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AGENDA RECOMMENDATION |
Consent Calendar 6.B.
City Council Regular Meeting
- Meeting Date:
- 11/10/2025
Agenda Item:
Resolution authorizing the City Manager to enter into a Development Agreement with Trellis Co. for a supportive housing project.
Recommendation/Action(s):
Adoption of the attached resolution.
Summary:
On May 28, 2024, the City Council authorized the City Manager to enter into a Memorandum of Understanding (MOU) with Trellis Co. (Developer) for the redevelopment of the Poplar Street site. The Developer has met the obligations of the MOU. Under the MOU, the City agreed to undertake title work to transfer the property to the Developer, work with the Developer on application of grants to aid in the redevelopment of the site, contribution of $100,000 in Community Development Block Grant (CDBG) funding, and 40 project-based vouchers.
In July 2025, the City was awarded a DEED contamination cleanup grant for the project in the amount of $115,554. The MOU set the property’s sales price at $100,000 and required the Developer to secure project financing by January 31, 2025, with an extension to January 31, 2026, for financing and zoning approvals. Once financing was secured, the MOU was to be replaced with a development agreement.
In January 2025, Minnesota Housing awarded project financing for the supportive housing project. The Developer has secured financing and obtained required zoning approvals and is finalizing financing with Minnesota Housing.
Purchase and Development Agreement
The attached Purchase and Development Agreement provides for the construction of a 40-unit affordable supportive housing project. Exhibit D of the Agreement is the Form of Declaration of Restrictive Covenants. The Declaration ensures the supportive housing project remains affordable and compliant with federal and local housing requirements for 50 years, with monitoring and enforcement rights retained by the City. All 40 units are required to be leased to qualifying tenants with incomes at or below 50% of the area's median income.
Article III outlines the purchase and sale of the property. The MOU outlined that closing was to occur by January 31, 2026. The Developer is actively working with Minnesota Housing on their closing documents. However, it’s anticipated their closing will extend into February 2026. The Developer requested to extend the site control and date of closing to occur by 4/30/2026, which would provide additional time if there are further delays in finalizing the closing documents with Minnesota Housing.
Section 4.1 of the Agreement outlines the City’s financial assistance, which includes:
The requested action of the Council is adoption of the attached resolution authorizing the City Manager to enter into a purchase and development agreement with the Developer.
In July 2025, the City was awarded a DEED contamination cleanup grant for the project in the amount of $115,554. The MOU set the property’s sales price at $100,000 and required the Developer to secure project financing by January 31, 2025, with an extension to January 31, 2026, for financing and zoning approvals. Once financing was secured, the MOU was to be replaced with a development agreement.
In January 2025, Minnesota Housing awarded project financing for the supportive housing project. The Developer has secured financing and obtained required zoning approvals and is finalizing financing with Minnesota Housing.
Purchase and Development Agreement
The attached Purchase and Development Agreement provides for the construction of a 40-unit affordable supportive housing project. Exhibit D of the Agreement is the Form of Declaration of Restrictive Covenants. The Declaration ensures the supportive housing project remains affordable and compliant with federal and local housing requirements for 50 years, with monitoring and enforcement rights retained by the City. All 40 units are required to be leased to qualifying tenants with incomes at or below 50% of the area's median income.
Article III outlines the purchase and sale of the property. The MOU outlined that closing was to occur by January 31, 2026. The Developer is actively working with Minnesota Housing on their closing documents. However, it’s anticipated their closing will extend into February 2026. The Developer requested to extend the site control and date of closing to occur by 4/30/2026, which would provide additional time if there are further delays in finalizing the closing documents with Minnesota Housing.
Section 4.1 of the Agreement outlines the City’s financial assistance, which includes:
- $100,000 Community Development Block Grant (CDBG) grant for site acquisition;
- $115,554 DEED grant for contamination cleanup; and
- 40 project-based rental assistance vouchers.
The requested action of the Council is adoption of the attached resolution authorizing the City Manager to enter into a purchase and development agreement with the Developer.