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Oakdale council approves conduit financing for three-site affordable-housing portfolio
Summary
The Oakdale City Council on June 9 adopted Resolution 2026-31 to serve as conduit bond issuer for the Washington 3 portfolio, enabling up to $17 million in tax-exempt revenue bonds to fund acquisition, rehabilitation and 15-year affordability extensions for three properties in Oakdale, Forest Lake and Stillwater.
The Oakdale City Council on June 9 voted to waive reading and adopt Resolution 2026-31, authorizing the city to act as a conduit issuer for multifamily housing revenue notes to finance the Washington 3 portfolio.
Finance Director Mikayla Hewitt told the council the developer-affiliated entity, Washington MDG LP (related to Metis Development Group), is proposing to purchase, rehabilitate and own three existing affordable housing projects: Gentry Townhomes in Oakdale, Westridge Townhomes in Forest Lake and Victory Villa in Stillwater. Hewitt said the aggregate principal amount is estimated not to exceed $17,000,000 and that the financing would support purchase and rehab costs and extension of existing affordability contracts for 15 years.
"These would be special, limited revenue obligations of the city, payable solely from revenues derived from the projects," Hewitt said, noting the city would not be financially liable if the projects defaulted. She said the city would receive an issuance fee of 1% of bonds issued and that the developer paid a $3,000 nonrefundable application fee.
Mayor Zabel reiterated the distinction between conduit financing and city debt: "It's not the city taking out debt. We're not financially liable in the event of default. There's no net impact on the city other than we actually get revenue from this debt issuance on behalf of a private party." He also explained that developers can package projects spanning multiple jurisdictions and that all three affected city councils must sign off.
After the presentation and the required public hearing (no members of the public spoke), a council member moved to adopt the resolution and the motion passed by voice vote. The council also authorized the mayor and city administrator to sign, when appropriate, the project loan agreement, funding loan agreement, regulatory agreements for each property, and related joint powers agreements for Stillwater and Forest Lake.
Hewitt confirmed Oakdale was the first municipal approval for the package; Stillwater scheduled its public hearing for June 16 and Forest Lake for June 22 (date listed in the meeting was corrected in-staff discussion). Documents will be executed closer to closing, she said.
Why it matters: The action enables private affordable-housing owners to use tax-exempt conduit financing to fund rehabilitation and extend affordability covenants while keeping the city's credit and tax base separate from the projects. The council recorded no direct city credit exposure in taking this procedural step.
What the council did next: Resolution 2026-31 was adopted and the council authorized city officials to sign related documents at the appropriate time; additional municipal hearings in Stillwater and Forest Lake were noted as forthcoming.
