St. Paul City Council Meeting Summary - November 19, 2025

This meeting focused on extending developer timelines for four affordable housing projects, reviewing the progress and expansion of the State Promise Act Grant Program, and proposing a detailed framework for a new $5 million Downtown Vitality Fund to stimulate housing and retail development. The council received updates on the 2026 HRA budget proposals, discussing specific funding sources, departmental transfers, and program adjustments.

Consent Calendar

• No consent calendar items were presented or voted on during this transcript.

Public Comments & Testimony

• Shahir Ahmed (Neighborhood Development Center): Represented NDC, detailing the administration of the Promise Act Grants. He expressed that the first round was highly competitive (20% of applicants selected) but successful in supporting BIPOC entrepreneurs. He noted the program faced challenges with a "digital design divide" where many applicants struggled to upload required documents, necessitating significant technical assistance. He expressed support for the continued expansion of the program into Round 2 and requested council support in promoting the cycle.
• Lakshmi Rao (Council Member/Community Member - Inferred Context): Expressed concern regarding the clarity of eligibility geography, specifically for the West Side, noting confusion among business owners. She advocated for better communication strategies to ensure eligible businesses are informed. She expressed support for the program but highlighted the need to identify alternative community hubs (like the Halley Q Brown library relocation) to replace the temporary loss of library computer labs used for application support.
• Commissioner Yang: Expressed curiosity and support for seeing granular data breakdowns by ward (specifically Ward 6/East Side and University Avenue) to better encourage local applicants. She stated that the current communication efforts are insufficient and requested a breakdown of eligible applications by specific geography to aid in outreach.
• Commissioner Naker: Expressed strong support for the business assistance aspects of the grant program and emphasized the importance of maintaining public spaces like libraries for applicant support. She advocated for facilitating follow-ups to ensure continuous access to resources during library redevelopment.

Discussion Items

• Extension Requests for Tentative Developer Status (TDS): Staff presented requests to extend TDS for four projects: The Hams Project, Gloryville, Face-to-Face, and the Rondo Community Land Trust (1036 Marshall).

  • Staff Position: The Housing and Redevelopment Authority (HRA) staff argued that the extensions are necessary because the primary barrier to completion is the competitive timeline of securing deferred funding from the Minnesota Housing Finance Agency (MHFA). They stated that while developers are making significant progress on pre-development milestones (design, environmental, community engagement), the capital stack cannot be finalized without MHFA awards.
  • Commissioner Naker's Position: Expressed full support for the extensions but raised a concern regarding the lack of rigorous "checkpoints." She requested assurance that the board would implement stricter milestones after an extension to prevent indefinite delays, noting the difficulty of building in the current climate.
  • Director McBann/HRA Staff Response: Clarified that extensions are contingent on meeting specific benchmarks and that the current extensions (18 months for three projects, 12 for Rondo) are based on the expectation that MHFA funding awards in December will allow projects to close within the proposed timeframe.

• Promise Act Grant Program (Round 1 & 2): Shahir Ahmed (NDC) provided a status update on the state grant program.

  • Staff Position: NDC reported that Round 1 awarded $9.5 million to 652 entrepreneurs (20% selection rate) and is currently in Round 2. They noted that new legal changes increased the threshold for ineligibility in Round 2, particularly regarding tax documentation. They proposed a self-check tool to filter applicants before they invest time in the portal.
  • Commissioner Bowie's Position: Asked for clarification on why South Minneapolis outperformed North Minneapolis in application numbers. She expressed support for the program and highlighted the community's need for these funds.
  • Commissioner Naker's Position: Inquired about the specific geographic boundaries of the West Side eligibility, noting constituent confusion. She expressed support for increasing communication to ensure eligible businesses apply.
  • Commissioner Yang's Position: Expressed support for the program but requested specific data on application rates by ward to improve targeted outreach efforts.

• 2026 HRA Budget Proposal: Director McMahon presented the HRA budget recommendations and funding source changes.

  • Staff Position: Proposed shifting District Council funding from CDBG (federal source) to local HRA sources to reduce compliance burdens. Proposed reallocating LAHA funds for downtown office-to-housing conversions and increasing funding for commercial corridors. The staff indicated a desire to be realistic about 2026 spending on affordable housing subsidies, deferring significant acquisition to 2027.
  • Commissioner Naker's Position: Expressed strong support for the budget changes, particularly the removal of federal strings from District Council funding and the retention of full funding for commercial corridors. She commended the leadership for ensuring downtown housing dollars are tied to a specific program to ensure they are spent.
  • Commissioner Kim's Position: Expressed gratitude for the budget work, noting that her priorities were included and that he appreciated the teamwork in solving funding gaps.

• Downtown Vitality Fund Proposal: Commissioner Naker proposed a specific program structure for the $5 million allocated to downtown vitality.

  • Commissioner Naker's Position: Proposed a program allocating $3 million for new housing development (at $10,000 per unit) and $2 million for street-level retail (structured as a forgivable loan). She argued that this approach is necessary to ensure the money is spent quickly and to catalyze both residential and commercial activity. She expressed flexibility, stating that if one pool is exhausted, funds could shift to the other to ensure the $5 million is utilized.
  • Commissioner Yang's Position: Expressed support for the proposal but raised a critical concern regarding LAHA restrictions, noting that only 1.25 million of the housing funds could be used for non-affordable (market-rate) units. She emphasized the need for coordination between the Downtown Alliance and the Planning and Economic Development (PED) team to avoid duplicating efforts and to ensure compliance. She supported the pilot nature of the fund.
  • Commissioner Bowie's Position: Expressed enthusiastic support for the