04-08-2019 Council Packet - Laserfiche WebLink

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The information provided here is of a general nature and is not intended to address the specific circumstances of any individual or entity. In specific circumstances, the services of a professional should be sought. Baker Tilly Virchow Krause, LLP trading as Baker Tilly is a member of the global network of Baker Tilly International Ltd., the members of which are separate and independent legal entities. © 2018 Baker Tilly Virchow Krause, LLP Memo To: Michael Grochala, Community Development Director, City of Lino Lakes Sarah Cotton, Finance Director, City of Lino Lakes From: Mikaela Huot, Director Date: April 8, 2019 Subject: Application Review for Financial Assistance through Tax Increment Financing (TIF) for Proposed Lyngblomsten Senior Care Campus Housing Project Background The City of Lino Lakes has received an application for financial assistance through Tax Increment Financing (TIF) to assist with financing a portion of the extraordinary development costs related to the construction of an approximate 198-unit senior care campus and 19 adjacent rental town homes. The project also includes the acquisition of several properties on the corner of County Road J and CSAH 49 where t he senior housing development will not occur but will present future development opportunities. The total investment budget including acquisition of all properties is about $77M and includes approximately $9.6M of TIF eligible expenditures including site improvements, acquisition, and demolition. City Council will be discussing the application with City staff at the April 1 work session. The purpose of this memorandum is to provide a summary of review status of the application and next steps Springsted will incorporate regarding the submitted materials. Included will be review of the development project costs, sources of revenue, and operating pro forma as provided by the developer to assist the City with making a determination if the project as proposed would be unlikely to proceed without the requested Tax Increment Financing (TIF) assistance, and to determine the appropriate amount, if any, of financial assistance based on TIF-eligible costs. Developer Request for Assistance Assistance has been requested for financing a portion of the costs associated with completion of the project. The developer has proposed the $77.2 million project will be funded by an estimated $9.8 million of equity and $66 million through a bank loan with a TIF request of $5.3 million. The developer’s submitted information provides that the request for assistance would be pay-as-you-financing as reimbursement for extraordinary development costs and has requested a term of 15 years. Additional analysis regarding the financing components, estimated amount of available tax increment revenues and the amount necessary for the project to proceed will need to occur as the project proceeds. The total estimated sources and uses of funds is shown below: