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Council moves forward to authorize HRA conduit bonding for Alice Nettle Tower rehab
Summary
The council voted to send a proposed ordinance delegating conduit-bonding authority to the Virginia HRA for consideration at first reading, supporting a developer-led purchase and renovation of Alice Nettle (Ellis Meadow) Tower financed with bonds and tax credits; council also required quarterly HRA updates.
Gigi Grahi, representing the Virginia HRA, asked council to adopt an ordinance authorizing the HRA to act as a conduit issuer under Minnesota statutory authority for housing projects, noting the request stems from Minnesota statute cited during the presentation. Grahi said the project would not use city or HRA tax dollars and would be financed with tax-exempt bonds and tax credits; she said the developer expects to invest about $70,000 per unit for rehabilitation of the Ellis Meadow/Alice Nettle Tower senior housing property.
Council members discussed whether to let the HRA use the conduit mechanism on a blanket basis or have the city serve as conduit on a project-by-project basis. City attorney and staff described the ordinance as duplicative of the city’s existing authority rather than a transfer of power; they noted the city could rescind the ordinance later if the council chose.
Council action: Councilor Johnson moved to adopt the ordinance as presented and the motion carried. A subsequent motion — moved by Councilor Bach Schneider and supported — directed the HRA to provide quarterly updates to the full council and mayor at Committee of the Whole meetings. A roll-call was recorded for the ordinances motion: the motion passed 6–1; Councilor Johnson voted no. The recorded roll call in the transcript listed the following votes: Motley (yes), Paulson (aye), Biondich (aye), Bach Schneider (aye), Reid Lieb (aye), Duffy (aye), Johnson (no). The council set the ordinance for first reading at the regular council meeting.
Why it matters: Conduit bonding allows private developers to obtain tax-exempt bond financing with a public issuer’s involvement; the HRA serving in that role can streamline financing for affordable-housing rehabilitation but raises a policy question about how much autonomous authority to delegate to the HRA versus retaining council-level review for each project.
What’s next: City staff will place the ordinance on the regular council agenda for first reading; the HRA will provide quarterly status updates to council as requested.
Ending: Council approved the procedural step to allow the HRA to act as conduit issuer and required quarterly HRA updates to the full council.
