Agenda - Economic Development Authority - 03/08/2012

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COMPARISON OF HRA AND EDA ENTITIES IN MINNESOTA Cities have authority to aid and cooperate in the planning, construction, or operation of economic development, redevelopment and affordable housing projects. These can be done through various government organizations. The predominant method of delivering and administering housing and redevelopment programs in Minnesota is through a legal public entity, accountable to city government. Since 1947 a city in Minnesota may establish this public agency, often a Housing and Redevelopment Authority (HRA) (MN Stat. 460.001 to 469.047), of which there are more than 230 in Minnesota. An HRA is a public corporation with power to undertake certain types of housing and redevelopment or renewal activities. While state legislation conveys authority for HRAs in each City, it is up to the City Council to formally establish an HRA before it can do business and use its powers. In addition to carrying out redevelopment efforts, HRAs are often the affordable housing entity that provides decent and safe rental housing for eligible low and moderate income families, the elderly and persons with disabilities. HRA activities can lead to reinvestment in commercial neighborhoods through acquisition, demolition and rehabilitation. In 1986 the Minnesota Legislative passed legislation (MN Stat. 469.090 to 469.1082) authorizing cities to establish formal Economic Development Authorities (EDAs) to promote local economic growth. An EDA is a legal entity created by a City to facilitate a well- rounded development program by taking advantage of various powers granted to other development entities, including port authorities and HRAs. By combining these powers, community leaders are able to create flexible business assistance and development programs. EDAs are allowed to buy and sell property, make loans and grants to businesses, provide loan guarantees and to sell bonds, subject to various limitations and conditions. Housing Redevelopment Authorities HRAs have two missions: to identify, eliminate and prevent the emergence of blight; and to facilitate development of housing affordable to low and moderate income persons. A blighted area is one with buildings and areas that are detrimental to the health, safety and welfare of the community because of dilapidation, obsolescence, and certain other factors. The HRA may then provide for improvements or redevelopment of these areas through a redevelopment plan. Regarding, affordable housing, the HRA determines what income limits are "low and moderate" (though many state and federal programs also set limits). HRAs may then take any action to facilitate, or even construct and own, housing for income - eligible persons. The area of 386164v2 SJB KG400 -12 Economic Development Authorities The overall purpose of an EDA is to promote economic development, using some specific powers granted to EDAs (some of which are similar to port authority powers), as well as all the powers of an HRA and of a city under the municipal development district statute. EDAs may exercise powers in an "economic development district ", or may create redevelopment projects or housing development projects (acting as an HRA) or development districts (acting as a city). In other words, an EDA can act as an HRA as well as use broader powers to stimulate economic development that is not directly related to either blight or affordable housing.