HRA Meeting Date: June 6, 2024
To: Members of the Housing and Redevelopment Authority
From: Melissa Hanson, Housing Coordinator
Title
Southbridge Development Update and Geotechnical Analysis Request.
Body
Action Requested:
The HRA hear an update regarding the Northcountry Cooperative Foundation (NCF) proposal at Southbridge and to authorize geotechnical analysis of HRA and City owned land at Southbridge.
Summary Report:
The Northfield HRA’s mission is to be a partner in providing a sufficient supply of affordable, adequate, safe and sanitary dwellings. The HRA exists 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. The HRA strives to create affordable housing opportunities and strengthen our neighborhoods utilizing:
• Sustainability
• Innovation
• Partnerships
• Community Input
In fall 2022, thanks to connections within the local-to-Northfield affordable housing advocacy network, NCF contacted City of Northfield staff to discuss a concept called, “New Leaf Cooperative.” The concept is a potentially scalable model for new single-family homeownership subdivisions built to municipal infrastructure engineering standards using a cooperative ownership model and HUD-certified manufactured homes as the product. Since then staff and NCF have been discussing this model and how it could be applied in Northfield, specifically if built on HRA- and City-owned land at Southbridge. NCF first presented the New Leaf concept plan to the HRA Board on May 4, 2023. On November 2, 2023, the HRA reviewed NCF’s revised concept plan and entered into a six-month Memorandum of Understanding (Att. 1) with NCF in order for the developer to secure additional funding for the project. The MOU was extended until May 31, 2024 and has since expired. A detailed timeline of the project proposal, presentations, and documents can be found on the City’s website: https://www.northfieldmn.gov/1613/Southbridge-Neighborhood
NCF has provided an update on the project’s progress (Att. 2).
The HRA recently passed a disposition policy (Att. 3). The Disposition Policy calls for the following analysis of the NCF New Leaf, unsolicited proposal:
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 application, and neighborhood community input regarding the proposal.
Originally, there were six parcels considered for the New Leaf Cooperative proposal: 22.07.2.53.021 (Aspen Park), 22.07.3.27.001 (Outlot A- owned by HRA), 22.07.3.01.004 (Outlot E), 22.07.3.03.004 (Outlot B), 22.07.3.01.003 (Outlot D), 22.07.3.01.002 (Outlot C).
Upon further investigation - prompted and supported by neighborhood residents - staff reviewed Resolution 2004-191 accepting conveyance of 10.06 acres: 22.07.3.03.004 (Outlot B), 22.07.3.01.002 (Outlot C), 22.07.3.01.003 (Outlot D) and 22.07.3.01.004 (Outlot E), Southbridge 1st Addition, for parkland and trail purposes. The resolution, passed on December 13, 2004, dedicated park and trail land for the entirety of the Southbridge Development. According to the Development Agreement, 6.05 acres were required to fulfill parkland requirements. 22.07.3.27.001 (Outlot A) is currently zoned N-2B, 22.07.3.03.004 (Outlot B) is zoned N-2B, 22.07.3.01.002 (Outlot C) is zoned N-1B, 22.07.3.01.003 (Outlot D) is zoned N-1B, and 22.07.3.01.004 (Outlot E) is zoned Public Benefit (park). Staff acknowledges that part of the parcels contemplated for future development are intended for park use and believes that a better configuration is possible with flexibility. Outlots C, D, E would need to be rezoned to N-2B in order to conform with the 2008-adopted Comprehensive Plan.
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.
It is not clear what the final development cost for the proposed project will be. NCF has been making every effort to apply for additional funds for neighborhood infrastructure. NCF has provided an estimated per unit/lot pro forma:
3. The estimated time to begin and complete the proposed project.
NCF contemplated timeline:
• Now - finalize details, secure additional financing
• Spring-Summer - Open model home and begin sales
• Fall & Winter & Spring construction
• Summer 2025 - Completion
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 City’s 2008 Comprehensive Plan identifies the need for housing that is affordable to existing residents and workers and the City’s 2021-adopted Climate Action Plan identifies goals associated with the sustainability and reduction in carbon footprint of buildings owned by or subsidized by city entities. The homes contemplated for the New Leaf Cooperative are HUD-certified manufactured homes built to a new, 2021 zero-energy-ready home standard developed in partnership with the U.S. Department of Energy. These homes are compatible with the City’s adopted Sustainable Building Policy. The homes are built to a national HUD standard that exceeds that for site-built single-family homes and installed to the same local standard as all homes, including modular and site-built.
There has been a question posed regarding the proposal’s consistency with the City’s public policies - namely, if there are enough different types of, “dwelling types” as required by the adopted Land Development Code’s subdivision requirements. As proposed the requirement is not met, but could be.
Table 2.3-1: Mixture of Dwelling Unit Types:
|
Number of lots in a subdivision |
Minimum % of lots required to accommodate any mix of 2, 3, or multi-family dwellings |
Required minimum dwelling types |
|
3-19 lots |
N/A |
2-unit types |
|
20-49 lots |
15% |
3-unit types |
|
50-99 lots |
20% |
4-unit types |
|
100 or more lots |
25% |
4-unit types |
5. Contribution of the proposal to the tax base of the City and net effect of the proposal on the City’s overall budget.
Any new building on undeveloped land offers a positive contribution to the City’s tax base and because the site is an infill site served by water and sewer, the long-term cost to the City is less than it would be if a similar development were to occur in a less connected area of the city. The total net impact to the city’s overall budget is unknown at this time, however projections suggest it is more likely than not to have a positive impact on the city’s tax base and not cost more to support in terms of city resources like police, fire, and public works than any other single-family home development.
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.
Northcountry Cooperative Foundation is a 501(c)3 nonprofit organization founded in 1999. To date, NCF’s housing work has focused on the conversion of manufactured home communities to co-ops through the Midwest Resident-Owned Communities (ROC) program, which has preserved thirteen (13) manufactured home communities and 850 affordable homes. NCF is a founding nonprofit affiliate of the ROC USA Network organization created in 2008. In partnership with organizations across the country, NCF has developed robust models for creating and sustaining new affordable housing co-ops. NCF’s development manager, Dave Berglund, has more than 20 years of sales and real estate experience. In addition, NCF has retained Charles Burdick, Principal at Streetfront Development. Burdick has more than 15-years of development and financial analysis expertise. As a LEED-ND-certified developer, Burdick has focused on infill projects using innovative and sustainable building techniques around Minnesota.
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.
NCF’s Executive and Associate Directors are both women. NCF’s Real Estate Development Director is a resident of Northfield and the contracted Tekton Engineers is a Northfield business. The proposed manufactured home builder, Schult/Clayton Homes, is located in Redwood Falls, MN, 100 miles from Northfield and has been in business since 1934 and in Redwood Falls since 1973. It employs a large, demographically diverse workforce and pays a living wage.
8. Achievement of other public purpose goals.
Because it is an infill project, the development will use existing infrastructure and enhance connections between and among neighborhoods; it will offer family-sized homes very close to several schools including the middle and high school, which will reduce vehicle miles traveled and other climate impacts, as well as offer homes priced at less than the existing average home sale price ($399,999 as of March, 2024) potentially affording churn within the existing Northfield housing market as seniors interested in single-level living may be interested in the homes as will young families looking to enroll children in Northfield’s high-quality public school system.
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.
In August 2023, the HRA heard a presentation by Rice County Habitat for Humanity for a different approach to development at Southbridge. In November 2023, the HRA entered into an exclusive six-month Memorandum of Understanding with NCF. The HRA Board has shared in prior meetings, that they would like to see a combined effort on a Southbridge Development by NCF, Rice County Habitat for Humanity and Johnson Reiland Homes.
As part of the update to the HRA, NCF is also recommending that the HRA/City complete a geotechnical analysis of the HRA- and City-owned Southbridge lots in order to determine the any risks to construction in the area.
Staff supports the recommendation. Such an evaluation must be done in order to complete development at Southbridge, regardless of the project proposer and engaging an engineering firm to do that work sooner rather than later will help achieve any development goals identified for the site by the HRA.
As the Board considers the future of development of the Southbridge area, staff asks the HRA board to consider the following questions:
• What information does the HRA board need to continue to support NCF’s proposed development? Would it be helpful to see additional housing types incorporated into the NCF proposal?
• Does the HRA board have interest in a combined proposal by NCF, Rice County Habitat and Johnson Reiland Homes?
• Is an RFP or an RFQ process the preferred approach and if so, which approach is of greater interested to the HRA Board members?
Alternative Options:
N/A
Financial Impacts:
Staff has reached out to Braun Intertec and Landmark Environmental for geotechnical analysis estimates.
Tentative Timelines:
If the HRA Board chooses to move forward with the creation of an RFP or an RFQ, it is estimated that the RFP/RFQ would go out Fall 2024, vetting and design work 2025 with possible ground breaking 2026.