8.1. HRSR 05-01-2023
Request for Action
To Item Number
Housing and Redevelopment Authority 8.1
Agenda Section Meeting Date Prepared by
Work Session May 1, 2023 Brent O’Neil, Economic Development Director
Item Description Reviewed by
Duffy Development Proposal Cal Portner, City Administrator
Reviewed by
Action Requested
This item is presented for information and discussion purposes.
Background/Discussion
Duffy Development, a developer of multifamily housing projects including The Depot and Coachman Ridge
Apartments in Elk River, has secured additional property in Elk River.
The property is located adjacent to Coachman Ridge and the North Star transit station. Duffy would like to
develop the property for affordable senior housing and is drafting a concept plan of 45 to 55 units.
The developer plans to apply for state grant programs to help fund the project. The state program application
deadline is in July. Duffy will be in attendance to introduce the project and discuss ways the city and HRA could
support the project and application, including financial participation.
Financial Impact
N/A
Mission/Policy/Goal
The goal of the HRA is to promote certain housing and redevelopment projects.
Attachments
Letter from Duffy Development
Site Information
The Elk River Vision
A welcoming community with revolutionary and spirited resourcefulness, exceptional
service, and community engagement that encourages and inspires prosperity.
Updated: January 2023
DUFFY DEVELOPMENT COMPANY
REAL ESTATE DEVELOPMENT
AND CONSTRUCTION MANAGEMENT
April 25, 2023
Mr Brent O'Neil
Economic Development Director
City of Elk River
13065 Orono Parkway
Elk River, MN 55330
Re: Seniors Housing Proposal
Dear M Neil, -eVA-
Duffy Development Company is a developer specializing in affordable and workforce
housing. The City has been a strong partner in our past developments, The Depot and
Coachman Ridge, near the Northstar Rail parking lot. Duffy Development has secured
another parcel in the same area and would like to add additional housing for a very
underserved population: Lower -income, independent senior, members of the community.
Until recently, creating new construction affordable housing for senior citizens has been
nearly impossible in Minnesota. The focus of the state housing finance agency has been
on housing for working families, much like what we have done with The Depot and
Coachman Ridge. In the past couple of years, Minnesota has provided small amounts of
funding for senior housing. The funding could only support 2-3 developments in the entire
state. However, it is expected that the state legislature will approve a substantially larger
funding source for the next biennium, most of which will be from a source that is one-time
money available only due to the large current state budget surplus. I give you this
background because we are in a uniquely strong position to create a new asset here in
Elk River.
Duffy Development is proposing a 45-55 unit independent senior housing development
for ages 55+. All units will be affordable to incomes at or below 60% of the area median
income with rents that will be at 30% and 50% of area median income. To put this in
perspective, rents on a one -bedroom home will range from $600 - $1,045 and two -
bedroom homes will be $725-$1,250.
The primary source of financing for developments such as these, comes from Minnesota
Housing, the state's housing finance agency. To access the financing, Minnesota Housing
uses an RFP application one time per year. The applications are substantial, and to
secure the funding, it is a very competitive process. It is typical that for every development
funded through Minnesota Housing, four or five other developments are rejected.
12708 Wayzata Blvd. • Suite 400 • Minneapolis, MN 55305
PH. (952) 544-6769 • FAX (952) 544-6091
Therefore, we come before the City to ask for help in submitting the strongest possible
application, and give this project the best chance of securing a portion of these state
resources for the residents of Elk River.
The application scoring is made up of 23 different scoring criteria. Much of the scoring is
based on location and population served. There are two specific scoring items based on
the degree of support an application receives from other funding partners, such as cities,
counties or philanthropic organizations. It is within these scoring criteria where the City
of Elk River could be most helpful to create a competitive funding application.
We are happy to discuss this in further detail before the Monday meeting but examples
of support we have received from other cities include: Tax Increment Financing (TIF),
direct grants/loans, waivers of fees (Park Dedication, SAC/WAC, Building Permit, etc.) or
combinations of any of these together.
Our deadline for an application submittal to Minnesota Housing is mid -July. Any City
action would need to be completed by the end of June. We would like to work with the
City to secure support of this project as soon as possible to make sure we have all needed
approvals by the end of June.
We look forward to a robust discussion at your upcoming meeting on May 1st
Thank you for considering this request, and thank you for your past support of The Depot
and Coachman Ridge.
Sincerely,
Jeffrey J. Von Feldt
8.1 Duffy Site - City Context
Sherburne County Public Works - GIS Division
April 28, 2023 0 0.3 0.60.15 mi
0 0.45 0.90.23 km
1:17,637
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Elk River Senior
Financial Readiness To Proceed
Total Development Costs
$
18,000,000
A (-fJAO. -FU h (,0IM0h(t
Scoring Ranges
Top
Bottom
Points
Less than 1.51%
$
271,800
0
0
1.5% - 3.0%
$
540,000
$
271,800
4
3.01% - 4.5%
$
810,000
$
540,000
6
4.51% - 6%
$
1,080,000
$
810,000
8
6.01- 7.5%
$
1,350,000
$
1,080,000
10
7.51% - 9%
$
1,620,000
$
1,350,000
12
Other Contribution
� n I�►ndS
Total Development Costs $ 18,000,000
Scoring Ranges
Top
Bottom
Points
Less than 1%
$
180,000
0
0
1% - 3.4%
$
612,000
$
180,000
2
3.5% - 6%
$
1,080,000
$
612,000
4
6.1% - 8%
$
1,440,000
$
1,080,000
6
8.1-10%
$
1,800,000
$
1,440,000
8
Greater than 10.1%
$
-
$
1,800,000
10