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8.2 SR 01-03-2022 Request for Action To Item Number Mayor and City Council 8.2 Agenda Section Meeting Date Prepared by General Business January 3, 2022 Brent O’Neil, Economic Development Director Item Description Reviewed by MHFA Workforce Housing Development Cal Portner, City Administrator Program Grant Request Reviewed by Action Requested Approve, by motion, the attached resolution supporting an application to the Minnesota Housing Finance Agency for a workforce housing grant. Background/Discussion Briggs Companies is proposing the construction of Jackson Hills II, a housing development of 44 apartments at Sixth Street and Jackson Ave. In addition to requesting Tax Increment Financing through the city, Briggs Companies is pursuing additional funding sources to finance the project and has request the city partner on an application to the Minnesota Housing Financing Agency (MHF) under its Workforce Housing Development Grant and Deferred Loan Program. This MHF program supports workforce housing projects in greater Minnesota. Under the parameters of the program, the city would be the applicant and recipient of funds. The developer would be the subrecipient of funds, and the city could distribute those funds as a grant or forgivable deferred loan. Briggs Companies has indicated requesting up to $750,000. Among the benefits of utilizing the program are potentially modifying the local contribution of TIF to the project, strengthening the feasibility of the project, and increasing the impact of the project through additional units. The attached resolution attests to the council’s direction to apply for the program. Any award of funds would require agreements between MHF and the city, as well as between the city and developer. Further, the city would conduct an additional financial review of the project to ensure TIF is being utilized in a prudent manner. Financial Impact Funds received by the city would be distributed to the developer for a net neutral financial impact to the city. Mission/Policy/Goal This request supports the goal of increasing the supply of housing in Elk River. Attachments  Local Government Resolution of Support  Program Information Sheet The Elk River Vision A welcoming community with revolutionary and spirited resourcefulness, exceptional service, and community engagement that encourages and inspires prosperity. Updated: August 2020 City of Elk River City Council Resolution 22-____ A Resolution of the City Council of the City of Elk River authorizing an application to the Minnesota Housing Finance Agency under its workforce Housing Development Grant and Loan Program WHEREAS, the City of Elk River, Minnesota, a municipal corporation under the Constitution and laws of the State of Minnesota (the “City” or the “Recipient”) has submitted an application (the “Application”) for a project (the “Project”) pursuant to the Workforce Housing Development Program (“Program”) in order to obtain funding from the Minnesota Housing Finance Agency (“Minnesota Housing”); and WHEREAS, on this 3rd day of January, 2022, there has been presented to the meeting of the City Council of Recipient a proposal for Recipient, upon selection by Minnesota Housing, to enter in to a Grant Contract/Funding Agreement pursuant to the Program in order to obtain funding from Minnesota Housing. WHEREAS, on January 3, 2022, the City Council of the Recipient established Tax Increment Financing District (Housing) No. 28 (Jackson Hills Apartments Phase II Housing Project) (the “TIF District”) and adopted a Tax Increment Financing Plan (the “TIF Plan”); all pursuant to and in conformity with applicable law, including Minnesota Statutes, Sections 469.124 to 469.133 and Sections 469.174 to 469.1794, all inclusive, as amended (the “TIF Act”). WHEREAS, The Briggs Company (or an affiliate thereof, the “Developer”) has proposed to construct an approximately 44-unit multifamily workforce apartment building in the Recipient (the “Development”). WHEREAS, in connection with its application to Minnesota Housing for the Grant, the Developer has requested that the Recipient indicate their support of the use of tax increment assistance for the Development. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Elk River, Minnesota, as follows: that Recipient is authorized to enter into a Grant Contract/Funding Agreement, substantially in the form as attached to these Resolutions as Exhibit A, pursuant to the Program in order to obtain funding from Minnesota Housing in an amount not to exceed $750,000 (the “Grant/Loan”). BE IT FURTHER RESOLVED, that Recipient is an Eligible Project Area, as defined in Minnesota Statute Section 462A.39, subdivision 2, has the legal authority to apply for financial assistance, and has the institutional, managerial and financial capability to ensure adequate construction, operation, maintenance and replacement of the Project for its design life. BE IT FURTHER RESOLVED, that Recipient certifies that it will use the Grant/Loan for qualified expenditures for the Project to serve employees of business located in the City or surrounding area. BE IT FURTHER RESOLVED, that the Grant/Loan will be matched by $850,000 from the City in the form of tax increment financing assistance with at least $1 for every $2 provided. BE IT FURTHER RESOLVED, that Recipient certifies that the average vacancy rate for rental housing located in the City, and in any other city located within 15 miles or less of the boundaries of the area, has been five percent or less for at least the prior two-year period. BE IT FURTHER RESOLVED, that the Grant/Loan will not exceed 25 percent of the Project costs. BE IT FURTHER RESOLVED, that the Mayor and the City Clerk, or their successors in office, are hereby authorized to execute the Grant Contract/Funding Agreement and such other agreements, and amendments thereto, as are necessary to implement the Project on behalf of Recipient. BE IT FURTHER RESOLVED, the City supports the use of tax increment financing for the Development in the amount of up to $850,000 payable over approximately 15 years; provided, however, that authorization of tax increment financing for the Development is solely within the discretion of the City Council after satisfaction of all conditions required pursuant to the TIF Act, including without limitation, (i) a determination by the City Council that tax increment financing assistance is necessary for the Development; (ii) negotiation of a final contract with the Developer for the provision of tax increment assistance; and (iii) verification of development financing need that substantiates that “but for” the use of tax increment financing the Development would be unable to proceed. BE IT FURTHER RESOLVED, that Minnesota Housing is authorized to rely on the continuing force and effect of these Resolutions until receipt by the Commissioner of Minnesota Housing at its principle office of notice in writing from Recipient of any amendment or alteration of such Resolutions. Passed and adopted this 3rd day of January 2022. John J. Dietz, Mayor ATTEST: Tina Allard, City Clerk EXHIBIT A – SAMPLE GRANT AGREEMENT MINNESOTAHOUSING FINANCE AGENCY GRANT CONTRACT AGREEMENT This Grant Contract Agreementis between the Minnesota Housing Finance Agency(“MHFA’)and\[GIVE THE FULL NAME OF THE GRANTEEINCLUDING ITS ADDRESS\] (the "Grantee"). Recitals 1.Under Minn. Stat. §462A.39,MHFAis empowered to enter into this Grant Contract Agreement. 2.MHFAis in need of the development of rental housing to servethe employees of local businesses (“Workforce Housing”)in \[COUNTY\], City of \[CITY\]pursuant to MHFA’s Workforce Housing Development Program (the “Program”). 3.The Granteerepresents that it is duly qualified and agrees to perform all services described inthis Grant Contract Agreementto the satisfaction of MHFA. Pursuant to Minn.Stat.§16B.98, Subd.1, the Grantee agrees to minimize administrative costs as a condition of this Grant Contract Agreement. Grant Contract Agreement 1Term of Grant Contract Agreement 1.1Effective date: \[SPELL OUT FULL DATE (e.g., July 1, 2020)\],Per Minn. Stat.§16B.98, Subd. 5,the Grantee must not begin work until this Grant Contract Agreement is fully executed and MHFA's Authorized Representative has notified the Grantee that work may commence. Per Minn.Stat.§16B.98Subd. 7, no payments will be made to the Grantee until this Grant Contract Agreement is fully executed. 1.2Expiration date: \[SPELL OUTFULL DATE (e.g., August 1, 2016)\],or until all obligations have been satisfactorily fulfilled, whichever occurs first. 1.3Survival of Terms. The following clauses survive the expiration or cancellation of this Grant Contract Agreement: 8. Liability; 9. State Audits; 10. Government Data Practices and Intellectual Property; 12. Publicity and Endorsement; 13. Governing Law, Jurisdiction, and Venue; and 15 Data Disclosure. 2Dutiesand Contracts 1Grantee’s Duties The Grantee, who is not a state employee, will: Comply with required grants management policies and procedures set forth through Minn.Stat.§16B.97, Subd. 4 (a) (1)and review the State of Minnesota Office of Grants Management policy 08-01, (Conflict of Interest for State Grant-Making). If the Grantee has knowledge or becomes aware of any actual, potential, perceived, or organizational conflicts of interest with respect to the Grant Contract Agreement, the Grantee shall immediately disclose the conflict of interest directly to MHFA. The Grantee has made application to MHFAfor the purpose of administering a Workforce Housing Development Program Project in the manner described in Grantee's Application (the “Project”)which is incorporated into this Grant Contract Agreementby reference. The Grantee, who is not a state employee, is awarded funds to provide financial assistance to address the need for Workforce Housing. The Project includes: \[INSERT BRIEF DESCRIPTION OF PROJECT INLCUDING TYPE (NEW CONSTRUCTION/ADAPTIVE REUSE, ETC.), ANDNUMBEROF UNITS\]. 1 October 2021WorkforceHousing Development Program Competitive Grant Agreement The Grantee will comply with all requirementsas further described in Exhibit A attached to this Grant Contract Agreementand incorporated by reference. The Grantee will be in compliance with the Workforce Housing Development Program Guide, as amended (the “Program Guide”), which is incorporated into this Grant Contract Agreementby reference. 2.2Provisions for Contracts and Sub-grants. (a) Contract Provisions.The Grantee must include in any contract and sub-grant, in addition to provisions that define a sound and complete agreement, such provisions that require contractorsand sub- grantees to comply with applicable local, state and federal laws, rules,regulations and ordinances, as well as any applicable MHFApolicies. (b) Use of Grant Funds.The Grant Funds(as defined below) awarded under this Grant Contract Agreementmayonly be used by Grantee or awarded by Grantee to third parties as grant funds or loans in accordance with the terms of the Program Guide.All Grant Funds must be used by an Eligible Project Area for the Qualified Expenditures of a Market Rate Residential Rental Property (as such terms are defined in the Program Guide).If awarded as a loan, any fees or interest charged cannot unduly enrich any parties involvedbeyond the approximate cost of the administrative costs associated with the Project. 3Time The Granteemust comply with all the time requirements described in this Grant Contract Agreementand the Program Guide. In the performance of this Grant Contract Agreement, time is of the essence.Project construction must begin within 12 months upon signing this Grant Contract Agreement. Construction completion must occur within 2 years of construction start. 4Consideration and Payment 4.1Consideration. MHFAwill pay for all services performed by the Granteeunder this Grant Contract Agreementas follows: (a)Compensation The Granteewill be paid in accordance to section 4.2 of this Grant Contract Agreement. (b)Total Obligation. The total obligation of MHFAfor all compensation and reimbursements to the Granteeunder this Grant Contract Agreementwill not exceed $\[ENTER AWARD AMOUNT\](the “Grant Funds”). 4.2Payment For all disbursementsof Grant Funds, the Grantee be in compliance with the Program Guide and must complete and submit aWorkforce Housing Development Program Disbursement Request Form, attached to this Grant Contract Agreementas Exhibit B,to MHFAfor review and approval. MHFAwill promptly pay the Granteeup to one third of the Grant Funds on or afterclosing. The Grantee may request an additional one third of the Grant Fundsas neededupon providing evidence of a grant or loan agreementrelating to the Project with a subgrantee. The remaining one third of the Grant Fundswill be withheld for final disbursement andwill not be released until construction completion of the Project and upon completion of all reporting and monitoring requirements pursuant to this Grant Contract Agreement. 3Unexpended Funds The Granteemust promptly return to MHFAany unexpended Grant Fundsthat: (i)have not been accounted for annually in a financialreport to MHFAdue at Grant Contract Agreementcloseout; or (ii) 2 October 2021WorkforceHousing Development Program Competitive Grant Agreement have not been used in compliance with the Program Guide. 4.4Contracting and Bidding Requirements This award is subject to the prevailing wage requirements of Minn. Stat. § 116J.871unless the award is for rehabilitation of existing housing or for new housing construction at a single project site which is less than $100,000. In addition, the statute does not apply if the award from MHFAis less than $200,000 for a grant or $500,000 for a loan. If the project is within the scope of Minn. Stat. § 116J.871, the recipient must certify to the commissioner of the Department of Labor and Industry that laborers and mechanics at the project site during construction, installation, remodeling, and repairs for which the award was provided will be paid the prevailing wage rate as defined in Minn. Stat. § 177.42, subd. 6. According to Minn. Stat. § 116J.871, subd. 2, MHFAcannot provide financial assistance to a recipient unless the required certification has been made. Per Minn. Stat.§471.345,grantees that are municipalities as defined in Subd. 1 must follow the law. If applicable, for projects that are publicly owned or leased and include construction work of $25,000 or more, prevailing wage rules also apply per Minn. Stat. §§177.41through 177.44;consequently, the bid request must state the project is subject to prevailing wage. These rules require that the wages of laborers and workers should be comparable to wages paid for similar work in the community as a whole. According to Minn. Stat. §177.42, the term “project” is defined as the “erection, remodeling, or repairing of a public buildingor other public work financed in whole or in part by state funds”. This state prevailing wage requirement may be affected if federal prevailing wage requirements also apply to the same project. The Grantee must not contract with vendors who are suspended or debarred in MN: http://www.mmd.admin.state.mn.us/debarredreport.asp 5Conditions of Payment All services provided by the Granteeunder this Grant Contract Agreementmust be performed to MHFA’s satisfaction, as determined at the sole discretion of MHFA’s Authorized Representative and in accordance with all applicable federal, state, and local laws, ordinances, rules, and regulations. The Granteewill not receive payment for work found by MHFAto be unsatisfactory or performed in violation of federal, state, or local law. 6Authorized Representative MHFA's Authorized Representative is Sara Bunn, Program Manager, 651.296.9827, sara.bunn@state.mn.us,400 Wabasha St N, Suite 400, St. Paul, MN 55102 or her successor, and has the responsibility to monitor the Grantee’s performance and the authority to accept the services provided under this Grant Contract Agreement. If the services are satisfactory, MHFA's Authorized Representative will certify acceptance on each invoice submitted for payment. The Grantee’s Authorized Representative is \[NAME, TITLE, ADDRESS, TELEPHONE NUMBER, EMAIL\].If the Grantee’s Authorized Representative changes at any time during this Grant Contract Agreement, the Granteemust immediately notify MHFA. 7Assignment Amendments, Waiver, and Grant Contract AgreementComplete 7.1Assignment The Granteeshall neither assign nor transfer any rights or obligations under this Grant Contract Agreementwithout the prior written consent of MHFA, approved by the same parties who executed and approved this Grant Contract Agreement, or their successors in office. 7.2Amendments Any amendments to this Grant Contract Agreementmust be in writing and will notbe effective until it 3 October 2021WorkforceHousing Development Program Competitive Grant Agreement has been executed and approved by the same parties who executed and approved the original Grant Contract Agreement, or their successors in office. 7.3Waiver IfMHFAfails to enforce any provision of this Grant Contract Agreement, that failure does not waive the provision or MHFA’s right to enforce it. 7.4Grant Contract AgreementComplete This Grant Contract Agreementcontains all negotiations and agreements between MHFAand the Grantee.No other understanding regarding this Grant Contract Agreement, whether written or oral, may be used to bind either party. 8Liability The Granteemust indemnify, save, and hold MHFA, its agents, and employees harmless from any claims or causes of action, including attorney’s fees incurred by MHFA, arising from the performance of this Grant Contract Agreementby the Granteeor the Grantee’s agents or employees. This clause will not be construed to bar any legal remedies the Granteemay havefor MHFA's failure to fulfill its obligations under this Grant Contract Agreement. 9State Audits UnderMinn. Stat. §16B.98, Subd.8, the Grantee’s books, records, documents, and accounting procedures and practices of the Granteeor other party relevant to this Grant Contract Agreementor transaction are subject to examination by MHFAand/or the State Auditor or Legislative Auditor, as appropriate, for a minimum of six years from the end of this Grant Contract Agreement, receipt and approval of all final reports, or the required period of time to satisfy all state and program retention requirements, whichever is later. 10Government Date Practices and Intellectual Property Rights 10.1Government Data Practices The Granteeand MHFAmust comply with the Minnesota Government Data Practices Act, Minn. Stat. Ch. 13, as it applies to all data provided by MHFAunder this Grant Contract Agreement, and as it applies to all data created, collected, received, stored, used, maintained, or disseminated by the Grantee under this Grant Contract Agreement. The civil remedies of Minn. Stat. §13.08apply to the release of the data referred to in this clause by either the Granteeor MHFA. If the Granteereceives a request to release the data referred to in this Clause, the Granteemust immediately notify MHFA.MHFAwill give theGranteeinstructions concerning the release of the data to the requesting party before the data is released. The Grantee’s response to the request shall comply with applicable law. 10.2Intellectual Property Rights In the event that the Grantee secures a copyright protection on any of the work product created as part of the Project, the Grantee agrees to and does hereby grant to MHFAand its officers, agents, and employees acting within the scope of their official duties, a royalty-free, non-exclusive, and irrevocable license to publish, translate, reproduce, deliver, perform, dispose of, and to authorize others to do so for the use by MHFA or the Stateof Minnesota, its divisions, instrumentalities, and local subdivisions, all materials, reports, writings, sound recordings, pictorial reproductions, drawings, or other graphical representations, and works developed and/or used in connection with the Project now or hereafter covered by copyright. 11Workers Compensation The Granteecertifies that it is in compliancewith Minn. Stat. §176.181,Subd. 2, pertaining to workers’ compensation insurance coverage. The Grantee’s employees and agents will not be considered MHFA employees. Any claims that may arise under the Minnesota Workers’ Compensation Act on behalf of these employees and any claims made by any third party as a consequence of any act or omission on the part of these employees are in no way MHFA’s obligation or responsibility. 4 October 2021WorkforceHousing Development Program Competitive Grant Agreement 12Publicity and Endorsement 12.1Publicity Any publicity regarding the subject matter of this Grant Contract Agreementmust identify MHFAas the sponsoring agency and must not be released without prior written approval from MHFA’s Authorized Representative. For purposes of this provision, publicity includes notices, informational pamphlets, press releases, research, reports, signs, and similar public notices prepared by or for the Granteeindividually or jointly with others, or any subcontractors, with respect to the program, publications, or services provided resulting from this Grant Contract Agreement.All projects primarily funded by state grant appropriations must publicly credit MHFA, including on the Grantee’s website when practicable. 12.2Endorsement The Granteemust not claim thatMHFAendorses its products or services. 13Governing Law, Jurisdiction, and Venue Minnesota law, without regard to its choice-of-law provisions, governs this Grant Contract Agreement. Venue for all legal proceedings out of this Grant Contract Agreement, or its breach, must be in the appropriate state or federal court with competent jurisdiction in Ramsey County, Minnesota. 14Termination 14.1Termination by MHFA MHFAmay immediately terminate this Grant Contract Agreementwith or without cause, upon 30 days’ written notice to the Grantee. Upon termination, the Granteewill be entitled to payment, determined on a pro rata basis, for services satisfactorily performed. 14.2Termination for Cause MHFAmay immediately terminate this Grant Contract AgreementifMHFAfinds that there has been a failure to comply with the provisions of this Grant Contract Agreementor the Program Guide, that reasonable progress has not been made or that the purposes for which the funds were granted have not been or will not be fulfilled. MHFAmay take action to protect the interests of MHFA, including the refusal to disburseadditional funds and requiring the return of all or part of the funds already disbursed. 14.3Termination for Insufficient Funding MHFAmay immediately terminate this Grant Contract Agreementif: (a)It does not obtain funding from the Minnesota Legislature; or (b)Iffunding cannot be continued at a level sufficient to allow for the payment of the services covered here. Termination must be by written or fax notice to the Grantee.MHFAis not obligated to pay for any services that are provided after notice and effective date of termination. However, the Granteewill be entitled to payment, determined on a pro rata basis, for services satisfactorily performed to the extent that funds are available. MHFAwill not be assessed any penalty if this Grant Contract Agreement is terminated because of the decision of the Minnesota Legislature, or other funding source, not to appropriate funds. MHFAmust provide the Granteenotice of the lack of funding within a reasonable time of MHFA’s receiving that notice. 15Data Disclosure UnderMinn. Stat. § 270C.65, Subd. 3, and other applicable law, the Granteeconsents to disclosure of its social security number, federal employer tax identification number, and/or Minnesota tax identification number, already provided to MHFA, to federal and state tax agencies and state personnel involved in the payment of state obligations. These identification numbers may be used in the enforcement of federal and state tax laws which could result in action requiring the Granteeto file state tax returns and pay delinquent state tax liabilities, if any. 5 October 2021WorkforceHousing Development Program Competitive Grant Agreement 16 Fraud Disclosure Fraud is any intentionally deceptive action made for personal gain or to damage another. Any person or entity (including its employees and affiliates) that enters into an agreement with MHFAand witnesses, discovers evidence of, receives a report from another source, or has other reasonable basis to suspect that fraud or embezzlement has occurred must immediately make a report to: MHFA’s Chief Risk Officer Any member of MHFA’s Servant Leadership Team EthicsPoint,statehotline reporting service vendor 17 Suspension By entering into any agreement with MHFA, a contracting party represents that the contracting party (including its employees or affiliates that will have direct control over the subject of the agreement) has not been suspended from doing business with MHFA. Please refer to MHFA’s website for a list of suspended individuals and organizations(https://www.mnhousing.gov/sites/np/suspensions). 18Responsible Contractor Requirement The Granteeagrees that it and its contractors will fully comply with all applicable provisions contained in Minn. Stat. §16C.285, as amended. 1. MHFAENCUMBRANCE VERIFICATION3. MINNESOTA HOUSING FINANCEAGENCY Individual certifies that funds have been encumbered as required by Minn. Stat. §16A.15 By: Signed: Title: Date: Date: SWIFT Contract/PO No(s). 2. GRANTEE The Granteecertifies that the appropriate person(s) have executed the Grant Contract Agreementon behalf of the Granteeas required by applicable articles, bylaws, resolutions, or ordinances. By: Title: Date: By: Title: Date: Distribution: Agency Grantee MHFA’s Authorized Representative 6 October 2021WorkforceHousing Development Program Competitive Grant Agreement EXHIBIT A Grantee agrees to comply with the following additional provisions: 1Reporting The Grantee will be required to complete an annual report which will include such information and will be in the format providedby MHFA. Once the Project is complete and the rental units are suitable for occupancy, and prior to final disbursement of Grant Funds, the Grantee will be requiredto complete a final report which will include such information and will be in the format providedby MHFA. 2Accounting For all expenditures of Grant Funds made pursuant to this Grant ContractAgreement, the Grantee must keep financial records,including properly executed contracts, invoices, and other documents sufficient to evidence in proper detailthe nature and propriety of the expenditures. Accounting methods must be in accordance with generallyacceptedaccounting principles. 3Records Retention The Grantee is responsible for the records retention requirements of all third parties. 4Monitoring The Grantee will be monitored annually. This will take place at the time of annual reporting. Monitoring could include a phone call and/or a site visit by MHFAstaff. Prior to final disbursement of Grant Funds, MHFAwill also ask to review the most recent disbursement records. This will include a reconciled account balance showing when Grant Funds were received by the Granteeand disbursed to the third party. MHFAreserves the right to ask for additional information. 5Compliance with Local, State and Federal Laws The Grantee and any third parties must comply with all local, state and federal laws, rules, regulations and ordinances, as well as any applicable MHFApolicies, including, but not limited to, the following: (a) Recipients and subrecipients must comply with Visitability requirements at 462A.34 7 October 2021Workforce Housing Development Program Competitive Grant Agreement EXHIBIT B Workforce Housing Development Program Disbursement Request Form 8 October 2021Workforce Housing Development Program Competitive Grant Agreement Workforce Housing Development Program Payment Information Summary This form must be completed, signed and submitted to MHFAprior to receiving a disbursement of funds. To complete the form, enter the amount of funds you are requesting and a summary of what the funds will be used for. Have the form signed by an AuthorizedRepresentative. Submit the completed form to Sara Bunnat sara.bunn@state.mn.us. Disbursement Request and Justification Amount Requested (not to exceed one-third of the total award): Use the space below to document what the funds will be used for: Authorized Representative Signature Authorized Representative Name: Authorized Representative Title: Date Signed: Authorized Representative Signature: 9 October 2021Workforce Housing Development Program Competitive Grant Agreement GPSHJWFBCMF!EFGFSSFEMPBOT0 HSBOU!GVOET !!!!!!!!!Xpslgpsdf!Ipvtjoh!Efwfmpqnfou!Qsphsbn Qsphsbn!Pwfswjfx The Workforce Housing Development Program is a competitive funding program that targets small to mid-size cities in Greater Minnesota with rental workforce housing needs. Grant funds or deferred loans are available to build market rate residential rental properties in communities with proven job growthand demand for workforce rental housing. Bqqmjdbujpo!Qspdftt Applications are accepted on an annual basis through a competitive Request for Proposals (RFP). Bqqmjdbujpo!Sfrvjsfnfout Eligible Applicants:An eligible applicant is an eligible project areathat is generally a small to mid-sized cityin Greater Minnesota. Specifically, an eligible project area is either: Ahomerulecharterorstatutorycitylocatedoutsideofthemetropolitanareawitha population exceeding500 A community that has a combined population of 1,500 residents located within 15 miles of a home rule charter or statutory city located outside the metropolitan area An area served by a joint county-city economic developmentauthority Preference will be given to projects located in an eligible project area with 30,000 or fewer residents.Developers cannot apply for program funds directly;they must work with an eligible applicant. Eligible Properties:Market rate or mixed income residential rental properties.Per the statute, preference will be given to projects with the highest percentage of market rate units. Eligible Activities:New construction or adaptive reuse. Rehabilitation of occupied rental housing is not an eligible activity under this program. Letter of Support:Letter of support from a local business or businesses that employ a minimum of 20 full- time employees in aggregate. Matching Requirement:Applicants must match the funds requested,at a minimum,of one dollar for every two dollars. A local government resolution stating the amount of committed matching funds from the local government, a nonprofit organization, a business, or a combination, is required. The match can come from sources such astax increment financing (TIF), tax abatement, cash funds, grants, land donationsand in-kind donations. Matching funds cannot come from the developer or an entity affiliated with the developer unless otherwise approved in writing by Minnesota Housing. Qualified Expenditures:Funds can only be used for qualified expenditures. Qualified expenditures include acquisition of property; construction of improvements; and provisions of loans or subsidies, grants, interest rate subsidies, public infrastructure and related financing costs. 911/768/4758 xxx/noipvtjoh/hpw Vacancy Rate: Vacancy rate in the community must be at or below five percent for the prior two-year period. Gvoejoh!Ufsnt! Funding Options: Applicants choose to request funds in the form of a grant or a deferred loan. Grant Terms:Three year grantcontract Construction must begin within 12 months of contract execution Construction must be complete within 24 months of construction start Deferred Loan Terms: Three year unsecured loan Zero percent interest Forgivable Construction must begin within 12 months of contract execution Construction must be complete within 24 months of construction start Disbursement Schedule Supporting documentation for the disbursement of funds is required. An initial disbursement of up to one-third of the award upon execution of contracts. An additional disbursement of up to one-third of the award mid-construction. A final disbursement upon construction completion. Maximum Funding The amount of funds requested cannot exceed 25 percent of total development Amount: costs (TDC). Reporting and Monitoring: Recipients will be subject to annual reporting and monitoring during the term of the grant or loan. Rvftujpot! Sara Bunn, Program Manager: 651.296.9827 or sara.bunn@state.mn.us. 911/768/4758! xxx/noipvtjoh/hpw!