EDA Agenda 03-10-2021 (Workshop Meeting)AGENDA
WORKSHOP MEETING - ECONOMIC DEVELOPMENT AUTHORITY (EDA) AND
CITY COUNCIL
Wednesday, March loth, 2021— 4:30 p.m.
Bridge Room, Monticello Community Center
Participants can choose to attend in -person or remotely via Go -To:
Web: https://global.2otomeetin2.com/ioin/407320829
Phone: (872) 240-3212 1 Access Code: 407-320-829
Commissioners: President Steve Johnson, Vice President Bill Tapper, Treasurer Jon
Morphew, Tracy Hinz, 011ie Koropchak-White and Councilmembers
Lloyd Hilgart and Jim Davidson
City Council: Mayor Lloyd Hilgart, Jim Davidson, Charlotte Gabler, Sam Murdoff,
Brian Hudgins
Staff. Executive Director Jim Thares, Angela Schumann, Sarah Rathlisberger and Jacob
Thunander
1. Call to Order
2. Roll Call
3. Discussion -Duffy Development Affordable Tax Credit Housing Proposal Discussion
4. Adjournment
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March 10, 2021
D.ILSCUSSION TOPICS
Introduction to Duffy Development Company, Inc.
The Need for Workforce and Affordable Housing
Financing Workforce and Affordable Housing
Housing Tax Credit Program and Process
Monticello Housing Proposal
www.duffydevelopment.com
IKRODUCTION TO DUFFY DEVELOPMENT OMPANY, INC.
CURRENTLY OWN 21 AND MANAGE 18 HOUSING TAX
CREDIT PROPERTIES IN THE TWIN CITIES
THE CROSSING IN BIG LAKE - 71 UNITS
THE DEPOT IN ELK RIVER - 53 UNITS
COACHMAN RIDGE IN ELK RIVER - 53 UNITS
LONG-TERM OWNER
-USING HOUSING TAX
Sk
IN 1992
-FIRST PROPERTY DEVELOPED
CREDITS COMPLETED
STRONG COMMUNITY PHRTNERSHIPS
www.duffydevelopment.com
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INTRODUCTION TO DUFFY DEVELOPMENT COMPANY, INC.
Minnetonka
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INTRODUCTION TO DUFFY DEVELOPMENT COMPANY, INC.
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THE NEED FOR AFFORDABLE AND WORKFORCE HOUSING
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3.. City of Monticello Housing Market Report 2017
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2. Feasibility Analysis for Monticello Workforce
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Housing — May, 2020
I City of Monticello Housing Needs and Market
yDemand, 2020
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www.duffydevelopment.com
THE NEED FOR AFFORDABLE AND WORKFORCE HOUSING
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Rental Demand
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2017Study DemandRental 243
2020 Housing Needs Study Demand of 290 — 362 Rental Units
145- 181 Affordable
107 — 136 Mid -Level Market
4k 38 — 45 High Market �•:; .-Yz�:;�4•Iy. ��; �;,
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Total Units constructed and approved since 2017 report - 294
Affordable Units constructed and approved since 2017 report - 10
www.duffydevelopment.com
THE NEED FOR AFFORDABLE AND WORKFORCE HOUSING
Rental Production —Avg. z BR Apartment
Deephaven Apartments - $1,500
Rivertown Residential Suites - $1,450 (10 affordable units)
Monticello Crossing - $1,550 - $2,400
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Household Income Required -Avg. 2 BR Apartment
• @30% of Income - $60,000
• @40% of Income - $45,000
• @50% of Income - $36,000
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www.duffydevelopment.com
THE NEED FOR AFFORDABLE AND WORKFORCE HOUSING
Workforce Demand 31839/5,076 = 75%
Office & Admir :
Supper! - Arl
r),340
$41.=)
'6 .0
1,015
sutf 502
$1 1.111
L.W
Sales & Related.
�.140
31,810
$554
5795
$74.390
$106,882
765
Uccupalio!
-170
38,525
t 5
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$88 03
$130,452
s59
Production
Occupalions - r s
Transportation &
s 445
$36.210
$586
5905
$78,175
$121.666
649
Material Movinq
hrlanagernent
Occupauorl,,�- All
wu� r'60
5102,915
61 39'
32,575
$1B7,364
$346, G3
618
Food Pf.
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$71.971
$84,706
526
All
.,)10
lkdlthcare
Practitioners & Reiati_.-
$42.105
i, ;
$1 { .;?
1.8)?:
$141.473
$251.614
. All
E34islne&s,and FInanc
Operaliom - All
$41.795
W.300
$1,{}45
$1,658
$140,431
$222.768
23H
Educationallm,.-
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52.495
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$�3.2�in
7b,388
;
& Llbrary , All
www.duffydevelopment.com
THE NEED FOR AFFORDABLE AND WORKFORCE HOUSING
Program Income Limits
County: Wright
Effective Date: 04/01 /2020
Income Limits By Household Size
1
2
3
4
5
6
7
8
20%
14,480
16,560
18,620
20,680
22,340
24,000
25,660
27,300
30%
21,720
24,840
27,930
31,020
33,510
36,000
38,490
40,950
40%
28,960
33,120
37,240
41,360
44,680
48,000
51,320
54,600
50°/a
36,200
41,400
46,550
51,700
55,850
60,000
64,150
68,250
60%
43,440
49,680
55,860
62,040
67,020
72,000
76,980
81,900
70°/9
50,680
57,960
65.170
72,380
78,190
84,000
89,810
95.550
800/0
57,920
66,240
74,480
82,720
89,360
96,000
102,640
109,200
Does this create competition with market rate housing?
www.duffydevelopment.com
FINANCING AFFORDARJUE AND WORKFORCE HOUSING
Project Costs
Construction Costs
Soft Costs
Financing Costs
Project Sources
• Amortizing Debt (20%)
• Housing Credit/Equity (70%)
• GAP (10%)
www.duffydevelopment.com
FINANCING AFFORDARJUE AND WORKFORCE HOUSING
■ Housing Tax Credit Program
• Federal program of the Internal Revenue Service
• Passed on to States for administration purposes
• Awarded to developers based on a scoring process
• Maximum request can be $1.35 Million in credits
• Minnesota has approximately $6 Million in credits for Greater MN
• In 2020, the State received 23 applications from Greater MN
• Credits were awarded to eight developments
■ Extremely competitive!!
• Scoring range of approved developments was 120-124 points
www.duffydevelopment.com •
FINANCING AFFORDARJUE AND WORKFORCE HOUSING
■ Housing Tax Credit Program
■ The credits are utilized annually over 10 years.
• Credits are sold to a third -party investor
• $1.3M award for 10 years = $13,000,000
• Investor partner buys credits for cash at a present value
• Credits are currently worth approximately $.86/$1.00
• Generates approximately $11.2 M for construction
• The 10-year credit creates 40-50 years of affordable housing
www.duffydevelopment.com V
FINAMU'ING AFF°ORDAD%E AND WORKFORCE HOUSING
Housing Tax Credit Program
Application includes 25 scoring categories
Population served
Geographical location
Deeper affordability or rental assistance
Design elements
Two of the 25 categories request direct City support
• Maximum points of the two categories is 26
(1) Readiness to Proceed
(2) Other Contributions
www.duffydevelopment.com
FINANCING AFFORDARJUE AND WORKFORCE HOUSING
• Readiness to Proceed
• Funding gap committed compared to total funding gap
• Can receive up to 16 points in competition scoring
• TIF support fills funding gap and allows maximum points possible
■ Other Contributions
• Non -financial support compared to total development costs
• Can receive up to 10 points in competition scoring
• Fee waivers and development flexibility create value
• Waive City development fees (bldg. permit, area charges, SAC/WAC)
• Allow one covered space vs. 1.15
• Allow less than 900 square foot minimum
• Scoring levels- 1 %=2, 3.5%=4, 6.1 %=6, 8.1 %=8 and 10.1 %+=10 pts
www.duffydevelopment.com V
FINANCING AFFORDARJUE AND WORKFORCE HOUSING
Sources and Uses of Funds
Development Expenses Amount
Land
$
609,000
Hard Construction Costs
$
10,007,044
Professional Fees
$
1,474,000
City Development Fees
$
400,000
Other Soft Costs
$
450,754
Financing Costs
$
546,850
Capitolized Reserves
$
289,250
Total Development Expenses $ 13,776,898
Development Sources
Amortizing First Mortgage (GMHF) $ 1,175,000
Limited Partnership Equity (Tax Credits) $ 11,676,332
GAP $ 906,566
Energy Rebates $ 19,000
Total Permanent Sources $ 13,776,898
www.duffydevelopment.com �•
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MONTICELLO HOUSING PROPOSAL
MONTICELLO HOUSING PROPOSAL
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o o e MONTICELLO RPRRTMENTS COLE GROUP
ARCH I T E C T S
K ha MONTICELLO, MN 216 Park Avenue S., Suite 102 • fit. Cloud, MN 56301
ano (3=o)esa-esm r.,: Cao)a3a_eno
www.duffydevelopment.com
MONTICELLO HOWNG PROPMAL
Three story apartment building with underground
k parking. Site amenities to include a fitness center,
playground, and community room.
53 Units
9 - One Bedroom Units
24 -Two Bedroom Units
k 20 -Three Bedroom Units2- As�
TScoring changes for 2021 /2022 put an emphasis on
ur-bedroom units.
www.duffydevelopment.com
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MONTICELLO HOUSING PROPOSAL
■ Timeline
■ Application to Minnesota Housing Due July 15, 2021
• Work with County on rental subsidy
• Work with City on scoring criteria support
• Work with Central MN Continuum of Care committee
• Finalize design and green building elements
■ Award of Funding Announced in December, 2021
■ Architectural Plans and City Development Approval, Spring, 2022
■ Finance Closing and Start of Construction, June, 2022
■ Construction Completion and Lease -up, July, 2023
www.duffydevelopment.com V
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