Laserfiche WebLink
Er.aYrraEat <br />515 Little Canada Road, Little Canada, MN 55117 -1600 <br />(612) 484 -2177 / FAX: (612) 484 -4538 <br />MEMORANDUM <br />TO: Mayor Fahey & Members of the City Council <br />FROM: Joel Hanson, City Administrator <br />DATE: January 23, 1998 <br />RE: Agreement with Dominium Regarding Provinces Tax Credit Issue <br />MAYOR <br />Michael 1. Fahey <br />COUNCIL <br />Beverly Scalze <br />Jim LaValle <br />Steve Morelan <br />Bob Pedersen <br />ADMINISTRATOR <br />Joel R. Hanson <br />Please find attached a copy of the draft Tax Credit Usage Agreement between Dominium (aka <br />Little Canada Leased Housing Associates LLP) and the City of Little Canada. The key <br />components of this agreement are as follows: <br />• It documents City approval for 65% of the units to be designated as Title II, tax credit <br />eligible. <br />♦ It establishes Dominium's commitment to manage the property in the manner consistent <br />with City objectives and based on representations made to us during deliberations (See <br />Provision #2 Operation). <br />♦ It documents all of the rehabilitation work contemplated as part of bond transaction have <br />been completed. (The detailed listing for this exhibit has not been received.) <br />♦ It requires our issuance of a 42(m) letter approving the 65% tax credit level. This letter is <br />to be issued contemporaneously with the execution of this Agreement. <br />• Provides for creation of an escrow to fund the sprinklering of the buildings. The City <br />would be committing its loan origination fee of $38,850 to this escrow. Dominium will <br />be contributing the difference between the property tax amount they identified on their <br />Section II, Tax Credit Proforma and the actual amount of real estate taxes beginning in <br />1999; assuming the 4(d) rate is in effect. My calculations indicate this should result in <br />annual deposits of approximately $35,000. Based on their earlier estimates of $170,000 <br />to fully sprinkle the buildings including decorative shielding, it should take <br />approximately four to five years (commencing in 1999) to fully fund this improvement. <br />This provision also provides that should the 4(d) class rate be eliminated and if the <br />escrow is insufficient to fund a sprinkler system meeting the approval of the City, then <br />the escrow would be dissolved and the City's funds would be returned to us with accrued <br />interest. (You will note that the language in the Agreement does not reflect this summary <br />Page 77 <br />