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Adopt Resolution 17-1 Approving Second Amendment to Development Agreement with Cottage Homesteads of Coon Creek Limited Partnership
Grant Fernelius, Community Development Director
The EDA is asked to adopt Resolution 17-1 which authorizes a Second Amendment to the Development Agreement with the Cottage Homesteads of Coon Creek Limited Partnership.
For several months the owners of the Cottages at Coon Creek senior townhomes have been in discussions with the City about refinancing and remodeling their 47-unit development. The owners are seeking an allocation of housing revenue bonds (which the City will eventually issue through conduit financing) and federal tax credits. The first round of funding requests for 2017 occurred this past January and the developer was unsuccessful in securing an allocation. One of the primary issues is that projects with age restrictions do not score well under the State's ranking system.
There has been a long history with this project. As you might recall, at the developer's request last fall the EDA approved a First Amendment to the original development agreement which modified the tenant eligibility criteria. The amendment put in place partial age restrictions, which limits 80% of the units to people age 55+. The remaining 20% of the units are available to the open market. The developer believed that the partial age restriction would allow them to preserve the senior housing character of the project, while also improving their scoring chances under the MHFA system. Unfortunately, that turned out not to be case and the owner has since learned that the partial age restriction lowered their ranking. They are now seeking to reverse the partial age restriction and restore the development agreement to the language from the original 1998 agreement. That agreement had no specific age-related restrictions. The City Council did discuss this request on two occasions earlier this year at Council Work Sessions on February 21st and April 18th.
Staff recommends that the EDA adopt Resolution 17-1 which authorizes a Second Amendment to the Development Agreement with the Cottage Homesteads of Coon Creek Limited Partnership.
EDA Resolution 17-1
Second Amendment to Development Agreement
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