04-0433R

RESOLUTION APPROVING A COOPERATION AGREEMENT WITH THE HOUSING AND REDEVELOPMENT AUTHORITY OF DULUTH, MINNESOTA EXEMPTING PUBLIC HOUSING UNITS IN MIXED FINANCE DEVELOPMENTS FROM TAXATION AND PROVIDING FOR PILOT PAYMENTS.

BY COUNCILOR GILBERT:

WHEREAS, the Housing and Redevelopment Authority of Duluth, Minnesota, (authority) is in the process of redeveloping the Harbor View Homes neighborhood pursuant to a fiscal year 2002 HOPE VI implementation grant in the amount of $20,000,000 (the HOPE VI grant)awarded by the United States department of housing and urban development (HUD); and

WHEREAS, the redevelopment will include the construction of new public housing units (PHA units) in phases at Harbor View and at scattered sites throughout Duluth (each a project); and

WHEREAS, the authority intends to develop the projects in accordance with the mixed finance method of public housing development in which the projects will be owned by private developers but will include scattered, floating PHA units which will be made available to authority's public housing tenants and which will replace existing PHA units; and

WHEREAS, HUD requires, as a condition to the authority's receipt of federal funds for the redevelopment, that the authority enter into a cooperation agreement providing that projects including PHA units will not pay more in taxes or payment in lieu of taxes than a specified amount based upon a percentage of PHA unit shelter rents; and

WHEREAS, the authority has submitted and the city council has reviewed a HOPE VI cooperation agreement.

BE IT RESOLVED, that the council hereby approves and authorizes the entering into and execution of the HOPE VI cooperation agreement by the city of Duluth.


STATEMENT OF PURPOSE:  This resolution approves entering into a cooperation agreement with the Duluth HRA exempting public housing units (PHA units)in mixed finance projects being developed by private individuals or entities as a part of the Duluth HRA's redevelopment of Harbor View Homes from real and personal property taxes and requires payments in lieu of taxation (commonly referred to as PILOT payments). Duluth HRA's existing PHA units are exempt from taxation and pay PILOT payments pursuant to existing cooperation agreements.