Mixed Income Development and TOD · We figured out how to build them, but building is not enough....

Getting the Big Picture Right:A series of conversations on Housing + Transit, 2016 - 2017

Mixed Income Development and TODMarch 7, 2017Wilder Conference Center

Mixed Income Communities

Housing optionsJobs / Services

EducationAmenities

Market rate

financing

Public / Tax credit financing

Mixed Income

Development

Strong markets / Soft markets

Small Group Discussion Questions:

• What key strategies should be emphasized to strengthen and sustain mixed income development and communities?

• What additional partners should be included in the conversation?

• What does success look like?

Presenters:

• Robin Snyderman, Brick Partners, LLC

• Nieeta Presley, Aurora Saint Anthony Neighborhood Development Corp.

• Tara Beard, Metropolitan Council

• Marie Franchett, City of Saint Paul, Dept. of Planning and Economic Development

• Ryan Cronk, Flaherty Collins

Getting the Big Picture Right:Mixed-Income Housing and TOD

Robin Snyderman, PrincipalBRicK PartnersMarch 7, 2017

Presentation Outline• Local Leadership is the heart of the matter: (The difference

between being at home and “being housed” is self-determination.)

• Nontraditional Stakeholders are critical to building successful mixed-income housing communities.

• Lessons from The Brookings Institution on the Changing Geography of Poverty

• Regional Mobility and Mixed-Income T.O.D. Housing

• Unique to the Twin Cities

BRicK Partners

• Focused on:– Regional Housing and Community Development

Strategies– Building Capacity, Collaboration and Community

• Current Work:– Consulting and Technical Assistance, Project

Management, and “Collaborative Management”– Local and national clients in the public and private sector

www.brickllc.com

Building Successful Mixed-Income Communities

Lessons learned from the Plan for Transformation?

Developer Roundtables, Working Groups, and Public Forums: 2000-2008

Community building in and around the site

Employer engagement


• “The logic is that concentrated poverty is a massive problem and we have to do something different. We can’t keep warehousing the poor in dense, isolated developments. But that logic breaks down when you say the opposite, that integrating housing developments must be an improvement…It takes more than just building new homes. What we learned is that by the time the development partners get to the phase of community building, they’re just burned out”

Mark Joseph, Author, “Integrating the Inner City: The Promise and Perils of Mixed-Income Public Housing Transformation”

http://press.uchicago.edu/ucp/books/book/chicago/I/bo18415894.html


• “Hopefully in 20 years, this time will be an inflection point where you began to see people be so much smarter about how they did this. We figured out how to build them, but building is not enough. Maybe in 20 years, mixed income will have gone to scale, with mixed income neighborhoods, not just developments, and mixed income will no longer be delineated by race and income so clearly. I still think there’s room among well-meaning policy and practitioners to do this more effectively. ”

Mark Joseph, Author, “Integrating the Inner City: The Promise and Perils of Mixed-Income Public Housing Transformation”

http://press.uchicago.edu/ucp/books/book/chicago/I/bo18415894.html

1 The geography of poverty and opportunity has changed

Current policies are not aligned with this new geography2

3 We need a new agenda for metropolitan opportunity

Confronting Suburban Poverty in Metropolitan Minneapolis-St. Paul

Confronting Suburban Poverty in Metropolitan Minneapolis-St. Paul

0

50,000

100,000

150,000

200,000

250,000

1970 1980 1990 2000 2014

Poor

peo

ple

Minneapolis & St. Paul Suburbs

This trend has played out in the Twin Cities region

Source: Brookings analysis of U.S. Census Bureau data9

Brookings’ Ingredients for Success• Achieve Scale

– Improve systems and networks– Promote high performing

organizations– Support smart consolidation

• Collaborate and Integrate– Identify and reduce barriers– Reward collaborative approaches– Catalyze regional capacity

• Fund Efficiently– Commit to flexible, enterprise-

level funding– Promote tools that leverage public

and private resources– Develop and maintain consistent,

comparable data sources

10

Structure of a Supply-Side Regional Mobility Strategy• Regional collaboration among Public

Housing Authorities deploying Project Based Vouchers to increase and diversify housing options in priority areas.

• Particularly relevant for families with children, given latest research and fair housing priorities.

• Key partners would include Metropolitan Planning Organization, Housing Finance Agency, and regional mayors.

11

Unique to the Twin Cities

• Breadth and Depth of Regional Vision, Housing and Workforce Expertise

• Action-Oriented Collaboration

• Realizing Strategies for the Range of Opportunity Areas

Contact information:

Robin Snyderman, 847/268-8633,

[email protected]

13

MIXED-INCOME HOUSINGCity of Saint Paul

Policy on Affordability Mix

• 30% of new rental production units must be at or below 60% of median income.

• At least 10% must be at or below 30% of median income.

• At least 10% must be at or below 50% of median income.

West Side Flats Apartments

West Side Flats III

• Market rate building with 182 units

• Mixed-income building with 78% affordable and 22% market rate units

• Mixed-income building will be constructed to Passive House standards using cutting edge energy efficient design techniques.

West Side Flats Phase III Building A

West Side Flats Phase III Building B

2700 University

• Mixed-Income 80% Market Rate, 20% Affordable

Project Analysis

www.2700university.com

Why do we pursue a mixed income project?

• City Requirement• In-House Team to execute a mixed-income deal

• Brings are market rate & affordable groups together• We see this as a growing trend in other markets

• As major markets rents continue to rise, mixed income projects will become more important.

• Great Real Estate • IN between St. Paul & Minneapolis• TOD (Green Line)• Edge of Campus• High Visibility


• GAP Analysis w/ City of Saint Paul

• Financing

Obstacles in Completing the Project

• Identify a Lender

• Identify an Investor

• Identify Other Soft Sources

• Appraisal (Light Rail Not Open)• Financial Structure

• Condo – (The way the project was done)

• One ownership – 80% / 20%

Ryan Cronk,Vice President of Development

Flaherty & Collins Properties


• Light Rail Opening

• City Clawbacks

• Condo Structure

• LISC – Mezz. Debt

• National Equity Fund (NEF)

Overcoming Project Obstacles/Hurdles




198 U n i ts

Ma rket Rate Cap i ta l S tac k

• BMO Co n struct ion / Mi n i - Perm Lo an

• L I S C – Mez zanine Lo an ( w / p art i c ipat ion

• Metro pol i tan Co u nc i l TOD G rant

• Ow n er Eq u ity

• D efe rred Fe e s

Side-By-Side Deals, Integrated198 Units

Market Rate Capital Stack

198 U n i t s

Market Rate Cap i ta l S tac k

• BMO Co n struct ion / Pe rm “A” Bo n d Lo an ( th ro ugh Co m p l iance Pe r i od)

• Mo n et ized T IF “B” Bo n d

• S a i nt Paul H RA H o m e fu n d s Lo an

• G e n era l Partn e r Lo an

• L IH TC Eq u ity

• D efe rred Fe e s

50 Units

Affordable Capital Stack

John SternAttorney, Real Estate Development

Winthrop & Weinstine


Project Feasibility

WHAT DOES IT TAKE TO MAKE A PROJECT LIKE THIS HAPPEN?


LOTS OF Project Partners


• Mixed-Income: 20% / 80% - 50% AMI

• Transit-Oriented Development (TOD) on Green Line

• “Main & Main” – but not “Main & Main”

• LEED®

• Project Labor Agreement & Economic Inclusion Goals

• Parking – Less than 1 per unit

• Project Financing Team

Uniqueness of the Project




• 1 s t F l o o r B a r / C o f fe e S h o p• H i g h - S p e e d W i - F i T h ro u g h o u t• 1 , 4 0 0 s q . f t . F i t n e s s C e n te r w /

M a t r i x ® E q u i p m e n t & Yo ga S t u d i o

• M a t r i x M y R i d e ® + G ro u p C yc l i n g

• R e s o r t - S t y l e S a l t w a te r P o o l w / We t D e c k

• 2 0 , 0 0 0 s q . f t . C o u r t ya rd• “ O u t d o o r L i v i n g R o o m ” w / F i r e

P i t s , C o m m e rc i a l G ra d e G r i l l s & O u t d o o r F u r n i t u r e

• 1 , 6 0 0 s q . f t . B a r k Pa r k w / D o g Pa r k E x p r e s s C o u rs e ( Wa te r & Wa s te S t a t i o n s )

• U n d e rg ro u n d Pa r k i n g

Features & Amenities• B i ke S t o ra g e w / R e p a i r To o l s• G r e e n L i n e L i g h t R a i l A c c e s s• L E D L i g h t i n g• O v e rs i z e d F l a t S l a b K i tc h e n

C a b i n e t s w / C u s t o m H a rd w a r e• O v e rs i z e d E n e rg y Ef f i c i e n t

W i n d o w s• F ro n t L o a d F u l l - S i z e E n e rg y

S t a r Wa s h e rs & D r y e rs• N e s t ® T h e r m o s t a t s• Q u a r t z T h e r m o s t a t s• F ra m e l e s s S h o w e r D o o rs• R e c e s s e d & D e c o ra t i v e Pa t i o s

a n d /o r B a l c o n i e s• S e l e c t Wa l k - u p / 2 - L e v e l U n i t

To w n h o m e s w / U r b a n D e s i g n s



Sources & Use of Funds

USES OF FUNDS Total Affordable Market Rate

To Purchase Land $3,500,000 $770,000 $2,730,000Total Construction Budget $37,279,423 $9,121,871 $28,157,552Architectural & Engineering 1,550,000 280,000 1,270,000Construction Period Costs

Real Estate Attorney 606,000 59,000 547,000Title, Recording & Lender Inspections 180,805 41,685 139,120Construction Interest - A 1,041,744 - 1,041,744Construction Interest - B 217,524 217,524 -TIF Interest & LISC Interest 2,016,928 956,928 1,060,000Bond Cost 450,475 450,475 -Finance Fee 408,648 54,000 354,648Furnishings and Equipment 400,000 - 400,000

Other Period / Costs 2,430,869 1,087,650 1,343,219Development Contingency 1,236,223 456,094 780,130

Total Development Cost $51,318,638 $13,495,227 $37,823,412Developer Overhead $3,633,346 $1,742,175 $1,891,171

TOTAL USES $54,951,984 $15,237,402 $39,714,582

SOURCES OF FUNDS Total Affordable MarketTax Exempt Bonds 12.16% $6,679,628 $6,679,628 $0Construction Loan / Market 50.95% $28,000,000 $0 $28,000,000Construction / Perm Affordable 2.98% $1,640,000 $1,640,000 $0Interim Income 0.00% $0 $0 $0Tax Credit Equity 8.46% $4,646,252 $4,646,252 $0LISC 11.39% $6,260,000 $0 $6,260,000HOME Funds 1.82% $1,000,000 $1,000,000 $0TOD Grant 3.54% $1,944,774 $0 $1,944,774General Partner Loan 1.73% $951,878 $951,878 $0

Developer Cash Contribution 2.73% $1,500,000 $0 $1,500,000

Deferred Fees 4.24% $2,329,452 $319,644 $2,009,808

TOTAL SOURCES $54,951,984 $15,237,402 $39,714,582


• 9% Tax Credits vs. 4% Credits

• Publically Owned Land that can be contributed

• City provide Credit Enhancement to make TIF Bond less Expensive

• Finance without condominium structure

• It ’s Early…

What Could Make Future Projects Better & Easier

• We will have more information on this in the future!


Questions?Ryan Cronk

[email protected]

Mixed Income Development and TOD · We figured out how to build them, but building is not enough....

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