Developers of a changing and complex Frogtown affordable housing proposal have been given more time to put things together. The St. Paul City Council, acting as the Housing and Redevelopment Authority (HRA) Board, voted Oct. 12 to extend the Sherburne Collective’s tentative developer status to March 2023 and to commit future city funding of $1 million.
The collective is comprised of the Thomas-Dale/District 7 Planning Council, Inc. d/b/a Frogtown Neighborhood Association, Model Cities of St. Paul Inc., and Hope Community Inc.
The tentative developer status centers on property at 652 Sherburne Ave., where a vacant eight-unit apartment building of about 16,000 square feet and adjacent land of about 8,000 square feet are located. The HRA has owned the site since March 2018.
Building tenants were relocated after the city acquired the property. The HRA issued a request for proposals in late 2020. Five offers were received on the property, with Sherburne Collective being selected. The HRA Board then designated tentative developer status on the partnership. The organizations want to develop the site for six units of deeply affordable housing.
Tentative developer status holds a property for parties wishing to develop a site or rehabilitate a building. Past deadlines expired earlier this year, but the developers have made progress on their project, said Nicolle Goodman, director of the city’s Department of Planning and Economic Development (PED).
PED staff recommended that the tentative developer status continue.
Project changes prompted some questions from city council members as income limits and funding sources have changed since the original proposal. Another change that has to be factored in? Rising costs of construction, from $1.9 to $2.9 million. Yet another need is to address the building condition, which has changed since the city acquired it.
The collective plans to renovate and reconfigure the building. They will add parking, a garden and green space for residents. Two four-bedroom units, three two-bedroom units, and one accessible, one-bedroom unit are proposed. The collective proposes to lease the units to qualified occupant households for five years, transitioning to some sort of community ownership model in the sixth year. That could be a land trust or residential cooperative.
Originally the units were to be for households earning no more than 50 percent Area Median Income (AMI), with a corresponding rent restriction to rents affordable at this income level. The developer has subsequently modified its proposal and now intends to reach deeper to 30 percent AMI income levels and affordability for all six units. While that change meets a dire need for deeply affordable housing, it also changes funding sources and the community ownership plan. The original proposal anticipated a $600,000 mortgage based on rents at 50 percent AMI. The deeper affordability allowed the project to successfully obtain Ramsey County funding, but rules out potential use of state and federal funding of more than $700,000.
The project has $1.68 million from Ramsey County’s affordable housing coffers which were drawn from the federal American Rescue Plan Act. Regional dollars from Metropolitan Council and the nonprofit Twin Cities Local Initiatives Support Corporation also provide funding. But there are concerns that the county dollars could go away if the project doesn’t move forward soon.
But the project still has a funding gap. Goodman said the city can consider its own ARPA dollars as well as federal Community Development Block Grant funds to fill in.
City council members, while questioning the open-ended pledge, said they still support the project and want it to succeed. They like the community partnership and the affordable housing goals. They also noted that many projects have had tentative developer extensions in the past.
Ward 5 Council Member Amy Brendmoen raised issues of equity, considering that other developers bid for the site and that the winning project has had so many changes.
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