The URL can be used to link to this page

Home My WebLink About2017-08-15 HRA Work Session PacketAgenda Housing and Redevelopment Authority Work Session Meeting City of Edina, Minnesota Edina City Hall Council Chambers Tuesday, August 15, 2017 6:00 PM I.Call to Order II.Roll Call III.Grandview Green - Project Update IV.Aordable Housing Proposal related to Estelle Edina Concept V.Adjournment The Edina Housing and Redevelopment Authority wants all participants to be comfortable being part of the public process. If you need assistance in the way of hearing ampli'cation, an interpreter, large-print documents or something else, please call 952-927-8861 72 hours in advance of the meeting. Date: August 15, 2017 Agenda Item #: III. To:Chair & Commissioners of the Edina HRA Item Type: Report / Recommendation From:Bill Neuendorf, Economic Development Manager Item Activity: Subject:Grandview Green - Project Update Discussion Edina Housing and Redevelopment Authority Established 1974 CITY OF EDINA HOUSING & REDEVELOPMENT AUTHORITY 4801 West 50th Street Edina, MN 55424 www.edinamn.gov ACTION REQUESTED: No action requested; for discussion purposes only. INTRODUCTION: Since the Preliminary Concept Study was presented in May 2017, City staff has been working with MnDOT officials to identify the steps necessary to more fully understand the cost and feasibility of this concept. Staff will present a project update for discussion among the Board of the HRA. ATTACHMENTS: Description Grandview Green Update 8-15-17 Grandview Green Presentation The CITY of EDINA Grandview Green Update: A Presentation to the Edina HRA August 15, 2017 Katie Clark Sieben, Project Consultant *DRAFT for Preliminary Discussion Purposes The CITY of EDINA Today’s Agenda •Background/ Project Overview •Grandview Green Project Update: •Five Year Plan •The Grandview Green Partnership •2017 Budget •Next Steps 2 DRAFT for Preliminary Discussion Purposes The CITY of EDINA Why Grandview Green? Reconnect neighborhoods and communities divided by Highway 100 ◦Reestablishes street grids, safe pedestrian walkways and bicycle paths ◦Provides new green space for community programming and social events Increases economic productivity: ◦Of airspace above Highway 100 ◦Of land adjacent to Highway 100 Enhances sustainability practices through increased storm water collection, potential solar installations, etc. Serves as a case study for lid development in Minnesota The CITY of EDINA MN Green Lid Outcomes …also serves as a case study to uncover how we leverage unused public land to spur private development! Neighborhood Connectivity Economic Development Green Space Transportation/ Parking Longfellow Gardens, Minneapolis x ABC Ramps, Minneapolis x Fort Snelling, Saint Paul x Radisson Blu, Bloomington x Leif Erickson Park, Duluth x x Grandview Green, Edina x x x x The CITY of EDINA FYI, update this graphic to show lid is also planned for parcel 12. The CITY of EDINA Grandview Green Feasibility Study In summary, the May 2017 feasibility study found: ◦No major fatal flaws in the development of a green lid over limited portions of Highway 100. ◦This concept has the potential to create approximately 13 acres of new buildable land on 16 parcels. ◦The area has the potential to support 2,525 new parking spaces and an additional 2.4 million square feet in private development. ◦After completion, property tax revenue is projected to increase from approx. $2 million to $100 million. ◦There is a dramatic range in the level of public investment that could be needed for this project: $6.7 million for the construction of one lid segment (another est. $2.3 million for design, landscaping, etc.) $70-90 million if both lid segments, new roads and off-ramps and public parking ramps are constructed ◦Several public entities could potentially be involved in this project – MnDOT, the Metropolitan Council, Hennepin County, the City of Edina and possibly others. ◦The initial economic analysis predicts the public investment will realize a 348% return on investment over a fifteen year period (assumes a public investment of $37 million). The CITY of EDINA 2017 2018 2019 2020 2021 City Engagement Public Agency Engagement Community Engagement Legislative Work Funding and Financing Concept Design/ Technical Studies Development Master Planning Detailed Design Infrastructure Construction (Phased) Building Construction (Phased) Occupancy Grandview Green 5 Year Plan •Infrastructure Construction Begins: 2020 •Building Construction Begins: Mid 2020 •Occupancy Begins: 2022 LEGEND Explore Discover Build The CITY of EDINA The Community Edina City Council Edina City Staff State & County Public Officials & Comp Plan Taskforce FundraisingHost Committee (501c3?) Local Grandview Stakeholders Agencies The Grandview Green Partnership… will continue to grow! The CITY of EDINA Current Issues: Property Rights ◦Highway 100 rights of way are a combination of city, county and state dedicated streets, highway easements and fee ownership Future Ownership/ Responsibility for Ongoing Maintenance ◦Since the green lid is located over a highway, MnDOT will need to be involved ◦Ensuring safety for pedestrians, bicyclists and motorists Shared Costs ◦What does a private-public partnership look like? What are the roles/ responsibilities of each private and public partner in green lid development? How can this serve as a replicable model for other MN communities? The CITY of EDINA Fall-Winter 2017 Budget Grandview Green Budget Estimated Cost ADMINISTRATION/ ENGAGEMENT The Eden Company Consultant $38,000 Architectural Field Office $16,500 Community Outreach $2,000 TOTAL $56,500 TECHNICAL STUDIES Transportation Study $30,000 Sustainability/ Energy Study $40,000 Utility Study $30,000 Market Study $10,000 ULI Technical Assistance Panel $6,000 TOTAL $116,000 LEGAL Property Research $25,000 TOTAL $25,000 GRAND TOTAL $197,500.00 A budget is proposed to more fully engage stakeholders and begin technical feasibility studies. Why? •The Community is our #1 client. Engagement with community members will guide the lid design process and begin to identify what amenities the lid should provide to current and future residents and visitors. •The Technical Studies, the ULI TAP and property ownership research will provide the detailed information we need to strategically work with a Master Developer. The findings from this research will inform the design process for roadways, public realm and streetscape improvements, district parking, buildings and the lid itself. The CITY of EDINA Community Engagement Lid Visioning Sessions this October and November: ◦School district ◦Businesses ◦Churches ◦Membership Organizations Edina Chamber of Commerce, Edina Rotary, etc. ◦Adjacent Neighborhoods!!! …Who else should we engage? The CITY of EDINA 2017 Next Steps: September: ◦Urban Land Institute Technical Assistance Panel ◦City Commissions Roadshow Oct – Nov: Community Engagement Visioning Sessions Sept – Dec: Technical Studies January 2018: Grandview Green Update to Edina HRA The CITY of EDINA D R A F T August 2017 The CITY of EDINA D R A F T August 2017 The CITY of EDINA Bill Neuendorf Economic Development Manager bneuendorf@edinamn.gov 952-826-0407 Contact Information Katie Clark Sieben Economic Development Project Consultant Ksieben@edinamn.gov 612-655-5199 Architecture Field Office Grandview Green Feasibility Study City of Edina HRA Update May 16, 2017 Architecture Field Office BRUCE JACOBSON LANDSCAPE ARCHITECT Architecture Field Office Meeting Agenda 1.Introductions 2.Overview: Site Context and Grandview Green Study 3.Financial Assumptions and Analysis 4. Discussion and Next Steps DRAFT FOR REVIEW: May 16, 2017 1 Architecture Field Office Study Goals 1.Verify technical and cost feasibility of lid structure (green roof). 2.Assess potential development opportunities. 3.Create the right scale of development to fit the neighborhood. 4.Create a new tax base that supports the existing community. 5.Assure new development benefits existing and future Edina residents. DRAFT FOR REVIEW: May 16, 2017 2 Architecture Field Office Grandview Green Site Grandview Green Feasibility Study Architecture Field Office DRAFT FOR REVIEW: May 16, 2017 3 Architecture Field Office HWY 100 Vernon Ave City Hall Grandview Green Existing Grandview District DRAFT FOR REVIEW: May 16, 2017 4 Architecture Field Office Vernon Ave City Hall HWY 100 Grandview Green MnDOT Right-of-Way DRAFT FOR REVIEW: May 16, 2017 5 Architecture Field Office Vernon Ave City Hall HWY 100 Grandview Green City of Edina Owned Land DRAFT FOR REVIEW: May 16, 2017 6 MNDOT Owned Land City Owned Land Architecture Field Office Precedent Projects Grandview Green Feasibility Study Architecture Field Office DRAFT FOR REVIEW: May 16, 2017 7 Architecture Field Office Klyde Warren Park –Dallas, Texas Completed:2012 Size: 5.2 Acres, Length: 1,045’ Cost: $471/Sq. Ft Attributes: •Spurred in excess of $1 billion in new development •Reconnected districts •Improved accessibility in/out of downtown CBD •Air quality improvement •Owner: City of Dallas Texas DoT Klyde Warren Foundation DRAFT FOR REVIEW: May 16, 2017 8 Architecture Field Office I-670 at Union Station –Columbus, Ohio Completed:2004 Area: 1.12 Acres, Length: 227’ Cost: $160/Sq. Ft Attributes: •Mend a 40-year scar •Composed of three separate bridges •Provides 25,500 SF of leasable space •The previous void caused by the highway was transformed into a seamless urban streetscape •Owner: Ohio DoT 30-year lease with an extension to 70 years DRAFT FOR REVIEW: May 16, 2017 9 Architecture Field Office Highway 100 Access and Street Network Grandview Green Feasibility Study Architecture Field Office DRAFT FOR REVIEW: May 16, 2017 10 Architecture Field Office Transportation Design Considerations •Simple and safe intersection configuration. •Balance vehicle movements with pedestrian comfort and current land ownership. •Right-size the travelways. •Highway 100 roadbed assumptions: •No car traffic lane expansions needed or planned. •Allow for possible transit (BRT) as a fourth lane in each direction. •If entrance/exit ramps are reimagined, that space can be repurposed. DRAFT FOR REVIEW: May 16, 2017 11 Architecture Field Office Potential Roadway Configurations DRAFT FOR REVIEW: May 16, 2017 12 Concept A Concept B Concept C Concept D Architecture Field Office Lid / Green Roof Section Grandview Green Feasibility Study Architecture Field Office DRAFT FOR REVIEW: May 16, 2017 13 Architecture Field Office Typical Freeway Section Typical Freeway RoadbedUnderutilized embankment Underutilized embankment Frontage Road Frontage Road Lid Zone Redevelopment ZoneRedevelopment Zone Grandview Green Typical Freeway Section DRAFT FOR REVIEW: May 16, 2017 14 Architecture Field Office Typical Freeway Section Hwy 100 Roadbed 3 Lanes + Safety Zones Existing Frontage Road 50th Street Bridge Eden Avenue Bridge Similar Redevelopment Zone Redevelopment Zone 50th Street Grandview Green Existing Highway 100 Section East West Site Section DRAFT FOR REVIEW: May 16, 2017 15 Architecture Field Office Typical Freeway Section Hwy 100 Roadbed 3 Traffic Lanes, Future Transit Lane + Safety Zones New N/S Frontage Road Redevelopment Zone Redevelopment Zone District Parking + Development above parking Grandview Green Proposed Highway 100 Lid Section East West Site Section 68 FT 68 FT DRAFT FOR REVIEW: May 16, 2017 16 Architecture Field Office Grandview Green Green Roof / Lid Section Architecture Field Office DRAFT FOR REVIEW: May 16, 2017 17 Architecture Field Office N/S Pedestrian Connection to 50th New Grange Road Location New N/S Access Road Arcadia Grandview Green Development Concept Lid HYW 100 Green Lid District Parking7 Story Building with parking below 5 Story Housing with parking below 2 Story Community Building with visitor parking below East West Site Section DRAFT FOR REVIEW: May 16, 2017 18 Architecture Field Office Parcel Development Potential Grandview Green Feasibility Study Architecture Field Office DRAFT FOR REVIEW: May 16, 2017 19 Architecture Field Office Grandview Green Road Alignments New Intersections Intersections Removed Impact on Existing Properties Phase 1 Access from Northbound Hwy 100 Phase 2 Access from Northbound Hwy 100 Ar c a d i a Gr a n g e DRAFT FOR REVIEW: May 16, 2017 20 Architecture Field Office 5a 9 5b 1 12 6 16 15 16 2 1 13 11 10 8 4 3 7a/7bPublic InfrastructureNew Roads •Central Main Street (New) •North South Freeway Access (New) •Grange (New alignment) Public Realm Improvements •Arcadia •Eden •50th Lids + Green •Lid A 42,000SF •Lid B 36,000SF Grandview Green Public Infrastructure Architecture Field Office DRAFT FOR REVIEW: May 16, 2017 21 No r t h -So u t h F r e e w a y Ac c e s s R o a d Architecture Field Office 1 34 5a 9 10 5b 1 2 11 12 13 8 6 16 15 17 7a 7b 14 Grandview Green Concept Parcels Parcel 1 Approx. 27,000 SF Parcel 2 Approx. 27,000 SF Parcel 3 Approx.46,000 SF Parcel 4 Approx. 57,000 SF Parcel 5a Approx. 14,000 SF Parcel 5b Approx. 11,000 SF Parcel 6 Approx. 21,000 SF Parcel 7a Approx. 26,000 SF Parcel 7b Approx. 20,000 SF Parcel 8 Approx. 17,000 SF Parcel 9 Approx. 31,000 SF Parcel 10 Approx. 85,000 SF Parcel 11 Approx. 50,000 SF Parcel 12 Approx. 86,000 SF Parcel 13 Approx. 15,000 SF Parcel 14 Approx. 34,000 SF Redevelopment site with Parcel 7b Parcel 15 Redevelopment Parcel 16 Redevelopment Total Parcels 13 Acres DRAFT FOR REVIEW: May 16, 2017 22 Phase 1 Development Phase 2 Development Redevelopment Opportunity Architecture Field Office Grandview Green Concept D2017 Parcels Architecture Field Office Grandview Green Full Build Out DRAFT FOR REVIEW: May 16, 2017 23 Architecture Field Office Grandview Green View Looking North East Architecture Field Office DRAFT FOR REVIEW: May 16, 2017 24 Architecture Field Office Grandview Green View Looking South East Architecture Field Office DRAFT FOR REVIEW: May 16, 2017 25 Architecture Field Office Financial Assumptions & Analysis Grandview Green Feasibility Study Architecture Field Office DRAFT FOR REVIEW: May 16, 2017 26 Architecture Field Office Grandview Green Roof Block Summaries -Assumptions DRAFT FOR REVIEW: May 16, 2017 27 Category Cost per Sq. Ft. Build - Residential 240 Build - Commercial 180 Land - Residential*80 Land - Commercial*80 Institutional Devel.180 Personal Prop.55 Parking 30,000 / unit Green Lid Construction 110 Green Lids - Maintenance 150,000 / lid / yr. Road Alignments 25,000,000 Land Sq. Ft.Land Value Residential 451,710 36,136,811 Commercial 157,290 12,583,189 Institutional 136,000 10,880,000 Totals 745,000 59,600,000 61%21% 18% % of Total Land Residential Commercial Institutional Architecture Field Office Grandview Green Roof Current Tax Roll DRAFT FOR REVIEW: May 16, 2017 28 Phase 1 Development Phase 2 Development Architecture Field Office Grandview Green Roof Current vs. Projected Revenue Stream DRAFT FOR REVIEW: May 16, 2017 29 (2,000,000) - 2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 12,000,000 14,000,000 16,000,000 18,000,000 Property Tax Revenue Less: Current Tax Roll Sales Tax Revenue Preliminary Current vs. Projected Revenue Stream * Sales Tax on Initial Construction ($30M) * 15-Yr. Property Tax Revenue on Phased Investment ($100M) (excluding parking) Bldg. 1 Bldg. 2 Bldg. 3 Bldg. 4 Bldg. 5 Bldg. 6 Bldg. 7 Bldg. 8 Bldg. 9 Bldg. 10 Bldg. 11 Bldg. 12 Bldg. 13 Bridge 1 Bridge 2 Architecture Field Office Grandview Green Roof Real Estate Tax •Current vs. Projected •15 yr. term •Phased investment DRAFT FOR REVIEW: May 16, 2017 30 --- (2,000,000) - 2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 12,000,000 14,000,000 16,000,000 18,000,000 Ph I - Bldg. 1 Ph. I - Bldg. 2 Ph. I - Bldg. 3 Ph. I - Bldg. 4 Ph. I - Bldg. 5 Ph. 1 - Bldg. 6 Ph. I - Bldg. 7 Ph. I - Bldg. 8 Ph. I - Bldg. 9 Ph. I - Bldg. 10 Ph. II - Bldg. 11 Ph. II - Bldg. 12 Ph. II - Bldg. 13 Ph. I - Green Roof Ph. II - Green Roof Projected New Tax Current Tax Architecture Field Office Grandview Green Roof Investment Summary DRAFT FOR REVIEW: May 16, 2017 31 Ph. I - Bldg. 1 (yr. 1 invest.)71 - 22,000 22,000 44,000 3,960,000 - 3,960,000 2,420,000 2,130,000 12,470,000 Ph. I - Bldg. 2 (yr. 1 invest)71 - 22,000 22,000 44,000 3,960,000 - 3,960,000 2,420,000 2,130,000 12,470,000 Ph. I - Bldg. 3 (yr. 3 invest.)125 98,500 15,000 - 113,500 2,700,000 23,640,000 - 825,000 3,750,000 30,915,000 Ph. I - Bldg. 4 (yr. 3 invest.)480 195,000 25,000 - 220,000 4,500,000 46,800,000 - 1,375,000 14,400,000 67,075,000 Ph. I - Bldg. 5 (yr. 3 invest.)- - 36,000 - 36,000 6,480,000 - - 1,980,000 - 8,460,000 Ph. I - Bldg. 6 (yr. 4 invest.)- - 21,000 - 21,000 3,780,000 - - 1,155,000 - 4,935,000 Ph. I - Bldg. 7 (yr. 4 invest.)210 303,600 40,500 - 344,100 7,290,000 72,864,000 - 2,227,500 6,300,000 88,681,500 Ph. I - Bldg. 8 (yr. 4 invest.)48 83,200 5,000 - 88,200 900,000 19,968,000 - 275,000 1,440,000 22,583,000 Ph. I - Bldg. 9 (yr. 5 invest.)80 - - 84,000 84,000 - - 15,120,000 4,620,000 2,400,000 22,140,000 Ph. I - Bldg. 10 (yr. 5 invest)685 323,000 80,000 - 403,000 14,400,000 77,520,000 - 4,400,000 20,550,000 116,870,000 Ph. II - Bldg. 11 (yr. 5 invest.)128 172,000 110,000 - 282,000 19,800,000 41,280,000 - 6,050,000 3,840,000 70,970,000 Ph. II - Bldg. 12 (yr. 6 invest.)342 189,000 53,600 - 242,600 9,648,000 45,360,000 - 2,948,000 10,260,000 68,216,000 Ph. II - Bldg. 13 (yr. 6 invest.)285 456,100 25,000 - 481,100 4,500,000 109,464,000 - 1,375,000 8,550,000 123,889,000 Ph. I - Green Roof 1 (yr. 1 invest.)- - - - - - - 4,620,000 - - 4,620,000 Ph. II - Green Roof 2 (yr. 6 invest.)- - - - - - - 3,960,000 - - 3,960,000 Total 2,525 1,820,400 455,100 128,000 2,403,500 81,918,000 436,896,000 31,620,000 32,070,500 75,750,000 658,254,500 Residential Sq. Ft. Commercial Sq. Ft. Total Developed Sq. Ft. Commercial RP Investment Parking Investment Total Investment Institutional Sq. Ft. Parking Spaces Residential RP Investment Personal Property Investment Institutional RP Investment Residential Sq. Ft. 76% Commercial Sq. Ft. 19% Institutional Sq. Ft. 5% Development Ratio Commercial RP Investment 12% Residential RP Investment 66% Institutional RP Investment 5% Personal Property Investment 5% Parking Investment 12% Investment Ratio Architecture Field Office Grandview Green Roof Return on Investment * No inflation is taken into consideration, which will positively impact the break-even point because of private investment, assessed value, and millage rate increases. Parking is not included in potential property taxes. DRAFT FOR REVIEW: May 16, 2017 32 Yr. 0 Yr. 1 Yr. 2 Yr. 3 Yr. 4 Yr. 5 Yr. 6 Yr. 7 Yr. 8 Yr. 9 Yr. 10 Yr. 11 Yr. 12 Yr. 13 Yr. 14 Yr. 15 Total Tax Revenue Sales Tax - 1,431,138 - 4,768,181 5,178,541 9,777,018 8,511,183 - - - - - - - - - 29,666,060 Property Tax - 291,560 724,047 1,759,289 3,443,377 6,123,545 8,732,751 8,732,751 8,732,751 8,732,751 8,732,751 8,732,751 8,732,751 8,732,751 8,732,751 8,732,751 99,669,333 Total Tax Revenue - 1,722,698 724,047 6,527,470 8,621,918 15,900,563 17,243,934 8,732,751 8,732,751 8,732,751 8,732,751 8,732,751 8,732,751 8,732,751 8,732,751 8,732,751 129,335,393 Less: Public Investment Lid 1 - 4,620,000 150,000 150,000 150,000 150,000 150,000 150,000 150,000 150,000 150,000 150,000 150,000 150,000 150,000 150,000 6,720,000 Lid 2 - - - - - 3,960,000 150,000 150,000 150,000 150,000 150,000 150,000 150,000 150,000 150,000 150,000 5,460,000 Possible Road Issues 25,000,000 - - - - - - - - - - - - - - - 25,000,000 Total Investment 25,000,000 4,620,000 150,000 150,000 150,000 4,110,000 300,000 300,000 300,000 300,000 300,000 300,000 300,000 300,000 300,000 300,000 37,180,000 Return on Investment 348% - 20,000,000 40,000,000 60,000,000 80,000,000 100,000,000 120,000,000 140,000,000 Yr. 0 Yr. 1 Yr. 2 Yr. 3 Yr. 4 Yr. 5 Yr. 6 Yr. 7 Yr. 8 Yr. 9 Yr. 10 Yr. 11 Yr. 12 Yr. 13 Yr. 14 Yr. 15 Return on Investment Cumulative Public Revenue Cumulative Public Expense Architecture Field Office Grandview Green Roof Special Tax District Edina’s construction of a green roof to encourage new development will be precedent setting. The philosophy behind establishing a special taxing district to capture and reinvest new tax revenue should be established. •Affordable housing •Micro loans •Green roof maintenance •Green roof programming •Schools •Property tax DRAFT FOR REVIEW: May 16, 2017 33 Architecture Field Office Discussion Grandview Green Feasibility Study Architecture Field Office BRUCE JACOBSON LANDSCAPE ARCHITECT Date: August 15, 2017 Agenda Item #: IV. To:Chair & Commissioners of the Edina HRA Item Type: Report / Recommendation From:Bill Neuendorf, Economic Development Manager Item Activity: Subject:Affordable Housing Proposal related to Estelle Edina Concept Discussion Edina Housing and Redevelopment Authority Established 1974 CITY OF EDINA HOUSING & REDEVELOPMENT AUTHORITY 4801 West 50th Street Edina, MN 55424 www.edinamn.gov ACTION REQUESTED: No action requested; for discussion only. INTRODUCTION: The developers of the proposed Estelle Edina project at 69th Street and France Avenue have requested that the Edina Housing & Redevelopment Authority (HRA) consider becoming an active partner in the creation of new affordable housing units in the event that the Estelle Edina project moves forward. Recognizing that affordable housing has been a long standing goal of the HRA, staff has prepared a background memo and outlined potential implementation strategies for discussion purposes. ATTACHMENTS: Description Aff Hsg options - Estelle Edina Economic Development / HRA Phone 952-826-0407 • Fax 952-826-0390 • www.EdinaMN.gov Date: August 15, 2017 To: Chair and Commissioners of the Edina Housing and Redevelopment Authority cc: Scott Neal, Executive Director From: Bill Neuendorf Economic Development Manager Re: Implementing Affordable Housing – Estelle Edina Co-developers Ryan Companies and Luigi Bernardi are considering a large investment in Edina’s Greater Southdale District. They continue to explore options regarding several parcels they own at Valley View Road and France Avenue. In June 2017, the developer proposed a mixed-use redevelopment consisting of two high rise condominiums with commercial and retail space on the first floor. Conceptual renderings are attached. Based on comments and concerns expressed by the Planning Commission and City Council, the developers are exploring ways to include additional community benefits with the project, including affordably-priced housing units in type and quantities greater than required by the City’s housing policy. The developer intends to price 14% of the condominium units at affordable rates, delivering 24 affordably- priced units in two separate phases as the proposed buildings are constructed. Alternatively, the developer has inquired whether the Edina Housing and Redevelopment Authority (HRA) would be interested in working together to deliver more affordably-priced units in a shorter time frame. These new units would be constructed on a separate site to be determined. Part of the Edina HRA’s mission is to create affordably-priced housing units in the Edina. Establishing a financial partnership with the developers could be a way to leverage HRA monies with private investment to create new long-term affordable housing. Before City staff begins working with the developers in any significant capacity, it is desired to review and discuss the options available to promote tax base growth and creation of new affordably-priced housing units in Edina. Housing and Redevelopment Authority Established 1974 City of Edina • 4801 W. 50th St. • Edina, MN 55424 Affordable Housing Discussion – Estelle Edina August 15, 2017 Page 2 Summary of Potential Financial Partnership – The Edina HRA could play an active role in compelling the construction of a significant number of new affordable housing units as a financial partner related to the Estelle Edina project. One potential arrangement could include the following elements. Please note that this is only one potential path based on the various options attached to this memo. •40 to 50 affordably-priced units (17-34 required by policy) •3-4 story stand-alone building •Condominiums instead of rental apartments •Deed restriction to ensure long-term affordability •Creation of new Housing TIF District •Use $3-5 million of existing Southdale TIF monies to fund land acquisition and construction •Work with local lenders to secure reasonable terms for construction financing Questions for HRA Discussion 1)Is the HRA interested in providing financial support of any type to the Estelle Edina project? 2)Is there interest in establishing a new 26-year Redevelopment TIF District to provide financial support for the affordable housing units? 3)Is there interest in using the 2017 Special Legislation and establishing a shorter term TIF District? 4)Is there a preference for ownership units (condominiums) rather than rental apartments? 5)Does the HRA have interest in the “land trust” model whereby the property acquired would remain as a public asset with the residential owners or tenants having a long-term lease? 6) Does the HRA have interest in being responsible for long term maintenance and management responsibilities or should those be outsourced to the private sector? Additional background information and the conceptual site plan is attached for reference. Affordable Housing Discussion – Estelle Edina August 15, 2017 Page 3 Background Options for Developer to Consider - the City’s affordable housing policy includes three possible options for a new residential redevelopment of this scale Description Detailed Description & Outcomes Feasibility 1)Provide 10% or 20% affordable units into each phase of the new condominium buildings Assume 14% of the 172 units to be affordably-priced; this would be accomplished by including more smaller units in the same building footprint The cost to deliver affordable units in the luxury building is very expensive. The developer is interested in this option so that units can be delivered on a predictable schedule. 2)Provide contribution to Affordable Housing Fund in lieu of including units Assuming $100k per unit, contribution could be approx. $3.2 million; the actual contribution is subject to negotiation This option has potential, but it is preferable that new units be delivered rather than enhancing the existing fund balance. 3)Provide affordably-priced units in separate project 40 to 50 units in a 3 or 4 story building This option also has strong potential and staff recommends it be explored in more detail. The creation of a separate building might be the most cost-effective route to deliver affordably-priced units that are primarily financed by the private sector. There are several challenges to delivering affordably-priced units – from land acquisition to construction costs. The City may consider entering into a public-private partnership to deliver an acceptable project. Challenge Possible Solutions Recommendation #1 Land Acquisition Cost – the cost of land in the Greater Southdale Area ranges from $2 to $6 million for a parcel of adequate size 1a -The City could participate by creating a new TIF District. 1b – The City could participate by pooling funds from the Southdale 2 TIF District using 2017 Special Legislation. Both options have merit although use of the 2017 Special Legislation could be preferable due to its limited duration (expires Dec 2019). #2 Construction Costs – costs to construct new housing exceeds the income generated by sale or lease at affordable rates 2a – same as 1a above 2b – same as 1b above Both options have merit although use of the 2017 Special Legislation could be preferable due to its limited duration (expires Dec 2019). #3 Construction Financing – market rate lenders require significant profitability to secure a mortgage; this drives up the cost of affordable housing 3a – In most projects, the developer secures the construction financing as well as the permanent financing. 3a is the traditional route, but large institutional lenders may not be the best fit for the affordable housing project. Affordable Housing Discussion – Estelle Edina August 15, 2017 Page 4 Challenge Possible Solutions Recommendation 3b - The City could issue debt to provide short term financing for the project. 3c - A local lending institution could be pursued to see if they would waive the standard profitability requirements. 3d - Short-term financing could be pursued through State, County or Met Council resources. 3b involves risk that the City has not previously taken on. It is unusual for Cities to take on this risk, unless it is in conjunction with publicly-owned housing. 3c and 3d have merit. Alternatively, the developer could retain responsibility for taking on the risk of construction financing before condominium units are sold or permanent financing is put in place. #4 Owner-occupied or Rental – apartments provide residents with stabilized rent with less risk while condominiums provide owners with some risk but the potential for income creation as the asset appreciates 4a – The private market has constructed many apartments in recent years. 4b – Ownership opportunities for first-time buyers or people on limited income are not as abundant. Recommend that affordably- priced condominiums be pursued to create new options in the market place. #5 Long Term Ownership – If apartments are constructed, who will be the long-term owner? 5a – The City could initiate a Public Housing Agency and own the building and site. 5b – A Developer could own the building and site. 5c – A land trust could be established so that the land is owned by the public and the building is owned by a developer or investor. 5a – Edina does not have a Public Housing Agency and has not taken on the task of owning and operating housing. 5b – This has merit. 5c – The land trust model has merit and might be the best way to invest public monies into affordable housing. The City, for example, could own the land and lease it to the developer for 50+ years. At the end of the lease, the land is still in public ownership and could be available to serve whatever purpose is appropriate at that time. #6 Long Term Management – If apartments are constructed, long-term management and maintenance responsibilities will need to be clarified 6a – It is traditional for the developer to hire a management company for leasing and other day-to-day matters. 6b – If the City has an ownership interest in the apartment building, it will need to take on or outsource day- to-day management and will also need to budget for long-term maintenance. 6a has merit, especially considering that the City has no experience or expertise in long term ownership of residential buildings. # # # INSERT COPY Project Name City, State Insert Date 12 BLOCK PATTERN Estelle Edina City Council Sketch Plan Review Presentation 6.6.2017 Estelle Edina Overall Site Plan FR A N C E A V E N U E W 69TH STREET W 70TH STREET VA L L E Y V I E W R O A D Estelle Edina Long Term Build-Out Potential FR A N C E A V E N U E W 69TH STREET W 70TH STREET VA L L E Y V I E W R O A D Estelle Edina 69th toward France Estelle Edina 69th Entry Estelle Edina France Entry Estelle Edina Motorcourt Estelle Edina Overall Project View