V.2. First Reading Ordinance Establishing Summit on 7 Housing Improvement Area; Needham
CITY OF HOPKINS
City Council Report 2025-059
To: Honorable Mayor and Council Members
Mike Mornson, City Manager
From: Revée Needham, Community Development Manager
Date: April 15, 2025
Subject: First Reading of Ordinance 2025-1226 Establishing Summit on 7 Housing
Improvement Area
_____________________________________________________________________
RECOMMENDED ACTION
MOTION TO Approve First Reading of Ordinance 2025-1226 Establishing Summit on 7
Housing Improvement Area.
OVERVIEW
The City Council is asked to:
1. Hold a Public Hearing on the proposed Housing Improvement Area (HIA) for
Summit on 7.
2. Consider comments by the public, stakeholders, and staff.
3. By motion approve the first reading of Ordinance 2025-1226 Establishing
Summit on 7 Housing Improvement Area.
HIA Overview
A Housing Improvement Area (HIA), authorized under the Minnesota Statutes Chapter
428A, allows cities to help arrange and finance rehabilitation for common areas of
owner-occupied residential buildings, such as condominiums or townhouses. HIAs
cannot be used for private area improvements that are the responsibility of individual
owners.
An HIA is a defined area where private housing improvements are made and where
costs associated with the improvements are paid for by fees imposed on property
owners. Within an HIA, the city has the authority to finance housing improvements
through levying fees and assessments, and may issue bonds to pay for those
improvements.
The association submitted signed petitions March 10, 2025 from a majority of owners
requesting the City Council schedule a public hearing to establish the HIA and impose
fees. Per state statue, cities may only establish an HIA when 50% or more of the
association owners petition the city to do so. The City set a higher 75% threshold in the
HIA policy. Petitions were received from 75% of the owners at Summit on 7 and
certified by staff. The establishment of the HIA is a request of the Summit on 7
condominium association and is not something the City has proposed to the residents.
On March 18, 2025 the City Council accepted the petitions and called for the public
hearing.
Planning & Economic
Development
Background Timeline
July
2024
Staff met with a representative from Summit on 7 inquiring about housing
improvement areas
Sept.
2024
City Council approved an updated HIA policy
Jan.
2025
City Council held work session on HIAs
Summit on 7 submitted initial application materials
Mar.
2025
Summit on 7 submitted petitions from 75% of owners
City Council accepted petitions and calls for public hearing
Apr.
2025
Public hearing notices sent to owners
Public Hearing & First Reading of HIA Ordinance
Future Second reading of Ordinance
Public hearing and resolution to set HIA fees
45-day veto period
Prepayments accepted
Construction begins
City Council approves Development Agreement & sells bonds
Ideally, an association reserves money from association dues to make needed
improvements. In reality, associations often fail to reserve adequate funds due to a
number of factors including limitations in annual dues increases set by the association
bylaws, failure to complete an accurate needs assessment and/or lack of an adequate
corresponding budget. A one-time assessment to pay for major improvements is also
problematic in that the high cost of repairs often puts a project out of reach for most
homeowners and an assessment is often unaffordable if not allowed to be financed
over time. It can also be more difficult for a condominium under shared ownership to
obtain private financing for improvements, due to insufficient collateral as common
areas have no real value that can be liened as security. Failure to obtain financing for
needed improvements can result in entire developments being restricted from obtaining
new mortgage lending, greatly impacting current owners’ ability to sell and decreasing
property values. HIAs are considered a financing of last resort. To apply for HIA
financing, an association needs to demonstrate that they have exhausted other means
of financing by submitting at least two denial letters from lenders. The association
would need to have an accredited third party complete thirty-year plans to review their
current reserves, assess future necessary improvements, and ensure the association is
sufficiently on track to cover future expenses, avoiding the need for another HIA.
HIA Policy Analysis
An analysis of how the project meets the City’s HIA Policy is attached.
Community Input and Engagement
• No community members commented on this item as of the writing of this report.
• Staff will provide an update to the City Council on all public comments received
during the public hearing.
Engagement Activities:
o The City Council’s public hearing.
o Mailed notice of the public hearing to property owners of Summit on 7.
o Published notice of this public hearing in the City’s official paper.
Association Information
Summit on 7 is located at 1502 5th St N. The building was a hotel converted to
condominiums in 2006, and the association is comprised of 62 condominium units. The
condominiums are a mix of one-bedroom, two-bedroom, and three-bedroom units
ranging in size from 770 sq. ft. to 1450 sq. ft. The median estimated market value is
$227,550 and the range is $174,200 to $261,600. The Association bylaws limit the
number of rental units to six units in total.
Affordable Homeownership
All units at Summit on 7, even with HIA fees, will be affordable to households at 80%
Area Median Income (AMI) based on the affordable homeownership limit of $290,300
set by the Department of Housing and Urban Development. The creation of the Summit
on 7 HIA will preserve affordable homeownership in Hopkins.
Proposed Scope of Work
Based on an initial engineering assessment by Encompass, the scope of work includes:
roof replacement, façade/siding replacement, renovation of balconies, and replacement
of all windows and doors. The construction costs include a contingency and if that
contingency is not fully used, the Association may complete the following projects:
replacement of common area carpeting, repainting of common areas, replacement of
the driveway and parking lot pavement.
Initial Cost Estimates
Summit on 7 requests $4,260,000 in funding which includes approximately $3,714,312
in hard costs and $545,688 in soft costs and contingency. They received five bids for
the improvements. Initial estimates for the cost of bond issuance would equate to
$4,640,000 in total costs including funding for construction costs, bond issuance costs,
and City administrative, legal, and financial costs.
The requested loan term is 20 years. The loan would be repaid by a fee collected as
part of the each condominium owner’s property tax payment. Hennepin County would
receive the payments and pass through to the City. This is a low-risk way for the City to
assist with bringing the property up to date to ensure many years of continued use for
current and future owners. Preliminary estimates of the fees to be imposed on the
housing units are based on the current interest rate, which is subject to change based
on market conditions. Initial estimates, attached, range from an annual payment of
$5,033 to $9,478 per unit. There will be a public hearing on May 6, 2025 to set the fees.
Financing
The HIA would be funded using general obligation special assessment bonds. In order
to decrease the cost burden for homeowners, the City will directly issue bonds and the
Association will not utilize a temporary construction loan.
HIA financing has been well-tested in the Twin Cities region and has not had a negative
impact on the City’s bond rating or resulted in negative cash flow for bond payments.
The City has previously created four HIAs and had no collection issues. HIA Fees are
not included in the calculation of levies or limits on levies imposed under any law or
charter. The City is protected from financial risk in several ways:
• Repayment of the loan is made through the owner’s real estate tax payments.
• In foreclosure events, tax liabilities, including special assessments, must be paid
by any party that purchases the unit. In cases of foreclosure, HIA fees have been
treated the same as special assessments.
• There would be 105% debt coverage when the City issues bonds.
• A development agreement is required which will provide additional contractual
conditions to ensure the financial stability of the association.
Next Steps
The next step in the process is the second reading of the Ordinance and a public
hearing to set the fees on May 6, 2025. Then the Ordinance would be published and
mailed to the Commissioner of Revenue. There is a 45-day period where owners can
object to the creation of the HIA. If less than 45% of owners file an objection, then the
HIA would be established. The City will accept prepayments until June 20, 2025.
Construction would begin and the City would approve a Development Agreement with
the Association. The City will issue bonds to cover the construction costs.
SUPPORTING INFORMATION
• Resolution 2025-025
• Ordinance 2025-1226
• HIA Policy Analysis of Summit on 7 Request
• Initial Cost Estimates
• Hyperlink to HIA Policy
• Hyperlink to March 18, 2025 Council Session
• Hyperlink to January 14, 2025 Council Work Session
1
CITY OF HOPKINS
HENNEPIN COUNTY, MINNESOTA
RESOLUTION NO. 2025-025
A RESOLUTION APPROVING THE FIRST READING OF ORDINANCE 2025-1226
WHEREAS, on April 15, 2025, pursuant to a petition from the owners of at least
seventy five percent (75%) of the housing units within the proposed area of a Summit on
7 Housing Improvement Area (the “Housing Improvement Area”), the Hopkins City Council
was presented with Ordinance 2025-1226 regarding the proposed establishment of the
Housing Improvement Area.
NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Hopkins
as follows:
1. That the City Council hereby approves the first reading of Ordinance 2025-1226.
2. Pursuant to Minnesota Statutes, Chapter 428A, a duly noticed public hearing shall
be held during the regular city council meeting on May 6, 2025 in order to allow for
public input regarding the imposition of a fee on the owners with the housing units
within the proposed Housing Improvement Area.
3. Following the aforementioned public hearing, City staff shall also present Ordinance
2025-1226 for a second reading on May 6, 2025, as required by the Hopkins City
Charter.
Adopted this 15th Day of April 2025.
_______________________________
Patrick Hanlon, Mayor
ATTEST:
____________________________________
Amy Domeier, City Clerk
CITY OF HOPKINS
HENNEPIN COUNTY, MINNESOTA
ORDINANCE NO. 2025-1226
AN ORDINANCE ESTABLISHING SUMMIT ON 7 HOUSING IMPROVEMENT AREA
THE CITY OF HOPKINS ORDAINS:
SECTION 1. Background.
1.01. The City of Hopkins, Minnesota (the “City”) is authorized under Minnesota Statutes,
Sections 428A.11 through 428A.21, as amended (the “Act”), to establish by ordinance a
housing improvement area within which housing improvements are made or constructed
and the costs of the improvements are paid in whole or in part from fees imposed within
the area.
1.02. The City Council of the City (the “Council”) adopted a Housing Improvement Area
Policy on September 18, 2024 (the “Policy”).
1.03. The City has determined a need to establish the Summit on 7 Housing Improvement
Area (the “Area”) as further defined below, in order to facilitate certain improvements to
property known as the “Summit on 7” all in accordance with the Policy.
1.04. The City has consulted with The Summit Condominium Association, Inc. a
Minnesota nonprofit corporation (the “Association”), and with residents in the proposed
Area regarding the establishment of the Area and the housing improvements to be
constructed and financed under this ordinance.
SECTION 2. Findings.
2.01. The Council finds that, in accordance with Section 428A.12 of the Act and the
Policy, owners of at least seventy five percent (75%) of the housing units within the
proposed Area have filed a petition with the City Clerk requesting a public hearing
regarding establishment of such Area.
2.02. On April 15, 2025, the Council conducted a public hearing, duly noticed in
accordance with Section 428A.13, subdivision 2 of the Act, regarding adoption of this
ordinance, at which all persons, including owners of property within the proposed Area,
were given an opportunity to be heard.
2.03. The Council finds that, without establishment of the Area, the Housing
Improvements (as defined below) could not be made by the Association for, or by the
housing unit owners in, the Summit on 7.
2.04. The Council further finds that designation of the Area is needed to maintain and
preserve the housing units within such Area.
2.05. The City has provided full disclosure of public expenditures, loans, bonds, or other
financing arrangements in connection with the Area, and has determined that the
Association will contract for the Housing Improvements.
2.05. The City will be the implementing entity for the Area and the improvement fee
pursuant to Section 427A.14.
2.07. The Council finds that the Area meets each of the approval criteria contained in the
Policy, including the criterion that a majority of the Summit on 7 owners support the project
and the Area financing. The Association presented evidence to the Council adequate to
demonstrate that these criteria were met, including presentation to the Council of the
petitions described in Section 2.01 above.
SECTION 3. Housing Improvement Area Defined.
3.01. The Area is defined as the area of the City legally described in Exhibit A attached
hereto.
3.02. The Area contains sixty two (62) housing units as of the date of adoption of this
ordinance.
SECTION 4. Housing Improvements Defined.
4.01. For the purposes of this ordinance and the Area, the term “Housing Improvements”
means the following improvements to housing units and common areas within the Area:
(a) roof replacement, (b) façade and siding replacement, (c) renovation of balconies, (d)
replacement of windows, (e) replacement of doors, and (f) if all the contingency is not
used, the following improvements may be completed: replacement of common area
carpeting, repainting of common areas, replacement of the driveway and parking lot
pavement. Any remaining unused contingency will be placed in the City designated fund
for the Association/Area for use on future debt service for any bonds issued by the City in
connection with the Housing Improvements. The estimated total cost is $4,640,000,
including construction costs, administrative fees and costs, soft costs, costs of issuing
bonds to finance the improvements, and capitalized interest.
4.02. Housing Improvements also include the following:
(a) all costs of architectural services, engineering services and consultant services for
establishing an Area in connection with the activities described in Section 4.01 hereof;
(b) all administration, legal and consultant costs in connection with the Area, including
without limitation all costs related to financing or issuance of bonds, if any.
SECTION 5. Housing Improvement Fee.
5.01. The City may, by resolution adopted in accordance with the hearing and notice
procedures required under Section 428A.14 of the Act, impose a fee (the “Housing
Improvement Fee”) on the housing units within the Area, at a rate, term or amount
sufficient to produce revenues required to provide the Housing Improvements, subject to
the terms and conditions set forth in this Section.
5.02. The Housing Improvement Fee will be based on the square footage (percentage of
common expense obligation) of each unit, which is consistent with Section 428A.14,
subdivision 1 of the Act and with the “Common Interest Community No. 1422
(Condominium) The Summit Condominiums Restated Declaration.”
5.03. The Housing Improvement Fee will be imposed and payable for a period no greater
than 20 years after the first installment is due and payable.
5.04. Housing unit owners will be permitted to prepay the Housing Improvement Fee in
accordance with the terms specified in the resolution imposing the fee.
5.05. The Housing Improvement Fee will not exceed the amount specified in the notice
of public hearing regarding the approval of such fee; provided, however, that the Housing
Improvement Fee may be reduced after approval of the resolution setting the Housing
Improvement Fee, in the manner specified in the resolution.
5.06. The Housing Improvement Fee shall be collected at the same time and in the same
manner as provided for payment and collection of ad valorem taxes, in accordance with
Section 428A.15 of the Act and Minnesota Statutes, Section 428A.05. As set forth in
Section 428A.14, subdivision 2 of the Act, the Housing Improvement Fee is not included
in the calculation of levies or limits on levies imposed under any law or charter.
SECTION 6. Annual Reports.
6.01. By August 15, 2026, and by each August 15th thereafter until the Housing
Improvement Fees have been paid in full and any bonds issued are no longer outstanding
(or any later date specified in an agreement between the City and the Association), the
Association (and any successor in interest) must submit to the City Clerk a copy of the
Association's audited financial statements.
6.02. The Association (and any successor in interest) must also submit to the City any
other reports or information at the times and as required by any contract entered into
between that entity and the City.
SECTION 7. Notice of Right to File Objections.
7.01. Within five days after the adoption of this ordinance, the City Clerk is directed to
mail to the owner of each housing unit in the Area the following: a summary of this
ordinance; notice that owners subject to the proposed Housing Improvement Fee have a
right to veto this ordinance if owners of at least forty-five percent (45%) of the housing
units within the Area file a written objection with the City Clerk before the effective date of
this ordinance; and notice that a copy of this ordinance is on file with the City Clerk for
public inspection.
SECTION 8. Amendment.
8.01. This ordinance may be amended by the Council upon compliance with the public
hearing and notice requirements set forth in Section 428A.13 of the Act.
SECTION 9. Summary Publication.
9.01. In accordance with Section 3.03 of the City Charter and Minnesota Statutes, Section
412.191, the City Council determines the publication of the title and a summary of the
Ordinance would clearly inform the public of its intent and effect, and so City staff shall have
the following summary printed in the official City newspaper in lieu of the complete
ordinance:
ORDINANCE NO. 2025-1226
AN ORDINANCE ESTABLISHING SUMMIT ON 7 HOUSING IMPROVEMENT AREA
On April 15, 2025, the Hopkins City Council adopted Ordinance 2025-1226. The purpose
of the ordinance is to establish the Summit on 7 Housing Improvement Area. The ordinance
defines the housing improvement area, housing improvements, and authority to impose a
housing improvement fee. The ordinance also provides certain findings, outlines annual
reporting requirements, and identifies the rights of owners within the housing improvement
area. A printed copy of the ordinance is available for inspection during regular business
hours at Hopkins City Hall and at the Hopkins Library and is available online at the City's
website located at www.hopkinsmn.com.
SECTION 10. Effective Date.
10.01. This ordinance is effective forty-five (45) days after adoption, or thirty (30) days after
publication, whichever is later, subject to the veto rights of housing unit owners under
Section 428A.18 of the Housing Improvement Act.
First Reading: April 15, 2025
Second Reading: May 6, 2025
Date of Publication: May 15, 2025
Date Ordinance Takes Effect: June 20, 2025
By_____________________
Patrick Hanlon, Mayor
ATTEST:
_______________________
Amy Domeier, City Clerk
EXHIBIT A
Legal Description
Original Underlying Description. The Original Declaration established Common Interest
Community No. 1422, Hennepin County, Minnesota, under the name The Summit
Condominiums. It is a condominium (and not a planned community or cooperative), and is
not subject to a master association. The underlying real estate included within this CIC was
legally described in the Original Declaration as follows:
Lot 1, Block 1, Crossroads, Hennepin County, Minnesota.
Present Description. The real estate included in this CIC is now legally described as
follows:
Units 200 through 205, inclusive, 207 through 213, inclusive;
Units 300 through 305, inclusive, 307 through 313, inclusive;
Units 401 through 405, inclusive, 407 through 413, inclusive;
Units 500 through 505, inclusive, 508 through 513, inclusive;
Units 600 through 605, inclusive;
Units 700 through 705, inclusive,
The Summit Condominiums, Common Interest Community No. 1422, Hennepin
County, Minnesota.
1
Housing Improvement Area Policy Analysis for Summit on 7
HIA APPROVAL CRITERIA
4.01 In order to be eligible for HIA financing through the City, the association must
submit a housing improvement project application along with all required fees
as set by the Council and must follow the HIA review process set forth in this
Policy. All HIA loans financed through the City of Hopkins must meet the
following minimum approval criteria. A proposed housing improvement project
that meets these criteria is not automatically approved. Meeting these criteria
creates no contractual rights on the part of the City or any association.
The Association submitted the HIA application and required fees.
4.02 The project must be in accordance with the Comprehensive Plan and Zoning
Ordinances, or required changes to the Plan and Ordinances must be under
active consideration by the City at the time of approval.
The project is in accordance with the Comprehensive Plan and Zoning Ordinances.
4.03 The HIA financing shall be provided within applicable state legislative
restrictions, debt limit guidelines, and other City financial requirements and
policies.
The HIA financing will meet applicable state legislative requirements, debt limit
guidelines, and other City financial requirements and policies.
4.04 The project must meet one or more of the above adopted HIA Goals of the City
of Hopkins as noted in Section 4.
The project meets the following HIA goals:
a) To promote neighborhood stabilization and revitalization, removing blight
and/or upgrading the existing housing stock in a neighborhood.
c) To maintain or obtain Federal Housing Authority (FHA) mortgage
eligibility for a particular condominium or townhome association home within the
designated HIA.
d) To increase or prevent the loss of the tax base of the City to ensure the City
has a long-term ability to provide adequate services for its residents.
e) To preserve or increase valuation and provide for the long-term
maintenance of the property.
f) To preserve naturally occurring affordable housing.
4.05 The association shall designate an administrator to be the City’s point of contact
throughout the process for HIA financing.
Summit on 7 designated Doug Strandness as the administrator.
4.06 The term of the HIA should be the shortest term possible while still making the
annual fee affordable to the association members. The term of the bonds or other
debt incurred for the HIA should mature in 20 years or less. The City has the
2
sole discretion to determine the source(s) of financing, and sources other than
issuing bonds may be used.
The term of the HIA will be 20 years.
4.07 Service charges, including, but not limited to, construction/housing
improvement project costs, cost of issuance of bonds and other pertinent costs
association with the proposed housing improvement project, will be imposed on
the association members in the same ratio as common elements or other such
uniform method as proposed by the applicant.
The service charges will be imposed on the association members based on the
square footage of the unit (percentage of undivided ownership) as prescribed in
Exhibit A to the Summit on 7 Condominium Declaration.
4.08 The association applying for the HIA must provide adequate financial
guarantees to ensure the repayment of the Housing Improvement Area financing
and the performance of the administrative requirements of the development
agreement. Financial guarantees may include, but are not limited to, the pledge
of the association's assets including reserves, operating funds and/or property.
The financial guarantees will be outlined within the Development Agreement.
4.09 All taxes, fees, assessments, and charges for shared or common areas must be
current.
The taxes are current for the common areas.
4.10 The proposed housing improvement project, including the use of HIA financing,
must be supported, in writing, by at least seventy-five percent (75%) of the
association members. The association must include the results of a vote by a
minimum of 75% of association members with its HIA application along with
the petitions to create the area.
The Association submitted petitions from 75% of association members. The City
will waive the vote requirement, given the logistical issues with coordinating a
meeting with all association members at one time.
4.11 The minimum housing improvement project cost for the issuance of bonds is
$750,000.
The project cost exceeds $750,000.
4.12 The association must have a replacement reserve study (the “Reserve Study”)
prepared by an independent third party, with designation as a Community
Associations Institute (CAI) certified reserve specialist. The Reserve Study must
conform to CAI Reserve Study standards and Minnesota Statutes 515B.3-114
through 515B.3-1141. The components of the Reserve Study must include a
thirty‐year replacement reserve plan (the “Reserve Plan”), and the Reserve
Study and Reserve Plan must be submitted with the proposed housing
improvement project application and will be reviewed by the City’s financial
advisor. The association must also have an independent third party prepare a
thirty‐year reserve plan (the “HIA Reserve Plan”) with the components of the
3
proposed project for housing improvements removed from the Reserve Plan.
The independent third party must also prepare a thirty‐year financial plan (the
“Financial Plan”) that reflects the annual replacement reserve contributions
based on the HIA Reserve Plan. The Financial Plan will provide a plan for the
association’s operating budget with cost increases over time to finance
maintenance and operation of the common elements within the association and
a long-range plan to conduct and finance capital improvements therein, that
does not rely upon the subsequent use of the HIA tool. The HIA Reserve Plan
and the Financial Plan must be submitted with the proposed housing
improvement project application and will be reviewed by the City’s financial
advisor.
The Association has submitted their Reserve Study, Reserve Plan, and Financial
Plan. The City’s Financial Advisor has reviewed the plans. The Association is
currently updating their Reserve Study and will resubmit in September 2025, with
any necessary changes reflected in the Reserve Plan and Financial Plan.
4.13 HIA financial assistance is last resort financing and will not be provided to
proposed housing improvement projects that have the financial stability to
proceed without the benefit of HIA financing. Evidence that the association has
sought other financing for the project must be provided at the time of application
and should include an explanation and verification that an assessment is not
feasible, along with rejection letters from at least two private lenders or other
evidence indicating a lack of financing options.
The project could not proceed without HIA financing, as a financing of last resort.
The Association submitted two rejection letters from two private lenders.
4.14 The average market value of units in the association should not exceed 80% of
the Area Median Income as set by the U.S. Department of Housing and Urban
Development.
All units at Summit on 7, even with HIA fees, will be affordable to households at
80% Area Median Income (AMI) based on the affordable homeownership limit of
$290,300 set by the Department of Housing and Urban Development.
4.15 The association shall obtain temporary construction financing from a private
lender, and the City shall provide a take-out commitment to the lender, detailing
the terms of payoff of the construction financing. Upon project approval and
issuance of a certificate of completion, the City will issue bonds or notes to satisfy
the temporary construction loan.
The City will waive the temporary construction financing requirement in order to
minimize the cost burden for homeowners.
4.16 The association must enter into a development agreement, prepared by the City,
which may include, but is not limited to, the following terms:
a) Establishment of a reserve fund
b) Staffing requirements
c) Annual reporting and financial auditing requirements, including regular
4
updates to the financial plan not less than once every five years
d) Conditions of disbursement
e) Limitations on prepayment of fees, if any
f) Required dues increases
g) Notification to all new owners of levied fees, including to individuals that
purchase property after the initial project
h) Requirement of multiple bids for proposed housing improvement project
construction
i) Assessments, including interest and City fees
A development agreement will be approved by City Council after the 45-day veto
period.
4.17 The improvements financed through the HIA should be exterior improvements
and, in the case of a homeowner's association, the improvements should be
restricted to Limited Common Elements defined within the association’s
governing documents. The improvements must be of a permanent nature. The
association must have a third party conduct a facility needs assessment to
determine and prioritize the scope of improvements.
The improvements are limited common elements including exterior elements.
Encompass Engineering conducted an assessment to determine the scope of the
improvements.
4.18 HIA financing should not be provided to projects that are not in the public
interest, as determined by the Council, including: poor project quality; projects
that do not comply with the Comprehensive Plan, zoning, or redevelopment
plans, and City policies; projects that provide no significant improvement to the
neighborhood and/or the City; and projects that do not provide a significant
increase in the tax base and/or prevent the loss of tax base.
The project is in the public interest, meeting the City’s policies and goals.
4.19 The financial structure of the project must receive a favorable review by the
City's Finance Director and Financial Advisor. Legal components will be
reviewed by the City’s legal counsel. If applicable, the review will include an
analysis of performance and level of outstanding debt related to any previously
approved HIAs.
There is no outstanding debt related to other HIAs in the City. The City
Attorney, Finance Director, and Financial Advisor have reviewed the financial
structure and legal components of the project.
4.20 If bonds are to be issued, legal components will be reviewed by the City bond
counsel.
The Financial Advisor has reviewed initial estimates and will review the final bond
issuance.
4.21All rental units within the HIA must be licensed according to City ordinance.
5
There are two rental licenses currently for units at Summit on 7.
4.22 The City will charge an administrative fee of 1% of the total project amount or
$7,500, whichever is greater. The Association is responsible for all City out of
pocket expenses, which can be financed with the project costs or paid from the
escrow. Any unused portion of the escrow shall be refundable to the Association.
The Association has paid the initial escrow to cover administrative fees and the
initial bond cost estimates include administrative costs. The City will return any
unused portion of the escrow.
4.23 The City reserves the right to deny funding for specific improvements if they
are determined to not be in keeping with the intent of the policy.
City of Hopkins
Summit Housing Improvement Area
Financing Summary - DRAFT March 20, 2025
SOURCES OF FUNDS
Par Amount of Bonds $ 4,640,000
Prepaid Assessments $-
Association Funds -$
TOTAL 4,640,000$
USES OF FUNDS
HIA Project Budget - Hard Costs 3,714,312$
HIA Project Budget - Soft Costs 245,688$
Contingency 300,000$
Rebate of prepaids special assessments $-
Total Project Costs 4,260,000$
Soft Costs (see detail below) $ 57,800
Underwriters Discount $ 55,680
Cost of Issuance $ 74,000
Capitalized Interest (Bond) $ 143,729
Rounding Amount $ 2,391
City Admin Fee (1%) $ 46,400
Total Soft and Loan Costs 380,000$
TOTAL 4,640,000$
Financing Information
Term (years)20
All Inclusive Cost 5.20%
All Inclusive Cost Plus 200 bps 7.20%
Average Annual Debt Service $ 444,815
Required Coverage (105%) $ 467,055
Annual Dues Paid 467,055$
Average Annual Assessment - Per Unit $ 7,533
Average Assessment if Monthly - Per Unit $628
Average Total Assessment - Per Unit - If Prepaid $ 74,839
Project Soft Costs Detail (included in Bond Amount)
City Legal Fees (estimate) $ 20,000
City Financial Advisor Fees (estimate) $ 15,000
Public Hearing/Legal Notice Fees $ 1,500
Ongoing Bond Consulting Expenses - To City (Con Disc, Pay Agent) - .05% of Bond Amount $ 21,300
TOTAL $ 57,800
Sources and Uses of Funds Amount
#PID Building Unit
No.Sq. Ft Percentage
Interest
Total Common
Area Construction
Cost
Total
Financing &
Soft Costs
Total Costs
(BEFORE
BOND SALE)
Annual Fee
(105% of
Total Costs)
Total P & I Paid
Per Unit (105%) -
Non prepaid only
Rebate to Owners
for Prepaid
Assessments
Total Annual Fee
With $10 City
Admin. Charge
1 2411722220078 1502 5th Str. N 200 770 1.0776% $45,905.81 $4,094.88 $50,000.70 $5,033 $100,660 $5,043
2 2411722220079 1502 5th Str. N 201 1,000 1.3995% $59,617.94 $5,318.03 $64,935.97 $6,536 $130,727 $6,546
3 2411722220080 1502 5th Str. N 202 1,086 1.5198% $64,745.08 $5,775.38 $70,520.47 $7,098 $141,970 $7,108
4 2411722220081 1502 5th Str. N 203 787 1.1014% $46,919.32 $4,185.29 $51,104.61 $5,144 $102,882 $5,154
5 2411722220082 1502 5th Str. N 204 1,105 1.5464% $65,877.83 $5,876.43 $71,754.25 $7,223 $144,453 $7,233
6 2411722220083 1502 5th Str. N 205 787 1.1014% $46,919.32 $4,185.29 $51,104.61 $5,144 $102,882 $5,154
7 2411722220084 1502 5th Str. N 207 826 1.1560% $49,244.42 $4,392.69 $53,637.11 $5,399 $107,981 $5,409
8 2411722220085 1502 5th Str. N 208 1,448 2.0265% $86,326.78 $7,700.51 $94,027.29 $9,465 $189,293 $9,475
9 2411722220086 1502 5th Str. N 209 1,445 2.0223% $86,147.93 $7,684.56 $93,832.48 $9,445 $188,901 $9,455
10 2411722220087 1502 5th Str. N 210 1,450 2.0292% $86,446.01 $7,711.15 $94,157.16 $9,478 $189,554 $9,488
11 2411722220088 1502 5th Str. N 211 1,450 2.0292% $86,446.01 $7,711.15 $94,157.16 $9,478 $189,554 $9,488
12 2411722220089 1502 5th Str. N 212 1,298 1.8165% $77,384.09 $6,902.81 $84,286.89 $8,484 $169,684 $8,494
13 2411722220090 1502 5th Str. N 213 1,012 1.4163% $60,333.36 $5,381.85 $65,715.21 $6,615 $132,296 $6,625
14 2411722220091 1502 5th Str. N 300 770 1.0776% $45,905.81 $4,094.88 $50,000.70 $5,033 $100,660 $5,043
15 2411722220092 1502 5th Str. N 301 1,000 1.3995% $59,617.94 $5,318.03 $64,935.97 $6,536 $130,727 $6,546
16 2411722220093 1502 5th Str. N 302 1,086 1.5198% $64,745.08 $5,775.38 $70,520.47 $7,098 $141,970 $7,108
17 2411722220094 1502 5th Str. N 303 787 1.1014% $46,919.32 $4,185.29 $51,104.61 $5,144 $102,882 $5,154
18 2411722220095 1502 5th Str. N 304 1,105 1.5464% $65,877.83 $5,876.43 $71,754.25 $7,223 $144,453 $7,233
19 2411722220096 1502 5th Str. N 305 787 1.1014% $46,919.32 $4,185.29 $51,104.61 $5,144 $102,882 $5,154
20 2411722220097 1502 5th Str. N 307 1,030 1.4415% $61,406.48 $5,477.57 $66,884.05 $6,732 $134,649 $6,742
21 2411722220098 1502 5th Str. N 308 1,448 2.0265% $86,326.78 $7,700.51 $94,027.29 $9,465 $189,293 $9,475
22 2411722220099 1502 5th Str. N 309 1,445 2.0223% $86,147.93 $7,684.56 $93,832.48 $9,445 $188,901 $9,455
23 2411722220100 1502 5th Str. N 310 1,450 2.0292% $86,446.01 $7,711.15 $94,157.16 $9,478 $189,554 $9,488
24 2411722220101 1502 5th Str. N 311 1,450 2.0292% $86,446.01 $7,711.15 $94,157.16 $9,478 $189,554 $9,488
25 2411722220102 1502 5th Str. N 312 1,298 1.8165% $77,384.09 $6,902.81 $84,286.89 $8,484 $169,684 $8,494
26 2411722220103 1502 5th Str. N 313 1,195 1.6724% $71,243.44 $6,355.05 $77,598.49 $7,811 $156,219 $7,821
27 2411722220104 1502 5th Str. N 401 1,000 1.3995% $59,617.94 $5,318.03 $64,935.97 $6,536 $130,727 $6,546
28 2411722220105 1502 5th Str. N 402 1,086 1.5198% $64,745.08 $5,775.38 $70,520.47 $7,098 $141,970 $7,108
29 2411722220106 1502 5th Str. N 403 787 1.1014% $46,919.32 $4,185.29 $51,104.61 $5,144 $102,882 $5,154
30 2411722220107 1502 5th Str. N 404 1,105 1.5464% $65,877.83 $5,876.43 $71,754.25 $7,223 $144,453 $7,233
31 2411722220108 1502 5th Str. N 405 787 1.1014% $46,919.32 $4,185.29 $51,104.61 $5,144 $102,882 $5,154
32 2411722220109 1502 5th Str. N 407 1,030 1.4415% $61,406.48 $5,477.57 $66,884.05 $6,732 $134,649 $6,742
33 2411722220110 1502 5th Str. N 408 1,448 2.0265% $86,326.78 $7,700.51 $94,027.29 $9,465 $189,293 $9,475
34 2411722220111 1502 5th Str. N 409 1,445 2.0223% $86,147.93 $7,684.56 $93,832.48 $9,445 $188,901 $9,455
35 2411722220112 1502 5th Str. N 410 1,450 2.0292% $86,446.01 $7,711.15 $94,157.16 $9,478 $189,554 $9,488
36 2411722220113 1502 5th Str. N 411 1,450 2.0292% $86,446.01 $7,711.15 $94,157.16 $9,478 $189,554 $9,488
37 2411722220114 1502 5th Str. N 412 1,298 1.8165% $77,384.09 $6,902.81 $84,286.89 $8,484 $169,684 $8,494
38 2411722220115 1502 5th Str. N 413 1,195 1.6724% $71,243.44 $6,355.05 $77,598.49 $7,811 $156,219 $7,821
39 2411722220116 1502 5th Str. N 500 798 1.1168% $47,575.12 $4,243.79 $51,818.91 $5,216 $104,320 $5,226
40 2411722220117 1502 5th Str. N 501 1,187 1.6612% $70,766.50 $6,312.50 $77,079.00 $7,759 $155,173 $7,769
41 2411722220118 1502 5th Str. N 502 1,086 1.5198% $64,745.08 $5,775.38 $70,520.47 $7,098 $141,970 $7,108
42 2411722220119 1502 5th Str. N 503 1,160 1.6234% $69,156.81 $6,168.92 $75,325.73 $7,582 $151,643 $7,592
43 2411722220120 1502 5th Str. N 504 1,105 1.5464% $65,877.83 $5,876.43 $71,754.25 $7,223 $144,453 $7,233
44 2411722220121 1502 5th Str. N 505 1,255 1.7564% $74,820.52 $6,674.13 $81,494.65 $8,203 $164,063 $8,213
45 2411722220122 1502 5th Str. N 508 1,448 2.0265% $86,326.78 $7,700.51 $94,027.29 $9,465 $189,293 $9,475
46 2411722220123 1502 5th Str. N 509 1,445 2.0223% $86,147.93 $7,684.56 $93,832.48 $9,445 $188,901 $9,455
47 2411722220124 1502 5th Str. N 510 1,450 2.0292% $86,446.01 $7,711.15 $94,157.16 $9,478 $189,554 $9,488
48 2411722220125 1502 5th Str. N 511 1,450 2.0292% $86,446.01 $7,711.15 $94,157.16 $9,478 $189,554 $9,488
49 2411722220126 1502 5th Str. N 512 1,298 1.8165% $77,384.09 $6,902.81 $84,286.89 $8,484 $169,684 $8,494
50 2411722220127 1502 5th Str. N 513 1,195 1.6724% $71,243.44 $6,355.05 $77,598.49 $7,811 $156,219 $7,821
51 2411722220128 1502 5th Str. N 600 798 1.1168% $47,575.12 $4,243.79 $51,818.91 $5,216 $104,320 $5,226
52 2411722220129 1502 5th Str. N 601 1,187 1.6612% $70,766.50 $6,312.50 $77,079.00 $7,759 $155,173 $7,769
53 2411722220130 1502 5th Str. N 602 1,086 1.5198% $64,745.08 $5,775.38 $70,520.47 $7,098 $141,970 $7,108
54 2411722220131 1502 5th Str. N 603 1,160 1.6234% $69,156.81 $6,168.92 $75,325.73 $7,582 $151,643 $7,592
55 2411722220132 1502 5th Str. N 604 1,105 1.5464% $65,877.83 $5,876.43 $71,754.25 $7,223 $144,453 $7,233
56 2411722220133 1502 5th Str. N 605 1,255 1.7564% $74,820.52 $6,674.13 $81,494.65 $8,203 $164,063 $8,213
57 2411722220134 1502 5th Str. N 700 798 1.1168% $47,575.12 $4,243.79 $51,818.91 $5,216 $104,320 $5,226
58 2411722220135 1502 5th Str. N 701 1,187 1.6612% $70,766.50 $6,312.50 $77,079.00 $7,759 $155,173 $7,769
59 2411722220136 1502 5th Str. N 702 1,086 1.5198% $64,745.08 $5,775.38 $70,520.47 $7,098 $141,970 $7,108
60 2411722220137 1502 5th Str. N 703 1,160 1.6234% $69,156.81 $6,168.92 $75,325.73 $7,582 $151,643 $7,592
61 2411722220138 1502 5th Str. N 704 1,105 1.5464% $65,877.83 $5,876.43 $71,754.25 $7,223 $144,453 $7,233
62 2411722220139 1502 5th Str. N 705 1,255 1.7564% $74,820.52 $6,674.13 $81,494.65 $8,203 $164,063 $8,213
TOTAL 71,455 100% $4,260,000 $380,000 $4,640,000 $467,055.32 $9,341,106.49 $0.00 $467,675.32
Summit HIA
Assessment Allocation - March 2025
City of Hopkins
Page 2 of 2