1 MEETING SUMMARY OF THE DULUTH HOUSING COMMISSION Thursday

							                            MEETING SUMMARY OF THE
                           DULUTH HOUSING COMMISSION
                            Thursday, September 8, 2005
                                   402 City Hall

MEMBERS PRESENT: Jeff Anderson, Jim Booth, Debra Branley, Judy Brown, and
Gary Eckenberg, Frank Jewell, Pam Kramer, Roger Reinert, David Ross, and Michael
Sayers.

MEMBERS ABSENT: Robert Reichert

OTHERS PRESENT: Keith Hamre, Karen Olesen, Kathie Severson and Aya Abe,
Community Development Staff. Joan Christensen, Assistant City Attorney; Tim
Mowbray, ASI, Inc; Gita Sweeney, TCG Development; Rick Ball, Duluth HRA; Maria
Danz, Women=s Community Development Organization; George Garnett, NHS; Jeff
Corey, NCLT; Rick Klun, Center City Housing; Carolyn Sundquist, Duluth Preservation
Alliance; Linda Sorden, Stanley Lowe, National Trust Historic Preservation.

Frank Jewell, Commission Chair opened the meeting with introductions.

REVIEW AND APPROVAL OF AGENDA:
     Motion by David Ross, seconded by Judy Brown, to approve the agenda.
     Motion passed.

REVIEW AND APPROVAL OF JUNE 9, 2005 MEETING SUMMARY:
Motion by Judy Brown, seconded by David Ross, to approve the August 11, 2005
meeting summary. Motion passed.

CONFLICT OF INTEREST:
Joan Christensen, Assistant City Attorney, reviewed the four sources for potential
conflict of interest. She indicated that all commission members who were also board
members for a non-profit organization, need to disclose their membership on the Duluth
Housing Commission with their non-profit board. Not doing so, could jeopardize an
awarded funding contract from the City of Duluth.

Pam Kramer, Program Director for LISC, and Joan Christensen discussed Pam=s
conflict of interest that pertained to four of the seven applications. LISC has an
investment in four of the projects/programs; and therefore must abstain from any
discussion or vote.

There was further discussion on this topic. While it is not a conflict of interest for a non-
profit board member to vote on a funding request from their organization, it could be
perceived as a conflict of interest. Judy Brown indicated that she would like to see
those individuals abstain from voting. Pam Kramer indicated that the process needed to
be clear and open, but this is local money and the group needed to be flexible so that
folks who are knowledgeable about the projects made the decisions. Mike Sayers



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suggested that if the vote was close, those with a conflict abstain. Gary Eckenberg felt
only those with a legal conflict should abstain.
       Motion by Gary Eckenberg, seconded by David Ross, that all members
       without a statutory conflict of interest could vote on all of the applications.
       Motion passed.

REVIEW OF HOUSING INVESTMENT FUND PROCESS:

Keith Hamre reviewed the process and timeline to-date. The Request for Proposals
(RFP) went out August 4, 2005. Applications were due August 24, 2005. Today the
Duluth Housing Commission is to make recommendations for funding. It is anticipated
that the recommendations will go to the Duluth City Council on September 26, 2005 for
approval. The first $150,000 will be disbursed in October, the remaining $150,000
would be available in February. An RFP for the 2006 funds will be issued in April 2006.
The Duluth Housing Commission will again make funding recommendations and the
Council would approve awards in May. The goal would be to have as much of the funds
as possible available for the construction season.

Keith announced that the Duluth Housing Commission was scheduled to meet with the
Duluth City Council at a Committee of the Whole meeting on Monday, September 12, at
5:30 pm, City Council Chambers, 3rd Floor of City Hall. All commissioners were asked
to attend.

The commission discussed what general questions should be asked. The questions
were:
Is your application for a project or a program?
What is the impact if not fully funded?
What if funding request were delayed until the next funding round (June2006)?
Explain your timing need for the funds.
Do you have any comments on the scoring?

APPLICATION REVIEW AND QUESTIONS:
Kathie Severson, Keith Hamre, and Karen Olesen gave briefly highlighted the seven
applications and staff summaries.

NCLT B New Affordable Housing Construction
Cannot wait for future funding. The 11 housing projects are already in the ground and
scheduled for completion within nine months (June 2006). Four of the eleven will be
outside of CDBG target areas, in Hawk Ridge, a mixed income housing development.

WCDO B Alicia=s Place
WCDO could work with receiving half of the funding now and half later by delaying
developer fees. The project is scheduled for completion in January 2006.




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CCHC B San Marco
CCHC could wait for the funds if they received a commitment. Project is scheduled to
close in October. Current issue is the fast rising construction costs, CCHC really wants
to close as soon as possible.

Communities Group / HRA B Village at Matterhorn
Project is scheduled to close before the end of the year and also very concerned about
rising construction costs. A funding commitment is most critical and needed to close.
Tax credit funding sources require that project be complete and placed in service by
end of 2006. Emphasized that construction costs are increasing faster than developers
are able to get to the closing table.

Accessible Space, Inc. - Minnesota Supportive Housing Development
Project cannot go to closing without being fully funded. Timing is critical. A delay of
funding would delay the closing and project start. This would mean increasing
construction costs and a need for more funds. Applications are in for 2006 CDBG and
HOME funds, but do not anticipate receiving any of those funds. Other projects in
Duluth include Superior View, Pine Grove Manor and Redruth.

NHS B Exterior Preservation Loan Fund
Handed out additional information regarding leverage. Original application did not show
minimum required leverage. If program is not funded, it will not happen. Timing is
critical. National Trust Historic Preservation has $150,000 that needs to be matched by
December 31, 2005 or it goes away. The program will not be limited to low-income
households and NHS expects some clients to have higher incomes.
The commission discussed the score for this application. Since five to seven points
may have been missed during the scoring process, Judy Brown thought some flexibility
was called for. Pam Kramer indicated that the intent of the criteria was not to limit the
program to new units.

NHS B Purchase, Conversion to Owner-Occupied, Resale
This is a City Council priority. Project to convert rental property in UMD area back to
affordable home ownership and counter the loss of single family housing in the area. If
not funded, the project would be delayed, but the market indicates that the opportunity
exists now. Responding to the project leverage not meeting the minimum required for
HIF funds, George Garnett said there was a tension between leverage and affordability.

FUNDING RECOMMENDATIONS FOR CITY COUNCIL:
Commission discussed how to proceed to make the funding recommendations. Pam
asked about engaging in the dialogue given her conflict of interest on some of the
projects. Keith Hamre suggested having separate discussion on each application.
Roger Reinert asked about a closed session to discuss the applications. The Duluth
Housing Commission is a public, open meeting and has no basis for a closed session.
Jim Booth indicated that he would like to discuss the applications in the order that they
were presented. Keith noted that $150,000 of the total $300,000 would be available in
October. The other $150,000 will be available in February.

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There was also discussion regarding pre-awarding the 2006 funding ($600,000). The
guidelines do not address pre-award, but the commission could make that
recommendation and then the City Council could review and decide. A pre-award
would call for a scaling back of the 2006, $600,000 RFP accordingly. Pam Kramer
asked about the affordability requirement. Karen Olesen indicated that the proposals
submitted would probably meet the requirement and this would be tracked.
       Motion by Judy Brown, seconded by Jim Booth, to fully fund the first two
       applications, NCLT - City Homes and WCDO B Alicia=s Place, giving WCDO
       half in October and half in February. Motion passed. Pam Kramer
       abstained.

       Motion by Jim Booth, seconded by Gary Eckenberg to not fund the lowest
       scoring application, NHS - Purchase, Conversion to Owner-Occupied,
       Resale. Motion passed.

The commission held further discussion on funding options for the other applications.
Roger Reinert indicated that the City Council would probably frown on any pre-
commitment action. Judy Brown questioned what would have happened with the bigger
projects that have been around for a while if the Housing Investment Funding had not
appeared. Gita Sweeney indicated that more cuts would need to taken in the value
engineering, the accessibility provisions (elevator), and cheaper products that increase
maintenance costs in the long run. Rick Klun indicated that San Marco is being planned
with two elevators, to assist in keeping the more vulnerable tenants separated from
those tenants who may be inebriated at times. Lack of funding, may mean cutting
desired amenities such as these. He stressed the need for a full commitment. San
Marco stands to lose $45,000 if it is not completed by January 2007. If not funded,
CCHC will continue to Aturn over rocks@ to find sufficient funding.

Gary Eckenberg stated that the big hitters, such as the HRA and Communities Group
address all the available funds in Duluth, but it was not the intent of the City Council to
fund projects that would have happened anyway. Roger Reinert expressed his concern
regarding the City Council reaction to the commission not addressing the City Council
priorities for the funding (i.e. rental housing around UMD, Historic Exterior Rehab). He
indicated that the City Council priorities needs to be a part of the discussion.
         Motion by Judy Brown, seconded by Gary Eckenberg, to fully fund NHS B
         Exterior Preservation Loan Fund, half in October and half in February.
         Following some discussion including that this motion does not follow the
         criteria created and that the score is too lower; the motion passed with one
         no vote and Mike Sayers abstained.

       Motion by Roger Reinert to reconsider the first motion to fully fund NCLT -
       City Homes and WCDO B Alicia=s Place, giving WCDO half in October and
       half in February, seconded by Jim Booth. Motion passed. Pam Kramer
       abstained.



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      Motion by Roger Reinert, seconded by Jim Booth to fund NCLT - City
      Homes at $50,000, WCDO B Alicia=s Place at $100,000, and San Marco at
      $50,000.



Judy Brown suggested that Accessible Space, Inc reapply in April for the 2006 round of
funding. It was discussed that the commission request the City Council to pre-commit
2006 funds to the Village at Matterhorn at the Committee of the Whole meeting with the
council.
       Motion by Judy Brown, seconded by Gary Eckenberg to recommend a pre-
       commitment of 2006 funds to the Village at Matterhorn. Motion passed.
       Jim Booth abstained. Pam Kramer abstained.

The Duluth Community Development staff will send a meeting reminder for the Duluth
Housing Commission Committee of the Whole meeting with City Council to discuss the
HIF funding recommendations along with the final spreadsheet of the commission
funding recommendations.

ADJOURNMENT:

      Motion by Jeff Anderson, seconded by Mike Sayers, to adjourn the meeting
      at 1:30 p.m. Frank Jewell declared the meeting adjourned.




Sum9-8-05.doc




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