Board hears plan for supportive affordable housing project

by Barbara Cameron

Most of the Itasca County commissioners and regular attendees were present at 2:30 p.m. on April 22 when Chair Leo Trunt (Dist. 3) called the board meeting to order. Mark Mandich (Dist. 5) was absent, and County Administrator Trish Klein joined the group about 20 minutes late. The board heard several details from the proposed supportive housing project planned for Grand Rapids. Following a short legislative update, most of the rest of the meeting was taken up with social services presentations.

Minutes approval from April 8 followed the flag pledge recitation. Both a 15-item amended consent agenda and the regular agenda for this meeting were adopted, and the chair moved directly to recognition of county employees retiring or otherwise transitioning, several of whom were in the audience.

Retirements noted included those of: Darlene Tanner from transportation accounting after 29+ years; Jerome Grossell after 20+ years as a deputy; Philip Sigfrinius after 13+ years and Gerald Radermacher after 30+ years in highway maintenance. Christin Serich took a voluntary demotion to highway maintenance.

Nicole Edwards has hired on with IMCare; Corey Rondeau as a deputy; and Kyle Bonestell as a part-time deputy.

Renee Cole and Jennifer Sackett have been promoted as public health supervisors.

Next on the regular agenda was an informational presentation to the board about a supportive housing project proposal made by the Itasca County Housing Institute, a housing coalition that formed in 2013. Dana Herschbach from KOOTASCA introduced their proposal for a 48- to 50-unit complex to be built in the Beacon Hill area.

The project would be funded by multiple agencies, including about 75 percent from tax credits through the Minnesota Housing Finance Agency.

Lorna Mix from Northland Counseling Center said their coalition unanimously determined that their greatest need was “permanent supportive housing – decent, safe, affordable, community-based housing that provides residents with the right of tenancy.” The housing is linked to voluntary and flexible supports and services.

This project would be 75 percent owned by the Itasca County Housing and Redevelopment Authority (HRA) and 25 percent by Northland Counseling. There will be 38 units and townhomes with one, two and three bedrooms for individuals and families. All residents will be people who meet the definition of long-term homelessness.

Another ten to 12 units would be designated to provide services for individuals with disabilities, including mental illness and chemical dependency. There would be on-site supervision and supports.

Diane Larson from the HRA continued the presentation. Housing tax credits are the principal source of funding for affordable housing. This would cover about 75 percent of the capital cost of this project.

The state uses a point system to rate the very competitive applications for the state tax credit funding. (Only one in four is funded.) Both the city of Grand Rapids and Itasca County have to be on board with the project, and the need for it must be documented. The application must show some sort of financial contribution from the local government.

Larson then introduced their consultant/developer on the project, Skip Duchesneau, who has handled other such enterprises in the area.

Duchesneau, DW Jones president, addressed the urgency of being able to make an offer on the recently tax-forfeited Beacon Hill site located close to Target and Cub in Grand Rapids. It could be built on without rezoning, it’s accessible to bus routes, sidewalks are in, and the county has the authority to sell the parcel to the HRA. Because this is a foreclosure property, Minnesota Housing Finance gives them extra points on the application.

This would be 100 percent affordable housing, so income restrictions would apply (60 percent of median income). This was the same restriction that applied for Oakwood Terrace, another property his management firm handles.

The county’s role here would be to help them acquire the site.

Duchesneau said the estimated market value of the parcel is $165,300, with nearly $190,000 of delinquent taxes and penalties. He wants to make an offer now, because they are facing a June 10 deadline to submit their proposal for consideration by Minnesota Housing Finance.

Anticipating criticism from anyone who thinks it’s unfair to others to give subsidies to a developer for this project, he said this was not like market-rate developments.

“Nobody except a non-profit is going to do this for this community . . . This is a project that requires deep subsidy and a lot of assistance,” he said.

He brought up the possible problem of the previous owner perhaps wanting to repurchase the land. This would throw a monkey wrench into things, so he certainly wanted to find out about this as soon as possible, and to know where the county stood.

Attorney Jack Muhar suggested they should coordinate a meeting as soon as possible to get all the facts about the concerned entities. The most important thing was to know if the buyer was a qualified entity in this public/private law situation.

The chair asked his colleagues if they thought this was a reasonable offer to pursue.

Rusty Eichorn (Dist. 4) found it reasonable at first blush, but he was concerned about the possible redemption right problem.

Someone in the audience said that although the previous owner had the right until Aug. 13 to repurchase, the county board would still have to approve that repurchase.

Terry Snyder (Dist. 2) added that both the city and the county had several thousands of dollars of delinquent taxes and assessments that would also need to be part of the fact-finding conversation.

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