06-20-2022 Council Packet - Laserfiche WebLink

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Memo To: Members of the City Council of the City of Little Canada Chris Heineman, City Administrator Corrin Wendell, Community Development Director From: Mikaela Huot, Director Date: June 20, 2022 Subject: TIF Loan Agreement between City of Little Canada and Twin Lake Limited Partnership Executive Summary The City of Little Canada (the “City”) has agreed to provide financial assistance to Twin Lake Limited Partnership (the “Developer”) as related to the construction of a 60-unit multifamily affordable housing project comprising of 1, 2 and 3-bedroom units with income and rent limits restricted to 60% area median income (54 units) and 30% area median income (6 units) (the “Project”). The City will provide a loan to the Developer using unobligated tax increment revenues from several of its existing Tax Increment Financing (TIF) districts exercising the authorized provisions of Minnesota Statutes 469.176 Subdivision 4n (temporary use of increment authorized). The City adopted a spending plan for the districts (Tax Increment Financing (Redevelopment) District No. 3-2, Tax Increment Financing (Housing) District No. 3-3 and Tax Increment Financing (Renewal & Renovation) District No. 5-1) at the June 8 City Council meeting after public hearing to authorize for the transfer of the identified unobligated funds ($1,000,000) to be used as a loan for this project. Pursuant to the terms of the TIF Loan Agreement between the City and Developer, the City will provide a loan in the amount of $1,000,000 for the Project. The Developer will use available funds from the TIF Loan to pay eligible project costs (defined as landscaping, including irrigation, foundations and footings, grading/earthwork, engineering, survey, environmental testing, soil borings, site preparation, onsite utilities, storm water/ponding, outdoor lighting, onsite road, curb, gutter, driveway, sidewalk, and streetscape improvements, parking and construction of affordable housing). Repayment of the TIF Loan by the Developer to the City shall be as follows: • Annual interest-only payments on the outstanding principal balance of the TIF Loan, as follows: o 1% of the principal amount of the TIF Loan on July 1, 2023 to July 1, 2037 ($10,000/year); o 3% of the principal amount of the TIF Loan from July 1, 2028 to July 1, 2032 ($30,000/year); and o 4% of the principal amount of the TIF Loan on July 1, 2033 to July 1, 2039 ($40,000/year); • As of July 1, 2039, the entire outstanding principal balance of the TIF Loan, if not previously paid, shall be due and payable in full ($1,000,000).