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Olmsted County's Mayowood Road senior housing project won't see state funding this year

The lack of approved funding on state level means few projects are expected to be on list when Minnesota Housing financial support is announced later this year.

Mayowood II Apartments.jpg
The site for Olmsted County's planned Mayowood II Apartments sits next to the existing Mayowood Apartments, which were constructed by Center City Housing at 1011 Mayowood Road SW.
Randy Petersen / Post Bulletin
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ROCHESTER — A proposed 36-unit apartment complex for low-income seniors won’t receive state support in the next round of funding.

“We got a rejection letter from the state; we are not getting funding from them for the 2023 round,” Olmsted County Housing Director Dave Dunn said of the application for state support of a proposed county-owned project dubbed Mayowood II at 1001 Mayowood Road SW.

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The project, with an estimated $12 million price tag, was seeking to use funds the state borrows through housing infrastructure bonds to build the proposed county-owned housing. The plan calls for maintaining at least half the 36 units for people earning less than 30% of the area median income, placing the maximum income at $24,720 for a couple and $21,630 for an individual.

The county applied for funding support through Minnesota Housing in July, and funding awards are expected to be announced in December.

Jill Mazullo, communications director for Minnesota Housing, said she could not comment on specific projects before state funding – which can include support through tax credits or housing infrastructure bonds – is announced.

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However, she said many projects that won’t qualify for funding this year have been notified, so developers and local governments can consider other options.

“For context, Minnesota Housing typically receives four to five times more funding requests than there is funding available,” she said.

Dunn said the county had hoped to receive funding through the state housing bonds, which weren’t approved this year when related legislation was left unfinished by the Minnesota Legislature.

Mazullio said the lack of state approval increased the level of competition for housing support throughout the state.

“The largest source of capital provided by the Legislature for housing development is housing infrastructure bonds, and the governor was requesting $250 million in new authorizations,” she said. “Without new resources provided by the Legislature, Minnesota Housing will select fewer rental housing developments compared to recent years.”

The 2021 Minnesota Housing funding announcement included approximately $265 million in funding for projects throughout the state.

Olmsted County housing staff worked earlier this year in an effort to make the county’s application as competitive as possible. Key points included donation of the land, dedication of housing subsidy funds, waiving of some city development fees and dedicating a large portion of the project to seniors in the lowest income brackets.

Dunn said if county commissioners decide to approve another application next year, the details would likely remain unchanged, in hopes that more funding becomes available, which would allow more projects to be approved.

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Until then, he said staff is considering options.

“We’re going to look to see what other opportunities we have with other funding sources,” he said, pointing to a goal of determining the next steps by the end of the year.

Randy Petersen joined the Post Bulletin in 2014 and became the local government reporter in 2017. An Elkton native, he's worked for a variety of Midwest papers as reporter, photographer and editor since graduating from Winona State University in 1996. Readers can reach Randy at 507-285-7709 or rpetersen@postbulletin.com.
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