It's 7:30 a.m. This is the meeting of the Adena Housing and Redevelopment Authority on this Thursday, July 16th, 2026. um starting today with a hazardous air quality index and uh interesting situation for all of us. I think also Dick Crockett funeral day. So um we are uh handling these meetings in a hybrid fashion just like we are at the city council meetings. Uh people can watch online. They can come into city hall. Uh we'll give people a chance who are watching online to call in and uh visit with us. Uh there are no uh public hearings today. Uh but they can certainly call in for a community comment. If there's something of concern they want to address with the H, they should feel free to do so. And those are some of the numbers that you should have in mind or be writing down at home if you are watching from home or your office somewhere else remote. And so having provided that information, I'm going to call the meeting to order and I'm going to ask for a roll call. >> Commissioner Risser >> here. >> Commissioner Jackson >> here. Commissioner Pierce >> here. >> Commissioner Agnu >> here. >> Chair Hublin >> here. Uh, next is the pledge of allegiance. >> I pledge allegiance to the flag of the United States of America and to the republic for which it stands, one nation under God, indivisible, with liberty and justice for all. We've got a form of meeting agenda that's been published to both the HRA members and the general public. Is there anyone on the HR who wishes to amend the agenda in any form or fashion or from a staff level? All right. Is there a motion to approve the meeting agenda as published? >> So moved. A second. >> Commissioner Jackson moves. Commissioner Agnu seconds the approval of the meeting agenda is published. Any further discussion? All those in favor of adoption of the meeting agenda is published say I. I. >> I. Opposed. Carried. We have a meeting agenda to work from. Uh it is time now for community comment. Is there anyone in the audience who wishes to address the HR on a matter of concern to them that's not on the agenda this morning or scheduled for a future public hearing? No one coming forward. Do we have anybody online? >> We don't currently have any callers, but I do recommend that we wait one minute before proceeding. All right, >> we'll do that. All right, it's been minute and we still have no callers. >> Very good. Um, we'll move on. Uh, our practice was to have our executive director comment on the uh public comments that were made, community comments that were made on the at the prior meeting. Is there anything to report there? >> We had no community comments at our last HR meeting. >> All right. Very good. Thank you for that. Uh, next is the consent agenda. We've only got one item on the consent agenda this morning, and that's the minutes of the June 11, 2026 meeting. Uh, does anyone have any uh modifications to those minutes? If not, I'll entertain a motion to approve the minutes of the June 11, 2026 HA meeting. >> So moved. >> Second. >> Jackson moves. Commissioner Pierce seconds the adoption of the minutes from the June 11, 2026 meeting of the HA. Any further conversation on that? All those in favor of adoption of those minutes of the H from June 11, 2026, say I. I. >> I. Opposed. >> I'm going to abstain because I was not there. Right. We have uh four eyes, one abstension, and the minutes are approved for June 11, 2026. Uh similar to the consent agenda, we only have one item on the reports and recommendations portion of the agenda this morning, and that is a proposed grant agreement with an organization called S KL, Inc. or LLC at 7275 Ohms Lane. and Bill Newandorf uh has that matter for us this morning. Our economic development director, Mr. Newondorf, welcome. >> Yes. Good morning. Thank you. Uh this item on the agenda on the agenda does require action your action this morning. It's the only action item. Uh the rest of the items will just be for information and discussion if you have any questions. Uh but this is um similar to a proposal that I presented earlier in the year. uh proposal to use the the spark streamline grant program to support a small business that is that is relocating and expanding in Adina. Um, so, uh, just as background, uh, back in 2021, we established that Spark program, we relied on statewide legislation that allowed cities to use unobligated tax increment dollars that had already been collected and paid by commercial properties, uh, to support job growth and reinvestment in the community. Uh, this program terminates at the end of the year. Uh the spark pro the spark program uh included both funding for larger projects and smaller projects. This streamline grant is intended to be simple and straightforward to really work at the pace of small business. Um so the the program is relatively small but vital for small businesses. Um uh we've identified eligible expenses on this pro on this pro project. Um I haven't had coffee this morning so I still working through that. Um so this project uh has eligible expenses primarily related to accessibility and to uh retrofitting a portion of the space so that uh it can be occupied by two businesses rather than just one. Uh the spark program is set up to require matching grants. So, the owner uh has already invested a substantial amount to purchase the property, and now they're uh investing even more to retrofit it for their expansion needs as well as the needs of a future neighboring business. And this program is capped at $24,000 reimbursement after they complete the the project. Um I mentioned the Spark program expires at the end of 2026. So, we've modified our grant agreements to make sure that they start work and get it finished post haste so that we can wrap everything up and fulfill the the uh uh the support of the project by the end of that year. This slide walks through the typical process that we've uh applied for this streamlined grant program. Uh for the last couple years, I've been reaching out to the business community to see if there's programs or projects that are in need of support. Um oftentimes um well in fact every time this has been a project that is intended to go forward but hit a roadblock and paused and delayed as they try to find a way to get over that hurdle. Uh we worked with our uh uh redevelopment attorney about two years ago to prepare a template that we can use for each business. Try to keep our legal costs uh low on this. Um, so the H's obligation is to consider this request and uh if it's approved to provide reimbursement after the project is finished. The rest of the responsibility rests with the business to scope the project to hire the architect to hire the contractor to make sure that they do what they said they would do in their contracts uh and then to provide some reporting back to the city to the HR so that they can be reimbursed. Uh at that time we'll we'll re we will review their um project, make sure they did everything they told us they were going to do uh and then issue a certificate of completion and then provide a check uh to reimburse them. Uh all that will happen by the end of this year as required by state law. The property in question is on Lane. Uh it's a singlestory office complex uh that's arranged as commercial condominiums. So the uh the owner uh owns the actual building but the parking lots, the site work, the landscaping is owned by the association in common and then every owner pays their proportional share of that. So the image on the top left is a image of the of the building. Uh it's at 7271 and 7275 Ohms Lane. Uh and then the aerial on the lower right shows the relation of the building. It's outlined in that in that blue box towards the northern end of the property. It's actually right next to the uh to the creek um behind a bunch of trees. So, I've been working with the owner for several months now, uh SK Low. Uh she and her family have owned and operated the Kumman uh reading and math tutoring center for several years in our community. Uh most recently, they had been located right across from City Hall uh at at Eden Avenue. uh the building that was eventually torn down and and is under construction by Opus for a new building. So as they realized that their lease was coming to an end, they sought new locations. It was very important to them to stay in Adina. This is where they've created their base um uh and it's where the bulk of their uh students and participants uh come from. So they really wanted to stay here. They found a property uh on Ohms Lane and over the decades uh it had been transformed from a multi-tenant building into a single tenant uh which is great for the past owner but for this current use it's just does isn't sufficient. So the intention there is to subdivide the space again to have uh two individual spaces. they would use the majority of the property. Um uh and then there'll be a future tenant that will lease the other half. That second tenant has not yet been identified. But the hurdle has been that with new construction codes, it's not as simple as rebuilding what was there in the 1980s. Uh ADA provisions, accessibility provisions, building codes have all changed. So, the cost of return restoring it to to accommodate two tenants is very very high. Over $300,000 just for a couple toilets, a new door, and a wall. Um, uh, and that uh gave the the owner some pause as far as how they're going to going to get it uh working. Um, but they've uh f found a good contractor. They feel confident in their pricing. They feel very confident that this is their path to continue the tutoring function as well as to reuse the other portion of the building. So with the Spark program, what we recommend to do is uh enter into this agreement, allow reimbursement for them to help pay for up to $24,000 of the cost of the ADA improvements. That's a uh two new toilet rooms and a new ADA entrance so that wheelchairs and other folks with limitations can get into the building readily. Um uh so it's a fairly simple project. Uh this is we follow the same exact process and the same contractual template as we've done for all these other streamlined programs. Uh Miss SK Low is in the house with us this morning. If you have any questions of of her about her business or or her project and with that I turn it back to you, Mr. Chair. Happy to answer any questions. >> Yeah, thanks manager Nuendorf. Um, but I think generally we really appreciate you um, working with the small business community to think about these opportunities to help them grow their businesses and and use some of these spark funds. So, um, I don't have any particular questions at this point in time. Just to get clarified though, the the qualified expenses, I think we're up to 71,000 and what we're talking about is that typical grant amount that we've been doing of 24,000 is what's being recommended. >> Correct. That that's exactly right. the qualified expenses of the plumbing, the ADA, the entrances, $71,000 to build two new toilet rooms. So, it's expensive these days. So, this program does uh uh have a cap of 24,000. Uh for other projects, we we have gone higher. Um that just um it entails a whole lot more paperwork and red tape and um evaluation. Uh they don't have time for that. They want to be up and running and the school year's coming. So, um, they're happy if we if they can, uh, have the support at the $24,000 level, they're confident that's enough to keep going and meet their deadlines. >> Good. Thanks for that additional information. I'm going to turn to my colleagues now to see if anybody has any questions about this matter. Commissioner Risser, >> first I want to say when it was um clear that the Opus office building was going to be removed, I was very concerned about affordable spaces for businesses and I did speak out on that and I do think in Edina we talk about affordable housing but we also need to talk about affordable office space. So I am absolutely thrilled that your organization has found space in Edina. Um, and I feel really torn on this. On the one hand, compared to like millions of dollars of spark funds that we have granted, this is a really small amount. Um, we have our own ADA issues on public infrastructure that we have not addressed. And so it's hard for me and I know, you know, we keep saying, well, the spark if it's not spent, it's going to go back to the tiff district. And I've been consistent and saying I really think, you know, we had $10 million if it had gone back to the county for redistribution. It could have been used for um projects, public projects, public spaces here in Edina. And so that is my concern. And um we need to I actually walked across that bridge cuz I had to drop my car off at Grand View Auto this morning and made my way to just check it out. There's a lot of spalling happening with the concrete on the west side and it actually looks like the section of the deck that you go on to get to the parking ramp is sort of sinking down a little bit. So I have concerns. The other concern is the air quality here is just so horrible today and I was listening to the radio. Where do you take your kids to go inside? And I have really wanted the Lewis Park rec center to be replaced. It got cut in 2024. It got cut in 2025. We've cobbled together several sources this year, but it's probably the riskiest and less likely of all three years to advance. And so I'm looking at this. Okay, it's just $24,000, but I looking at all the other expenses that we've got and the public need. I I'm having a hard time with this, but I Anyway, thank you. >> Other comments from commissioners, >> Commissioner Jackson? >> Yes. So, I have just a quick question for our um business owner, Miss Low. Uh when do you think will you be able to open up classes again when school starts? Will will this be done in time for uh for you to resume business in the fall? >> Dr. you have to come up to the microphone here and introduce yourself and just give you a chance to talk a little bit about your business as well. >> Yes. Um the Kuman has been in place since 1991. So it's been around for 35 years already and we are doing it all year round. So even though we have to move um and the space was not ready uh because we couldn't get the contract signed and and so forth. So we had to take on a temporary classes at the community center for the summer you know over that was last summer not even this summer but it took us a very very long time to get all the you know modification and everything in in place. So we had just started the project but the classes is always continuing and we just finding space you know to do that. So right now we are occupying a place that is actually undergoing some renovation and they have been very careful in terms of putting you know temporary wall and as well as uh plastic you know partitioning so it wouldn't affect the classes at all. Well, I'm I'm happy to hear that you're be able to continue operations during this and uh and excited that you'll have a brand new space for your wellestablished business. [laughter] >> Right. We haven't asked you know for any subsidies or grant in the past and this was one thing when I find out you know we have to pay quite heavily for the ADA you know bathrooms and so forth that I felt you know we if there's any way to help us that would be great. >> Terrific. Thank you. So it's a small grant compared to the building price as well as all the you know renovations and it's only half of the renovation right now. So there are other part when we have to you know put it on the market that we also need to renovate again too but the ADA requirements is satisfied you know for the kuman side as well as the there are two ADA bathrooms so one for each tenants then >> thank you >> thank you >> yeah thanks stand by in case anybody else has more questions anybody Okay. Thank you. You can go ahead and sit down. >> Okay. Thank you. >> Thank you. All right. Other questions for Mr. Nundorf? Any comments? Um, yeah. Commissioner Agnu. >> Thank you. And thank you so much for for being here and continuing to invest in the community. Um I I echo Commissioner Risser and in just thinking about when the Opus building was going away, thinking about where tenants might go. Um and so it is really great that you were able to continue to find a place within Edina and continue investing in the community. So I just want to thank you for that. Um I'm personally supportive of this. I think that this is exactly the kind of project where um we have these funds available. It it makes sense for me. Um, so I am supportive of this. Thank you, >> Commissioner Pierce. >> Uh, thank you, uh, Mr. Chair. It is, um, very exciting to be able to to use funds to just invest back in the community. Um, and so I am definitely supportive of this and, uh, thankful that, uh, you were able to find space in Edina and stay in Edina. So, uh, thank you for your multiple years of of um running your business in Edine and we're glad that you're able to stay. >> Commissioner Jackson. >> Oh, I'm in favor of this. Thank you. Uh, we we're happy you're here and um I think this is a good use of these funds. I would I would just comment that um having legislative support I think in both 2021 and 2025 to be able to do something like this in communities where we can gather up some of those unused tiff funds and and use them to promote small business is a has been a pretty extraordinary opportunity and the idea that uh it's coming to an end and we need to be thinking about uh how to wrap up that program but trying to get some good work done in the meantime to support small business and yeah we can we can worry all we want about where people are going to be going like when a building like uh the old building on Stilts is torn down. Uh but here now you're coming to us with an opportunity to have us help you have your city help you that you've been in so long and supporting people with your program uh continue to build your business. And that's exactly what I think that this fund is for is to be able to help small business. And I appreciate again manager Nounorf's uh diligent work in the small business community to be able to make sure we take advantage of these kinds of opportunities. These other issues we have to address we we can address with other funding mechanisms, but this one has a particular this particular trunch of revenue has a has a dedicated sort of purpose and we're trying to take advantage of that and make sure that we make our small business community as strong as it can possibly be. So I'm I'm glad that you were able to work something out with them. So, I I'm obviously supportive as well. So, uh I'll entertain a motion to approve the proposed grant agreement to enable uh the business expansion of uh uh of Kuman Math and Reading Center at 7235 Lane. >> Member Pierce moves. Member Agnu, Commissioner Pierce moves, Commissioner Agnu seconds the uh motion as stated to approve the uh proposed grant agreement between the city and uh and the Koma math and reading center. Uh any further discussion? All those in favor of the adoption of the motion and the award of the awarding of the grant, say I. >> I. >> I. Opposed. >> Nay. >> Uh motion carries four to one. All right. Thanks for being here this morning and take care of yourself today. Be careful. Yeah. All right. Uh we now are into that portion of the agenda that manager new Newandorf was alluding to which is a report out on various uh projects including spark related projects and our executive director may have some comments as well as well as our affordable housing manager. Turn back to manager Nundorf. >> Yes. Good morning. Thank you. Um, under uh the executive director report, we just have some information we wanted to share with you. So, I'll just cover the the rough highlights, but there's a full write up in the staff report uh that that's been posted. Uh the first is an update on the uh Stling restaurant. A few months ago, we had a discussion about possibly using Spark funds to help them expand their parking lot. They've been looking into different parking solutions to address what's perceived as a parking shortage there for a few years now. We had a a robust conversation about whether Spark would be a good investment for that. Uh initially there was um some suggestion of support uh when we first discussed it with this group. So after that meeting I met with the owner um and uh and had more of a heart-to-heart uh asked them to really value engineer their project. Uh it is a very expensive project. Um some of it is uh with some trimming they could cut cost significantly was was our goal. So I asked them to to to get serious and scale back the cost a little bit. Um uh also encouraged them to continue their conversations with the landlord to make sure that they were still on board for funding. Um so it was a it was a good convers a difficult but good conversation. Um ultimately they got back to me a couple weeks later and decided to pause the project. um they felt it just um uh as a as they try to bring down the cost they reduce the parking count um uh and ultimately they felt it just was not the right project. So they will uh they did formally withdraw their request for funding. Um they do not expect to submit uh a variance or a modification to their zoning for that site plan. Um so that idea is essentially dead. um uh they will look at other solutions. Those have not been identified yet. Every other option they looked at was a no in the past. So um uh but as far as any spark funding for that project, that is withdrawn and no longer on the table. So just to make that clear. >> All right, thanks for that update. And then the other update, um, last year, um, let's see, let me make sure I've got the right ones here. Um, last year when this group authorized the extension of the Spark program to follow that 2025 state law, I promise to come back with regular updates so that we know where we are with the balance. Uh, and so in your packet, uh, there's a a a robust, uh, update there. Um, in summary, uh, our initial budget based on unallocated TIFF funds that had already been paid by the commercial tiff districts, uh, that budget was $10.2 million in total. So far, we have, uh, obligated and paid to finish projects nearly $8.6 million over the last several years. Uh we still have about $248,000 in funding that has been obligated. The projects are under construction, but we haven't reimbured them yet. Um and then we have a few that are under review. Um uh the one this morning for uh for Kumman and SK uh 24,000 uh is now committed for that one. And then I I am still working with a few other small businesses to see if we can squeak in a few more streamlined grants uh in August. Um if if they're not ready in August, I think that's going to be it for the streamline grants. We're just get we're getting really down to the line and I want to be careful that we're not overpromising or getting someone in a pickle uh if they can't finish the work in time. Uh and then we also have one other project uh uh with Enclave Companies uh with the Macy's furniture redevelopment site. Uh we did pledge uh or authorize ourselves to use up to $1.5 million of spark in order to reduce any future TIFF contribution to that site. So um uh so if all these things happen, we will fully expend the 10.2 2 million. Um, so while it's possible that we might actually invest all these dollars into the community, I also want to be realistic. Um, uh, Enclaves, um, work at the Macy site started about a year and a half later than we first thought it was going to. They ran into even more difficulty in the financial markets than they than they expected. So, while they're moving forward, I don't know if they're going to be moving forward quickly enough to actually use Spark on that project. Um, so that's kind of a wait and see. Um, uh, but the, uh, uh, if they do move forward, uh, quickly, um, uh, we would fully expend the Spark program. Uh, if they don't, we would end up with a balance of about 1.35 million at the end of the year. Um, and those funds would then be returned to to the same place they started in those commercial tiff districts to help fund um obligations of those districts or to be used in in any other way if that's allowed by state law. Um, so that's where we are as of today and just want to give you a full reporting on that. >> All right, Commissioner Risser has a question for you. >> Um, specifically this is regarding the settings department and that France TIFF 2 district. My understanding is the the original TIFF district 7.5 million was for phase one. Is that correct? >> Uh the original TIFF agreement, so it's been modified a couple times. Um but the original had about I don't remember if it was 7 something. I don't remember the precise number. >> Yeah. >> And that was intended to be laid out under two notes. The first note would be issued upon completion of the office and all the site work. >> Right. >> The second note would be issued after the completion of the apartments. >> Exactly. But both went to that phase one site. >> Correct. >> None of it went to the settings. >> That's correct. >> But the 4.862 million went to the settings. >> That's also correct. >> Okay. So, aren't we talking about a tiff district that's way over what it was originally created to be? we added additional funds to it. It's a larger amount of public money that is being invested in that tiff district. Um the fact that we use spark to support the affordable housing in the um settings does not impact that tiff budget. Uh it is certainly a a contribution that we made from another funding source from the spark program. So, while it was different than we first expected back in 2022 when we approved the overall master plan, um it's not a violation of the TIFF budget or funding source or anything. >> Okay. And I'm not concerned about that original. We're not going to pull money from phase one. Making that very clear. We're sticking to what we agreed to there. But what I what keeps me up at night is realizing that when council approves a tiff district, it can still garner millions and millions and millions of extra tiff dollars without having a public hearing. And I don't understand how that's possible because my understanding is if you are taking a tiff district and you are enlarging it in terms of the financial obligation of the public and it's tiff or spark but that is money from the public. There should be a public hearing but >> are you referring to >> that's not the case. >> Are you referring to the spark money? >> Yeah. >> That's not tiff money though. I understand that and I feel like we're having this conversation where we're going it's a par it's another paradox. It's another it's just like the tunnel paradox. >> Hardly a paradox. >> No, it's not. It is a paradox. >> It's a it's a use of spark funds which are dedicated to construction purposes in lie of having to have an expanded tiff district from a size standpoint. So, we're we're we're using available cash to reduce the amount of money we'd otherwise have to do through a tiff district, which is a benefit to the taxpayers. >> It feels like it's a big loophole or a paradox. I will think about it more. I I don't see how it's spark, yes, but spark is tiff. And you can say that the spark has been processed or the tiff has been processed into this new program, but you are obligating public dollars to a greater extent to this single this and we don't have our attorney here. So, um >> is this an assertion that we're doing something illegal? >> I am very concerned. It is me being an elected official being very concerned about this and you can interpret it as an assertion but I feel as if this is something that we should be concerned about. We've had some of the finest legal advice you can have in the state of Minnesota around the tiff and spark and uh I I would have no worries whatsoever that we have done everything that is appropriate and legal. Uh Commissioner Jackson. >> Yes. Thank you, Mr. Chair. I think it comes down to do we need to have a public hearing every time we expend public dollars on a redevelopment project? And I think that's what you're arguing that we need to have a public hearing um every time we do this. And I think, you know, legally we don't we aren't required to. Um that's how I interpret what's being said. >> Just for clarification, that's not what I'm saying because I I did not think we should have a public hearing for what happened this morning. Um but what we're talking about is a single TIF district and bringing more dollars into it. It is remarkable that you can establish a tiff district and then you can um increase the amount of public investment in it to the degree that we have with tiff 2 and maybe that's where we leave it today. >> Any further comment? Um, I'll just state that the uh the state law requires public hearings when a tiff district is established and when you set the budget, but um uh public hearings are not required when you get into the specific projects that come after because you've already had the public hearing to cap the overall budget. So that's where the state law requires public meetings and public notice but not necessarily public hearings. Uh, and my recollection is when we first created the Spark program, I believe that was a public hearing as well, um, to set the overall budget, um, but then only require meetings like this to actually award funding to specific programs or projects. Um, so, uh, uh, I I share your, um, confidence, Mr. Chair, that, uh, the legal representation we use, um, knows the TIFF law backwards and forwards. They know the public finance laws backwards and forward. So I I have no uh I'm not at all unconfident that we're doing things properly. >> So the amount of tiff reimbursed is not going to exceed the amount that was budgeted for or contracted for. >> That's correct. >> Regardless of how much tiff is collected. I mean we we collect no more than necessary. >> Correct. In order to exceed the budget or anything of that matter. then we would have to go back and modify the TIFF district and hold public hearings at that point. Um uh but as we stand here today in the summer of 2026, I don't see any need to uh or any expectation to have to modify that budget. I think everything we're going to do in that tiff district uh 72nd in France number two will be within the allowable budget that has already been approved and reviewed. >> I think my recollection is consistent with yours that the that the spark monies used at the setting departments, I think it's about 4.8 862 million was for the purpose of us being able to assure a level of affordability for 10 or 12 apartments in perpetuity. >> That that's >> that was our commitment our public commitment to affordable housing. >> That's correct. And and that that was necessary because as that if you recall we created the TIF district, approved the master plan and then it sat. It's been an um just extraordinarily difficult financing environment the last several years. Um and so when that site when they were tussling between is it a rental apartment, is it a hotel, is it a vacant lot, which was one of the options, just a surface parking lot to begin with. Um as they went through their budgeting, they realized to make that apartment possible with the affordable housing that we required and then required for it to be there um in perpetuity that created a funding gap that that was not originally anticipated. So that's where the spark program came came through. Manager Hawinson shephered that project and got all the contracts uh reviewed and awarded. Um so there's a history with that one. >> All right. Thank you, Commissioner. Did that comment cause you to have any other further questions? >> So it's 10 to 12 apartments that we're getting. >> I I don't recall the exact number. Maybe >> 15 apartments. >> Okay. >> 15 apartments is the number. >> Yeah. Thanks for that. >> Yeah. and and those have been documented in many past conversations as far as the makeup and arrangement of those. So, >> all right. And you've got uh another report as well. 8.3. >> Yeah. One last one and then I'll and then I'll sit down and and uh move on. I wanted to provide a very brief update about a federal program uh that was uh being considered in Adina. Uh the federal program is called an opportunity zone. It's version 2.0. Uh the first opportunity zone was enacted federally oh gosh 8 10 years ago. Um uh this program does not require any um there's no cost contribution on the local side. It's all a federal program. It's basically a federal tax incentive to invest in qualified census tracks. uh and those census tracks meet a a a slightly confusing uh criteria set by the federal government where there's a certain low income component to that to that particular census tract. So uh the city of Adina is divided into 15 different census tracks. Uh one of our census tracks did meet that federal criteria to potentially be considered as an opportunity zone. Uh that's the 300 acre census tract that is between France Avenue in York, between uh city limits Minnesota Drive on the south and uh uh uh and 70th Street on the north, just the southern edge of the Galleria. Um in that area, as we know, it's um already been redeveloped from the gravel pit back decades ago. Um, but there's a lot of uh senior housing, lowincome housing in that in that whole census tract. There's also a lot of marketer rate housing and luxury housing. Um, uh, but the census track did meet the criteria. Uh, we did ask the we worked through the statemandated process um where we worked with the county to submit this as something we'd be interested to learn more about to see if we qualify. Um eventually the governor's office will make the decision of which census tracks are actually identified as an opportunity zone. Um and the governor's office is working through the counties which is then working through the cities. So we worked with Henipin County to to put our hat in the ring. Uh eventually this census tract was categorized as a tier 2. Um uh so while it is possible that we might be identified for this federal tax incentive, I think it's unlikely at this point. I think the tier one designated cities uh are going to be the ones that will actually be uh in the running. Uh it is a competitive program. Out of the hundreds of qualified census tracks in the state, only 25% can actually be recognized. and there's a a strong um skew to recognize more rural areas than urban areas. So, um our hats in the ring, but I think this will be the last time you hear about this from me. Um but it is an important program. Um it would have been a uh could have been a gamecher for a couple projects that are stalled. Uh both the Enclave site that's I mean they're back and running now, but also the Morton Mortonson site. um it could have really incentivized uh uh national credit investors to to put those on the radars more heavily than they are today. Um but if there's any other uh reporting on that, if we are awarded or designated, I will I will follow up. Um but I think it's unlikely unlikely at this point in time. >> Okay. >> Well, thanks for thanks for reporting on the long shot at least with some kind of a shot. >> All right. Well, uh Commissioner Pierce. >> Uh thanks, Mr. here. Um I I didn't want to let the moment just pass by. We had received um several emails about Starling and using public funds to um for that particular project. Um and um I do appreciate you going through the process that you went through and really verbalizing it in um this meeting because it does show the due diligence that you have taken and staff takes to uh be good stewards of those funds. Um, and so I definitely appreciate um that you do that um and that you're just sharing uh publicly what you've done in that particular case uh is very much appreciated. >> Welcome. >> Yeah, thanks for that observation. All right. Um well, to the extent we can help you work with the county on anything uh related to influencing the governor, let us know. >> We'll do Good morning, manager. >> Good morning. >> Presentation up. >> Good morning. So, it has been eight years since the position of affordable housing development manager was created. And it was created to have a person um focus on affordable housing endeavors. Um be it new construction, be it preservation, helping the people that live in affordable housing or what all. It was a pretty open um charge and after a review process I was honored to be the first person in this position. So this is not a report about self-grandisement. This is a report about decisions that you all made that have helped further in um affordable housing goals. So you um the city approved the first inclusionary affordable housing policy in 2015. Um, prior to that, as uh the chair has said, there'd be negotiating to try to get developers to include affordable units within their buildings, but you know, they could say no and they could proceed. Um, and there wasn't really anything to really hold their feet to the fire. um a policy was approved in 2015 and there was some movement on that but it was it was ancillary to every other thing that was being worked on in the city and so although movement was made it wasn't a focused effort. Uh so you allowed buyin to create some flexibility with your policy uh in 2018 and that's the year that this position was created. I think it was determined that there needed to be staff that this was their job. So what has happened since that time um for multifamily inclusionary where it's a market rate building that includes the affordable units since 2018 there's delivered under construction 86 units. I would like to point out that the Finch that was approved in 2022 um is up and operating and a subsequent decision was made for 28 of the affordable units to have a priority to serve adults with intellectual and developmental disabilities and that is working. Um they and it's fully operational. The one that's under uh construction right now is a setting that will bring those 15 units in a permanent affordability. Um what has been approved but not delivered yet um are the 58 units that were at the old Macy site for 100% affordable um since 2018 that were flats, the sound and 4040 flats that were approved in 1920 and 21. Um and then we had 136 units that were approved in 2024. That was the residence building um the hotel that converted into affordable housing and that's naturally occurring. They did not require any money from us. There's no declaration placed on those units or anything. So the pictures show 4040 flats and Amenson Flats. Um I think that was an era of naming um where all of a sudden we have a lot of flats. We also have um you all have approved multif family preservation. Um the first project was in 2019 when AON bought uh Villanova on Sandell. Uh and it's a 11 unit building. Six of them are affordable units. Um, and then under construction right now that was just approved in 2024 was the acquisition rehab of the two common bond properties. Um, I had a meeting at South Haven last week and they I walked through an apartment. They look great. Um, those both those two buildings serve seniors. Um, that's the picture um of a happy senior getting a renovated apartment. And then uh Summit Point is the picture on the bottom. It hasn't been easy having um an occupied rehab um when there's a lot of work within the units like um flooring in the bathrooms or just re people have had to be moved around. There's been a lot of shuffling of residents. It's not comfortable having to be moved around a lot within an apartment building for those residents, but it's happening. Some are getting back into their permanent space. Summit um point should be done in August. So, we shouldn't hear anything more from that's being set. Um South Haven will be a few more months because it's a lot larger building. You also approve the Noah preservation program and what this is is to try to take naturally occurring affordable apartments where the rents are already affordable and preserving them. there's worried about flipping um that some a new buyer could come in or rents could be jacked up and price um out of the people that were currently living there. So, y'all approved a program that allowed us to have them apply and opt into a 4D tax classification status. If 20% of the buildings um had a declaration placed on them that they had to remain affordable, they could have a affordable housing tax classification which would save them a lot of money on their tax revenue and they would be um eligible for a $50,000 energy upgrade. So they could save on utility bills and they have to be energy upgrades. It can't be carpeting. Um there has to be a a connection point between energy and cost savings and the grant. and then the affordability period is longer. Slow start. It's not a very popular program. Um we've had four participating buildings since 2019, but it's four where all those units, those 42 units are affordable and they will remain affordable. One of the buildings is 100% affordable and they actually ex um opted to extend their declaration for extending their affordability term. Um, the reason I think it's not very popular is they have to income verify the new tenants on turn. Right now, they just have to make sure that they make enough money when they have the decoration placed on them. They have to make sure they don't make too much and so it shrinks the market. So, it's a harder one to sell. Um but that we have room in that for one or two more buildings funding remaining for that and one is getting energy upgrades this summer or start of the process. Um you approved the housing improvement area which allows condominiums to borrow money for common area improvements. Uh so far Edina West was the first applicant. 162 units saw upgrades. The it's being paid back through property tax uh fee added to their property tax statement. It's all going well. I've had two other condominiums inquire. We expect another application in a couple years. It's a long leadup time to get this done. you have to have a vast majority of the residents agree to this assessment placed on their building. But some of our condos in the city are getting older. Um and there also some of them are bigger than a Dino West. So we might see this one was um 3.65 million and the bonds they could be higher than that um the request moving forward. >> Have you been over there at all to look at the improvements that have been made to date? I drove through there, but I did not get a tour of it. Um, seems that people are happy. There have been I received a call from one resident saying, "What is this fee on my property tax?" So, I explained it and it was all fine. Um, there have been questions. They've been able to sell though because um, people, the buyers know that these improvements were being made and so it has helped actually with some of the turns when people have moved out. >> Yeah. Yeah. I think it'd be nice to see what they've done over there or in process or when they finished. >> They are finished. They are complete. >> They are finished. Yep. They're they're done. >> Okay. >> They've been done for a year or more. >> Well, maybe you can give us uh contact information. I'd like to go over there and look and see what what they've done. >> I can do that. >> Thank you. >> For sure. >> The affordable ownership preservation program. Um this was kind of one of like how do we preserve our remaining stock of affordable houses? they they're diminishing. They're um we've lost over a thousand to tear downs plus just natural evolution of pricing um housing costs. I don't know if you've seen any headlines in the newspaper. Housing costs are increasing. It's becoming really hard to buy a home. So, we came up with this idea. Let's just send out a postcard to every house that has a value of less than 425,000 and say, "Hey, if you don't want your house torn down, you want to preserve for another family, give us a call." And you awarded um a total of $6.3 million to Habitat and Homes Within Reach. We're closing on two homes in the next three weeks. U we just sold one um to an end buyer and I think two more are pending. I said there are two pending now, but I I prepared this a week ago. Um, something's happening. It was It goes quiet and then I get a lot of calls. It goes quiet, then I get a lot of calls. So, um, have or Homes Within Reach has already expended their original 3.3, but then they sold the homes, kept those proceeds, and are recycling them. And so, they're still using those recycled funds. Those are drying up a little bit. Um, this program was supplemented with money from the Met Council and from Minnesota Housing. I applied for two grants and was awarded another million plus to keep the program going. Um, so we are we are doing so, but 26 homes have been um preserved, 20 sold to end buyers um since this program started in 2021. So, I think that exceeds expensive program, but those homes are now 99 years. They're not they're not going anywhere and they're going to be affordable. Single family rental. Um, we've done a couple programs. We had a partnership with the Met Council that was approved in 2020 to preserve um four homes um for their family affordable housing program that these are rental that are owned and managed by the Met Council. Uh you all also awarded um money to LAA for two group homes that are owned and operated by MOA. Um so we those for 12 units total or 12 households have been helped through the single family rehab programs. Home rehab. Um this was approved in 2021 and um it we have served 66 um households and we have enough money for one more loan. Um so one of these homes, one of the programs was was tied into the housing preservation program, the affordable preservation program. Some were condos and so they were excluded from that. But there is a home a borrower of this program who said that they wanted to opt for that preservation. So she is selling her home to Habitat and then this loan will be forgiven. Otherwise, it's a 2% simple interest and due on sale. Um but as far as having a tie into preser long-term preservation, it's worked on one so far. you awarded money for the first generation down payment assistance program. This has helped 12 buyers as you can see on the chart on the right that since the introduction of this um in recent years the diversity of buyers through the come home to a dinina program has increased a lot um in part because of the first generation program that's been on pause because we don't have the come home to eina program right now and it's tied to that it's um subordinate to the come home to adina program since we don't have the come home to adina program this isn't really existing the only place where come home to adina and this can still exist is if it's tied to the single family preservation program where we are funded through Minnesota housing or the met council if any of those funds are applied part of the requirement is that we make available the first generation program so there's a loop there's a window um for doing that. But you approved recently the Heroes Down payment assistance program. The third loan is closing tomorrow. Um for we've had two people in the school district and one a city employee. Um we've had a lot of inquiries but finding a home has been the challenge. Um they only one has borrowed up to the maximum. The other two has been about half um under $50,000 that has been borrowed. Um these are due. They are going to they are paid back. These are not grants. Um there's been one house and two condos that have been able to be acquired. Um far less than $600,000 cap. Um nothing I mean the home that's closing tomorrow is about 200. So it it that was just trying to do math and open up the pool, but it hasn't reached that. And for Commissioner Agnu, that is the logo. And you can see with a R, it looks like a cape and a shield. >> I definitely missed that the first time around, but I do love the logo. Thank you. >> I know you were concerned that we were going to have a logo. We've given emergency rental assistance that has helped thus far and I haven't received quarter 2's invoice yet um for this year 708 households through the emergency rental assistance program. So um right now it's closed to all the other cities except Edina. So it says applications are only being accepted for the city of Edina because the other cities didn't get weren't as robust in their giving as you all were. Um and so that they've run out of money for everyone else. So only Adina um are is they're only accepting applications for Adina. Um not to cast shade on the other cities but to applaud you for the generosity. Internet Essentials was a program that also started in 2020. This is we have currently um 121 active participants. Um this ends at the end of the year due to lack of funding. It is um about $16,000 annually. It um goes to very lowincome people so they can have internet to be able to watch TV, look for work, do homework, whatever. Um, and for some folks that this is their only access to being able to have internet in their home, but the program does dry up at the end of the year. So then we have summaries, you know, we we've used for the multifamily inclusionary and the multifamily um 100% affordable tiff and other sources of funding. I would like to point out based on the previous discussion with multif family affordable often tiff is layered with multiple other sources. It's the only way that these projects can get funded. Um so they are layered with tiff that is generated from the project as well as pulled tiff as well as affordable housing trust funds um met council funds, Minnesota housing funds, henipin county funds, federal home loan bank funds sometimes. So it is a layering sometimes there are 12 sources um including tiff as one of the 12. So um there's lots of layering and that is a standard practice for every affordable housing in every community. [clears throat] Um multif family preservation we use tiff pool in the affordable housing trust fund. Noah preservation um we use affordable housing trust fund housing improvement areas were the general obligation bonds affordable housing um preservation program was affordable housing trust fund and outside sources single family rental we used to pulled and laa um home rehab program was the affordable housing trust fund first generation down payment assistance affordable housing trust fund heroes DPA um down payment assistance was the tiff pulled emergency rental assistance was CARES ARPA and LAHA and internet essentials was um LA ARPA primarily. So none of these programs, none of those households that have been helped, those over 10,000 households that have been helped have used any general levy funds, zero dollars. with that internet essentials. Have you had any conversations with the Adina ad fund or Adina give and go because we you'd hate to see these families without the ability to have uh access to the internet with I'm assuming kids in the household and um if there's some way we can figure out how to continue that program either through philanthropy or some other method. >> I've not talked with them. Do >> I I I haven't spoken with the school or with with done a give and go, but we have had uh a conversation with Comcast to see if there's any willingness on their end to have some flexibility and they are thinking about it. >> Well, good. Yeah, that was a good move on your part. Yeah, thanks for that. >> Yeah. Um it may be combined. They have some programs through um where they get philanthropic dollars through to Minneapolis. And so they're talking to some of their funders about whether or not since this is a suburb of Minneapolis, whether or not they can expand the boundaries of the um dollars that they're receiving that help um these low-income families. Um we >> have several is it the Minneapolis Foundation then that's providing that philanthropy? I don't know the source that she was she was not forthcoming with letting me know that other than that they have these programs with philanthropic sources. >> We've got several community members on the Minneapolis Foundation board and I'm wondering whether they even know that this is a possibility or that you know they might have some funds to be able to help continue these internet essential >> and Comcast did tell me that um some of their their philanthropy goes runs through nonprofits and I said well we have an ancillary nonprofit that could help if you need the money to go to a nonprofit that could still serve these same customers. So, we have been in some conversations, but nothing has been decided. And I have closed applications. They're no longer I've not been accepting any more applications. Um I haven't for many months because I knew the funds were running out >> and we didn't we were ekking by on serving the customers that we have um to the end of the year. >> I think this was originally an allocation of federal funds during co >> it was >> that was and I think it was half million dollars >> through ARPA. >> It started out as a half million but then we realized we didn't need that half million and it um was reduced and the funds were reallocated so it ended up being only about 80. Oh, okay. >> Because it's only it's less than $20,000 in my mind how we can how we went through a half a million dollars in federal funds with this program so soon with 121 families. So, >> we weren't sure at the time that we made the allocation, how many people sign up for it? >> Correct. >> Understood. >> All right. Thank you. >> Um and then just to make you aware that we do have this on uh there is a dashboard on the website um that talks about our progress. So, if you have any questions, I'm available. But, um, kudos to moving the dial. >> Yeah, good, great report. It's good to get these updates. I think our residents appreciate these updates, too, so they can see how funds are being invested. Commissioner. >> Yes. Thank you, Mr. Chair. So, when I was at the League of Minnesota Cities, I was talking to some folks about affordable housing. And one of the programs that I believe this um city council member from Minnitankka was talking about, this would be for our legislative agenda. Um with naturally occurring affordable housing and the it was the 4D program. Um she was talking about how she has a a child who lives in Austria like our executive directors, but a different program. um where you have to be affordable to move in, but once you're in and your income goes up, you don't get booted out. And so, I'd like to see that as part of our legislative agenda. I don't know which program it would go through, but I feel really badly that if someone it's a burden on the manager for the building, and if we can get them in the program to upgrade these buildings and keep them affordable, we shouldn't have to put the burden on the manager to then make sure that people continue to be uh need affordable housing. To add some clarity, when people sign up, when manage um owners sign up for the program, no one is booted. Everyone is grandfathered in and they're not checked after that. Okay? >> The rents have to be affordable. But the only time when someone, and this is true with our inclusionary, this is true with our 100% affordable. We're not in the business of keeping people oppressed. If someone moves in and they're qual income qualified to move into a building of any of these types and they get a better job, good on them, you know, and they're not punished. >> Okay. So, but as as you're looking at programs, you know, make sure that if there's an opportunity for us to make that clear or expand it to again not punish people for for doing well in life, um I I'd like you to keep an eye open for that because I thought it was a great idea. >> Yeah. Thank you, >> Commissioner Risser. >> I should know this, but you started and you said in 2018 we allowed the buyin for the affordable housing, and I know there have been periods when we don't have the buy in. And then where where are we now? Um or the buy Yeah. >> Uh chair, commissioners, the buyin is still an option. The law states that you can't you that cities can require affordable units. The law does not say that you can at firsthand offer the buyin without requesting the affordable units. So you have to the first layer is requiring the affordable units. That's allowed. If they choose not to it is an option to do a payment in lie. Um, and we have that still. It's right now at $175,000 per unit. If a project comes forward and from economic reasons or whatever and you agree to it that they do a payment in lie and do not include the affordability that is allowed. Metropolitan council recently completed a nexus study that helps determine what that pay payment in lu should be. So, we will be looking at our policy because we have did some um mental, you know, math calculations of how much they're losing with the af the rents in the affordable and trying to come up with some equivalency that would not cause the developers to all run and never come into Edina. Um and because it really equates to over $350,000 is the what the delta really is. But it's not realistic to ask a developer. They wouldn't want to develop here. So we have to find that sweet spot where we're still attractive for developers to come in here, but we're not making it where doing a payment in L is such an easier choice. So we have to find that sweet spot. At any rate, we still have it in our policy. >> So there's no requirement if the land is reszoned to PUD, you don't have to actually build the affordable housing. you can do the buyout. >> It it depends on the density um where they they have to do uh comply with the affordable housing policy. A change was made in 2022 where they if they are at maximum density, they have to include the units. If they are not at maximum density, if they're at 75% of maximum density, then they can have a choice of doing the inclusion or the buyin. >> And it's not connected to public land or anything. It's um the policy in um doing the having the policy imposed is if a building is bought or land is bought on the private market and it's zoned correctly and they don't need to have a PUD, they do not need a zoning change, they do not need a comp plan change, they can build it because it complies. They do not the affordable housing policy does not kick in if they are buying public land. if they re need money, if they need a um a PUD, they need a comp plan change, then the policy gets kicked in. Whether or not they choose to do inclusionary or they choose to do buy in, that's up to them with your approval. Um but it's what triggers the policy. >> But it needs our approval. The policy is triggered if certain events take place whether or not they do buyin or um inclusion area they include the units. Yes, you approve the project and it is disclosed to you upfront whether or not they're going to be including the project uh the units or they're going to do buyin and that is part of the overall site plan approval and funding approvals that you approve. >> Thank you. >> Couple of quick things for you. would you send around by email to all of us because I think we could use it and at least I would like to have the program summary, those last three slides, the program summary and then the uh two pages of that and then the affordable housing dashboard. And then secondly, uh I think it'd be beneficial to me to have a conversation with you soon because we had our first MLC housing meeting online yesterday to start preparing for the next legislative session. uh as we've worked these last few years in in trying to think about local control and the things we're doing in our individual cities and and and making sure the legislature understands what we're all doing and what we're expanding on affordable housing. Uh beyond that, we still need to think about how to achieve housing more housing production and more housing affordability. And so I for me I think it would be helpful if I visited with you about your ideas around some of those things >> so that so that we can find a pathway that still allows cities to maintain local control over their land use. >> I'm happy to meet at any point in time. I you can see by the years of when things were approved a vast majority of these projects were approved in 2019 2021 and 22. There has not been much activity since then. And part of that is financing, the financing world. Um, it's harder. Um, and so it the movement has stalled. >> Okay. Commissioner Pierce. >> Uh, thanks, Mr. Chair. Um so we had spent I don't know I can't even remember when this was now maybe two years ago a year ago um looking at other creative solutions to try to solve the finance um the funding problem for affordable housing. Um, and so I just, this is one of the spaces, and this is probably true in every space, but for sure you can see it in affordable housing and all the programs that you're leading. It's you can always look at it and say, well, we should be doing something different. Well, this isn't working. I can't believe we only have x number of apartments. But it's a space where it's like it's always under construction. So no no pun intended. But um it is I have found since I've been in this role I think six years something like that. When I started I wanted to redo everything. Like you come in you have this idea this isn't working. Let's tear it down and redo it so that it's better. And there's nothing in princ there's nothing principally wrong with that. But what you see here is that you're doing both. You're saying, "All right, this is what we have today. Let's execute this as well as we can to get as much benefit as we can out of it." And then you're saying in parallel, let's look at other ways to make that even more efficient. Um, and so I just appreciate that. Um, kind of my theme today, we also get an email or two of uh from residents that don't think these funds are being used in the best way possible. Um, but when you look at the result and you think to yourself, well, if we didn't do any of this, what would the outcome be? I I just think it's it's worth it and um I just want to underscore the work that you have been doing um and say thank you for that and to continue the parallel approach. Let's keep running what we got and be open to trying to figure out are there other things we can do to increase uh the impact that we have in in all these areas. >> Yeah. Well said. Thank you for that. All right. Anybody else? Thanks. Thanks for the update. Uh, executive director, anything to report? >> Uh, nothing to report this morning. Thank you. >> Any other HR member comments? member. Uh, Commissioner Risser, >> just real quickly, I was dropping off stuff at Ark yesterday and um it was do-it-yourself drop off because of the weather and the smoke and just thinking about all the city employees who may be out and about and really hoping, you know, we have messaged take care of yourself because it is it is really bad. It >> it is and it's in I saw the AQI this morning is in 395 which is probably the highest in the world this morning. But uh we we are going to be closing the aquatic center later today um because of the air quality issues. Other other more elective parks we're not going to close. We're not going to close golf, but but the aquatic center we will close. >> Okay, very good. Is there a motion to adjurnn? >> Still moved. Second. >> Second. Commissioner Jackson moves. Commissioner Agnu seconds the uh motion to adjurnn. Uh any further discussion? All those in favor of German say I. >> I. >> I. Opposed. Carried. We stand a journ.