09/08/2009 Council Packet (2) - Laserfiche WebLink

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;1 t s 1-z- r,.Q. VA" or- k SP s MEMORANDUM TO: FROM: DATE: SUBJECT: � I G f Zool Mary Alice Devine, Economic Development Coordinator Terri Heaton, Senior Vice President, Client Representative Jennifer Wolfe, Senior Project Manager September 8, 2009 Proposed Country Inn and Suites Conversion — TIF #1 -11 Springsted Incorporated 380 Jackson Street, Suite 300 Saint Paul, MN 55101 -2887 Tel: 651 - 223 -3000 Fax: 651 - 223 -3002 www.springsted.com The City has been approached by Winkelman Building Corporation with a proposal to convert the Country Inn and Suites hotel located within the Legacy TIF District #1 -11 into a senior living facility. The current hotel owners indicate they are currently operating at only twenty percent occupancy and have partnered with Winkelman Building Corporation to seek alternative uses for the property. The City has requested that we calculate the estimated impact to the TIF District #1 -11 if the conversion proceeds as proposed. The current value of the property (2008 assessment) for taxes payable in 2009 is $3,750,000. The assessor's value for 2009 remains the same for taxes payable in 2010. As a hotel, the tax classification for the property is commercial /industrial. Commercial /industrial properties include a portion of the tax capacity to be distributed to the fiscal disparity pool, thereby reducing the tax increment portion (an election the City made when the TIF District was es tablished). The proposed re -use for the hotel is for 70 units of senior living housing, including 41 units of assisted living, 28 units of memory care and 1 guest room. According to the Anoka County property assessment department, the estimated market value resulting from the proposed conversion is $3,500,000 to $4,200,000. Additionally, the proposed senior living facility includes 20% of the units' set -aside as "qualified low- income rental housing" (4d classification), which reduces the tax capacity for the qualified units. The Minnesota Housing Financing Agency will determine the applicability of a reduced tax classification for the affordable units. However, we have assumed the applicant is successful and calculated the estimated tax increment with 20% of the taxable market value classed as "qualified low- income rental housing" (0.75% class rate) and the remaining 80% classed as apartments (1.25% class rate). Public Sector Advisors