Adopt Resolution #26-202 Approving Local Affordable Housing Aid Loan (LAHA) to Elevate Hope House

The purpose of this case is to consider approval of Resolution #26-202 Approving Local Affordable Housing Aid (LAHA) to Elevate Hope House.  On June 11, the EDA met and recommended to the City Council the sale of Outlot B, COR STONE BROOK ACADEMY and the provision of $250,000 in City LAHA Funds to Elevate Hope House.  The proposed mixed-use project consists of a first floor coffee shop/cafe/gathering space with 3 affordable apartments on the second floor.  On July 14, the City Council reviewed the EDA recommendation, approved the sale of the parcel to Elevate Hope House and directed staff to draft a LAHA Loan Agreement compliant with LAHA statutory affordable housing requirements.  The City currently has $612,611.66 in its LAHA Fund and will receive an additional $176,934.13 in December of 2026.  The City attorney and Staff have drafted a Forgivable Loan Agreement for consideration of approval by the City Council.

No public notice or hearing is required for the City Council action.

Elevate Hope House is a growing organization that is supporting single women through the provision of affordable housing and life skills training.  The proposed mixed-use project in Ramsey will satisfy the mission of that organization and will also fit nicely into the COR Development.  The property is zoned correctly, and Elevate is doing well in their fundraising efforts.  The Purchase Agreement calls for a Notice to Proceed to be provided by Elevate on or before January 15, 2027.  Elevate is in the process of a site plan submittal and should have the necessary approvals well before the Notice to Proceed date. 

The $250,000 in LAHA funds will be allocated for $55,000 for site acquisition and $195,000 for costs associated with the construction of the 3 affordable apartment units. The City Attorney has drafted the attached Forgivable Loan Agreement that is compliant with LAHA requirements. The forgivable loan essentially serves as grant as long as the Elevate completes the project and operates it for five years.  Based on this loan/grant structure, the forgivable loan/grant is interest free. Per the LAHA statute, the maximum income requirements for the renters must be no higher than 80% AMI for all renters.  Elevate also needs to provide the City receipts showing the qualified expenses relating to the affordable housing component of the project.  In the event of a default of the Loan Agreement, Elevate will be required to repay te loan upon request of the City.  Elevate has agreed to the terms in the attached Forgivable Loan Agreement.  Elevate plans to commence construction in Spring of 2027.

Alternatives:
1) Adopt Resolution #26-202 Approving Local Affordable Housing Aid Loan (LAHA) to Elevate Hope House (as presented); subject to City Attorney review
2) Adopt Resolution #26-202 Approving Local Affordable Housing Aid Loan (LAHA) to Elevate Hope House (with changes); subject to City Attorney review
3) Something else

$250,000 of City LAHA Funds.  The City currently has $612,611.66 in its LAHA Fund and will receive an additional $176,934.13 in December of 2026.

Staff recommends Adoption Resolution #26-202 Approving Local Affordable Housing Aid Loan (LAHA) to Elevate Hope House (as presented); subject to City Attorney review

Motion to Adopt Resolution #26-202 Approving Local Affordable Housing Aid Loan (LAHA) to Elevate Hope House (as presented); subject to City Attorney review