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MINUTES <br />CITY COUNCIL <br />APRIL 2, 1997 <br />percentage could go up or down. Brachman indicated that people making <br />more money are usually looking to rent in a newer apartment complex. <br />Scalze pointed out that there are places to live in Little Canada for people <br />whose incomes exceed low to moderate guidelines. However, she did not <br />want to say that The Provinces is a place were these people cannot live. <br />Brachman stated that they wil] not turn away people who make more <br />money than the ~uidelines allow. If people leasing apartments fall within <br />the guidelines, then Dominium will get a tax credit. If not, there will be <br />no tax credits. Brachman again pointed out that tax credits generate <br />dollars which can be used to make improvements to the property. <br />Ippel pointed out that at this point Dominium will syndicate 40% of the <br />units for tax credits. Dominium is requesting an upward adjustment of <br />that percentage and is proposing 85%. However, 40% is the floor, and <br />there would be movement between the 40% figure and 85% figure. If at <br />the end of 1997, for example, there were 60% of tenants meetin~ <br />low/moderate income guidelines, then tax credits would be claimed for <br />60%. However, if 85% is the ceilin~ that is established, at no time could <br />tax credits be collected for over that percentage. <br />F1hey pointed out that the obvious problem is there is a financial incentive <br />in a hi~her percentage, and asked if that will cause prospective tenants <br />whose incomes are too high to be turned away. <br />Brachman reported that Dominium is willing to enter into an agreement <br />which sYates that Yhey will not turn higher income tenants away. This <br />agreement can provide for penalties. Brachman felt the Council was <br />losing site of the fact that with additional tax credits enough dollars will be <br />generated to sprinkler the buildings and improve landscapin~. <br />Todd U~ness, an attorney representing Dominium, indicated there is no <br />financial incentive to having an empty unit. Therefore, not renting to a <br />qualified tenant with a l~igher income in hopes of renting later to one who <br />meets low/moderate income guidelines is not economically feasible. <br />The City Administrator pointed out that tax credits for one unit calculates <br />to approximately $100 per month. Urness pointed out that the loss of one <br />or Ywo month's rent on a unit virtually wipes out the tax credit for the year. <br />Therefore, tl~ere is no i~~centive to leave a unit vacant. <br />Scalze pointed out that 60% of the housing in Little Canada is multiple- <br />family housing. Scalze felt it was in the best interests of the City not to set <br />a precedent and approve tax credits at a level of SS% to 100% fo~ The <br />7 <br />