02-04-2019 Council Packet - Laserfiche WebLink

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la Springsted MEMORANDUM TO: Michael Grochala, Community Development Director Sarah Cotton, Finance Director Springsted Incorporated 380 Jackson Street, Suite 300 Saint Paul, MN 55101-2887 Tel: 651-223-3000 Fax: 651-223-3002 www.springsted.com FROM: Mikaela Huot, Vice President/Consultant DATE: February 4, 2019 SUBJECT: Proposed Financing for Lyngblomsten Senior Care Campus Development The City of Lino Lakes has been approached by Lyngblomsten to construct a senior care campus on property near County Road J and Hwy 49. The project would include approximately 20 detached townhomes and 198-unit continuum of care building with 100 independent living, 50 assisted living and 48 skilled care units, as well as an approximate 4500 square foot restaurant. The developer has also proposed to acquire the properties on the corner of County Road J and Hwy 49 for future redevelopment opportuntiies that may include retail/office buildings. There are anticipated to be extraordinary public improvement costs associated with development of the project site and the developer has indicated public assistance will be necessary to assist with financing a portion of those costs. Tax abatement and tax increment financing have been identified as possible financing tools to assist with providing financial assistance, subject to determining there is a gap and what the amount is. A proposed financing plan could include the establishment of a tax abatement area or a housing tax increment financing (TIF) district. A tax abatement is approved by each separate taxing entity and may include only the City's share of taxes. Tax increment is approved by the City and includes all taxing entities incremental taxes from the new project. In order to qualify as a housing district, one of two tests need to be met: 1) at least 20% of the units are occupied by persons with incomes no greater than 50% of the area median income or 2) at least 40% of the units are occupied by persons with incomes no greater than 60% of the area median income. Income limitations are based on monthly/annual salaries, not including assets. Tax increment should reduce the term of assistance, as opposed to tax abatement. Tax increment from a housing district can only be used solely to finance the cost of housing projects as defined in sections 469.174, subdivision 11, and 469.1761. The cost of public improvements directly related to the housing projects and the allocated administrative expenses of the authority may be included in the cost of a housing project