Housing and development authority to order.

Roll call, please.

Here.

Coleman.

Here Johnson.

Here.

Joast.

Here.

Kim.

Here.

Yang.

Here.

Six present, one absent.

That being Commissioner Kim.

Discussion item number one.

Resolution 25-1725.

Resolution approving an administrative amendment to the budget for tax increment financing plan for the Osceola Park Tax Increment Financing District.

The housing district and approving an HRA budget amendment.

District 9, Ward 2.

We have been briefed on them.

We've received uh reports, and so I'm gonna hand it over to Director Uh McMahon to see if there's anything to add for the items.

Yep.

So last year the HRA unanimously approved similar actions for three different TIFF plans, providing technical changes that align expenditures to match the projected use of funds, which then you know helps ensure accuracy in a reporting that we do annually.

We have Jenny Wolf here with some additional information and able to answer any questions that any of you may have.

Thank you, Director McMahon.

Welcome, Miss Wolf.

Thank you.

Uh good afternoon, Chair Johnson and Commissioners.

Um Jenny Wolf with PED.

As mentioned by interim director McMahon, these next two items pertain to technical changes to our adopted TIFF plans for housing TIFF districts.

And these TIFF districts were created in 2002 and 2003.

The budget change is a technical change and does not impact the housing project or the pledged tax increments and solely amends the HRA budget specific to the TIFF district to align with the proposed amended TIFF plan budget.

And Ms.

Wolf, I received a couple of uh just inquiries from folks I think that are watching.

And so I'm gonna I'm gonna ask you to um to simplify that in terms of a couple of things that I think would be really helpful for folks that maybe tuning in to understand this item and just why it's a technical change.

Is this is there were the projections lower or higher than what we've received?

And also if you could just in simplistic terms for these these next two items share the action that the body is taking in about as simplistic terms as you can get.

Oh, Chair Johnson and Commissioners.

Um I'll preface this comment with just we have an obligation, um, a pay as you go note that we issued that requires us to send 90% of the tax increments that we receive.

The noteholder doesn't care if we call them principal or we call them interest, we have to send those tax increments.

Um the fact that the interest has been paid out higher than what was expected is because just of the timing of the tax increments, and the interest has to be paid first before we reduce principal.

So yes, the projected increments are lower than what we've collected, but it's not any impact on the ability for the for the note to stay in place.

We we we're required to amend our budget so that we can align with our actual spending.

Um, if we don't amend our budget, um, then we will overspend interest, and that could be flagged by the state auditor for our TIFF district.

Okay, thank you so much for that.

I think it's just really helpful for folks to make the distinction whenever we're making a uh a decision regarding TIFF.

Um Council President.

Thanks, Chair.

Thanks, Chair.

I I really appreciate you asking for the plain language version because I do think there's a lot of attention on TIFF right now, and I think this is an important example.

Um so just to make sure I also understand uh there's no more tax increment being allocated to this project than was originally, it's just that the amount of tax increment, the 90% of the increment that is going to the developer, more of it is going to have to go to interest than we thought because the district has underperformed, and no none of that money is um going to other TIFF districts, or you know, we we are not making up the shortfall in any way.

It's just an accounting change from saying that some of it more of it is going to be principal versus more of it is going to be interest for the same amount.

Yeah, Chair Johnson, Commissioner Naker.

Um, the language we include and that I included in the board report and that is included in all of our um pay-yeah note obligations is that this is a limited pledge to what we collect.

We will send you what we collect.

Um if it if you end up not getting all that you thought you would get for principal, that you there is no recourse, no other sources pledged to this obligation.

And um, I think there's many factors of why the tax increments haven't come in as originally expected.

Just I would say I looked at the TIFF plan um projections, and mostly it's the market value.

The market value just never uh attained what was expected.

Um, and then one of the impacts of late, it's not really the main driver, but the um impact of late is the the change to 4D.

Um so that was a legislative change that we had no control over, and that reduced our tax increments for a project that's 100% affordable by 60 percent.

Um so I I feel like we might have more of these coming with that change, um, but we keep an eye on um our budgets and what we're um paying out so that we can align the two.

So go ahead to follow up on that, thanks, Chair.

In the case where a tax increment district underperforms.

That sounds bad, but what it really means is that we got the development while putting less public subsidy into it and more was fall is falling on the private developer to pay for uh uh Chair Johnson, Commissioner Naker.

So to me, underperforming, it's it's a projection.

Um it was done 20 years ago, and it it's based on a lot of assumptions of what the project will be valued at, what the tax rates will be, and whether the collections will be um timely because time time matters as well.

If collections, if a district, for example, they are allowed to petition their value.

Um if they petition their value and the county withholds tax increment from us, we won't have that to pay, and the interest on that amount will continue to accrue.

So it's it's there's many factors involved, um, but no, we're not paying anything more out than what we're obligated to pay out.

There's not any um additional um mechanism that we're asking for here.

We're just asking to continue to align our budget with what the note obligates us to do, which is to continue to send 90% of the pledged increment.

Or yeah.

Yes, and I think to the clarity piece of that, it's like not that that's less subsidy going into it, but more that it's the subsidy that we obligate are obligated to do is going towards interest instead of principal.

Well, or I mean, I guess put another way, I don't I want to make sure I understand this.

If a if a building costs $100 to build, and um we say that over time, you know, we will dedicate all of the tax increment to that 90% of the tax increment to that building.

Um, and we expect that that tax increment will be $50, right?

So $50 and TIFF and $50 from the private side.

The building gets built, and the taxable value isn't as high as we thought.

So instead, instead of $50 coming in in tax increment, $20 comes in, right?

Then $20 is coming in from tax increment, and $80 is being covered by the private side because we're not on the hook for the shortfall, right?

I guess I'm I'm I'm trying to say like underperforming sounds bad, but what actually happens is that the building got built.

We're putting or allocating the tax increment we said we would to it, but that number is lower than we thought it would be, and the developer has to make up the gap.

Um and so, in some ways, not that we want underperforming or overperforming, but I think it's important for people to to know that that's um in some ways that means that there's less public support of this building, and more of it is being fronted is is being supported by the private side, and we still got the benefit of the building and the affordable housing, and when this district closes, all of the additional taxable market value that it has that it has generated.

Is that uh uh Chair Johnson, Commissioner Naker?

Uh maybe I'll summarize it in this manner.

I mean, there are only you know, like I said, three years left.

Um, 2028 is the final year.

Had this district performed as projected, we would have paid out all 90 percent at the end of 2028, and there would be no principal left due on that note.

Right now, we're gonna pay out still 90 percent of what we collected, but it will not retire all the principal because we've had to pay more of it out in interest.

And the developer will have to cover that.

Well, yes, yes.

They if they have a loan with a bank still outstanding, they have to pay the bank.

Um, I think that you know that's really helpful just to have that conversation, especially because it applies to these two.

My one uh question that I did have was around just the what is do we typically do these numbers like at the 20-year mark or some of these for both of both this one and our next item, you know, being that they originally done in 2020 2002 and 2003.

Do just for my own awareness, um, do when we go back through numbers and provide just administrative amendments like this, do they typically happen when we're getting ready to be close to closing out the TIFF district?

Um, Chair Johnson Commissioners, I evaluate where we are on our spending budgets every year when we file a reports with the state auditor.

So I keep in a tab on how much um each budget is performing at with actuals, budget to actuals.

And I note if one appears to be you know getting uh closer to the actuals, and then look at why, and then evaluate um and project through the end of the TIFF district, and that's what I've done on these two projected through the end of the TIFF district to make sure that the amendment covers everything what I expect to have happen by the end.

Okay, thank you.

That's really helpful.

Any other questions from any of the commissioners on on this item?

Okay, seeing none, thank you, Ms.

Wolf.

Um, I will take a motion from Commissioner Naker to approve all those in favor.

All opposed.

Six in favor, none opposed.

The resolution is adopted.

Item number two, resolution 25-1726.

Resolution approving an administrative amendment to the budget for tax increment financing plan for the housing tax increment financing district number three, Shepard Davern Senior Rental Housing District, and approving an HRA budget amendment.

District 15, Ward 3.

Thank you so much.

And Director McMahon and Ms.

Wolf.

I'm this mirrors the previous request and and nature.

But just could you just quick summarize for some of the main changes here?

And I know you mentioned the uh increase from the previous amendments.

So if you could do that here too as well, we'd appreciate it.

Sure, Chair Johnson and Commissioners.

Um this is similar.

It um was a senior housing project, 120 units were um created.

The address is 1745 Graham Avenue in Ward 3, and the increase to the interest budget is 160,000 in this case.

So I don't yes, so thank you uh for for that.

Are there any questions or um further things that need to be clarified on this item?

Okay, seeing none, I'll take a motion from Vice Chair Jones to approve all those in favor.

Aye.

All opposed.

Six in favor, none opposed.

The resolution is adopted.

Item number three, resolution 25-1749, approving and authorizing the CDBG loan extension for Ramsey Hill Apartments, District 8, Ward 1.

Okay, we received a uh staff report that was an introduction to Ramsey the last uh last housing and redevelopment authority meeting.

Um I'll hand it over to Director Uh McMahon if there's anything in particular that you want to say about this this item.

Otherwise, this is the action that's in front of us today.

Thank you, Chair.

Yep, as a reminder, this item extends the C C D BG loan term through the end of 2031 and also extends the affordability terms through that period as well.

Um, staff is available if there's any additional questions you have that have um come up since last week's presentation.

Okay, seeing none, I'll take a motion from Commissioner Bowie to approve uh any discussion.

All those approved all of those in favor.

I have any opposed six in favor, none opposed.

The resolution is adopted.

Staff report.

Staff report 25-244, introduction to amendment to temporary TIFF spending plan authority.

Okay, so for background, um, so this item actually is coming before us in introduction.

It will vary from our typical introduction to action simply because this will come back before you on December 3rd.

I share that now because believe it or not, we are um next week is our last meeting of November, and then we'll be heading into to approving the budget on the third as well.

So there'll be quite a bit to get through.

But this is one item that'll come before us.

Um, and at that time for that particular meeting, um, Vice Chair Joseph will be chairing the meeting, and that will be when we'll actually vote on the spending plan um changes, but this is just an introduction to outline what those are for.

Um, so I'll hand those back, I'll hand it back over to Director McMahon, and I believe Ms.

Wolf is joining us yet again.

So uh as our extraordinary thank you, Chair Commissioners, and thank you for noting yes.

So the city council will hold the public hearing on this item, and the HRA will take action on this item on December 3rd.

This item's a response to state law changes, this past legislative session that extend a deadline for using transferred increment as well as authorizes the use of interest earned on that transferred increment.

And we have our TIFF guru, Ms.

Jenny Wolf here with more information.

Welcome back, Miss Wolf.

Uh good afternoon, Chair Johnson and Commissioners.

Um, so as you both introduced uh action in three weeks, and this is um uh to address changes made at the legislature this past uh session here um for our temporary TIFF authority.

Um so I do have a slide here about the purpose um regarding the legislative amendments uh to extend the spending and to authorize the use of interest earnings.

The HRA board is required to amend our spending plan under the temporary TIFF Act to utilize these legislative amendments.

The interest earnings must be used within the same limitations under the original temporary TIFF Act, which requires private development that includes substantial rehabilitation or new construction of buildings, creates or retains jobs in the state, including construction jobs, and commences construction by the end of December 31, 2026 as amended, and would not have commenced by this date without the assistance.

I will quickly cover the background because I know um many of you were not here in 2022 when we um were presented with the opportunity to adopt a spending plan under the temporary TIFF Authority.

Um so that was done by the 2021 legislature, and they authorized TIFF authorities to expend unobligated tax increments to advance private development, and in that case, the construction had to start by the end of this year, um, and the tax increments needed to be transferred out of each TIFF district into a separate spending plan account by the end of 2022.

The adopted spending plan identified six proposed categories for the spending authority as follows.

Private development of HRA owned sites, private development of underutilized privately owned sites, private development of commercial properties for the purpose of preventing displacement of emerging and small businesses, private development of all types of housing production and private facilities serving unsheltered populations, and private development demonstrating substantial job impacts, as well as any other private development that meets the statutory requirements and for which the HRA documents its findings at the time of approval.

So the HRA transferred 27,549,047 to the spending plan account by December 31st, 2022.

In 2022 through 2024, the HRA board authorized 10 projects to spend the full amount that we transferred.

These projects are shown in the table here with the dollar amount authorized, and I will highlight each one of on the next few slides.

So one project was approved to include the installation of required infrastructure serving a specific area on the west side flats to advance new housing.

The photos shown here are the construction of a new sewer lift station as well as two housing projects that were able to advance and commence construction and complete construction because of the temporary TIFF funding.

This is the Essex House with 221 units and Harbor Line with 63 affordable units.

Two projects included private development of underutilized privately owned sites.

The photos here include United Village construction of buildings, which include two new restaurants as well as a new 80,000 square foot office and a 160 room hotel, and the construction of the new Excel Energy Service Center at the Heights.

That was able to advance and commence construction because of the temporary TIFF funding for the required infrastructure.

Two projects included private development of underutilized privately owned sites and commercial properties for the purpose of preventing displacement of emerging and small businesses.

The photos here include Little Africa Plaza on Snelling Avenue, which includes a new grocery store and new offices for AEDS, as well as the Molly Center on Front Avenue, which includes a gym and a health focused business hub developed by Tyrone Minor, owner of the Fit Lab, which business was displaced from their prior location.

And last but not least, we had five projects that included private development of all types of housing production and private facilities serving unsheltered populations.

The list is here with listening house with the new daytime drop-in service center serving the unsheltered, habitat for humanities phase one development at the Heights, which included 73 ownership units, which the first unit is about to sell next week, I think.

The conversion of the landmark tower's office portion, resulting in 187 new housing units, 892 East 7th Street project developed by PPL with 60 units of affordable rental housing and 652 Sherburn, which included substantial rehabilitation of HR and property to preserve six units of 30% AMI rental housing.

The photos are here shown on the are shown on the following slide.

So here we have a photo from the Habitat for Humanity Development and the Listening House Project and photos of 652 Sherburn, 892 East 7th, and the landmark towers.

So that's background on the spending plan that we've already done.

Are there any questions on that before I go on to the amendment?

Okay.

So the spending plan will be amended and restated to identify the specific approved expenditures, those that I just reviewed, those 10 projects, authorize the expenditure of interest earnings on funds held in the spending plan account for authorized uses, which includes the same spending categories that I identified as well.

Extend the deadline for spending funds, including the transferred tax increments and interest thereon until December 31st, 2026, and will increase the total spending to 29 million 049047, which is an increase of one and a half million, which results from the interest earnings.

This amount is an estimate, and the HRA will be limited to spend the actual interest earned.

The required approvals for the amended and restated spending plan includes action of the HRA board and city council as has been mentioned before with a public hearing at the city council.

And these actions are planned for December 3rd.

And if we oh um and and the actions must occur in December if we want to extend the spending deadline and authorize interest earnings for spending.

Any interest earnings remaining in our spending plan account on December 31, 2026 will be transferred back to one or more TIFF districts.

And thank you, Ms.

Wolf.

We do have a question from Commissioner Naker.

Thanks, Chair.

I just going back to the previous slide, actually, Ms.

Wolf, you mentioned that we would be increasing the total spending to 29 million, which is an increase of 1.5 million.

How much of that has already been spent?

Oh, 27 million, 549.047 is what's been obligated and contractually to contractually be spent.

We haven't sent all of that out the out the door yet, but it's all obligated under contracts.

Okay, so the really the extension of the deadline for a year only gives us one and a half million more.

And the ability to use interest.

All that we're talking about is Yeah, Chair Johnson, Commissioner Naker, it's it's only it's only for for interest to projects, yes.

Um, but some of the projects that we have approved might really appreciate a little more time to spend the dollars.

Um the projects all commenced already and they've they're working on them, um, but they're just having trouble getting the the draw request in and are getting the money out the door by the end of of December just because of timing and all of that, but they're all actively um going on.

So um so yes, then it would be new spending uh of the interest earnings up to one and a half million.

Thank you.

Thank you, Commissioner Eaker.

And I appreciate the clarity as well.

I I think that just kind of going into the broader scheme, so much of this doesn't necessarily was already kind of uh obligated, but then the remaining amount.

Do we but I guess to that vein, do we anticipate any sort of unaccounted for interest um in the next year or so in addition to that 1.5 million or is the 1.5 million pretty well that's Chair Johnson can um commissioners.

Um that is our upper boundary.

I was advised that this probably is our one shot chance at at amending it on so I I had asked if I could wait till you know a few months into next year and see where we are, but um it was suggested that we go ahead and just uh budget high for this purpose.

Okay, and to clarify, we would you know, just so for everybody's awareness, we would have to make an action on this before the end of the year because they are originally set right now to not be in alignment with what the state change is, which would be to expire at the end of the year.

So if we didn't do that, we wouldn't be able to carry it into next year for that year extension without this body acting.

Chair Johnson, correct?

Yep.

Okay.

I'm not sure if you have additional slides or if that was your last one.

Oh no, that was my last one.

Okay.

Yep.

Any additional questions on this item?

Yeah, Commissioner Bowie.

Thank you.

Thank you, Chair Johnson.

Thank you so much.

I had a chance to talk about the PD step and just get a briefing of this.

Um, as you know, like there's a lot of noise, right?

Around just like what TIF is and what isn't, so I do appreciate this refresher.

Um, and just um continuing just kind of the questions I had um in the last meeting, particularly around, you know, how is it like what it where is like the clear like indicator, I guess, of like how we're seeing like where the pool of money for particularly of like all different TIF districts, um, how it can be transferred out.

Because I remember last time you mentioned um that even though the project is to completion, that TIFF pool is still open and can be used to fund additional uh affordable housing projects.

Um I guess my question is is like there's not like a clarity around like how we see where like like when the when the pool is I guess when the money is pulled, where does it go, right?

Because I feel like we're able to see like the source, you know, of everything, but this one just kind of seems like it's like a cloud, you know, of funds.

So if you could speak to just like how like OFS or if that's PED, like how that sourcing of funds of the additional pooling of money, and I know that's kind of complicated, but I'm just trying to skip my like my.

And I know that's kind of complicated, but I'm just trying to just get my like my.

Yeah, Chair Johnson, Commissioner Bowie.

Um for first, I'll start with just say this presentation that I just gave was on temporary um TIFF authority.

It is not something that is always available.

It was uh um it was an ability to pool unobligated tax increments into a single spending plan account, and then we had to, we were able to then spend from that account.

That is not the typical pooling that we've been speaking about about affordable housing.

So when we pool from a tax increment district, the funds stay in that tip district, and we identify them as available for affordable housing.

And then what happens is when we have projects that are looking for funding, we look to see how much do we have from each TIFF district, and then we pool that for the project, but it stays in that tip district.

So that tip district cash balance has those dollars.

They don't they don't get transferred and they don't get pooled.

They just they they get pooled to spend on a project, but not they don't leave the TIP district account.

This this temporary authority was special that that and it required us to move the money out of the TIFF districts, but that's not typical.

Thank you.

And I think if I was to sum it up, it's kind of like TIFP districts are like credit cards, right?

And once you have like limits, your limit gets to increase, you have more access you can pull from that different accounts.

Um, yeah, I don't know if that's a a good description, but I'm just trying to come up with you know analogies that just makes sense.

Um, Chair Johnson and Commissioner Bowie.

Um I'll just say that our policy and practice has been to maximize pooling for affordable housing to the greatest extent that we can with all of our TIFF districts.

So we're always keeping an eye on what pooling abilities we have.

Um, and that's you know, we have our internal resource team within PED, and that's where we kind of keep track of of where the dollars are.

And I think the presentation I gave last fall, I gave a highlight of how much um money we were we had um pooled, and right now I believe we have about five million that's pooled for affordable housing for decisions made by this body that that money doesn't go anywhere until this body approves it.

Thank you.

Thank you.

Are there any other questions from commissioners on this item?

Otherwise, it'll be back for a public hearing on December 3rd with the action at that time.

Okay.

Um before we adjourn today, I just wanted to take the time to share with my colleagues some of the information that was shared with me today.

Um, and also to thank uh director Ntagna and his team for their work surrounding the emergency rental assistance and eviction prevention program.

We are open for applications as of today, which is exciting.

Um, and as a reminder for people who are noticing it, you know, this was a program that was really established to try and to assist um low-income rental households in St.

Paul from having to face an eviction on the record.

We know the implication the implications of that, and this allows for that 14-day intent eviction notice just suffice in order to qualify for additional funding.

Um, and this is something that I'm really excited about.

Each household could qualify for up to 2500 to cover their late rent and associated fees.

Um, as the council member who and as the chair, but as the council member whose ward has 55106, and you've heard me say multiple times that it has some of the highest eviction rates in the county, and as we're heading into what will soon be winter, my LA reminded me that winter is in December, although it feels like winter is here sometimes in November and comes early.

We have a real opportunity, I think, here at the city to um stand in and disrupt the continued impact of folks going into the pipeline in the beginning by also being able to invest in um eviction prevention work here.

So it's been a long time coming.

Um if you ask me, we there's been a lot of work that has gone through it, but we do have an open um application process on the website, just saying paul.gov slash backslash or forward slash ERA.

Um, and people are able to reach out at this time.

Um so I'll be sure to send that out to commissioners too, so you will have that.

But overall, just um the applications will be processed in the order that they come.

Um sharing with community partners will be really important as well for if you hear of anything.

I just know that some of us have received direct emails from folks that have uh been looking for this assistance, and so as a reminder, we invested a million dollars this year, and um we're really working to continue to invest that that resource into next year as an eligible use of local affordable housing aid.

But genuinely really excited to see that that is up and um back here at the city because we have to talk about housing on all the full spectrum, including keeping people in their house once they have it.

Um so that's just something that I was really excited about and couldn't let go without telling you that we have like flyers for it, so we'll be able to share that with you.

Um multiple organizations have been also shared the information with by the wonderful PED team and PED staff that have been working working to set the sub since the beginning of the year.

As you know, we've been working really hard to get that together despite all of the things that this year has thrown at us, and so just to be able to see that the program is still launching in lieu of um you know the cyber attack, in lieu of all of the things that we have received in order to try and get it just in time to keep buildable people in their homes for additional time periods during some of the coldest months, the holiday season, and in all the times where you do not want to have to deal with having an eviction in your record, and we know the barriers of that can hold it citywide.

Um there are restrictions on uh like on income, but it is not related to a specific geography.

So if they live in the city, this is something that any of us can refer people to and utilize.

I've been waiting.

So I'm really excited about that.

And I think that in many ways um we look forward to partnering with staff to get as many people to through that process as possible.

Um, and if you have any additional questions, uh not to volunteer voluntarily staff, but we have a wonderful uh housing director and director of PED.

Feel free to reach out if you have any additional questions or you need the flyers sent to you.

With that, I'm happy to give you back time.

We are adjourned.