HRA Meeting Date: June 30, 2025
To: Housing and Redevelopment Authority
From: Jake Reilly, Community Development Director
Melissa Hanson, Housing Coordinator
Title
Update on Grant Application to Minnesota Housing for Infrastructure for Potential Homes Adjacent to Meadows Park.
Body
Action Requested:
The HRA receive an update on City Council Resolution 2025-060 authorizing application to the Greater Minnesota Housing Infrastructure Grant Program for up to $800,000 to support the infrastructure needed to develop up to 40 units of housing affordable to Northfield’s workforce.
Summary Report:
Staff worked with the Community Action Center to develop a grant application to Minnesota Housing’s new Greater Minnesota Housing Infrastructure Grant program. The program uses general obligation infrastructure bonds to support cities, counties and Tribal Nations creating sites for workforce and affordable housing in Greater Minnesota.
Grant funds can be used to cover up to 50% of the capital costs of physical public infrastructure necessary to support a qualifying housing development. This may include sewers, water supply systems, utility extensions, streets and more, necessary to support single-family, multifamily, homeownership and rental housing development. Capital costs to develop the infrastructure for the homes is estimated at $1,200,000 based on existing projects let for bid in 2024 and 2025.
Applicants’ matching funds may include in-kind contributions, such as donation of land. The land in question for this grant application is adjacent to Meadows Park in the southeastern corner of the City. The match must be committed in the grant application. Staff identified the following methods for generating the required $800,000 in matching funds:
• Selling or gifting the land at estimated market value (currently expected to be $78,700 per lot) for a total of at least $1,416,600 to address the required match.
• Downpayment assistance funds at $25,000 per home for a total of at least $450,000.
• Affordable housing trust fund dollars of at least $150,000.
• In-kind staff time, site preparation cost and other related administrative costs ($200,000).
Background
History
The area consists of 41.7 acres of land in the southeast corner of the City of Northfield. The land designated for park development was previously preliminary platted as a component of the phased Fargaze Meadows Planned Unit Development in 2005-2007 and designated as Outlots C and D, dedicated to single-family home development. The entire area was originally conceived as having 141 housing units of varying scale and unit counts, a five-acre park, and infrastructure including stormwater retention ponds, sidewalks and trails. Outlots C and D were to have 14 units. The Great Recession negatively impacted the project, and the two parcels of land were acquired by the City of Northfield through land forfeiture proceedings on July 1, 2013.
The city council designated the Park and Recreation Advisory Board (PRAB) as the lead to facilitate a master plan for the area. In 2015 the City Council via resolution 2015-108 (attached) adopted the Meadows Park Master Plan which designated all but approximately five acres of the northern most portion of the property (east of the existing Abbey Road). Several scenarios were contemplated during the master planning process including a mix of housing and parkland and several different park designs. The resolution also directs the city to pursue a turnback of the northern most ~five acres to the state for sale by auction. This turnback did not occur. Today, a decade later, the land still consists of agricultural land surrounded by single-family homes, a stormwater pond and adjacent spoils pile and other agricultural land to the east and south. A local farmer continues to lease the land from the City.
Community development staff wish to retain local control over the use of those acres to ensure that any prospective development in the area meets the needs of the existing and future Northfield community. Therefore, concurrent to the grant application, staff will work with the state to identify the best path forward for the city to make use of the property for additional single-family homes. Similarly, community support and engagement will be initiated later this summer for the entire southeast corner of the city, an area most connected to important resources such as the Highway 3 commercial/industrial/job center, the Northfield Community Resource Center (NCRC) and the high school and middle school complex.
Comprehensive Plan
The project envisioned in the grant application complies with the City’s adopted Northfield 2045 comprehensive plan, which has an overall vision of creating a place where all can thrive, including having safe and secure housing and economic opportunities, and sustainable, resilient, and economical infrastructure investments. The policy direction of the city’s comprehensive plan to focus on development and redevelopment opportunities that are connected to existing infrastructure, including in this area which is identified as a priority growth area within the city limits. The plan also sets the stage for the city to intervene - when appropriate - in the case of market failures and uncertainty. This grant application addresses the following comprehensive plan strategies:
• Access Strategy 2: Develop in a compact, sustainable, and fiscally responsible pattern
• Access Strategy 6: Design for resiliency and sustainability
• Housing and Economic Security Strategy 4: Support the local workforce
• Housing and Economic Security Strategy 6: Grow in a compact, sustainable development pattern
• Housing and Economic Security Strategy 8: Build more housing
• Housing and Economic Security Strategy 9: Support at-risk sellers, buyers, and tenants
• Housing and Economic Security Strategy 10: Create programs to support affordable and sustainable homes and neighborhoods.
• Resilient Infrastructure Strategy 2: Plan water, stormwater, and wastewater infrastructure to be resilient
• Resilient Infrastructure Strategy 3: Plan streets for safety and stormwater management
Strategic Plan
The 2025-2028 Strategic Plan identifies the creation of at least 100 units of housing each year between 2026 and 2028. It also identifies a goal to right-size of city services with community needs and addressing the tax base mix and related burden on single family home property owners.
Should MN Housing award this grant, the approach will require a new public planning process to address a new outcome for the area. Staff has committed time and resources to a thorough title search and evaluation of potential barriers to success, including due diligence such as survey and preliminary geotechnical work so as to be as prepared as possible for conversations with the community, with potential building partners, and to get into the ground in a reasonable timeframe if awarded the grant.
Later in 2025 staff will work with an engagement team to coordinate conversations with those who live and work in the southeast portion of the city about the needs of existing and future residents.
Alternative Options:
None identified.
Financial Impacts:
Cost impacts: Long-term maintenance costs. Use of downpayment and affordable local housing trust fund dollars.
Revenue impacts: Subsidy of one half of the initial infrastructure cost is a cost reduction to the municipality. Additional tax capacity generated by additional housing units.
Tentative Timelines:
Grant application submitted June 12, 2025
Grant award announcement anticipated by year end 2025
Initial community conversations initiated Q3 2025
Specific community engagement process anticipated in 2026, if awarded.
Infrastructure construction anticipated 2026-2027, if awarded.