HRA Meeting Date: September 19, 2024
To: Members of the Housing and Redevelopment Authority
From: Melissa Hanson, Housing Coordinator
Title
HRA to Consider a Housing Redevelopment Proposal for an HRA Owned Vacant Lot.
Body
Action Requested:
HRA is being asked by Oberto Properties, LLC and Rice County Habitat for Humanity to consider their residential redevelopment proposal utilizing the HRA-owned lot at 307 Sumner Street East.
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.
Oberto and Habitat is interested in redeveloping the HRA owned lot at 307 Sumner Street East. The proposal is part of a larger vision by Oberto Properties, LLC that is being referred to as Northfield R1 Revitalization and Reasonable Cost Housing Development Initiative (Attachment 1).
The proposal and letter of interest (Attachment 2) and concept art (Attachment 3) were received outside of the HRA’s RFP/ RFQ process. According to the HRA’s Disposition Policy, HRA staff has evaluated the proposal on the principles in the Disposition Policy below:
1. The proposed use of the property, and the consistency of that use with existing or proposed zoning, the City comprehensive plan, applicable City design guidelines, heritage preservation guidelines, where applicable, and neighborhood and community input regarding the proposal. The proposal is consistent with existing R-1 zoning for the property. The proposal is consistent with the adopted 2008 City of Northfield Comprehensive Plan. The Plan prioritizes infill development, which this project qualifies as. The proposal addresses the Plan’s goals to: Provide affordable housing opportunities for all the people who live and work in Northfield; provide a variety of housing options; preserve the historic neighborhoods and therefore Northfield’s sense of place; and contemplates green, sustainable, and other environmental considerations. While the proposal doesn’t indicate neighborhood and community input, staff included a requirement for the project proposer to include communicating with the neighborhood as a requirement in the Tentative Developer Status Resolution (HRA Resolution 24-005)
2. The estimated total development cost for the proposed project, including the amount to be paid to the HRA for the real property and/or additional public investment sought for demolition, remediation, infrastructure, etc. The HRA is in the process of clearing and preparing the site for redevelopment. The sale price of the lot has yet to be negotiated with the developer.
3. The estimated time to begin and complete the proposed project. The estimated time to begin and complete the proposed project is currently unknown. Based on the Tentative Developer Status Resolution and the benchmarks included, staff believe it reasonable to expect a spring 2025 groundbreaking on the project.
4. Its consistency with the City's public policies, including its affordable housing goals, Sustainable Building Policy, promotion of quality architectural design and level of quality acceptable to the Board and Community. The preliminary drawing shared by Oberto and Habitat seem to be in line with the City’s policies. Oberto and Habitat have employed Sweetgrass Design Studios, represented by resident and architect Brian Nowak, who happens to also serve on the Northfield Planning Commission to aid in determining sustainable building construction and architectural design. Sweetgrass Design Studios also designed the Community Action Center’s (CAC) Hillcrest Village.
5. Contribution of the proposal to the tax base of the City and net effect of the proposal on the City’s overall budget. The contribution of the proposal to the tax base of the city as compared to the amount of subsidy needed is unknown at this time. The proposal calls for construction of an affordable home ownership opportunity for a single, double/duplex/twin-home, or a tri-plex. The Tentative Developer Status Resolution identifies that a minimum of two (2) housing units be designed and constructed for the property, with a preference for three (3) units; maximizing the existing allowed density in an infill opportunity. Further, as the site is an infill site, it will make use of the city’s existing water and wastewater infrastructure and is therefore less burdensome on existing taxpayers than greenfield development has the potential to be.
6. Demonstration to the Board’s sole satisfaction of the developer’s ability to complete the proposed project based on past development experience, general reputation, credit history, among other factors, and including experience with the size and scope of the proposed project. Oberto has commercial rehabilitation and new construction experience (see Attachment 4). Habitat has a history of providing affordable housing in Northfield. The architect team has a record and history of providing high-quality development products from accessory dwelling units to single-family homes including townhomes, including as part of the team that developed Hillcrest Village, which has become a model for other communities around the country.
7. The developer's demonstrated ability to meet equal opportunity/affirmative action employment and contracting goals established by the City of Northfield, its demonstrated past history of providing contracting and employment opportunities for qualified minority and women individuals and minority/owned small businesses and its proposed use of local contractors. Hat this time, the City of Northfield does not have stated equal opportunity/affirmative action employment and contracting goals, however, the project team includes a woman-led nonprofit development organization in Habitat and all three components of the project team are local to Northfield and have demonstrated success in using local contractors for all aspects of other developments in which they have worked, including in public and private partnerships.
8. Achievement of other public purpose goals. HRA’s acquisition of the property proved a solution regarding a blighted property that had been a challenge for both the Building and Police Departments. This also presents an infill opportunity, to add density to an established neighborhood with a design that fits the character of surrounding homes.
9. Upon evaluation of all the proposals, the Board by Resolution may either reject all the proposals or select one or more of the proposals that best accomplishes the objectives and goals of this Policy. The Board may grant tentative developer status or authorize a development agreement or contract for the sale of land by Resolution contingent on the completion of all the requirements contained in the Resolution. There was no HRA solicitation for proposals or RFQ/RFP. Oberto and Habitat partnered with other local-to-Northfield partners to assemble their proposal.
This is a discussion item. The HRA Board will have an opportunity to grant or deny Oberto and Habitat’s request for Tentative Developer Status when discussion has concluded.
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