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CC Memo 6-22-05 Sand Companies Letter of Support CITY OF CHANHASSEN 7700 Market Boulevard PO Box 147 Chanhassen, MN 55317 Administration Phone: 952,227.1100 Fax: 952,227.1110 Building Inspections Phone: 952,227,1180 Fax 952.227.1190 Engineering Phone: 952,227.1160 Fax 952.227,1170 Finance Phone 952,227,1140 Fax 952.227,1110 Park & Recreation Phone: 952.227.1120 Fax 952,227.1110 Recreation Center 2310 Coulter Boulevard Phone 952.227.1400 Fax: 952,227,1404 Planning & Natural Resources Phone: 952,227.1130 Fax: 952.227.1110 Public Works 1591 Park Road Phone: 952.227.1300 Fax: 952,227.1310 Senior Center Phone 952,227.1125 Fax 952,227.1110 Web Site www.ci.chanhassen.mn.us 7h _,~ Ii. [T MEMORANDUM TO: Todd Gerhardt, City Manager FROM: Justin Miller, Assistant City Manager oiL. DATE: June 22, 2005 RE: Sand Companies Letter of Support BACKGROUND Representatives from the Sand Companies have approached the City about providing assistance for their proposed apartment project near the intersection of new Highway 212 and relocated Highway 101. During the June 13th work session discussion, council asked staff and the applicant to provide more information, which is presented below: References Staff has contacted several of the communities where the Sand Companies have completed projects and they all had nothing but complimentary things to say about them. In each case, the cities stated that they built high quality projects and were very responsive to staff and council requests. Preliminary Tax Credit Scoring Tabulation As requested, the applicants completed a preliminary scoring tabulation for their Minnesota Housing Finance Agency Tax Credit Application. As you can see from their attached letter and application, with city assistance they will receive a score of 99 and without it a score of 87. It is difficult to tell exactly how these scores will rank them in the application process, but the applicant states that a project with city assistance will be looked upon more favorably than one without it. Draft letter Attached is a draft letter that would be included as part of the application if the council chooses. Staff has worked with the applicants on the wording, and both believe that it is sufficient. In the letter there is language stating that the tax increment financing district process would still need to be completed and appropriate financial requirements must be met before any financial assistance would be provided. RECOMMENDA TION Staff recommends that the City Council approve the attached letter of support for the Sand Companies tax credit application with the Minnesota Housing Finance Agency. The City of Chanhassen . A growing community with clean lakes, quality schools, a charming downtown, thriving businesses, winding trails, and beautiful parks, A great place to live, work, and play, CITY OF CHANHASSEN 7700 Market Boulevard PO Box 147 Chanhassen, MN 55317 Administration Phone: 952.227.1100 Fax 952.227.1110 Building Inspections Phone: 952.227.1180 Fax 952.227.1190 Engineering Phone 952.227.1160 Fax: 952.227.1170 Finance Phone: 952.227.1140 Fax: 952.227.1110 Park & Recreation Phone: 952.227.1120 Fax 952.227.1110 Recreation Center 2310 Coulter Boulevard Phone 952.227.1400 Fax: 952.227.1404 Planning & Natural Resources Phone: 952.227.1130 Fax: 952.227.1110 Public Works 1591 Park Road Phone 952.227.1300 Fax: 952.227.1310 Senior Center Phone: 952.227.1125 Fax: 952.227.1110 Web Site www.ci.chanhassen.mn.us June 27, 2005 Minnesota Housing Finance Agency 400 Sibley Street, Suite 300 St. Paul, Minnesota 55101 Attention: Multifamily Underwriting RE: Housing Tax Credit Program & Super RFP. GATEWAY PLACE, CHANHASSEN. Dear Multifamily Development: The City of Chanhassen is a community made up of residents, businesses and institutions sharing a common history of social, economic and political interests. One of the primary purposes of a community is to serve as a place of residence for its citizens. Assuming this charge, offering a mix of life cycle housing opportunities becomes a challenge for local governments. The City is committed to providing a variety of housing styles with housing available for people of all income levels to meet the life cycle housing needs of Chanhassen residents and local businesses. While committed to providing life cycle housing, the City must overcome obstacles to their development. One of the most difficult impediments to providing one facet of life cycle housing and/or affordable housing is the high cost of land. Developers or housing providers must be partners in providing life cycle housing. The proposed 48 unit development called Gateway Place is an excellent opportunity for the City of Chanhassen to meet a portion of our housing goals. Its location is along new Highways 101 and 212 near shopping, jobs and public transportation. The location of Gateway Place meets the characteristics of Smart Growth development. The City of Chanhassen proposes significant local financial assistance for this project as part of its endorsement. If the project is selected for funding, the City Council supports the use of tax increment financing (TIP) for the project in a manner similar to other affordable housing projects the City has offered assistance in the past. The TIP structure for past projects has been 90% increment for the first five years and 50% increment for two additional years. As part of the tax increment financing, the project will need to meet the state guidelines for tax The City 01 Chanhassen . A growing community with clean lakes, quality schools, a charming downtown, thriving businesses, winding trails, and beautiful parks. A great place to live, work, and play. increment financing including the "but for" test. The City of Chanhassen will also require the project to stay affordable for a specified period of time. Besides the financial assistance, the City supports fast-track permitting and flexibility in zoning and development standards. To accomplish this, the City used a Planned Unit Development (PUD) approval process to allow for this flexibility. On June 7, 2005, the City Planning Commission recommended approval of the PUD for the project and at our June 27, 2005 Council meeting, we approved these plans. As has been previously stated, the City of Chanhassen is committed to the development and completion of work force or life cycle housing within the City. We ask that you participate with us to help meet our common goal of affordable housing in Chanhassen by funding this development. Sincerely, Tom Furlong Mayor /" June 15, 2005 *SQ; &iBiI t16ltf1fJllies, fneJ. 366 South Tenth Avenue, PO Box 727 Waite Park, Minnesota 56387-0727 Telephone (320) 202-3100 Fax (320) 202-3139 www.SandCompanies.com Sent Via E-Mail City of Chanhassen 7700 Market Boulevard PO Box 147 Chanhassen, Minnesota 55317 RE: Gateway Place - Chanhassen. Dear Honorable Mayor & Council Members: Thank you for the opportunity to present our development to you at your workshop on June 13th. We know you had a very busy agenda and we greatly appreciate the opportunity on short notice. As requested, we have completed a preliminary scoring sheet for Gateway Place based on what additional points may be awarded based on the City's participation. As was mentioned, the competition for tax credits is very competitive and every points weighs heavily. As you will see in the attached score sheet, with the City assistance the project preliminarily scores "99" while without the assistance the project scores "87". This is a very significant difference. Besides just points, the Minnesota Housing Finance Agency will select a project that has local support over one that does not. With our significant past experience, we are confident with the City's assistance of TIF and the flexibility in development standards, the project will be very competitive. Without it, we feel the project has very little chance of being selected. We will be in attendance at your Council meeting on June 27th, but if you have any questions in the mean time my contact information is below. Thanks again for your support and we look forward to completing a successful development with you. Office Telephone Mobile Telephone E-Mail (320) 202-3100 (320) 267-3922 JJThelen@SandCompanies.com Sincerely, Jamie Tpe!en Jamie J. Thelen President Development. Architecture. Construction. Property Management Equal Opportunity Employer MINNESOTA HOUSING FINANCE AGENCY 2006 HOUSING TAX CREDIT PROGRAM SELF-SCORING WORKSHEET FOR SELECTION POINTS Development Name: Gateway Place Address: xxx Lake Susan Drive City: Chanhassen To be eligible for selection considerations ofMHFA administered tax credits from the State's volume cap under the MHFA Qualified Allocation Plan. a developer must demonstrate that the proiect is eligible for not less than 30 points. Please indicate below the selection and/or preference priority points expected for your development. Where multiple points per section are available please check the appropriate box (D) for points claimed. The MHF A will determine actual selection points used, based on the application and additional documentation you have submitted to justify the points claimed. (Attach separate details sheet). Please Note: If submitting an electronic version of the application, you must also submit a signed original paper Self-Scoring Worksheet for Selection Points (HTC Form 10) with your application package. The scores reflected on both submissions must be identical. You must also be sure both sheets identically reflect all supporting detail information as called for on the sheets. Only the signed original Self- Scoring Worksheet for Selection Points that accompanies the application will be reviewed and considered as the controlling document Do not claim points unless documentation is provided along with the application to justify the points claimed. Please Note: Deed Restricted Covenants covering the rent restrictions and occupancy requirements presented at selection will be placed on the building(s) at the time of allocation. For applications submitted in Round 1 all applicants statewide must meet one of the following threshold types. If you are applying to Round 1, please indicate the Threshold item you meet: a. In the Metropolitan Area: 1. I:8J New construction or substantial rehabilitation in which, for the term ofthe extended use period (term of the Declaration of Land Use Restrictive Covenants), at least 75 percent of the total tax credit units are single room occupancy units which are affordable to households whose income does not exceed 30 percent of the area median income. 2. D New Construction or substantial rehabilitation family housing projects that are not restricted to persons 55 years old or older in which, for the term of the extended use period (term of the Declaration of Land Use Restrictive Covenants), at least 75 percent of the total tax credit units contain two or more bedrooms and at least one-third of the 75 percent contain three or more bedrooms; or 3. D Substantial rehabilitation projects in neighborhoods targeted by the city for revitalization. b. Outside the Metropolitan Area: 1. D Projects which meet a locally identified housing need and which are in short supply in the local housing market as evidenced by credible data such as local council resolution submitted with the application. (For Threshold Letter- Sample Format, see HTC Procedural Manual, Reference Materials Index.) c. Projects that are not restricted to persons ofa particular age group and in which, for the term of the extended use period (term of the Declaration of Land Use Restrictive Covenants), a percentage of the units are set aside and rented to persons: 1. D with a serious and persistent mental illness as defined in Minnesota Statutes S 245.462, Subdivision 20, paragraph (c); 2. D with a developmental disability as defined in United States Code, Title 42, Section 6001, paragraph (5), as amended; 3. D who have been assessed as drug dependent persons as defined in Minnesota Statutes S 254A.02, Subdivision 5, and are receiving or will receive care and treatment services provided by an approved treatment program as defined in Minnesota Statutes S 254A.02, Subdivision 2; 4. D with a brain injury as defined in Minnesota Statutes S 256B.093, Subdivision 4, paragraph (a); or 5. D with permanent physical disabilities that substantially limit major life activities, if at least 50 percent of the units in the project are accessible as provided under Minnesota Rules chapter. 1340; d. D Projects, whether or not restricted to persons of a particular age group, which preserve existing subsidized housing, if the use of tax credits is necessary to (1) prevent conversion to market rate use or (2) to remedy physical deterioration of the project which would result in loss of existing federal subsidies; or e. D Projects financed by Rural Development, which meet statewide distribution goals. Minnesota Housing Finance Agency Multifamily Housing Resource Housing Tax Credit Program 2006 Self-Scoring Worksheet I of 15 (HTC Form 10) MHR Form 310 5/2005 1. Large Family Housing 10 Points The proposal is for a project that provides family housing that is not restricted to persons 55 years old or older. At least 75 percent of the total tax credit units must contain two or more bedrooms. The tenant selection plan must give preference to families with minor children. To receive these points, the project must meet HTC Design Standards including the design requirements for Large Family Housing. Compliance must be evidenced by, a Design Standards Certification form executed by the owner and architect. Note: Ifpoints are claimed/awarded for this category, then no points may be claimed/awarded from the selection priority categories of Single Room Occupancy Housing or Special Populations. 2. Single Room Occupancy Housing 10 Points At least 50% of the total tax credit units must be one bedroom or less with rents affordable to households whose incomes do not exceed 30 percent of AMI. Scores based on gross rent level including utilities before rental assistance. Eligible units must have rents affordable to households whose incomes do not exceed 30 percent of median income without rental assistance. To receive these points, the project must meet the HTC Design Standards and be evidenced by a Design Standards Certification form executed by the owner and architect. Note: If points are claimed/awarded for this category, then no points may be claimed/awarded from the selection priority categories of Large Family Housing or Special Populations. 3. Strategically Targeted Resources 10 To 12 Points D The proposal is for the rehabilitation of an existing structure 10 points Note that for all HTC Rehabilitation proposals: the amount of rehabilitation must exceeds: (a) $5,000 per low-income unit for the project; and the greater of (b) $3,000 qualified basis per low-income unit per building; or ( c) 10 percent of the adjusted basis. A qualified preservation project that receives full points for "Preserved Federally Assisted Low Income Housing" may qualify if rehabilitation exceeds the greater of (b) or (c) above. Calculation is based on rehabilitation hard costs and cannot include intermediary costs or soft costs identified in the application; plans and/or scope of work provided at time of application. D The rehabilitation proposal is part of a community revitalization or stabilization plan. 2 additional points Must be evidenced by a letter from the city verifying that the proposed project is part of an approved community revitalization area as established by resolution or other legal action. -OR- ~ The proposal is for new construction and will utilize existing sewer and water lines without substantial extensions. 10 Points To receive these points, the project must meet the HTC Design Standards and be evidenced by a Design Standards Certification form executed by the owner and architect Minnesota Housing Finance Agency Multifamily Housing Resource Housing Tax Credit Program 2006 Self-Scoring Worksheet 2 of 15 Pts. w/o City Assistance 10 10 Q o , 'I '~ 10 10 (HTC Form 10) MHR Form 310 5/2005 4. Special Populations 3 or 10 Points Projects that are not restricted to persons of a particular age group and in which, for the term of the extended use period (Declaration of Land Use Restrictive Covenants), a percentage of the units are set aside and rented to persons with the following disabilities: (a) a serious and persistent mental illness as defined in Minn. Stat. ~ 245.462, subdivision 20, paragraph (c); (b) a developmental disability as defined in United States Code, Title 42, Section 6001, paragraph (5), as amended; (c) assessed as drug dependent as defined in Minn. Stat. ~ 254A.02, subdivision 5, and are receiving or will receive care and treatment services provided by an approved treatment program as defined in Minn. Stat. S 254A.02, Subdivision 2. (d) a brain injury as defined in Minn. Stat. S 256B.093, Subdivision 4, paragraph (a); or ( e) permanent physical disabilities that substantially limit major life activities, if at least 50 percent of the units in the project are accessible as provided under Minnesota Rules, Chapter 1340. o A project in which at least 50 percent of the total units are set aside and rented to such persons: 10 points -OR- o A project in which at least 25 percent of the total units are set aside and rented to such persons 3 points If a proposal sets aside a percentage of units for persons with disabilities, the applicant must contact the human services department for the county where the project will be located to discuss the proposal. The applicant must obtain a letter from the human services department indicating that its staff has reviewed the proposed project, and stating whether there is a need for such housing and ifthe project would be eligible for funds to assist with the social service needs of the residents. In addition, if the project will be delivering supportive services to residents in these units, the proposal must include documentation describing: the scope of services residents will require, specific services the project will offer, whether the applicant will be responsible for delivery or will partner with identified organizations (and if so the status of those arrangements and partners' credentials), specific sources that will fund the services and their commitment status, and how residents will be connected to the services. To receive these points, the project must meet the HTC Design Standards and be evidenced by a Design Standards Certification form executed by the owner and architect. Note: If points are claimed/awarded for this category, then no points may be claimed/awarded from the selection priority categories of Large Family Housing or Single Room Occupancy Housing 5. Economic Integration 2 Points Two (2) Points will be awarded for the election of25-50 percent of units affordable to households with rents at or below 60 percent of the area median income to the total units (not including full-time manager or model units) in the project: The corresponding HTC applicable fraction will be based on the number ofHTC low income units to total and will be enforced at the time the Carryover Allocation and IRS Form 8609 are prepared to determine the maximum tax credit allocation for the project. Minnesota Housing Finance Agency Multifamily Housing Resource Housing Tax Credit Program 2006 Self-Scoring Worksheet 3 of 15 Pts. w/o City Assistance Q o Q o (HTC Form 10) MHR Form 310 5/2005 6. Cooperatively Developed Plan 5 or 10 Points City comprehensive plans alone do not qualify for the options below. o The proposal is created in accordance with a comprehensive cooperatively developed plan that encompasses housing plus services and/or economic related initiatives. - 10 points Eligible plans include: . Saint Paul - Ramsey County Five-Year Low Income Housing and Homeless Services Plan; . Minneapolis Hennepin County Homeless Plan or other plans that include housing plus services and/or economic development initiatives -OR- [8J The proposal is created in accordance with a cooperatively developed plan, which incorporates housing initiatives. - 5 points At a minimum, any combination of the above must have the input of the following entities: . City or county (or instrumentality thereof) OR . Regional Unit of Government AND one or more of the following: . Neighborhood and/or community group . Housing provider . Funders 7. Project Location 5 or 10 Points The proposed housing is needed to increase or sustain the supply of affordable housing in counties that experience both job and population growth during the last ten years. [8J The proposed housing is located in one of the top ten job or population growth - 10 points o The proposed housing is located in one of the top twenty, but not in the top ten, job or population growth counties - 5 points (See Reference Materials Index - Project Location -for a list of cities) 8. Cost Avoidance / Cost Reduction 1 to 10 Points One or more of the following: (One point for each box checked, with a maximum of 10 points) o Land donation of the development site [8J Monetary/in-kind work and material donations o Donation or waiver of development specific assessments or infrastructure costs [8J Density bonus [8J Reduced setbacks o Reduced parking requirements [8J Decreased road widths Minnesota Housing Finance Agency Multifamily Housing Resource Housing Tax Credit Program 2006 Self-Scoring Worksheet 4 of 15 Pts. w/o City Assistance 10 10 10 10 .8. o (HTC Form 10) MHR Form 310 5/2005 [8] Flexibility in site development standards [8] Flexibility in zoning code requirements D WAC/SAC reductions [8] Fast-track permitting and approval [8] Innovative building techniques or materials Provide specific cost savings amounts and details to justify points claimed If land donation of the development site, monetary/in-kind work and materials donations, or donation/waiver of development specific assessments or infrastructure costs are claimed for points in this section, it cannot also be claimed in the selection points category of Local Contributions. Assistance from the MHF A Super RFP and related Funding Partners i.e. Family Housing Fund, Greater Minnesota Housing Fund, Metropolitan Council Local Housing Incentive Account, IS NOT eligible for inclusion in this section To receive these points, documentation of the terms and conditions of a cost avoidance/cost reduction measure must be provided from the contributor of the assistance or authorized local official, at the time of the application. The documentation shall be in the form of a development specific letter of intent, city or council resolution, letter of approval, statement of agreement or eligibility, or memorandum of understanding. If the documentation provided contains words synonymous with "consider" or "may", (as in "may award") regarding the cost avoidance/cost reduction measure, the points will not be awarded. Documentation from an engineer, architect or certified contractor or provider for innovative building techniques or materials must be submitted at the time of application and be reviewed and approved by the Agency to be eligible for the points. The applicant must provide accurate, complete and credible evidence of the amount of cost savings for each cost avoidance/cost reduction measure and record the savings in Section VII E. ofthe MF Application Form. The value of the donations and in-kind contributions must be consistent with current market comparable costs for land, materials and services 9. Local Contributions 2 to 10 Points [8] The proposal is receiving funds from an area employer. - 4 points. [8]1 The proposal is receiving funds from the local municipality. - 4 points Funds from local municipalities may include, for example: . Tax increment financing . Reservation land not subject to local property taxes . Historic tax credits . Monetary grants . Tax abatement . Land donation of the development site [8] The proposal receives funds from a private philanthropic group, religious organization, or charitable organization. - 2 points Provide specific details to justify points claimed Ifland donation of the development site, monetary/in-kind work and material donations, or donation/waiver of development specific assessments or infrastructure costs is claimed for points in this section, it cannot also be claimed in the selection points category of Cost Avoidance/Cost Reduction. Minnesota Housing Finance Agency Multifamily Housing Resource Housing Tax Credit Program 2006 Self-Scoring Worksheet 5 of ]5 ~ ~ Pts. w/o City AssistaIKe 10 6 (HTC Form 10) MHR Form 310 5/2005 . Selection Priorities (Selection Priority 9. continued) To qualifY for points using historic credits and tax abatement, there must be satisfactory documentation that the resource will provide additional positive investment capital to the development that will reduce the demands on the state and federal housing resources. For tax increment financing to qualifY for points, there must be satisfactory documentation that the resource is committed to the development at the time of application. Documentation of the amount and the terms of assistance must be provided by the provider of the assistance at the time of application in the form of a development specific letter of intent. The value of the donations must be consistent with current market comparable costs for materials and services. Within 6 months of the date of selection (MHF A Board selection date) the applicant must provide the MHF A with documentation ofa firm commitment, authorization or approval of the local contribution(s). The documentation must state the amount, terms and conditions and be executed or approved at a minimum by the contributor. Documentation containing words synonymous with "consider" or "may", (as in "may award") regarding the contribution, will not be considered acceptable. Lack of acceptable documentation will result in the reevaluation and adjustment of the tax credits or RFP award, up to and including the total recapture of tax credits or RFP funds. 10. Leverage 2 to 10 Points Points are awarded for leveraging requested state deferred funding with funding from private, federal, local government, religious, philanthropic, or charitable organizations. The formula used to determine the Leverage Ratio Percentage is based upon the cumulative state deferred funding award (including current request) for MHF A RFP funds* divided by Total Development Cost. *(including past and present MHFA and Funding Partners [i.e. Family Housing Fund, Greater Minnesota Housing Fund, Metropolitan Council Local Housing Incentive Account] awards and current requests) and (excluding First Mortgage, Syndication, HOME, MARIF funds). Total state RFP/Funding Partner Funds awarded and current request $960.000 divided by Total Development Cost $6.240.000 equals Leverage Ratio 16%. [81 0-20% = 10 pts o 21-30% = 8 pts o 31-40% = 6 pts o 41-50% = 4 pts o 51-60% = 2 pts o 61 and above = 0 pts Documentation of the amount and the terms of assistance must be provided from the provider of the assistance at the time of application in the form of a development specific letter of intent. Within 6 months of the date of selection (MHF A Board selection date), the applicant must provide the MHF A with documentation of a firm commitment for each funding source. The documentation must state the amount, terms and conditions and be executed or approved by the lender or contributor and the applicant. Documentation containing words synonymous with "consider" or "may", (as in "may award") regarding the commitment will not be considered acceptable. Lack of acceptable documentation will result in the reevaluation and adjustment of the tax credits or RFP award, up to and including the total recapture of tax credits or RFP funds. Minnesota Housing Finance Agency Multifamily Housing Resource Housing Tax Credit Program 2006 SelF-Scoring Worksheet 6 of 15 -t -t Pts. wlo City Assistance 10 10 (HTC Form 10) MHR Form 310 5/2005 11. Readiness to Proceed 2 to 10 Points The MHF A shall award points to applicants who have secured funding commitments for funding for one or more funding sources at the time of application (commitments for funding from MHF A and Funding Partners (i.e. Family Housing Fund, Greater Minnesota Housing Fund, Metropolitan Council Local Housing Incentive Account) are only included if obtained in a previous funding cycle/round). The documentation must state the amount, terms and conditions and be executed or approved by the lender or contributor and the applicant. Documentation containing words synonymous with "consider" or "may", (as in "may award") regarding the commitment will not be considered acceptable. (Excludes current funding round requests for Syndication Proceeds and First Mortgage Financing) Total eligible funding secured, awarded or committed $316.800 Divided by Total Development Cost $6.240.000 equals Percentage of Funds Committed ~%. D 60% or more of funding secured, awarded or committed D 30% to 59.9% of funding secured, awarded or committed D 10% to 29.9% of funding secured, awarded or committed 9.9% and below offundin awarded or committed 12. Intermediary Costs (Soft Costs) 10 points 6 points 2 point o oints 1 to 6 Points Points will be given to projects with the lowest intermediary costs on a sliding scale based on percentage of total development costs. For HTC selected projects, this percentage will be enforced at issuance of the IRS Form 8609. *(In 2004 Total Mortgageable Costs were in effect) Intermediary cost amount: $873.600 divided by Total Development* Costs $6.240.000 Equals Intermediary Percentage 14% I8J 0.0-15% D 15.1-20% D 20.1-25% D 25.1 - 30% D 30.1% & over 13. Unacceptable Practices 6 points 3 points 2 points 1 point o oints -10 to -25 Points MHFA will impose penalty points for unacceptable practices as identified in Section IV.F. of the Housing Tax Credit Procedural Manual. 14. Eventual Tenant Ownership 1 Point The proposal incorporates a financially viable plan to transfer 100 percent of the HTC unit ownership at the end of the 15-vear compliance period from the initial ownership entity (or MHF A approved "Transfer of Ownership") of the project (the Limited Partnership) to tenant ownership. The unit purchase price at time of sale must be affordable to incomes meeting HTC eligibility requirements. To be eligible, the buyer must have an HTC qualifYing income at the time of initial occupancy (HTC rental tenant) or time of purchase. The plan must incorporate a Limited Partnership ownership exit strategy and the provision of services including home ownership education and training. The Declaration of Land Use Restrictive Covenants will contain provisions ensuring compliance with these home ownership program commitments by the Limited Partnership Owner. (Refer also to Section V. W. of the HTC Procedural Manual for additional information.) Until the time the HTC units are purchased by a qualified tenant or in the event the HTC units are not acquired by a qualified tenant, the owner will extend the duration of low-income use for the full extended use period (30 years). The owner therefore, agrees to waive provisions of Section 42(h)(6)(E)(i)(II) and 42(h)(6)(F) and extends the duration of low-income use of the project to a minimum of 30 years. Minnesota Housing Finance Agency Multifamily Housing Resource Housing Tax Credit Program 2006 Self-Scoring Worksheet 7 of ]5 PIS. w/o Cily Assistallce Q o .2 6 Q o Q o (HTC Form 10) MHR Form 310 5/2005 15. Underserved Populations 3 to 10 Points The development serves an underserved population as defined by the Agency as Single Female head of household with minor children, Individuals and Households of Color and one of the following is true: o Marketing efforts or project design features will be used that will attract underserved populations (as defined by the Agency) including collaborations and partnerships proposed with members or organizations addressing the needs of under served populations? 3 points OR [gI Marketing efforts or project design features will be used that will attract underserved populations (as defined by the Agency) including collaborations and partnerships proposed with members or organizations addressing the needs of underserved populations; and the applicant has past successful experiences in marketing to or working with underserved populations? [gI I Underserved Population = 5 points [gI 2 Underserved Population = 10 points (NOTE: see selection priority #4 for Disabled Individuals) 16. Temporary Priority 3 Points The proposal addresses a temporary housing priority and is eligible for the award of points by the Commissioner or the Board of the Minnesota Housing Finance Agency pursuant to authority cited in the Permanent Rules of the Minnesota Housing Finance Agency. 17. Preservation of Existing Housing Tax Credit Units 10 Points ~MPORTANT NOTE:1 THESE POINTS ARE AVAILABLE ONLY TO EXISTING MHF A TAX CREDIT PROJECTS APPLYING FOR TAX CREDITS FROM MHFA'S COMPETITIVE ALLOCATION PROCESS (CONSOLIDATED RFP) and QUALIFIED TAX EXEMPT PROJECTS APPLYING FOR A PRELIMINARY DETERMINATION LETTER FROM MHFA AS THE CREDIT ALLOCATOR. To obtain the related points, the existing tax credit housing must meet the following criteria: 1. The development received an MHF A allocation of housing tax credits either prior to 1990 or is eligible to and will exercise their option under the provisions of Section 42(h)(6)(E)(i)(II) and 42(h)(6)(F) within the next 12 months; and 2. Applicant agrees to maintain the Housing Tax Credit Units in the development for at least 30 years; and 3. The proposal will not result in the displacement of existing low and moderate income residents; and 4. Units must be considered at risk of going to market rents, where the market rents of comparable units exceed the tax credit rent limits by 10 percent and the proposed rents will increase by more than 30 percent within two years of the Housing Tax Credit Application date. The risk of conversion must be supported by information contained in the application and with final determinations made by MHF A; or 5. Tax credit units would no longer remain decent, safe, and affordable due to physical deterioration or deterioration of capacity of current ownership/management entity. Minnesota Housing Finance Agency Multifamily Housing Resource Housing Tax Credit Program 2006 Self-Scoring Worksheet 8 of 15 PIS. w/o City Assistance .ill 10 Q o Q o (HTC Form 10) MHR Form 310 5/2005 18. Permanent Housing for Individuals Experiencing Long Term Homelessness (5 to 110 Points) Pis. w/o City Assistance MHFA Competitive Round, Non-Tax Exempt Points ("bonus" points) 100 Points Q o MHF A Competitive Round or Tax Exempt Points ("non-Bonus" points) 5 or 10 Points ~MPORTANT NOTE:I THE 100 "BONUS" POINTS ARE AVAILABLE ONLY TO QUALIFIED PERMANENT HOUSING PROJECTS TARGETING INDIVIDUALS EXPERIENCING LONG TERM HOMELESSNESS APPLYING FOR TAX CREDITS FROM MHF A'S COMPETITIVE ALLOCATION PROCESS (CONSOLIDATED RFP) QUALIFIED TAX EXEMPT PROJECTS APPLYING FOR A PRELIMINARY DETERMINATION LETTER FROM MHFA AS THE CREDIT ALLOCATOR WILL BE LIMITED TO A MAXIMUM AWARD OF 10 POINTS ("NON-BONUS" POINTS) FROM THIS POINT CATEGORY. QUALIFING PROPOSALS MUST CONTAIN A MINIMUM OF 4 UNITS SERVING HOMELESS HOUSEHOLDS. A proposal which is awarded scoring points from this categorv and is selected to receive tax credits will be required to complv with the Long Term Homelessness reporting requirements as defined bv the MHFA. The Tax Credit Declaration of Land Use Restrictive Covenants. including a specific Rider to the Declaration. will contain performance rec!Uirements related to these Long Term Homelessness units and will be recorded with the property. The 100 points ("bonus points") will be available until a total of $1,452,000* (estimated 25 percent MHF A authority) in tax credits are awarded for qualifying proposals for Persons Experiencing Long Term Homelessness selected in the 2006 Housing Tax Credit competitions. Once this maximum amount is reached, the 100 points ("bonus" points) will no longer be awarded to qualified proposals for the remaining 2006 Tax Credit Program competitive funding round. Qualified proposals may earn a maximum of 10 points ("non-bonus" points cited below) and may continue to compete in the appropriate set aside. The MHFA will promote housing for households experiencing long-term homelessness by giving preference points to proposals that meet all the following conditions: a) sets aside a percentage of housing tax credit units to (minimum 4 units) serve households experiencing long-term homelessness as proposed to be defined in Minnesota Rule, Chapter 4900.3705; b) addresses an unmet need and fits with the Continuum of Care goals and action steps intended to address homelessness as identified in the Exhibit I Plan Housing Gaps Analysis and described in the Continuum of Care Narrative submitted to HUD; c) provides an acceptable plan for resident support services (i.e. information and referral, advocacy, case management, self-reliance training, resident association and community building activities) contingent upon an agreement with an established organization providing such services to residents and financial plans demonstrating feasibility; d) provides a service budget which supports the plan; e) provides an executed memorandum of understanding between the owner, lead service provider and property management which outlines the duties and responsibilities of each, and; f) the applicant agrees to pursue and continue renewal of rental assistance, operating subsidy, or service funding contracts for as long as the funding is available. Minnesota Housing Finance Agency Multifamily Housing Resource Housing Tax Credit Program 2006 Self-Scoring Worksheet 9 of 15 (HTC Form 10) MHR Form 310 5/2005 Additional points ("non-bonus" points) will be awarded to a proposal in which a certain percentage (rounded up to the next full unit) of the total units are set aside and rented to household experiencing long term homelessness: 5% to 10%, but no fewer than 4 units = 5 points. 50 % to 100%, but no fewer than 20 units = 10 points. To receive points under this category, an applicant is required to complete and submit with the application materials, the Narratives, Forms and Submissions outlined in Part F of the Supportive Housing Section of the Housing Resource Application Guide and Checklist. Materials include, but not limited to, a plan outlining the services to be provided, a budget to support the plan, and such other items as are required by the MHF A for applications serving persons experiencing long-term homelessness. The MHF A recognizes that rental assistance, or operating subsidies, and supportive services may be necessary to effectively serve households experiencing Long-term homelessness. In the event that necessary rental assistance, operating support or tenant service funding is withdrawn or terminated due to reasons not attributable to the actions or inactions of the owner and alternative funding is unavailable, the owner may petition MHF A, in writing, for the termination or modification of the requirement that the assisted units be occupied by households Experiencing Long-Term Homelessness. MHFA will consider the petition and may relax or eliminate the requirement for Supportive Services or may eliminate the requirement that the assisted units be occupied by Households Experiencing Long-Term Homelessness. A development that is in full compliance with all the terms of the funding may be permitted to phase out the targeting of tax credit units to persons experiencing Long-term homelessness and convert the rents to the 50% tax credit rent limit without jeopardizing the tax credit allocation. The 50% tax credit rent limit for these units must be maintained for the remainder of the tax credit compliance period and extended use period to retain the tax credit allocation. 19. High Speed Internet Access 1 Point The development will provide High Speed Internet access via installation of all appropriate cable and connections to every unit in the development. This will be a design requirement if points are taken. + 1 + PIS. w/o City Assistance 1 1. Extended Duration (New for 2006) All proposals must maintain the duration oflow-income use for a minimum of30 vears. To be eligible for selection considerations ofMHFA administered tax credits under the MHFA Oualified Allocation Plan. one of the minimum requirements is that a proposal maintain Section 42 income and rental restrictions for a period of 30 vears be~inning with the first day of the compliance period in which the building: is a part of a qualified low-income housing proiect. Points are no longer awarded to proiects where the owner agrees to waive provisions of Section 42(h)(6)(E)(i)(1I) and 42(h)(6)(F) and extend the duration of low-income use of the proiect. The owner agrees that the provisions of Section 42(h)(6)(E)(i)(II) and 42(h)(6)(F) (which provision would permit the owner to terminate the restrictions under this agreement at the end of the compliance period in the event the MHF A does not present the owner with a qualified contract for the acquisition of the project) do not apply to the project, and that the Section 42 income and rental restrictions shall apply for the period of30 years beginning with the first day of the compliance period in which the building is a part of a qualified low income housing project. The primary financing proposed must meet MHF A's underwriting standards or demonstrate to the sole satisfaction of the MHF A that the project can remain financially feasible for the entire 30-year duration oflow income use. Minnesota Housing Finance Agency Multifamily Housing Resource Housing Tax Credit Program 2006 Self-Scoring Worksheet 10 of 15 Points are not awarded for this item. Points are not awarded for this item. (HTC Form 10) MHR Form 310 5/2005 2. Serves Lowest Income TenantslRent Reduction 5 to 13 Points PIS. w/o City Assistance Scores based on gross rent level including utilities before rental assistance. Eligible units must have rents affordable to households whose incomes do not exceed 30 percent or 50 percent of median income without rental assistance. lQ 10 In addition to the elected income limit of 50 percent or 60 percent AMI for the full term of the declaration (refer to the Minimum Set Aside), the applicant agrees to maintain deeper rent structuring for which selection points are requested. Units Representing _percent ofthe HTC units will have additional rent restrictions requiring rents affordable to households at 30 percent AMI (Rent Restrictions 30 percent) 48Units Representing IOOpercent of the HTC units will have additional rent restrictions requiring rents affordable to households at 50 percent AMI (Rent Restrictions 50 percent) Applicants may choose either option 1 or 2, and at your choice, option 3 for the development. This selection will restrict rents only (tenant incomes will not be restricted to the 50 percent or 30 percent income level by claiming points in this section). ~ Option 1- A project in which 100 percent of the HTC unit rents are at the county 50 percent HUD area median rent limit. (10 points) o Option 2 - A project in which at least 50 percent of the HTC unit rents are at the county 50 percent HUD area median rent limit. (5 points) OR o Option 3 - In addition to Option I & 2, a project that further restricts 30 percent of the above Restricted units to the county 30 percent HUD area median rent limit. (additional 3 points) NOTE: If points are claimed / awarded for this category, then no points may be claimed / awarded from the selection priority category of Rental Assistance for the same units. ~MPORTANT:I All 50 percent rent restricted units must meet the 50 percent area median rent for a minimum of five years. After the first five year period has expired rent may be increased to the 60 percent rent limit over a three year period with increases not to exceed the amount listed in the table below All 30 percent rent restricted units must meet the 30 percent area median rent for a minimum of five years. After the first five-year period has expired rent may be increased to the 40 percent rent limit over a three-year period with increases not to exceed the amount listed in the table below. Year 1-5 6 7 8 130% of 50%1 Rent Levels 30% of 50% 30% of 53% 30% of57% 30% of 60% 130% of 30%1 Rent Levels 30% 000% 30% 003% 30% 007% 30% of 40% MHF A will incorporate these restrictions into the project's Declaration of Land Use Restrictive Covenants. The applicant must demonstrate to sole satisfaction of MHF A that the project can achieve these reduced rents and remain a financially feasible project, IRC 42(m)(2). Points are contingent upon financial plans demonstrating feasibility, positive cash flow on a I5-year pro forma and gaining MHFA management approval (for management, operational expenses, and cash flow assumptions). Minnesota Housing Finance Agency Multifamily Housing Resource Housing Tax Credit Program 2006 Self-Scoring Worksheet 11 of 15 (HTC Form 10) MHR Form 310 5/2005 Preference Prio 3. Preservation of Federally Assisted Units Pts. w/o City Assistance (Non-Tax Exempt, MHFA Credit Ceiling, Competitive Round Projects) 10 Points (Tax Exempt, Non-MHFA Credit Ceiling, Non-competitive Round Projects) 10 Points Q o ~MPORTANT NOTE:I THESE POINTS ARE A V AILABLE ONLY TO QUALIFYING NON-TAX EXEMPT PROJECTS APPLYING FOR TAX CREDITS FROM MHFA'S COMPETITIVE ALLOCATION PROCESS (CONSOLIDATED RFP) and QUALIFIED TAX EXEMPT PROJECTS APPLYING FOR A PRELIMINARY DETERMINATION LETTER FROM MHFA AS THE CREDIT ALLOCATOR. (Provide specific details to justify points claimed) DEFINITION - Any housing receiving project based rental assistance, operating subsidies, or mortgage interest reduction payments. The universe includes public housing, Section 236 and Section 22 I (d)(3) interest reduction payments, and any development with a project based Section 8, rent supplement, or rental assistance payments contract. Preserves federally assisted low income housing which, due to mortgage prepayments or expiring rental assistance, would convert to market rate use or due to physical deterioration or deterioration of capacity of current ownership/management entity would lose its federal subsidies. MHF A, at its sole discretion, must agree that a market exists for a conversion to market rate housing. In order to obtain the related points, the federally assisted housing must meet the following criteria: I Units must be considered at risk oflosing assistance within two years of the Housing Tax Credit Application date as supported by information contained in the application and with final determinations made by MHF A. 2 Applicant must agree to continue renewals of existing project based housing subsidy payment contract for as long as the assistance is available. 3 Applicant must agree to maintain the Housing Tax Credit Units in the development for at least 30 years. Except for "good cause", applicant must not evict existing subsidized residents and must continue to renew leases for those residents. 4. QCT/Community Revitalization 1 Point A point is awarded to projects that are located in a Qualified Census Tract (See Qualified Census Tract- Reference Materials Index) and are part of a concerted plan that provides for community revitalization. This must be evidenced by a letter from the city; verifying that the proposed project is part of an approved community revitalization area as established by resolution or other legal action. Q o Minnesota Housing Finance Agency Multifamily Housing Resource Housing Tax Credit Program 2006 Self-Scoring Worksheet 12 of 15 (HTC Form 10) MHR Form 310 5/2005 5. Rental Assistance 4 to 18 Points Priority is given to an owner that has entered into negotiations with a Local Housing Authority to receive Project Based Rental Assistance. The assisted units must be located in buildings on the project site. For the purpose of this section, if a proposal contains existing Project Based Assisted units, these units will be counted towards meeting required Rental Assistance percentages. Rent for assisted units must be at or below FMRs (or appropriate payment standard for the project area). Receiving these points and agreeing to a minimum number of assisted units does not release owners from their obligations under the Minnesota Human Rights Act and Section 42 prohibiting refusal to lease to the holder of a voucher or certificate of eligibility under Section 8 of the United States Housing Act of 1937 ecause of the status of the prospective tenant as such a holder. A current request for MHF A HTF Rental Assistance will not receive rental assistance points. A past award or existing HTF Rental Assistance will be counted toward meeting required the Rental Assistance percentages. Indicate the applicable combinations of the below components. Points for A and B cannot be claimed in combination. o (A) For developments agreeing to set aside at least 20 percent of the total units for project based rental assistance - 10 points. o (B) For developments agreeing to set aside at least 10 percent but under 20 percent of the total units for the project based rental assistance - 6 points. o (C) For selected components A or B above, if, in addition, the above commitments are coupled with a commitment from the HRA to provided the project based assistance for a minimum 10 year contract term. - 4 points. [gI (D) For developments that cooperatively develop a housing plan to provide other rental assistance (e.g. Section 8, portable tenant based, HUD Operating Subsidy or other similar programs approved by the Agency) to meet the existing need as evidenced at application by a letter of intent signed by both the applicant and the local housing authority or other similar entities. - 4 points. NOTE: If points are claimed/awarded for this category, then no points may be claimed/awarded from the preference priority categories of Serves Lowest-Income TenantslRent Reduction for the same units. To receive these points, the applicant must comply with all program requirements for the assistance for which priority points were given, including maintaining rents within the appropriate payment standard for the project area in which the project is located for the full compliance and extended use period of the housing tax credits. For proposals claiming points for Project Based Rental Assistance, at the time of application, the applicant must submit a letter of intent signed by the Local Housing Authority. The letter of intent must establish that the Local Housing Authority: 1) is willing to commit the project based assistance to the proposed development; and. 2) will submit an application ofHUD project based assistance; or 3) has sufficient project based authority available; or 4) has authority available to convert to project base units. As a condition of Carryover or 8609, whichever occurs first, the applicant must submit a copy of the fully executed HUD Approval for the project-based rental assistance to be included in the development. For Project Based Rental Assistance in conjunction with a commitment for an "extended term contract" by the HRA, in addition to the above HUD application, at time of application the applicant must submit a letter of intent to enter into the "extended term contract" for project based assistance for a minimum of 10 years which is signed by the Local Housing Authority. As a condition of Carryover or 8609, whichever occurs first, the applicant must submit a fully executed copy of a copy of the HRA "extended term contract" for the project-based assistance to be included in the development. Minnesota Housing Finance Agency Multifamily Housing Resource Housing Tax Credit Program 2006 Self-Scoring Worksheet 13 of 15 Pts. w/o City Assistance .1 4 (HTC Form 10) MHR Form 310 5/2005 For Other Rental Assistance (e.g., Section 8, portable tenant based, HUD operating subsidy or other similar rent assistance programs approved by the Agency), at time of application the applicant must submit a letter of intent to develop a cooperative agreement which is signed by the applicant and Local Housing Authority along, with the completed Agreement to Utilize Public Housing and Section 8 Waiting Lists. As a condition of Carryover or 8609, whichever occurs first, the applicant must submit a fully executed copy of the cooperatively developed housing plan. TOTAL POINTS Minnesota Housing Finance Agency Multifamily Housing Resource Housing Tax Credit Program 2006 Self-Scoring Worksheet 14 of 15 99 Developer Claimed Pts. w/o City Assistance 87 MHFA Awarded (HTC Form 10) MHR Form 310 512005 Under penalty ofperiurv. Owner hereby certifies the information provided herein is true and accurate. Name of Owner: Chanhassen Gateway Place, LLC By: (Signature) Of: (Name of Legal Entity) Its: (Title)(Managing General Partner) (Print or type name of signatory) Please Note: During the competition process, MHFA's review ofthe submitted scoring points worksheet is only to validate that the points claimed are eligible, to reduce points claimed if not eligible, and to determine points awarded. MHFA will not award additional points which are not initially claimed by the Applicant/Owner. Many performance obligations are created by the claiming of certain scoring points. As such, MHF A cannot and will not assume the position of creating any such performance obligations on behalf of the Applicant/Owner. Also Note: Applications funded under the Joint Powers Agreement must also comply with the sub-allocators selection criteria defined in their Qualified Allocation Plan. Minnesota Housing Finance Agency Multifamily Housing Resource Housing Tax Credit Program 2006 Self-Scoring Worksheet 15 of 15 (HTC Form 10) MHR Form 310 5/2005