11-12-2025 Workshop Packet - Laserfiche WebLink

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STAFF REPORT To: Mayor Fischer and Members of the City Council From: Ben Harrington, AICP, Community Development Director Date: November 12, 2025 Re: TIF and Conduit Bond Support Request – 99 County Road B – Lupe Development Actions To Be Considered Consider Lupe Development’s revised financing requests, including a modified TIF proposal and a request for conduit bond support, for a 106-unit senior affordable housing development at 99 County Road B. Background Lupe Development has submitted a revised request for the City of Little Canada to establish a tax increment financing (TIF) district in support of its proposed affordable senior housing project at 99 County Road B. The proposed development includes 106 units of income-restricted rental housing for seniors. At its June 11 and 23, 2025, meetings, the City Council directed staff to counter the developer’s original TIF request with an offer of $200,000 or a 10-year term, whichever is less. The intent of this limited assistance was to offset the developer’s share of public infrastructure costs associated with the project. Council also expressed concerns about the long-term general fund impact and the limited public benefit of the originally proposed 26-year TIF term. Lupe and the City agreed that the developer would return with an updated financing proposal following notification of its LCDA grant application. In early October, both parties were informed that the project had been awarded $432,500 by the Metropolitan Council, less than the $910,000 originally requested. Following that award, Lupe has reworked its project financing and is now requesting a base TIF of $300,000 or a 10-year term, with a potential conditional increase tied to the outcome of a DEED grant application expected in January. Specifically, Lupe proposes that the TIF amount increase proportionally to offset any shortfall in the DEED award, up to a maximum TIF of $400,000. If the Council does not wish to provide more than $200,000 in TIF assistance, Staff have identified a potential alternative funding option for consideration. As the anticipated $200,000 in increment would be realized within approximately 3–5 years, and the process of establishing, reporting, and decertifying a TIF district is administratively burdensome, the City could instead utilize Local Affordable Housing Aid (LAHA) funds to provide equivalent support. As of today, the City’s LAHA balance is $175,803, with an estimated total of just over $274,000 projected by December 31. Instead of creating a new TIF district, the Council could provide $200,000 in the form of a forgivable loan through the LAHA program. The City’s distribution factor has remained stable since last year, so another $175,000–$200,000 allocation is expected in 2026.