A letter of understanding with Duffy Development Company, Inc. for a proposed downtown redevelopment project was approved by the Rogers City Council on May 28.

The approval stems from a closed meeting of the city council following its May 14 meeting, where potential land transactions were discussed.

The company is proposing to construct a 40-unit affordable senior apartment building and 64-unit workforce apartment, comprised of 50 affordable and 14 market rate units, at the southwest corner of Main Street and John Deere Lane. Ninety of the 104 affordable units would be considered affordable to households with incomes at or below 60 percent of the area median income.

The site plan also includes a small commercial building and optional space for a new senior center attached to the senior apartment building.

The 3.6-acre site now consists of five properties owned by the city and two that are privately owned. The senior housing and commercial spaces would be constructed on the current city property, and the workforce/market rate building and parking would be located on the two privately held parcels.

According to the letter of understanding approved May 28, the master planned redevelopment project includes five properties owned by the city that have a combined assessed value by Hennepin County of $854,000.

Before a purchase agreement can be approved, the letter of understanding states that the developer and city “must obtain the necessary financing and commitments to construct the development, and developer must agree to construct the development upon terms acceptable to the city.”

“In addition, the development requires acquisition of the additional properties,” the letter said, adding that the developer has agreed to seek to secure ownership of property at 21510 John Deere Lane, and the city has agreed to seek to secure ownership of property at 12905 Main Street.

In order to apply for tax credits, the developer needs to demonstrate site control, City Administrator Steve Stahmer said.

The letter of understanding spells out the city’s responsibilities: to pursue acquisition of the properties and to support the developer’s use of tax increment financing (TIF).

The developer’s responsibilities include providing a detailed site plan, negotiating a purchase agreement for the city property, and negotiating the purchase of the other two properties.

“We’re asking the state for quite a bit of money,” said Jeff Von Feldt, CEO of Duffy Development Company, adding that his company plans to apply for funding for the Rogers project this month. They won’t know until December whether the funding is approved. If it isn’t approved in December, Von Feldt said, Duffy would plan to continue its quest for funding in 2020.

Prior to its closed meeting on May 14, the city council approved a resolution and letter of support from the city to Duffy Development Company, Inc. to enable the developer to proceed with tax credit and other funding applications for the project.

The project would require tax increment financing (TIF), which the city is authorized to use for public purposes. Duffy also would need to secure housing tax credits from the Minnesota Housing Finance Agency (MHFA) for the project.

The resolution states that Rogers supports the use of TIF up to $1.3 million, as requested by Duffy, to help address the funding gap for the project.

If the project is approved, construction would begin in spring 2020. Duffy has estimated the development cost of the senior housing project at $10 million, and the workforce housing project at $16.8 million.

City Administrator Steve Stahmer said earlier that the city is “trying to solve the affordable housing gap.”

“An affordable project brings with it outside dollars they couldn’t get with a market rate project,” Stahmer said earlier.

“We do like the concept of redevelopment here,” Von Feldt said earlier. “The site in the downtown area would bring traffic and pedestrians. It’s exciting for us to look at what it looks like now and what it could look like. This is a neat layout and design, and it hits a lot of points. It’s kind of an exciting concept.”

“Housing designed to serve seniors is a piece that’s new for us,” Von Feldt said earlier. “The state has not funded that at all since the ‘80s. Now the state Legislature is providing bonding money to do this. We would require well over $5 million in gap funding from the state.”

He pointed out that providing senior citizen housing would allow current Rogers residents who are aging but still want to remain in the community a place to live locally, and their homes could be sold to young families.

“The availability of (rental) units in the Rogers area is pretty limited, unless you’re talking about high-end,” Von Feldt said earlier. “These (proposed housing units) would be $800 to $1,000 (in monthly rent) per unit. There’s nothing in the community close to that. The high end is multiple thousands of dollars a month.”

In keeping with the city’s wishes, Von Feldt said earlier, a retail element would be pursued in order to secure a couple of small shops as part of the downtown development.

The resolution approved earlier by the council noted that “employers within the city have indicated the need for the city to expand multi-family and affordable housing options, which are vital to their ability to attract and retain workers.”

It also stated that the Metropolitan Council 2021-2030 Allocation of Affordable Housing Need identifies the allocation of affordable housing needed in Rogers as 630 units by 2030.

The proposed 2040 Comprehensive Plan for Rogers also establishes the goal of creating a variety of lifecycle housing opportunities at varying price points and amenities, with an emphasis on attainable workforce housing, affordable apartments and senior living communities.

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