policy shall enter into a Housing Performance Agreement as described below, which documents how the developer complies with each of the applicable requirements of this Policy. (2) Approval The Housing Performance Agreement shall be approved by the City. (3) Contents. The Housing Performance 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 and affordable dwelling Units in the development by bedroom size and income threshold. D. The pricing for each affordable ownership dwelling Unit. 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 18 6 in the formulas used in this ordinance. E. Proposed schedule of individual Unit development (market rate vs. affordable units). F. For owner-occupied units, 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 are comparable to the appearance of the market-rate Units. G. Any and all other information that City staff may request to achieve the Council’s affordable housing goals. VIII. Recorded Agreements, Conditions and Restrictions (1) The Housing Performance Agreement and/or Declaration of Restrictive Covenants shall be executed between the City and Developer, in a form approved by the City Attorney, which formally sets forth Development approval and requirements to achieve affordable housing in accordance with this Policy and location criteria. The Housing Performance Agreement shall identify: A. the location, number, type, and size of affordable housing Units to be constructed; and B. income limitations for the affordable Units; and C. sales and/or rental terms; occupancy requirements; and D. a timetable for completion of the Units; and E. restrictions that will be placed on the Units to ensure affordability; and F. annual rental tenant income and rent reporting requirements; and G. 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 Restrictive Covenants and other related instruments, to ensure the affordability of the affordable housing Units in accordance with this Policy. (3) The applicant or owner must 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 subject to this Policy. (4) Documents described above shall be recorded in the Hennepin County Registry of Deeds as appropriate. IX. Exemptions The City acknowledges that, in some circumstances, it may prove difficult for a developer to meet the standards set forth in this Policy. In cases where a developer can demonstrate, in the sole 19 7 judgment of the City Council, that the requirements represent an undue burden to their project, the City Council may grant a full or partial exemption from this Policy or may otherwise alter the requirements of this Policy X. State and Federal Law 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. 20 Regular Housing and Redevelopment Authority October 26, 2023 Agenda Number:7.1 To:Dave Callister, City Manager Prepared by:Grant Fernelius, Community and Economic Development Director Reviewed by: Item:Staff Updates 1. Action Requested: Receive update from staff on various projects and activities. 2. Background: As requested at the last meeting, staff has prepared the attached memo updating the HRA on various projects and activities involving the Community and Economic Development Department. 3. Budget Impact: N/A 4. Attachments: HRA Updates (October 2023) Sketch_Layout (Prudential) 21 MEMORANDUM DATE: October 19, 2023 TO: HRA Commissioners FROM: Grant Fernelius, HRA Executive Director/CED Director SUBJECT: Updates for October 2023 As requested, staff has prepared the following updates on projects and activities of the Community and Economic Development Department. Four Seasons Mall Earlier this year the city and Wellington Management chose to part ways and discontinue their negotiations for redevelopment of the former shopping mall. The parties were far apart financially on a deal. The city acknowledges this is a challenging site and has been prepared to offer various tools, including tax increment financing. Unfortunately, the gap was simply to big to overcome. Since then, staff has been in informal discussions with another developer. Those talks are on-going. No formal plans have been submitted as this point. Prudential Redevelopment Scannell and Roers Co. received approval at the September 26th city council meeting for a Comprehensive Plan amendment that will re-guide the site from its current Office designation to Mixed-Use Development (future use). The MXD designation would allow for range of land uses including housing, commercial/retail and med-tech. The Comp Plan amendment is the first step in the process. Future steps will include rezoning, re-platting and one or more site plans for the individual projects. At this point, the developer has a concept plan (attached), but no specific details about individual development components. Building demolition and site is anticipated to start some time in 2024. Dietrich Development Earlier this year, Dietrich Development presented a sketch plan for a mixed-use (apartments and retail) project on a vacant parcel of near 10th Avenue and South Shore Drive. This parcel is often referred to the John Allen site, the developer who originally bought the property in 22 1990’s. The Dietrich proposal includes 330 units of apartments and a small amount of ground floor retail. Since last spring the developer has been working on their financing. The developer is still evaluating options unit mixes and level of affordability. We don’t a timeline on next steps, but at some point the developer will need to go through a formal site plan application process. Any requests for development assistance will be also need to be evaluated. Parkera Development Parkera which redeveloping the former Dundee Nursery site along Highway 55, is requesting an extension of their PUD approval that was originally granted in 2021. The company cited rising interest rates and construction costs as the reason the delay. They are asking the city council for a 2-year extension, which will be considered on October 24th. TCO Had their grand opening on October 7th and the event was well attended. The Brooks Apartments Enclave Companies continues on the construction of their new apartment building near Nathan Lane and Bass Lake Rd. The 219-unit complex is expected to open in late 2024. City Center As follow-up to adoption of the City Center 2.0 plan, the City Council approved updated zoning code changes and new design standards in September. The goal is to revitalize the area that serves as Downtown Plymouth and encourage new investments in housing, retail, entertainment and other activities. As part of the plan, the city will also make some significant infrastructure improvements. Plymouth Blvd. will be reconstructed between Highway 55 and Rockford Rd. beginning in 2024. Additional details can be found here: Plymouth Boulevard Rehabilitation Project | City of Plymouth, MN (plymouthmn.gov) In addition to Plymouth Blvd. the City is also looking to add a 4th sheet of ice at the Plymouth Ice Center; construct regional stormwater ponding to address needs throughout City Center; add a parking ramp that would serve multiple users at the Hilde, LifeTime and potentially serve commuters for a transit stop that would be part of a new Bus Rapid Transit (BRT) line along Highway 55. Development News Other development news can be found on the CED webpage. Link here: Development Happenings | City of Plymouth, MN (plymouthmn.gov) 23 SY C A M O R E LA N E N . QUIN W O O D L A N E N . NORT H W E S T B O U L E V A R D BASS L A K E R O A D CHANKAHDA T R A I L (CSAH 47) IN T E R S T A T E 4 9 4 KEYNOTE LEGEND PRUDENTIAL SITE SITE SKETCH PLAN 06/09/2023 COR R I D O R REST A U R A N T S & RETA I L WETLANDS AREA + TRAILS GROCERY /COMMERCIAL MED-TECH / BUSINESS PARK WATERFRONTRESTAURANT & RETAIL MULTIFAMILY MULTIFAMILY PRESERVED KNOLL &TREES PRESERVED AREA 06/21/2023 N 24