HRA Meeting Date: December 5, 2024
To: Members of the Housing and Redevelopment Authority
From: Melissa Hanson, Housing Coordinator
Title
HRA to Receive Update on HRA Resolution 2024-005.
Body
Action Requested:
HRA to receive proposal update by Oberto Properties, LLC and Rice County Habitat for Humanity and consider the sale of the property.
Summary Report:
The HRA’s mission is to be a partner in providing a sufficient supply of affordable, adequate, safe and sanitary dwellings in Northfield. Our goal is to create a community with housing opportunities available along the entire housing spectrum: from renters to homeownership, first-time homeowners, to senior living, workforce housing and empty-nesters. We strive to create affordable housing opportunities and strengthen our neighborhoods utilizing:
• Sustainability
• Innovation
• Partnerships
• Community Input
Oberto Properties, LLC (Oberto) is a small, real estate developer that resides in, and is a part of, Northfield. Oberto has a history of purchasing blighted, unused commercial spaces and rehabbing them as well as having experience with commercial new construction, having built the Rebound Self Storage.
Rice County Habitat for Humanity (Habitat) is a nonprofit organization dedicated to building a world where everyone has a safe, stable, and affordable place to call home. Habitat believes that affordable housing plays a critical role in strong and stable communities. Habitat has a long history of providing affordable housing, through both rehab and new construction, in Rice County and has recently expanded their rehab arm by adding Starfish, a newly established Northfield non-profit, under their umbrella of programs.
The HRA approved Attachment 1 Resolution 2024-005, Authorizing Designation of Tentative Developer Status for Oberto and Habitat for a period of 180 days. Within the time frame, the Tentative Developer will complete the following:
1. Within 90 days (December 18, 2024), for the Project, complete a formal scope of work with architectural/engineering plans and specifications to include site plan, elevations, incorporate Northfield’s Sustainable Building guidelines, exterior treatments/materials for review by HRA and suitable for submission to the Building Department to obtain the proper building permits.
The HRA received the attached Project plans November 25, 2024, in time to be included in the December 5, 2024 HRA meeting packet. As of the writing of this report, the HRA has not yet had the opportunity to review the Project plans to determine if suitable for submission to the Building Department for necessary permits.
2. Within 90 days (December 18, 2024), for the Project, submit evidence of availability of construction financing for review by HRA staff for acceptability.
The Development Team has met with HRA, EDA, and Community Development staff to talk about permanent financing for the potential occupant household and has shared that the project is already anticipated to receive funding through the Minnesota State Housing Tax Credit (SHTC) Contribution Program. It is not clear to staff the construction financing mechanism.
3. Finalize a detailed development budget and business plan for approval by the HRA staff.
4. Within 120 days (January 17, 2025), a HRA approved scope of work must be completed.
5. Within 180 days (March 18, 2025), receive all approvals for zoning, licenses and any other required City or State approvals required for the Project.
6. Negotiate final terms and conditions of a purchase agreement and development agreement which will include review of all compliance requirements, details of the bidding process and a sworn construction cost statement from their selected contractor for the Project.
Staff believes it is still premature to start negotiations for the purchase of the property until
The Development Team will provide their update to the HRA. Staff recommends that the HRA Board reserves making the formal decision to sell the property for one dollar ($1) until staff has had the opportunity to review the plans fully, and the Board has had the opportunity to discuss the transaction, and Down Payment Assistance requests, in relation to the budget at the January work session.
Attachment 2 is Tentative Developer update.
Attachment 3 are the exhibits provided to update.
Alternative Options:
N/A
Financial Impacts:
Total financial impacts have yet to be determined.
Tentative Timelines:
September 2024 - finalize agreement
September 2024 to March 2025 - due diligence, including site investigation, community meetings
March 2025 to June 2025 - additional due diligence as needed
Spring 2025 - potential to break ground