Crow Wing County HRA reports major value gains, outlines housing trust lending and new duplex plan in Brainerd

Eric, a representative of the Crow Wing County Housing and Redevelopment Authority, gave a midyear update to the Crow Wing County Board of Commissioners on July 15, describing redevelopment progress in Brainerd, lending through the county housing trust fund and a new higher‑density infill project that the HRA and City of Brainerd hope to build.

The HRA highlighted three tax‑forfeited neighborhoods—Brainerd Oaks, Serene Pines and Delmar Estates—where the authority conveyed roughly 112 lots to a private developer and supported single‑family construction. "When we started this back in 2016, the EMV estimated market value of all of those lots was just over a million bucks," Eric said. He reported the estimated market value of the units built is now about $30,500,000 and that the developments collectively generate roughly $270,000 annually in property tax revenue.

Why this matters: the county HRA framed the work as returning vacant, tax‑forfeited land to productive use, expanding the local tax base and adding workforce‑level housing options. The authority is also using its housing trust fund to make loans for owner‑occupied rehabilitation, down‑payment assistance and development finance that are intended to preserve housing and support affordable units.

Key details and next steps

- Remaining lots and developer purchase: Eric said three lots remain unsold and the HRA expects the current developer (identified in the presentation as Lehi Contracting) to purchase the remaining lots by year end. The HRA also plans to add additional parcels to the redevelopment agreement to enable more houses.

- New duplex infill: The HRA described two outlots the agency holds in Brainerd that will be conveyed to the Crow Wing County HRA and developed as an 18‑unit infill project (nine duplexes). Eric said the larger outlot will take the buildings and the smaller outlot will serve as roadway access; the north portion of the site avoids wetlands, and stormwater permitting (SWPPP) remains to be completed.

- Infrastructure grant ask: The HRA reported it applied to Minnesota Housing for an infrastructure grant to help fund water, sewer, curb and gutter for the duplex site. Eric said total infrastructure cost is about $450,000 and the HRA requested roughly $170,000 from Minnesota Housing; the project will depend on additional funding if the grant is not awarded.

Housing trust fund activity

- Loan totals and types: Eric reported the trust fund has funded just over $1.7 million in loans to date, covering 22 loans since the program began in 2022. The breakdown reported to the board was 13 owner‑occupied rehab loans, 8 down‑payment assistance loans and 2 new construction or development financing loans.

- Recent closings and paybacks: The HRA closed one owner‑occupied rehab loan for roughly $20,000 the day before the meeting and said three loans previously funded had been repaid, returning about $65,000 to the trust fund.

- Loan terms and repayment: Eric described owner‑occupied rehab loans as typically structured with a 20‑year repayment term, no monthly payments (balloon at term) and 0% interest. The HRA files a mortgage or lien on properties that receive loans; repayment is triggered on sale or other specified events. Eric said the trust fund also financed a $1,000,000 loan to a multifamily project (referred to in questions as the lofts on the botany) under the same 20‑year, deferred structure to allow stabilization.

- Income limits and affordability commitments: The HRA uses other funding (Minnesota Housing and DEED programs) first where possible and will apply higher AMI limits when appropriate. Eric said the HRA’s qualification for some programs can go up to 115% of area median income (AMI), while Minnesota Housing and DEED programs typically target 50% AMI and 50–80% AMI thresholds respectively. For a recent multifamily partner (referred to as Los Novotny), Eric said the agreement requires 60% of rents to be affordable at 115% AMI or below (40% of units targeted at that higher threshold and another 20% at 80% AMI or lower), with the remaining units at market rate.

Other items discussed

- My Neighbor to Love Coalition: The HRA noted it financed a development for My Neighbor to Love Coalition in northwest Brainerd; Eric said 16 units are completed and another 12 units are under construction.

- Baxter and other tax‑forfeited properties: The HRA reported new developer interest in four tax‑forfeited properties in Baxter; because those forfeitures predate 2018, the HRA said it can use existing conveyance processes to move lots to developers for nominal conveyance fees, subject to municipal assessments and infrastructure needs.

- State funding and tax credits: Eric said the HRA secured a $150,000 award from Minnesota Housing to add to the county trust fund and that the HRA and its development partners are exploring state housing tax credits and local purchases of tax credits as one strategy to bridge funding gaps (Eric noted the state's allocation sold out quickly this year).

What the board directed (discussion vs. decision)

The board did not take formal action on these items at the meeting; the session was an informational midyear report and included questions from commissioners seeking clarifications on platting, wetlands, loan terms, tax revenue estimates and funding timelines. Eric committed to providing additional tax revenue figures for specific properties at a later date.

Ending

Eric closed by reiterating the HRA’s mission "to support the creation of affordable housing, economic development, and redevelopment projects toward a more vibrant, growing county" and said the agency would return with updates as projects progress and when grant decisions are known.