Hennepin County, Minnesota
The Goal
Hennepin County established a funding program to advance transit-oriented development (TOD) projects that demonstrated a financial gap and an ability to proceed with funding support.
The Solution
Hennepin County selected Ehlers to analyze and underwrite funding applications to best allocate scarce public resources. Our municipal advisors conducted a detailed pro forma review for each application to determine if a gap exists, the size of the gap and to what extent a TOD funding award would allow the project to advance to construction. Working collaboratively with County staff, we successfully identified which projects had the greatest ability to move forward while adhering to program objectives.
The Outcome
During the 2017 and 2018 funding cycles alone, Ehlers financial advisors reviewed more than 50 projects and financial pro-formas including over 6,000 apartment units, 617,000 square feet of commercial space and $1.7 billion in total development costs. Those projects requested nearly $30 million in TOD funding, far exceeding the $4.5 million of available dollars in those funding cycles. In collaboration with the County, we prepared evaluation criteria to consistently determine those projects that had the greatest ability to minimize gaps, leverage other sources and achieve financial feasibility.
Of note: This transaction marked the first time a Minnesota issuer combined G.O. – supported housing revenue bonds with 4% tax credit available to issuers of private activity bonds for qualifying purposes. This allowed the CDA to combine the low interest cost of G.O. Bonds with the equity generated through the sale of tax credits to provide seniors with the lowest possible rents.