87-1015 e
WNf7E —�C�TV CLERK • � �
.:PINK — FINANCE GITY OF SAINT PAUL Council
CANA:P" — C3�'�ARI,MENT �
BLUE — MAY(SR File NO. ��_/4�
Page � of 2 Counc " Resolution
- 1.- �
Presented By
Referred To Committee: Date
Out of Committee By Date
REQUESTING THAT THE MINNEAPOLIS/SAINT PAUL HOUSING FINANCE BOARD ACT AS A
DESIGNATED HOUSING CREDIT AGENCY ON BEHALF OF THE CITY OF SAINT PAUL PURSUANT
TO SECTION 42 OF THE INTERNAL REVENUE CODE OF 1986 AND DESIGNATING THE
MINNEAPOLIS/SAINT PAUL HOUSING FINANCE BOARD TO RECEIVE RESERVED LOW-INCOME
HOUSING CREDITS ON BEHALF OF THE CITY OF SAINT PAUL
WHEREAS, pursuant to the Tax Reform Act of 1986, the Congress of the
United States provided under Section 42 of the Internal Revenue Code of 1986,
as amended, a tax credit of certain qualifying low-income housing and provided
for a volume cap for such credit of $1.25-per capita; and
WHEREAS, pursuant to 1987 Minnesota Laws, Chapter 350, Sections 12
through 16 (to be codified as Minnesota Statutes, Sections 462A.221 through
462A.225) , effective June 2, 1987, the Minnesota Legislature provided that the
federal allocation of low-income housing credits available in Minnesota should
be allocated among certain cities and counties or their designees and the
Minnesota/Saint Paul Housing Finance Agency; and
WHEREAS, pursuant to Section 462A.222, the City of Saint Paul (the
"City") qualifies for a reservation of low income housing credits, which may
be allocated by the City or its designee to specified low-income housing
developments within the jurisdiction of the allocating agency; and
WHEREAS, in order to obtain such reservation, the City must submit a
written request to the Minnesota Housing Finance Agency by July 16, 1987; and
WHEREAS, pursuant to Section 462A.222, the City may designate the
Minneapolis/Saint Paul Housing finance Board as the agency to receive low-
income housing credits on behalf of the City;
COUNCILMEN /� Requested by Department of:
Yeas Nays 1^
q� Planning and Economic Development
�_ In Favor
__ Against BY
Form Approved by City ttor y �
Adopted by Council: Date
Certified Pa. - o nc'1 Se ry BY
By�
�lpproved by 1Aavor. Date _ Appr by Mayor for S is 'on t ouncil
BY - – — BY
Pt�liStt�D �u� ��
� •
•WH17E -�- G TV CLERK '- •
PINK - FIIJANtE G I TY O F SA I NT � PA U L Council -
' CANPRV --D�PAfijTMENT File NO. �� �D��
BLU� � MAVOR
page 2 °f 2 Council Resolution
Presented By
Referred To Committee: Date
Out of Committee By Date
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SAINT
PAUL:
1. That the City Council of the City of Saint Paul hereby finds that
it is in the best interests of the public health, safety and
welfare of the citizens of the City that the City obtain a
reservation of the available low-income housing credits pursuant
to Section 462A.222, and the City Clerk is hereby authorized and
directed to submit a certified copy of this resolution to the
Minnesota Housing Finance Agency prior to July 16, which shall
constitute a written request to the agency for the
Minneapolis/Saint Paul Housing Finance Board to act as a
designated housing credit agency as provided in Section 42 of the
Internal REvenue Code of 1986.
2. Be it further resolved that the City hereby designates the
Minneapolis/Saint Paul Housing Finance Board as the agency to
receive reserved low-incorae housing credits on behalf of the City,
and to allocate such credits in such manner as it shall determine.
Such designation shall be effective continuously unless the same
is affirmatively revoked by resolution of the City Council of the
City.
COUNCILMEN Requested by Department of:
Yeas Drew Nays
� ��.��rpn f � Planning and Econo 'c Develo ment
In Favor
Nicosia
��' � __ Against BY
So�ne�
�(,lJ�/DA
W�ISt�n ��+JU� � `r � Form Approv by City tt ey
Adopted by Council: Date �
Certified Pas e un .il , ry , � BY /
By �—
Approv :Navor: Date
�U�- � � �� Appr d by Mayor for Submi i t Co cil
B
Pt1B�lSNED .i U L 2 5 1987
_ PED ' � • - OEPARTMENr ��`/0%5` 1r� Q V�l I
Naney West , CONTACT . �
_ _..� , ��
228-3354 PN�dE
June 29, 1987 QATE ��i / r� � ,
ASSI6N MiNBER �1RREIUTIM6 flER Cli Ail Locations for Si nat r� s -
part�ent Dit�+ector Director of 1�e�a�nen yor .
finance a�d �lainagement Services Oirector • ,,�;C1Ly C1erk
8udget Oirec#or � T-,
ty Attor�ey ,.�„ __S��r,r�j rn..iLXy u�',►:�e��, _
_
WM NILt BE �4CbtIEYEO 6Y fiAKIN6 ACTION OM TNE ATTACHED MATERIALS? (Purpose{
�tationai�e):
Direct administration of the Federal Low Incrnne Housin� tax credits will allow the
Housing Finance Board, on behalf of the citie� of St. Paul and Minneaoplis to foster
and �promote the .highest qua.lity developments which will fulfill both cities:
commitment to the hou�ng needs of low income` famil3.es. Minneapolis and St. Paul's
tax credit allocations are $951,584 and $544,16�► respectively, .
_ .
COS7/BENFftT, 6l�1�6�D PERSONNEL IMPACTS ANTICIPATEDs
Staff costs will be funded by appli�taLon._fees to reserve the tax credits.
ti�v,.'_.i�.�.�'
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�9 a ��� .
�INA�ICING SOURCE Aiii? @UOC�T ACTIYITY Nt�lBER CHARGED OR CREDITED: (Mayor'� tfgna-
ture ewt t�e- -
Total Aa�oue►t Qf Transaction: . quired 1f under
. =10,�0)
funding Source: Applicant fees pC^C��p�D
f�CVG V
Activity Ntnnber: ' �UN 3 0 �987
I�TTACHMEN7S (Litt and Num,�b�r A11 AttacF�nts): CITY ATT�RNEY
1. City Council Resolution
2. Draft�/M�Income Housing Tax Credit A1location Policies
3. Reservation and Allocation Procedures for Low Income Housing Tax Credit Pro�ects �
�EPARTMENT REYIE1i CI'fif ATT�tNEY REYIEM
�„Yes No Oauncil �esolution Required? ' Resoiution Required? �C �es No
,Yes ,No Insurance Required? insura�ce SufffcientT ��Iles ,,,_ No
Yes No In�urance Attached:
. tSEE •REYERSE SIDE FOR INSTRUCTIONS)
1�vised 12/84
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� Low-Income Housing Tax Credit Allocation Po]icies
ADMINISTRATION
1 . The Joint Finance Board will act as the designat'ed housing credit agency
and administer the Low-Income Housing Credits for both Minneapolis and
St. Paul .
2. The Board will appoint a Committee of four (two people from the MCDA and
two people from St. Paul PED) to review and approve reserving and
allocating the Credits based on adopted Policies and Procedures. : .
3. The two Cities will pool their respective Credit entitlement and 'share' �
their Credits if it becomes evident that one of the Cities could not use
. ' all their Credits for that calendar year. . .
4. Applicants for the Credits will apply to the MCDA for projects located •
within the City of Minneapolis and to the Department of Planning and
Economic Development (PED) for projects located within the City of
St. Paul. Appropriate staff from MCDA and PED will review all
applications and make recortunendations to the Committee for reservation
of the Credits.
ALLOCATION
1 . Credits for 1987 will be allocated on a first-come, first-serve basis.
Credits for 1988 and 1989 will be allocated on a priority system as
described in the Project Selection Procedures Section after 30� of the
Credits has been reserved or allocated. —
2. Once the Credits have been reserved or ailocated to a project, the
deve]oper may not assign the Credits to a different project without the
approval of the Committee. �
�
` 3. At the time of application, a �1 ,000 non-refundable application fee and
-� one-half of the reservation deposit equal to 1� of the total depreciable
;` basis of the building will be required (assuming the applicant is
� applying for and receiving the credits. in the same calendar year).
4. If a Project has not been placed in service as of August lst, the
remaining one-half of the reservation deposit will be -required by the
applicant prior to _August lst as discussed in the Reservation Deposit
Section. .
5. If an applicant desires to extend his/her reservation of the Credit into
the next calendar year, it will be considered as a new application and a
non-refundable �1 ,000 application fee wil] be required along with
one-half of the reservation deposit due and payable in that calendar
yea r.
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6. The applicants reservation deposit will be forfeited to MCDA/HRA should
a project not be placed in serv�ce within the same year the tax credits
were reserved to be allocated to the project.
7. Once the Project has been placed in service, �the reservation deposit
' will be returned� to,fthe ap�li,cant. ,�.; =�''� "��-�' ..'�3 , , - . ,�..�� �,
-__ _,-r__ . . � : • --- . .
8. Once the Credits are allocated to a project, the burden of proof to the
IRS is on the develope� No on-going monitoring will be required by the
municipalities,�!� �'�"�t`'-
9. The Board reserves the right to reconsider and adopt new Policies� and
roce ures as appropria e. �
10. These Policies and Procedures may be eliminated or modified by pending
final Treasury regulations.
PL:wml
0109�/2
6/24/87
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' ° � MINNEAPOLIS/SAINT PAIIL HOUSITG FINANCE BOARD'S
RESERVATION AIJD ALLOCATION PROCEDURES � �/G'i�`�
FOR
LOW INCOME HOIISING TAR CREDIT PROJECTS
I. Project Selection Procedures
". A. First-come, First-serve Stage �.
1. Applicant's may apply to reserve a commitment for tax
� credits any time prior to thirty (30) days of the pro3ected
in service date, but no later than August lst of the year in
which the tax credits are to be allocated. .
2. Tax credits will be reserved for 1987 and the following •
years on a first-come, first-serve basis. •
3. The first-come, first-serve stage will desist when 30$ or
more of the tax credits available for the applicable year
have been reserved. _
B. Priority Stage �
1. Once the 30� reservation threshold level has been attained
for the relevant year� a priority selection process will be
instituted, whereby projects will be ranked and select:•d
monthly according to selected priorities.
2. Projects will be prioritized and tax credits reserved- as
follows:
� a. Projects which the Minneapolis Community Development
Agency (MCDA} or Department of Planning and Economic
Development, City of Saint Paul (PED) have provided
significant subsidies for rehabilitation or new
construction.
b. Projects involving significant rehabilitation or new
construction which provide the most number of targeted
low income housing units regardless of public
assistance. �
c. All other qualified pro�ects will be deferred until
the 2nd first-come, first-serve stage.
3. The priority stage for esch tax credit allocation year will
. end April 30th of the year the tax credits are to be
allocated.
C. 2nd First-come� First-serve Stage ,
1. The selection of qualified projects will be made on a first-
come� first-serve basis between May 1 and August 1 in the
. year for which the tax credits are to be allocated.
2. The application date to reserve tax credits, which may be
filed during the Priority or 2nd First-come� First-serve
� stages� shall determine the order in which qualified
developments are selected.
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II. Project Reservation and Allocation Procedures
A. Application Procedures
1. Developer shall complete an application. supplied by MCDA/PED
which requires the following informa�tion:
� a. Identification of the applicant� including general
partners (principles) , architect, engineer,
builder/contractor and leasing/management agents.
b. A description of the applicant's previous projects and
experience and summary of prior participation
involving city, state or federal programs and/o� -
funding. � '
c. Applicant's and general partner's networth statements
and sponsoring company's balance sheet and income '
statements for the past three (3) years. All
financial information must be current to within two
months of the application date.
d. Narrative description of project including site plan,
number and mixture of units by type, targeted units,
residential floor space devoted to targeted and non-
' , targeted units.
e, Projected project costs including land acquisition,
site development, construction� equipment, architect's
fees, engineer's fees, legal fees, construction
interest, contingencies, developer fees and
organization expenses.
f. Sources of project financing including syndication,
' developer equity, mortgage, contract for deed or
� • public assistance.
g: Project schedule including tax credit application
date, financing sources secured, construction start,
construction completion and in service date of the
building.
h. Ten year project pro forma indicating revenue broken
down by type of units� operating expenses, real estate
taxes, before and after cash flows� anticipated debt
service and depreciation.
i. Evidence of site control such as an option agreement
or purchase agreement.
3 . Projected tota depreciable basis, eligible basis and
qualifying tax credit basis of the building. .
2. Applicant shall pay at the time the application is filed a
$1�000 non-refundable processing fee and one-half of the
first year's reservation deposit to the agency processing
the application, Minneapolis Community Development Agency
(MCDA) or Department of Planning and Economic Development,
City of Saint Paul (PED) .
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' 3. Within 30 days of a project's application filing date, the
��.�e.�w Com,m�ittee will notify the applicant in writing as to
which of the �ollowing decisions has been made:
a. tax credits are reserved for the project; or
b. a reservation for tax credits �s being deferred until
the 2nd first-come, first-serve selection stage goes
into effect; or
c. the application to reserve tax credits is denied.
B. The Housing Finance Board or Review Comrnittee at thier discretion
may reserve or allocate less credits to a project than the maximum
permitted by law. . �
C. Reasons For Denial of Tax Credits .
• 1. Within thirty (30) days of the application filing date of a . '
project, Review Committee will notify the applicant in
writing the reason(s) for denying the reservation or
� allocation of tax credits.
2. The reason(s) the reservation or allocation of tax credits
may be denied include but are not limited to the following:
. a. falsifying information on the application; or
b. past, outstanding, current or pending litigation
against the applicant or principles which may propose
a liability to the proposed project; or
c. Judgments against the applicant or principles
regarding bankruptcy, loan default, mechanic's lien,. -
tax liens or non-payment of bills.
d. Applicant incompetency regarding the subcontracting of
work, timely completion of projects and financial
wherewithal to undertake the proposed project.
e. Proposed project does not qualify for tax credits
pursuant to the Tax Reform Act of 1986 under Section
42 of the Interna� Revenue Code of 1986, as amended.
f. Project does not qualify for tax credits under the
priority selection policies and/or procedures for the
applicable tax credit allocation year.
g. Available tax credits have been reserved or allocated
by the Housing Finance Board to other projects for the
- respective year tax credit allocation year.
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' D. Appeal Process .
�
1. Applications for tax credit reservations which are denied by
the Review Committee may at the developer's request be
appealed pursuant to the following procedures:
a. Upon receipt of the written no�tification of the denial
• to reserve or allocate tax credits by the Review.
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Committee,__the applicant shall have ten (10) days in
which to respond in writing to the reasons for the
denial.
b. Within ten (10) days after receipt of the written .
response from the applicant, the Review Committee '
shall make a determination based upon the new �
information and findings to either approve tax credits •
for the applicant's project or to deny the tax
credits.
c. Should the applicant be denied the reservation or
allocation of tax credits a second time by the Reviaw_
Committee he applicant shall have ten (10) days from
• t e notification date of the last denial in which to
file an appeal to the Housing Finance Board.
d. The Housing Finance Board shall establish a hearing
date, no later than thirty (30) days after the
applicant files for appeal to the Board� to review and
make a final determination to approve or deny tax
credits for the applicant's project.
e. An application for the same or similar project� once
denied by the Housing Finance Board shall not be
resubmitted for action within one year from the date
of denial by the Housing Finance Board.
E. In Service Date Change �
1. Applicants, who request a change of the in service date of
their building from one allocation year to another
allocation year, must file a new application including a new
filing fee to reserve tax credits under the new allocation
tax credit year. Any reservation deposits paid todate will
also be forfeited. �
2. The new application would be subject to the selection
procedures for the year in which the building would be
placed in service.
F. Reservation Deposit
1. Reservations are valid until August lst of each year.
' 2. All applicants whose projects have not been placed into
service as of August lst will be required to submit to
MCDA/PED a reservation deposit by no later than August lst
of the ssme year to revalidate their reservation for tax
credits.
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' 3. The amount of the reservation deposit to be paid by the
applicant is :calculated by subtracting the year in which the
payment of the reservation deposit is taking place from the
year the applicant's project is projected to be allocated
tax credits;
a, if the number equals zero, the deposit shall be equal
to 1$ of the total depreciable basis of the building.
b. if the number equals one (1) , the deposit shall be
equal to .5$ of the total depreciable basis of the
building. ,
c, if the number equals two (2) , the deposit shall be•
equal to .25$ of the total depreciable basis of the �
building.
4. The above reservation deposits are cummulative.
5. ' An applicant's reservation deposit will be forfeited to
MCDA/PED should a project not be placed in service within
the year stated on the application.
� G. Allocation of Housing Tax Credits
1. Thirty (30) days prior to the projected in service date� the
developer must provide:
a. A final qualified basis and credit calculation
worksheet prepared, certified and sworn to by a
licensed accountant; and
b. A statement prepared by the spplicant's legal counsel
describing litigation or lack thereof by or against
the applicant or subsidiaries, or the executive or
managing officers or directors of the applicant.
c. Such legally binding representation as may be required
by the Housing Finance Board.
2. MCDA/PED's Special Tax Counsel will review the documentation
submitted by the developer to ascertain compliance with the
provisions of Section 42 of the Internal Revenue Code of
1986� as amended.
3. The applicant is responsible for the payment of the Special
Tax Counsel's fee to review the project.
4. Upon favorable review of the project by the Special Tax
Counsel, payment of the Special Tax Counsel's fee and
certification by the applicant that the building has been
placed in service� the Housing Finance Board will allocate
the reserved housing tax credits to the pro�ect.
5. The applicant's reservation deposit(s) will be refunded to
the applicant within thirty (30) days after the tax credits
are allocated.