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Amendments to Livable Communities grant agreements that propose changes to end projects

8/1/2008

Implementation of the Livable Communities Act Program will continue to focus on partnering with communities to achieve local plans and objectives consistent with the Council’s 2030 Regional Development Framework. LCA staff will continue to hold grantees accountable for funded projects, monitoring progress and contacting communities to help resolve issues for funded projects on which progress is delayed.

If the purpose for which the funds were awarded remains the same, but the requested amendment proposes changes to the overall, or "end" project (for example, a change from a condominium to a rental apartment building), the amendment request must undergo two reviews: first, to ensure that with incorporation of the proposed amendment the overall project will remain within the scope and intent of the original project as documented in the LCA grant application and grant agreement; and second, to determine if the proposed changes are significant enough to warrant a review by the Community Development Committee (CDC).

The CDC adopted separate standards for each of the LCA funds to set the threshold for a "significant" change. The significance criteria for the Tax Base Revitalization Account, the Livable Communities Demonstration Account, and Local Housing Incentive Account are below. If the proposed change to the overall development project is not deemed significant, the amendment can be processed administratively. If the proposed change to the overall development project is deemed significant according to the criteria below, the proposed changes must be approved by the Community Development Committee.

Grant agreements issued after 12/7/2007 include language requiring grantees to advise the Council of any changes to the end development or redevelopment project as described in Attachment A of the grant agreement as soon as those changes are known.

Criteria

Decisions as to whether or not proposed changes to end projects are significant will be based on consideration of the account-specific legislative outcomes and on the factors considered when the application for funding was scored. For example, some end project proposals do not include jobs; others do not include housing units. Only the factors applicable to the end project as originally proposed will be evaluated.

For the Tax Base Revitalization Account, a proposed change will be considered significant if the change:

• replaces the end project as originally proposed with a completely different end project; or
• results in a reduction of 20 percent or more of the total net tax capacity expected to be generated by the redevelopment as originally proposed; or
• reduces by 15 percent or more, or by 50 jobs, (whichever is higher) the total number of new or retained jobs; or
• reduces by 10 percent or more, or by 50 units, (whichever is higher) the total number of housing units; or
• reduces the total number of affordable housing units by 20 percent or more from the project as originally proposed.

 

For the Livable Communities Demonstration Account, a proposed change will be considered significant if the change:

• replaces the end project as originally proposed with a completely different end project; or
• substantially changes the mix and type of land uses originally proposed in a way inconsistent with program objectives or substantially changes the nature of the project originally proposed; or
• reduces the overall project density below the density guidelines for developments in the project location, or 20 percent below the density originally proposed (whichever is higher); or
• reduces by 10 percent or more, or by 50 units, (whichever is higher) the total number of housing units; or
• reduces the total number of affordable housing units by 20 percent or more from the project as originally proposed.

 

For the Local Housing Incentives Account, a proposed change will be considered significant if the change:

• replaces the end project as originally proposed with a completely different end project; or
• reduces by 20 percent or more the total number of affordable housing units; or
• no longer meets Minnesota Housing funding requirements resulting in the withdrawal of Minnesota Housing funds from the project.

 

Decision Makers

• If the proposed change is inconsistent with the scope and intent of the original grant agreement, the Community Development Director or the Director of Housing and Livable Communities is authorized to deny the request.
• If the proposed change to an end development project is not found to be significant, an administrative amendment to the grant agreement may be approved by the Community Development Director or the Director of Housing and Livable Communities.
• If a proposed change to an end development project is found to be significant, CDC has the authority to grant or deny the amendment request.

Process

1. The grantee submits a written request to amend the grant agreement to LCA staff, describing in detail the proposed changes to the end project. An email is acceptable.
2. LCA staff will promptly acknowledge receipt of the request and contact the grantee if further information is necessary.
3. LCA staff will review the request for consistency with the scope and intent of the original grant application and grant agreement.
   1. If the request is not inconsistent with the scope and intent, the request will be reviewed for significance. Proceed with step 4.
   2. If the request is not consistent with the scope and intent, the request will be referred to the decision-maker with a recommendation to deny the request.

4. LCA staff will review the request for significance according to the criteria described above.

   1. If the proposed amendment is not considered significant:
      1. LCA staff will make a recommendation to the Community Development Director or the Director of Housing and Livable Communities, who are authorized to make the amendment decision.
      2. If approved by the decision-maker, LCA staff will work with the Office of General Counsel to produce the amendment to the grant agreement.
      3. LCA staff will work with the grantee to execute the amendment.
   2. If the proposed amendment is considered significant:
      1. LCA staff will notify the grantee.
      2. LCA staff will rescore the grant application utilizing the proposed changes to the end development project.
      3. Proceed with step 5.
5. A Review Panel, consisting of three CDC members who are appointed by the CDC Chair, will be convened to make a recommendation to the CDC.
6. LCA staff will provide the Review Panel with a memorandum assessing the proposed amendment's eligibility and compliance with additional account-specific criteria and reporting the results of the rescored grant application.
7. Representatives of the grantee will be asked to present to the Review Panel their requests for changes to the original end project and be available to answer panel members' questions.
8. The Review Panel will consider the information provided and make recommendations to the CDC for a final decision regarding disposition of the request for amendment. The Review Panel may recommend an amendment to the project description included in the grant agreement provided that the end project, as revised, will produce the intended results described in the Livable Communities Act and meets additional account-specific conditions as follows:
   • Tax Base Revitalization Account (TBRA) account-specific criteria:
     • provide the highest return in public benefits for the public costs incurred, encourage development that will lead to the preservation or growth of living-wage jobs or the production of affordable housing, and enhance the tax base of the recipient municipality; and,
     • meet the account eligibility criteria; and
     • the revised end project must be acceptable to the Council’s funding partners that have also granted polluted site cleanup funds to the project; and
     • the revised end development or development project must score similarly to the original end project (i.e., rank within the list of projects recommended for funding) in the jobs/housing and tax base increase categories.
   • Livable Communities Demonstration Account (LCDA) account-specific criteria:
     • interrelate development or redevelopment and transit; interrelate affordable housing and employment growth areas; intensify land use that leads to more compact development or redevelopment; involve development or redevelopment that mixes incomes of residents in housing, including introducing or reintroducing higher value housing in lower income area to achieve a mix of housing opportunities; or encourage public infrastructure investments which connect urban neighborhoods and suburban communities, attract private sector redevelopment investment in commercial and residential properties adjacent to the public improvement, and provide project area residents with expanded opportunities for private sector employment; and
     • meet the account eligibility criteria; and
     • an examination of the record of review for the grant award must indicate that the end development/redevelopment project, as amended, would still include the demonstration and innovation elements that contributed to the Livable Communities Advisory Committee’s selection of the project for funding; and, in addition,
     • (for projects awarded funds in 2006 or later) the revised end development/redevelopment project must score similarly (i.e. would score at least 20 points [the threshold level] in the Step One evaluation) to the original end project in the staff technical evaluation.
   • Local Housing Incentives Account (LHIA) account-specific criteria:
     • create incentives for developing communities to include a full range of housing opportunities;
     • create incentives to preserve and rehabilitate affordable housing in the fully developed area;
     • meet the account eligibility criteria; and
     • the revised end development/redevelopment project must be acceptable to the Council’s Metropolitan Housing Implementation Group funding partners that have also granted funds to the project.
9. The CDC will consider the item during a regularly-scheduled CDC meeting. The Community Development Committee will endeavor to inform grantees of the committee’s decision regarding requested amendments in writing within 45 days of receipt of the grantees written requests, subject to the committee’s meeting schedule.
   1. If the CDC approves the request to amend the grant agreement to make significant changes to the end development or redevelopment project and the request is made prior to the expiration of the grant agreement, the grant will be amended following the established administrative process.
   2. If the CDC denies the request to amend the grant agreement to make significant changes to the end development or redevelopment project, the steps taken will depend upon the status of funds awarded as follows:
   • If any portion of the awarded funds has been encumbered or expended for eligible uses prior to the CDC’s decision, the grant will be terminated without recovery of any of the encumbered or expended funds. Any unencumbered or unexpended funds remaining in the grant award on the date of the Community Development Committee’s decision will be returned to the funding account from which the grant was awarded for inclusion in a future grant funding round.
   • If an end development or redevelopment project changes at any point after all awarded funds have been expended for documented eligible uses, the Council will assume that funds were expended in good faith and without malfeasance. No attempt will be made to recover the funds provided they were expended for the specific purpose(s) for which they were awarded.
   • If the grantee’s end development or redevelopment project as described in Attachment A of the grant agreement is terminated in its entirety at any time during the original two-year term of the grant agreement, the grantee will be reimbursed for any eligible funds encumbered or expended up to the point the end project is terminated. All remaining grant funds will be reserved for the grantee until the grant agreement expires to provide the grantee with an opportunity to replace the original project with a similar project reviewed and approved by the CDC as described in the amendment procedures. If the grant agreement expires without an approved end development or redevelopment project in place, no further extension of the grant agreement deadline will be authorized. All unencumbered/unexpended funds will be returned to the fund account from which the grant was awarded. The grantee may reapply for funding during a future grant round.