Page 1 of 31

9/4/07

Northeast Minnesota Housing Readiness Planning Day August 28, 2007 9:00 AM to 4:30 PM Hibbing Park Hotel Meeting Objectives: 1. IMPROVE REGIONAL COORDINATION AND CAPACITY: Present logical options for better coordination and sharing of existing and expanded housing development expertise regionally 2. REVIEW REGIONAL HOUSING NEEDS: Provide clear overview and consolidated summary of recent housing market studies, including indications of need by location, income, and housing types. 3. PROVIDE FUNDER PERSPECTIVES: Share funders’ assessments, priorities, and vision for funding affordable housing projects, programs and initiatives, capacity building, and regional planning. Meeting Structure: 1. UTILIZE AND BUILD UPON A COLLABORATIVE PROCESS: Utilize a meeting process and structure that strengthens a sense of common cause, builds trust, and encourages the sharing of ideas, strategies, suggestions, concerns, and creates a framework for future decision-making. Meeting Outcome: 1. RECOMMENDATIONS AND ACTION STEPS: Attendees leaving with workable recommendations and action steps that clarify how joint plans and commitments will support better coordination of development efforts that lead to more affordable housing production. 2. CORE GROUP DIRECTION: Provide direction and support to the current and future Core Group.

Page 2 of 31

9/4/07

Agenda 9:00 9:15 • • Welcome and Introductions Warren Hanson - Chip Halbach

Meeting Expectations Randy Lasky Meeting outline and review of agenda will be presented Review of meeting expectations o Ground rules for meeting o Primary focus on Hwy 169 corridor way Range Readiness Planning Randy Lasky • Role of Range Readiness planning with housing and possible intersections today • Distribute working paper and new outline of organizational structure Historical and Background Summary MHP Summary of previous housing activities and plans. Participants will map recent housing efforts with comments within each county.

9:20

9:40 • •

10:10 Break 10:20 Funders Panel – Randy Lasky Roles, priorities, assessments, and vision for housing in NE Minnesota • Minnesota Housing, GMHF, DEED Small Cities, Blandin Foundation, MHP. 12:00 Announcements 12:10 Buffett Lunch 12:50 Last half-day discussions Set up afternoon tracks Randy Lasky

1:00 Group Discussion on options (2 sessions at same time) I. Regional Planning – creating and finishing a regional planning process II. Regional Housing Development Capacity and Regional Coordination Options: Identify and review elements of improved regional coordination – discussion of “pros and cons”. This would frame the discussion to be about “options”, affirm suggestions from the prior conversations. 2:30 Break 2:45 3:45 4:15 Report out, discussion, and possible next steps in large group Reflections by Core Group Members Evaluation and Adjournment Randy Lasky Randy Lasky

Page 3 of 31

9/4/07

A Coordinated Regional Response to Potential Large Scale Development Projects on the Iron Range June 2007
Situation on the Horizon Currently there are more than twenty (20+) larger development projects at various stages in the project development process across the Iron Range from Babbitt to Cohasset. They represent the largest concentration of large-scale projects since the 1970s when major taconite plants were built at key locations. The scope of these projects range from several million dollars to $1.6 billion dollars and in total would represent about $5 billion in potential new investment that will leverage temporary construction jobs, permanent living wage jobs and other value added spin-off and supplier opportunities as well as spur other new investment in the regional economy (See attached list of projects and scales of development). More specifically, several of these major projects have already begun construction and others are being positioned to move forward in the next 12-18 months. Construction began this spring on the west Iron Range for Minnesota Power’s Boswell 3 Energy Center - air emissions control environmental improvements project in Cohasset. Over the next three years Minnesota Power will investment over $200 million and will be ramping up to hire 400-800 construction and trades people to meet their development needs. This decision and announcement in the spring of 2006 has now spurred local action to anticipate and begin addressing the potential impacts and needs of this temporary and long-term workforce situation. Just to the east is the $1.6 billion Minnesota Steel integrated mine and steel making facility proposed near the Cities of Nashwauk, Marble and Taconite. They are in the midst of completing a project environmental review process to secure permits and are working out the final details with a major international investor to capitalize the project and move toward development in 2008. The project would involve 2,000 construction workers for up to four years and then would employ 700 permanent workers. Right adjacent to the Minnesota Steel site is the proposed Excelsior Energy project which is about 6-12 months behind Minnesota Steel. It is coal gasification to electrical generation project that is working through the state’s energy and environmental regulatory process and requirements and is also firming up its major investors. This project would represent a capital investment of over $1.5 billion and could add an additional 1,000 temporary construction workers and 150-300 permanent employees when operational with both phases. A similar scenario is going on in the far east Iron Range near Hoyt Lakes and Babbitt. Mesabi Nugget a direct reduced iron nugget plant began renovation and construction in late winter 2007 and is working on the final details for its total capitalization of around $200 million. That project will need 400 temporary construction workers and will eventually add 100 permanent jobs as the plant becomes operational in 2010. Adjacent to Mesabi Nugget is the proposed PolyMet project a non-ferrous minerals mining company that would mine and process copper-nickel and other precious metals. That
A Coordinated Regional Response to Potential Large Scale Development Projects on the Iron Range June 2007 1

Page 4 of 31

9/4/07

project is also in the environmental review process and is seeking permits to mine and process ore near Babbitt and Hoyt Lakes. PolyMet is preparing to invest $380 million and hopes to begin construction in 2008 hiring 1,000 temporary construction workers and eventually 400 full time workers at the facility. All of these projects are of a “mega” scale and if they all come to fruition as planned will create a major demand for workers, housing, infrastructure and related needs. Add the other smaller projects and you have a growing demand for workers, housing and a host of other socio-economic issues that will need to be addressed. As these projects have begun to come on line or getting closer to reality, there is a lot of energy and interest by the public and private sectors to address potential problems and take advantage of potential opportunities. This activity and energy is occurring in pockets across the Iron Range and is not being addressed at a regional scale in all instances. In April the Itasca Community Readiness Committee was formed and held its first meeting with representatives from a multi-community/township affected area in Itasca County. The initiative was created by Itasca County under the direction of the Arrowhead Regional Development Commission (ARDC) to assess the readiness of the affected communities to handle some of the anticipated issues and needs associated with this type of multi-year short term and long-term growth. On the east Iron Range, the East Range Readiness Committee has been meeting periodically and involves a similar group of communities in the Hoyt Lakes area. They have largely heard updates on the projects by representatives of the companies and generally discussed possible issues down the road. What appears to be lacking is some form of a coordinated and facilitated regional response that is Range-wide and could effectively address a number of common issues and needs that are being raised in different ways across the Range. Reactions and Concerns Conversations across the Iron Range keep focusing on the same potential problems and needs. How will we handle the influx of workers? Where will they come from and how many and when? Will there be diversity and non-union issues? How will they be housed? What impacts will that have on the existing housing market including rental, multi-family, single family and possible creation and siting of “man camps”? Will the workforce bring their families? What will that mean for education, recreation, law enforcement, utility capacity, transportation networks, etc.? How are we positioned to handle these major changes…will they be isolated or widespread? Do we want growth in our community…at what cost and benefit? These are a few examples of the questions that various groups and the companies themselves are asking. The dynamics of what is starting to evolve is not isolated. It has Range-wide ramifications and needs to be handled in a coordinated way. We need an ad hoc forum in which we can regularly communicate, focus on key issues and opportunities, avoid disruptions, and emphasize good planning so we don’t pay for major mistakes later, share in developing strategies and solutions and bring the financial and technical resources needed to solve or mitigate problems. By broadening and coordinating our efforts, we can be regionally

A Coordinated Regional Response to Potential Large Scale Development Projects on the Iron Range June 2007

2

Page 5 of 31

9/4/07

proactive taking advantage of everyone’s desire to do the right things for the Iron Range. It needs to be recognized that the situation today is much different than back in the 70s and 80s. For example, we have a workforce shortage of a variety of skilled and unskilled abilities today and a migratory workforce that is as diverse as we have seen since the Range was populated. We are seeing a steady increase in retirements in the mining industry and other public and private businesses that is adding additional pressure to workforce needs. The number of temporary workers as a whole will be larger than was experienced two to three decades ago. We now have land use plans, zoning and health regulations that were non-existent 20-35 years ago. Obviously, this is not the same situation as before and will require new solutions and adjustments today. Coordinated Regional Response – “Framework for Action” It is proposed that Iron Range Resources take the lead in establishing a Large-Scale Projects Regional Response Team which would be responsible for an organized regional response that will build on the initiatives already underway in Itasca County and the East Range and within individual communities but will broaden and strengthen these efforts as just one part of a comprehensive and coordinated response. To be effective, it is proposed that the organizational structure or framework consist of a Leadership Team of state and regional leaders including elected officials and key stakeholder groups; a technical Strategy Team comprised of the leaders of various state and regional planning and development agencies and groups with a communications responsibility tied to its mission; and the initial creation of four specific sub-teams that will concentrate on key issues that have been identified to date. Chairs of the subteams would also meet with and become members of the Strategy Team. The subteams would consist of a Projects Team of company representatives, Workforce Team, Housing Team, and a Community Resources and Readiness Team which will address a number of issues including public infrastructure needs. More sub-teams can be added as needed in the future. These groups will require ongoing facilitation to organize and keep the groups focused and productive. A steering committee has developed this model based on a similar approach used during the closure of LTV Mining in 2001 and it proved to be an effective tool to develop focus, communicate, coordinate and deploy resources, and accomplish key objectives as defined by the leadership involved. (See organizational chart). The approach emphasizes the need to have a balance of being inclusive but remaining productive. Draft purpose statements and an initial list of participants have been developed to support and clarify key roles and responsibilities as a starting point for more discussion of this model. (See attached Organizational Chart and Purpose Statements). The next step will be to finalize and implement the framework. A meeting of the Strategy Team will be convened by Iron Range Resources to take the next steps.

A Coordinated Regional Response to Potential Large Scale Development Projects on the Iron Range June 2007

3

Page 6 of 31

9/4/07

Next Steps and Call for Action To begin implementing this approach will require a couple of things to happen. First, we will need to have the support and resolve by Iron Range Resources to lead this effort. Secondly, we will need to assign or allocate resources to hire a facilitator to coordinate this initiative and engage the leadership. Third, we will need to make initial contact with proposed participants and conduct the first meeting of the Strategy Team and decide the next steps. This is a great opportunity for IRR to “Call for Action” and be proactive in organizing and leading this supportive initiative.

A Coordinated Regional Response to Potential Large Scale Development Projects on the Iron Range June 2007

4

Page 7 of 31

IRON RANGE LARGE SCALE PROJECTS REGIONAL RESPONSE TEAM
Leadership Team
x x x x x
Iron Range Resources (Chair) Iron Range Resource Legislative Delegation Board Members Congressman Oberstar Senator Klobuchar Senator Coleman

9/4/07

Updated: 8/8/07

x x x x x

Minnesota Department of Employment and Economic Development (DEED) , Commissioner Range Association of Municipalities and Schools (RAMS) Chairs Itasca County Board Member St. Louis County Board Member Northeast Higher Education District (President)

Communications Team
x
To be determined

x x x x x x x x x x x x

Iron Range Resources, Roy Smith Iron Range Resources, Roy Smith ComArrowhead Regional Development Arrowhead Regional Development Commission (ARDC), John Chell mission (ARDC), John Chell The Northspan Group, Inc., Randy Lasky The Northspan Group,Municipalities and Range Association of Inc., Randy Lasky Schools (RAMS), of Municipalities and Range AssociationRon Dicklich Schools (RAMS), RonOpportunities Arrowhead Economic Dicklich Arrowhead Economic Opportunities Agency (AEOA), Harlan Tardy Agency (AEOA), Harlan Tardy St. Louis County, Barb Hayden St. Louis County, Barb Hayden

x x x x x x x x x x x x

Strategy Team Strategy Team

Minnesota Department of Employment and Economic Minnesota Department of Employment Development (DEED), Heather Rand and Economic Development (DEED), Heather Rand Itasca Economic Development Corporation (IEDC), Peter McDermott Itasca Economic Development Corporation (IEDC), Peter McDermott Kootasca, Barb Dorry Kootasca, Economic Iron RangeBarb Dorry Alliance (IREA), Duane Northagen Iron Partnership for Economic (IREA), Duane Northagen Area Range Economic Alliance Expansion (APEX), Area Partnership for Economic Expansion (APEX), Jack LaVoy Jack LaVoy Northeast Higher Education District, Sue Collins Northeast Higher Education District, Sue Collins

x x x x x x

Northeast Entrepreneur Fund, Mary Mathews Minnesota Power, Nancy Norr Northeast Minnesota Office of Job Training (NEMOJT), Michelle Ufford UMD Center for Economic Development, Elaine Hansen Blandin Foundation, Wade Fauth Northland Foundation, Tom Renier/John Elden

Projects Team
x x x x x x
Minnesota Power Minnesota Steel Mesaba Energy PolyMet Mesabi Nugget Blandin Paper Company

Workforce Team
x
Minnesota Department of Employment and Economic Development (DEED) Workforce Investment Board (WIB) Minnesota State Colleges & Universities (MNSCU)/Roy Smith Labor Area Partnership for Economic Expansion (APEX) Northeast Minnesota Office of Job Training (NEMOJT) K-12 Education

Housing Team
x x x x x x x x
County Housing & Redevelopment Authority Minnesota Housing Finance Agency (MHFA) Minnesota Housing Partnership Greater Minnesota Housing Fund (GMHF) Kootasca Arrowhead Economic Opportunities Agency (AEOA) Range Board of Realtors Itasca Board of Realtors

Community Resources & Readiness Team
x x x x x x x x x x x x
Arrowhead Regional Development Commission (ARDC) St. Louis County Itasca County Consulting engineers Range Association of Municipalities and Schools (RAMS) Minnesota Department of Employment and Economic Development (DEED) Iron Range Economic Alliance (IREA) Chambers Iron Range Resources Minnesota Department of Transportation (MnDOT) United States Department of Agriculture (USDA) Public Facilities Authority (PFA)

Opportunities Development Team
x x x x x x x x x x x
Iron Range Resources APEX Northeast Entrepreneur Fund UMD Center for Economic Development Itasca Economic Development Corporation (IEDC) Northland Connection Minnesota Power Minnesota Department of Employment and Economic Development (DEED) Natural Resources Research Institute (NRRI) Superior/Douglas County Development Association Affected community economic development professionals/IREA reps - Nashwauk - Grand Rapids - Hibbing - East Range - Other?

x x x x x x

Page 8 of 31

9/4/07

Large Scale Projects Response Team – Purpose Statements
Mission
To be an ad hoc forum that will focus on, coordinate and address common but critical issues related to the siting and development of multiple, large-scale regional development projects across the Iron Range. The response team approach will be multi-faceted and involve regional public and private leaders who will meet as needed to anticipate major problems, issues and opportunities, develop shared strategies and solutions, and focus technical and financial resources in an efficient and effective, targeted response benefiting the Iron Range.

Leadership Team
Will serve as a steering committee of key elected officials and public/private stakeholders that would meet as necessary to guide the response process, coordinate resources, review progress and communicate with the media as appropriate.

Strategy Team
Will serve as the technical team of regional and local resource professionals that will develop, communicate and facilitate a coordinated regional response in cooperation with the Leadership Team and specific Functional Sub-Teams to be named. Day-to-day communication will be a critical role of this group. Chairs of the Functional Sub-Teams will serve on the Strategy Team.

Functional Sub-Teams A. Project Team To be largely comprised of the affected companies with projects underway or planned and other supporting resources that can coordinate and communicate development needs, provide critical information for community planning and help respond to common problems in a coordinated and timely manner. B. Workforce Team To identify the number, skills, sources, timing and gaps necessary to define and coordinate strategies for adequate workforce resources. C. Housing Team To strategically accommodate residential growth short and long-term across the Iron Range.

Updated: 8/8/07

Page 9 of 31

9/4/07

Large Scale Projects Response Team – Purpose Statements (continued)
D. Community Resources and Readiness Team To assess community readiness and define how well communities will be able to address potential impacts related to large scale project developments in their areas. Specific areas of need will include but are not limited to land use and availability, water and sewer services, transportation, K-12 education, health and public safety, and community facilities. They will assess and identify needs and funding to accommodate growth impacts both temporary and long-term. E. Opportunities Development Team
To maximize local and regional business development and new regional wealth retention by evaluating potential large scale projects determining major supplier, indirect spin-off and value added business development needs and opportunities, and communicating this information to existing businesses, entrepreneurs, investors and local and regional development, recruitment and financing professionals. Coordinate assistance and technical support for land and real estate options, deal structuring and financial packaging, risk assessment and management, and growth management planning for existing and new businesses.

Updated: 8/8/07

Page 10 of 31

t u
53

9/4/07

International Falls

Northeast Minnesota
CANADA

KOOCHICHING

¬ «
217

¬ «
65

t u
53

t ¬ u «
71 6

¬¬ ««
1 1

¬ «
73

SAINT LOUIS
Ely

COOK LAKE

¬ «
61

¬ «
38

¬ «
46

¬ «
286

ITASCA
Chisholm

t Hibbing u
169

Hoyt Lakes Biwabik Virginia Eveleth

¬ «
169

¬ «
1

Grand Rapids

¬ «
73

Lake Superior

¬ «
200

t u
2

Two Harbors

¬ «
33

Hermantown

Duluth

t u
169 47 169

¬ «
232 27

¬ «
73

Cloquet
45

¬ ¬ « «
23

AITKIN

CARLTON

´

¬ ¬ « « t ¬ u « ¬« «¬
18 18 65

¬ «
289
0 10 20 40 Miles

Page 11 of 31

9/4/07

Proposed Mesabi Range Economic Development Projects, Northeast Minnesota

Babbitt
PolyMet Plant

¬ «
65

¬ «
73
Hibbing Taconite USS Minntac Mine

¬ «
135

Franconia Minerals Birch Lake Project

¬ «
169
Laurentian Energy

Mesabi Nugget

ITASCA
Keewatin Taconite

PolyMet Northmet Deposit Development

Hoyt Lakes

Mountain Iron Chisholm Buhl

Biwabik Virginia Gilbert Eveleth
Mittal Steel Minorca Mine Excelsior Energy Proposed Plant

LAKE

£ ¤
169

¬ «
38
UPM Blandin Paper Co: Thunderhawk Project & Unit 7 Expansion

Excelsior Energy: Proposed Plant

¬ «
1
Northshore Mining Furnace 5 Restart

Keewatin Nashwauk
Minnesota Steel Industries

Hibbing
Laurentian Energy

¬ «
37

£ ¤
53
United Taconite

Coleraine Bovey

£ ¤
169

Silver Bay

Grand Rapids

¬ «
65

¬ «
73

SAINT LOUIS

¬ «
61

£ ¤
169

Lake Superior

´

0

2

4

8

12

16 Miles

Page 12 of 31

9/4/07

Northeast Minnesota Housing Studies

Koochiching County Housing Study and Action Plan Prepared for Koochiching Housing Coalition Arrowhead Regional Development Commission, June 2005 Housing Market Analysis and Demand Estimates for Hibbing, Minnesota Prepared for Hibbing Housing and Redevelopment Authority November, 2005 Maxfield Research Inc. Housing Impact Analysis Conducted for the Greenway Area Business Association, Itasca Development Corporation/Jobs 2020 and Itasca County Housing and Redevelopment Authority Rebecca Cohen, December 2005 Housing Market Analysis and Demand Estimated for Grand Rapids, Minnesota Prepared for Housing and Redevelopment Authority of Grand Rapids, City of Grand Rapids, Independent School District 318, Grand Rapids, MN Maxfield Research Inc., September 2003 Ely Area Housing Study Prepared for Community Economic Development Joint Powers Board Community Partners Research, Inc. May 2002 Ely Area Housing Study Update 2002 Hired by Community Economic Joint Powers Board, consisting of the cities of Ely and Winton, the Town of Morse and Independent School District #696 Community Partners Research, Inc. City of Virginia Housing Study
A comprehensive analysis of the overall housing needs of the City of Virginia

Prepared for the City of Virginia Community Partners Research, Inc. April 2001 City of Babbitt Housing Needs Assessment Prepared for the City of Babbitt Arrowhead Regional Development Commission, January 2000 Ely Area Housing Study Prepared for the Community Economic Development Joint Powers Board Community Partners Research, Inc. January, 2000

9/4/2007

1

Page 13 of 31

9/4/07

City of Eveleth Housing Study Prepared for Eveleth Economic Development Authority (EDA) Community Partners Research, Inc. Draft August 2000 City of Bigfork Housing Study (an update of the 1999 Itasca County Housing Study) Prepared for Itasca County Housing and Redevelopment Authority Community Partners Research, Inc. 1997 Housing Needs Assessment Hibbing, Minnesota Prepared for Hibbing Housing and Redevelopment Authority Maxfield Research Inc., January, 1998 City of Tower Limited Housing Market Study on The Need For Additional Single Family Housing Lots Prepared for the City of Tower Arrowhead Regional Development Commission, September, 1998 City of Duluth Housing Needs Assessment Prepared for Duluth Housing Study Committee Arrowhead Regional Development Commission, Fall 1998 Cook County Housing Assessment Prepared for Cook County Resource Development Council Arrowhead Regional Development Commission, May 1997 Northeast Minnesota Regional Housing Assessment Prepared for Iron Range Economic Alliance July 1, 1995 Arrowhead Regional Development Commission Rental Housing Market Analysis and Demand Estimates for Selected Areas in the St. Louis County, Minnesota Housing Partnership Prepared for St. Louis County Housing and Redevelopment Authority Maxfield Research Group Inc. January, 1994 Northeastern Minnesota Comprehensive housing Affordability Strategy Prepared for a Five County Consortium: Cook Itasca Koochiching Lake Saint Louis Nancy Freeman and Associates, November 1991

9/4/2007

2

Page 14 of 31

9/4/07

Other publications: 2006 Community Report, Socioeconomic Indicators, Itasca County Area 2003 State of Housing, Housing Facts and Figures, St. Louis Co and City of Duluth Census 2000, Census Report, Mapping & Facts, A Geographical Portrait, St. Louis Co. Itasca County HRA Strategic Plan, 2005 Regional Housing Affordability, April 2005, Minnesota Housing Partnership St. Louis County Housing Snapshot, 2007 WORKER HOUSING, Temporary, St. Louis County Land-Use Requirements, 2007 Mesabi Iron Range Large Scale Development Projects, May 2007

9/4/2007

3

Page 15 of 31

9/4/07

Housing Plans Summary, Themes, & Opportunities Minnesota Housing Partnership reviewed recent housing plans to see what themes emerged and provide those themes for your own decision-making. The themes which emerged, while interesting should not be conclusive without updates from a more current regional study. 1. Housing rates (cost and density) follow amenities and jobs. a. Communities with physical amenities (lakes, rivers, theatres) have provided more housing developments, followed by communities with job growth. High amenity communities are more likely to develop housing and tend to see low-income housing as secondary. Communities with job growth tend to want a mix of housing. b. Homes in communities with a high number of amenities and high percentage of jobs to residents receive home sale prices almost double that of homes in low employment and low amenity areas. c. Very few communities see manufactured homes or subsidized apartments as a serious option. 2. The condition of older homes are not known. a. While there are funds for rehab work, even at a reduced interest rate homeowners may not see rehab as a financially viable option. b. Various capacity levels or desires in enforcing housing standards may lead some to think livable housing is not a community issue. 3. Small coordinated developments are as important as large developments. a. When looking at affordability, small coordinated housing developments across communities yield cost saving that enable families with lower incomes to purchase or rent. b. Developments that include single-family, multi-family, and rental properties are viable in communities with increasing employment levels. 4. Many communities consider low-income housing a secondary market. Opportunities (social and economic changes) 1. Anticipated job growth along Hwy 169 will fuel need for temporary and long-term housing. 2. The creation of strong working relationships that go beyond history, geography, or issue. 3. Federal rural policy is putting less emphasis on commodities and more toward community development issues. 4. Staff from regional and statewide entities are ready to be part of a regional housing effort. 5. Funders are ready to look for opportunities.

Page 16 of 31

9/4/07

Page 17 of 31

Dynamic Market Analysis & Housing Needs Assessment Tool

9/4/07

Goals of Dynamic Analysis Tool
1. Identify housing production capacity and identify need for added capacity from private market, non-profit partners and public agencies. Inform planning opportunities by housing type – identify the need for temporary construction worker housing vs. longterm homeownership and rental needs, and the possible conversion over time that provides both temporary worker housing and high-quality, affordable, permanent housing for the region. Identify opportunities geographically – assess buildable sites, redevelopment needs and pending projects in specific communities within the region to shepherd and inform implementation strategies. Help attract resources for plan implementation -Provide usable, accessible and informative document for communities, agencies, builders and funders. Banks, non-profit and public funders need clear, specific and detailed documentation and review of local housing market data to inform funding decisions and investments. Support further planning, and local and regional collaboration through coordinated planning effort – Range Readiness process engages stakeholders from across the region, supporting collaborative thinking, strategic planning, decision making and collective action.

Key Partners and Roles
Professional Consultant
Market research analysis & housing needs assessment

2.

Public & Private Funders
Resources, consultation and technical assistance

3.

Local Housing Professionals
In-kind participation, collaboration and data coordination

Range Readiness Taskforce
Current economic and industrial expansion data, housing subgroup to coordinate info

4.

5.

OUTCOME: Collated, consistent and up-to-date baseline information feeds dynamic tool for modifying and adjusting housing needs assessment based on frequently changing market conditions to inform housing readiness planning and project implementation.

Page 18 of 31

9/4/07

Examples of Critical Baseline Planning Data Needed to Assess Existing and Projected Housing Needs
Benchmark Existing Housing Market Information
Existing housing supply Existing Housing Conditions Current vacancies and rents among rental properties restricted to moderate- and lowincome households - rental types, number of properties and contacts Number and type of housing units currently in the development pipeline Number of existing homes currently for-sale by price range Number of new homes/lots available for development by price range Sample of market-rate rental properties in the study region Economic development projects with short-term and long-term employment impacts

Data Source
•U.S. Census •ARDC •MHFA •Local housing professionals and agencies •Local housing professionals and agencies •Local MLS •Local housing professionals •City/county staff •Public listings •Iron Range Resources

Information used for analysis of housing needs based on current forecasts of population, household and employment growth in study area by identifying gaps or oversupply in the availability of housing at all income levels and housing types.

• •

Collaborative process saves all constituents money, streamlines research process, and creates consistent baseline market information throughout region to inform decision making structure and strategic local priorities. Market analysis normally costs in excess of $10 thousand per community/study – the scope of this project, if executed by individual communities along the 169 planning corridor, would easily total over $200,000 and would likely lack regional context and consistent baseline information and data classification. Proposed process presents opportunity to save money, and act on a tight time-table, through local cooperation and in-kind support, to produce a dynamic modeling tool that is easily updated as new development occurs throughout the affected corridor.

Page 19 of 31

Collaborative Housing Action Plan Process

9/4/07

Planning Process

Market Market Study Study

Housing Housing Vision Vision
Establish local Establish local goals and goals and priorities priorities

Resource Resource Inventory Inventory
key players, key players, local capacity, local capacity, decision-making decision-making structures, structures, resources resources

Production Production Goals Goals
Site & housing Site & housing type specific type specific

Plan Plan Projects Projects & & Submit Submit Funding Funding Proposals Proposals

Develop Develop Individual Individual Projects in Projects in Local Local
Communities Communities

High Need Estimate

Low Need Estimate

Housing Action Plan based on documented needs, available resources and highest local priorities

Develop projects and update on progress

Housing production based on limited resources, and individual communities strategic use of limited dollars to meet highest local priorities.

90 Days

Ongoing
Monitor Production Goals and Project Development

Page 20 of 31

9/4/07

Situation Review – pg 1 • • • • • • Delivery capacity to administer Gap information – market analysis Move out silo’s Impact on retiree’s Funders interested Amenities

Funder Panel Question/Answer – pg 2, pg 3 • • • • • • • • • • Levy program flexibility? Staffing capacity develop joint powers or regional approach MHFA flexibility? loan vs. grant for capacity building Situation – non-traditional – urgent here…so is Southern Minnesota Low income displacement Impact policy makers Move coordination – more competitive Secondary market pooling/investments model? Multi-County HRA? Urgency – Temporary Housing Response Anticipate and address permanent housing needs

Page 21 of 31

9/4/07

Private and Public Structure – pg 1 1) Use existing structure – mix roles and responsibilities: o Staff o $$$ o HRA o CAP’s Model – develop planning tool: o Private Private versus Public: o Need information o Coordinate o “Red Tape” access to resources/permits

2) 3)

Structure (Option) – pg 2 • • • • JPA Inter-community collaboration Six to twelve months - R.R. housing sub group jointly formed R.R. Concerns: o Temporary worker housing o Impact on existing affordable housing

Vision – pg 3 • • • Moving from dependence to self-reliance and regain interdependency Resources: Fund and implementation Incentives: result orientated

Next Steps – pg 4, pg 5 1) 2) Education/Community decision makers at all levels Plan – Define: o Flow o Government o Budget Get buy-in: o Private o Public o Employers Get local lenders involved Results - projects in the ground

3)

4) 5)

Page 22 of 31

9/4/07

6) 7)

Celebrate good work: o P.R. Share combined information /plan Business plan: o Need based

Pros – pg 6, pg 7, pg 8, pg 9, pg 10 1) 2) 3) 4) 5) 6) 7) 8) 9) 10) 11) Reduce Duplication Efficiency in investment Broader picture Efficient delivery/communication/information Share Expertise Prioritize project Institution commitment Pooling political base (see page 16) Cross ideas Adv. opps of timing/economic expansion Id gaps: o Delivery o $$$ o Need Consistent with value of funders “self-selection” Willing participation or non-players Improved access to capacity Excitement (sustain) Local Regional Leadership -----Choice Voice in program/funding policy development Go to group for information/go to private sector for knowledge Other existing culture of JPA: o Climate of Urgency o Models –IRR sub-regional Funder incentives Range wide ID sites and Opps.

12. 13. 14. 15. 16. 17. 18. 19. 20. 21.

Challenge – pg 11, pg 12, pg 13 1) Credibility – Private Public Partnership o Personality o Performance o History o Membership/Leadership Decision Making Convince Policy Makers “Political Will” Admin Funding – Meeting Cost

2) 3)

Page 23 of 31

9/4/07

4) 5) 6) 7) 8)

9) 10) – pg 16 • • •

Past precedent - unknown political will Competition – “econ” + private vs. public Lack of vision – plan? Self-reliance Shift from employer $ ?Existing funding sources/ priorities Geography “real and perceived” o Mine Rights o Land Ownership o G.R. to Ely??? 132mi., 16,000 sm o Short Hwy 169 Long Multi and Co o Service and program delivery area o IRR – sub regional planning $20 mil o History past relationship Non-profit status Funder program reg

Engage elected officials Link housing with education thru range readiness Union labor market information

Reactions/Themes – pg 17 • Today’s work needs to be further within structure process: o Build options o Displacement impacts o Engage private sector o Need quantification o Project expediter

Page 24 of 31

9/4/07

Page 25 of 31

9/4/07

Northeast Minnesota Housing Readiness Planning Day August 28, 2007 * Pre-Registered Attendees
Name

Barbara Gene Stewart Jannelle Jim Ted John Megan Patrick Ken Skip Tarry Reed John Dick Leah Jennifer Jennifer Dana Eric Andy Mary Bob Ellery Diane Steve Nancy Duane Sandy Jim Devon Catherine Barb Andrew Jill Gary John Gaylene Wayne Donavon Tammy Rick Richard Scott

Ackerson Baker Bastian Bastian Berry Birch Chell Christianson Donahue Doresky Duchesneau Edington Erickson Fedo Grabko Hall Hawkins Hawkins Hiltunen Howe Hubley Ives Johnson July Larson Nelson Norr Northagen O'Fallon Paske Pohlman Sampson Sanderson Schlack Schubert Shields Sloan Spolarich Stave Thronson Thronson Utech Walsh Zahorik

Job Title Housing Developer Mortgage Banker

Company/Organization Arrowhead Economic Opportunity Agency Wells Fargo Home Away From Home Home Away From Home Vice President Hurst and Henrichs MN. LTD. Verndale Custom Homes Executive Director Arrowhead Regional Development Commission Director Northern Minnesota Builders Association Program Director NRRI-Wood Products Housing Development Officer Minnesota Housing President D.W. Jones, Inc. Housing Development Specialist Itasca County HRA Director, Small Cities Program DEED Economic Development Coordinator RLK Inc Principal SEH Planner Arrowhead Economic Opportunity Agency (AEOA) SR Analyst Economic Development Minnesota Power Minnesota Power AEOA Mayor City of Palisade Division Director ARDC Real Estate Developer Ives Realty Boswell Unit 3 Manager Minnesota Power Vice President of Operations MHP Executive Director Itasca County HRA St. Louis County Minnesota Power Community Economic Development Coordinato City of Hibbing KOOTASCA Community Action Executive Director HRA of Virginia Minnesota Housing Director-Area Agency Aging Division ARDC Itasca County and Grand Rapids HRA Boards GMHF Director GRACE House of Itasca County Verndale Custom Homes City of Coleraine Clerk City of Palisade Verndale Custom Homes Home Away From Home Home Away From Home Community Dev. Specialist Itasca Economic Development Corporation Community Dev Rep Iron Range Resources Director of Asset Development/Housing KOOTASCA Community Action, Inc.

Email backerso@aeoa.org gene.baker@wellsfargo.com s.bastian@thehomefromhome.com j.bastian@thehomefromhome.com jberrype@qwest.net ted@verndalecustomhomes.com jchell@ardc.org nmba@paulbunyan.net pdonahue@nrri.umn.edu ken.doresky@state.mn.us skipdwjones@arvig.net tarryhra@grandrapidsmn.com reed.erickson@state.mn.us jfedo@rlkinc.com dgrabko@sehinc.com hall@aeoa.org tloken@mnpower.com jhawkins@mnpower.com dhiltunen@aeoa.org spoly@frontiernet.net ahubley@ardc.org mary.mirealty@mchsi.com rljohnson@mnpower.com ejuly@mhponline.org ichra@grandrapidsmn.com nelsonst@co.st-louis.mn.us nnorr@mnpower.com dnorthagen@ci.hibbing.mn.us sandyo@kootasca.org jim@vhra.org devoni@hotmail.com csampson@ardc.org bsanders@paulbunyan.net aschlack@gmhf.com jill@grgracehouse.org garyshields@verndalecustomhomes.com john@greenwayrealty.com spoly@frontiernet.net wayne@verndalecustomhomes.com d.thronson@thehomefromhome.com t.thronson@thehomefromhome.com rick@itascadv.org Dick.Walsh@IronRangeResources.com scottz@kootasca.org

Page 26 of 31

9/4/07

FOR IMMEDIATE RELEASE August 1, 2007 Contacts: Warren Hanson Greater Minnesota Housing Fund 332 Minnesota Street - Suite 1310-East Saint Paul, MN 55101 800.277.2258, ext. 107 | 651.221.1997, ext. 107 whanson@gmhf.com | www.gmhf.com FORECLOSURES: TWICE AS MANY AS WE THOUGHT IN OUTSTATE MINNESOTA? The wave of foreclosures swamping greater Minnesota may be twice as large as previously reported by national studies, housing officials heard at a recent “Greater Minnesota Foreclosure Crisis Summit” in St. Cloud. More than 60 community leaders from outstate Minnesota gathered in Saint Cloud to hear the results of a new study documenting that foreclosures in Minnesota are occurring at twice the rate previously being reported to Congress and other policymakers. The summit was convened by Greater Minnesota Housing Fund, a statewide non-profit affordable housing organization. “This newest study reveals what was an invisible epidemic of foreclosures in Greater Minnesota,” said Warren Hanson, president of Greater Minnesota Housing Fund. “We now see that the foreclosure crisis extends to every corner of the state and hurts both families and neighboring property owners,” said Hanson. The new study quantified for the first time the number of actual sheriffs’ sales of foreclosed properties county by county in Minnesota1 in 2006. It found a stunning 11,207 foreclosures statewide — nearly double the 5,995 reported in a national study2 conducted by RealtyTrac, a leading provider of real estate industry data, over the same period. The study, which covered the 80 counties outside the Minneapolis-St. Paul metropolitan area (“Greater Minnesota”), was commissioned by Greater Minnesota Housing Fund and prepared by HousingLink, a Minneapolis-based research organization that provides information to housing organizations and policymakers. To assure the integrity of the study, researchers contacted officials in each of the 80 counties of greater Minnesota to collect actual sheriff’s sale data—the first time that such a study has been completed. It
Data is for 80 counties in Minnesota; seven of 87 counties did not provide data for the study. The full study is available at http://gmhf.com/foreclosure.pdf. 2 “More Than 1.2 Million Foreclosure Filings Reported in 2006.” , available at http://www.realtytrac.com/ContentManagement/pressrelease.aspx?ChannelID=9&ItemID=1855&accnt=64847 )
1

Page 27 of 31

9/4/07

complemented a similar 2007 study on foreclosure trends in the seven-county Minneapolis-St. Paul area completed by Housing Link for the Foreclosure Prevention Funders’ Council, a collaboration of Twin Cities area affordable housing funders. Previously, data on Minnesota’s foreclosure rates depended on nationally-publicized foreclosure reports which cite RealtyTrac data, a national provider of real estate data. The two new Minnesota based studies highlight that the foreclosure crisis in Minnesota may be much worse than many officials realized. Greater Minnesota foreclosures were up dramatically from 2,707 in 2005 to 4,168 in 2006. Based on first quarter 2007 foreclosure figures, Greater Minnesota Housing Fund and Housing Link project that total foreclosures will reach 8,721 in Greater Minnesota in 2007. The 2007 projected rate of foreclosures varies widely across the state, with rates ranging from 1 in every 1000 households in foreclosure in some rural counties to more than 2 of every 100 households in the hardest hit counties. Foreclosure rates tend to be highest in the counties that adjoin the Twin Cities metropolitan area. For example, approximately 3 of every 100 households in Chisago and Isanti counties are projected to be in foreclosure in 2007. Foreclosures often result from what are called subprime loans and predatory sales practices. “Not all subprime loans are predatory,” University of Minnesota housingstudies professor Jeff Crump told the group in St. Cloud, “but nearly all predatory loans are subprime.” Predatory practices include lending without regard to borrowers’ ability to pay, failing to verify borrowers’ income, “churning” or repeat refinancing, charging excessive fees, and high-pressure sales and marketing. “Predatory loans,” says Crump, “are sold, not bought.” In fact, Crump said, “half of subprime borrowers actually would have qualified for a prime loan. There are a lot of people who paid more for their mortgage than they should have paid.” Meanwhile, subprime loans are “clearly associated with increased foreclosure,” said Crump. According to Home Mortgage Disclosure Act (HMDA) data, subprime loans represent about 25 percent of all loan originations in small communities around Minnesota and surpass 40 percent in several counties — 47 percent in Faribault County in 2005, for example, according to Crump. “The national wave of subprime mortgage foreclosures has resulted in hardship for thousands of families throughout the state,” said Hanson. Foreclosures can devastate family finances. Following foreclosure, many families are displaced from their neighborhoods and communities, and their credit ratings are

Page 28 of 31

9/4/07

irrevocably damaged. Moreover, foreclosures can result in abandoned properties that may reduce the value of nearby homes and adversely impact entire neighborhoods. Local governments are feeling the pinch from rising foreclosures. Some city officials report having to mow the lawns of foreclosed homes where lenders have abandoned their responsibility to maintain the properties. A recent report by the U.S. Congressional Joint Economic Committee3 estimates that the combined costs of foreclosures for all stakeholders– borrowers, lenders, city and local governments, and neighboring homeowners—can be as high as $80,000 per home. What should be done about the growing foreclosure crisis? “It’s an issue that defies simple solutions,” said Mike Haley, deputy commissioner of the Minnesota Housing Finance Agency. Haley outlined ways in which the state may be able to help including enhancing the current foreclosure prevention and homebuyer counseling resources available to all state residents. While Minnesota has a strong network of nonprofit foreclosure prevention counselors, the system is being strained by a record volume of assistance requests from struggling homeowners. A conference participant suggested that late payment notices from lenders should include the contact number for a local foreclosure counseling agency. “Homeowners prefer to talk to someone from Minnesota who can help them understand their options before they contact the national call center of a bank,” said one foreclosure counselor in attendance. Julie Gugin, executive director of the nonprofit Minnesota Home Ownership Center, noted that homeowners facing the prospect of foreclosure can contact the Center at 866-462-6466 or online at http://www.hocmn.org/map.cfm?pageID=7 for referrals to foreclosure prevention services in their community. However, to provide those services effectively, more financial counselors are needed, particularly in areas where numbers of foreclosures are increasing. Another conference participant noted that lack of information is a significant barrier to addressing the foreclosure problem, noting that “we need better data and more frequent data on foreclosures so we can track and respond to the problem.” It’s an issue that won’t go away. “Our research suggests that with flat or depreciating home values expected to continue, the foreclosure surge is nowhere near the end,” said Melissa Manderschied, a land-use attorney with Kennedy and Graven in Minneapolis.

“Sheltering Neighborhoods from the Subprime Storm”, Joint Economic Committee of the U.S. Senate, March 2007, http://jec.senate.gov/Documents/Reports/subprime11apr2007revised.pdf

3

Page 29 of 31

9/4/07

To address the balloning foreclosure crisis in greater Minnesota, Greater Minnesota Housing Fund is partnering with key stakeholders and affordable housing funders to develop strategies and responses to assist families and communities confronting foreclosure. GMHF and its partners will monitor state-wide foreclosure trends and data, work to expand the foreclosure prevention counseling programs and resources available to families, and provide assistance to cities and towns facing a growing number of vacant and/or blighted properties due to foreclosure. --Founded in 1996 by The McKnight Foundation and the Blandin Foundation, Greater Minnesota Housing Fund is a private, nonprofit organization that supports the creation of affordable housing throughout the 80 counties outside of the Twin Cities metropolitan area. By combining its resources with funds from other private and public organizations, GMHF offers financial and technical assistance to make affordable housing initiatives possible, and develops affordable housing strategies that strengthen local communities, promote economic vitality, and increase the health, stability and self-sufficiency of lowincome and working families in greater Minnesota. Since its inception, GMHF has provided over $89.3 million to help create over 6,748 affordable homes worth over $774 million statewide.

Page 30 of 31

9/4/07

FOR IMMEDIATE RELEASE For more information contact:

Barb Jacobs, (651) 649-1710 ext. 117 Minnesota Housing Partnership

Andrew Schlack, (651) 221-1997 ext. 106 Greater Minnesota Housing Fund

Northeastern Minnesota Leaders Come Together to Plan for Incoming Workforce
Meeting Marks the Beginning of New Approach to Planning for Homes on Minnesota’s Iron Range
Hibbing, Minn. (August 30, 2007) – Faced with the possible creation of over 1,700 permanent and as many as 6,500 construction jobs on the Iron Range, Northeastern Minnesota communities and organizations, Minnesota Housing Partnership (MHP), and the Greater Minnesota Housing Fund (GMHF) came together on August 28th to strategize about housing the new workforce. Fifty-four representatives from a wide array of Range communities, service agencies, and private business participated in the meeting and showed support for creating new approaches to meeting housing need in the area. “Our primary goal,” said Chip Halbach, MHP’s executive director, “was to have an environment where local solutions and expertise emerge with clear action steps that illustrate how to move forward. We’re pleased to report that at this meeting several initial actions were identified.” Participants agreed to first get a handle on the housing need facing the Iron Range by pursuing a dynamic market analysis developed by GMHF which will be equipped to track rapidly changing employment projections. Acknowledging the need for urgency and timeliness as various industrial projects approach fruition, participants voiced the desire to complete the market assessment in the next 90 days. “We’re pleased to see so many representatives of public and private agencies uniting to address the housing impact of some twenty major industrial projects planned for the region,” continued Halbach. “A unified, collaborative approach will benefit everyone.” Many local and regional organizations have already started working together to address the possible economic growth. One group, the Iron Range Large Scale Projects Readiness Initiative has already organized a response process and is moving ahead to address housing,

Page 31 of 31

9/4/07

infrastructure, government services, workforce and other needs arising from the realization of one or more proposed industrial developments in the area. “I look forward to working with the housing group emerging from this meeting on helping Northeastern Minnesota grow in a sustainable way,” said Range Readiness facilitator Randy Lasky. “There is tremendous potential to address temporary and permanent housing needs as we look at non-traditional and flexible ways to finance and construct a variety of market rate and affordable housing while minimizing displacement of low income residents and the elderly population. We have the opportunity and a responsibility to maximize our effectiveness by bringing all of the resources available in a coordinated, targeted, and equitable manner.” In addition to needs assessment and coordination, organizations that fund affordable housing development in Northeastern Minnesota shared ideas on how the region can attract more resources for projects. Greater Minnesota Housing Fund, the Minnesota Department of Employment and Economic Development (DEED) Small Cities Development Program, Blandin Foundation, Minnesota Housing, and Minnesota Housing Partnership underscored the importance of regional collaboration to help address both short- and long-term affordable housing needs through collaborative planning and project coordination. “The potential for new economic development along the Highway 169 corridor brings the prospect for new workforce housing needs throughout the region. We support all efforts to work collaboratively to address the full range of temporary and long-term housing needs” said Warren Hanson, president and CEO of Greater Minnesota Housing Fund. Earlier this year, Greater Minnesota Housing Fund announced it had set aside $1 million to help Northeastern Minnesota respond to projected housing needs related to economic expansion. “As a funder, GMHF is committed to being nimble and responsive to emerging affordable housing needs in Northeast Minnesota. Our Board of Directors feel funds need to be reserved for well-planned projects to help strengthen communities and families and support economic expansion and business investments on the Range,” Hanson explained. --Founded in 1996 by The McKnight Foundation and the Blandin Foundation, Greater Minnesota Housing Fund is a private, nonprofit organization that supports the creation of affordable housing throughout the 80 counties outside the Twin Cities metropolitan area. By combining its resources with funds from other and public organizations, GMHF offers financial and technical assistance to make affordable housing initiatives possible, and develops affordable housing strategies that strengthen local communities, promote economic vitality, and increase the health, stability, and self-sufficiency of low-income and working families in Greater Minnesota. The Minnesota Housing Partnership is a statewide nonprofit organization that advances the preservation and creation of housing affordable to low- and moderate-income people as a means of strengthening communities and families. MHP provides local governments and nonprofit housing organizations access to loans, grants, and technical expertise to plan and construct housing, in addition to advocating and educating people on sound housing policies. MHP's work in Greater Minnesota is primarily supported by The McKnight Foundation. ###