The most impactful development of the meeting was the acceptance of a land donation from West Fargo Bank, NA, in lieu of a demolition assessment. The property, located on Fremont Avenue, was previously foreclosed and demolished, leaving a third of an acre lot. The donation is strategic for future residential development, with potential to support five to six housing units, possibly more if combined with an adjacent city-owned lot. The commissioners showed appreciation for the opportunity, and the resolution passed unanimously.

The meeting also delved into the financial complexities surrounding the Commerce Building, a historic downtown property originally converted into affordable housing with 100 units. CommonBond Communities, the former managing entity, was unable to sustain ownership due to financial losses, prompting the decision to sell the property to avoid foreclosure. PAC Properties emerged as the buyer with a bid of $3,200,000. The sale’s implications on long-term homeless units and supportive housing for disabled individuals were a focal point, with adjustments set to maintain restrictions on five long-term homeless units and provide necessary support services. CommonBond committed to aiding current residents through transition notifications and offering one-year lease extensions to ensure stability. The sale is expected to be finalized by March 31, just ahead of an obligatory tender date.

Financially, the project involved multiple loans issued by the HRA with an outstanding debt of $3,100,000. CommonBond has requested partial forgiveness of these HRA loans and existing debt from the Minnesota Housing Finance Agency (MHFA), as the sales proceeds will not suffice to cover all existing debt. The request seeks approximately $1,200,000 in combined debt forgiveness, with $1,900,000 available to repay the HRA loans. The topic of loan forgiveness was a point of concern, with one commissioner expressing discomfort about not securing full loan repayment but recognizing the priority of maintaining housing affordability. The HRA emphasized the significance of offering residents a one-year lease extension, which is vital in preserving affordable housing access.

The meeting also addressed the reuse of CDBG funds upon their return. While HOME funds must be utilized exclusively for housing, there was some ambiguity regarding the specific reuse requirements for CDBG funds, which will be clarified in future discussions. The procedure for how funds return to the HRA was also queried, with a detailed explanation provided. This process begins with a loan modification application by borrowers, involving discussions between HRA staff, CommonBond, and the buyer, considering the challenges faced by the property. Negotiations involved repayment terms and modifications to existing restrictions from the MHFA.