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10.0 Item #: 3 T j Meeting Date: July 6, 2010 • MOUNDS VIEW Type of Business: WS Administrator Review: City of Mounds View Staff Report To: Honorable Mayor and City Council From: Heidi Steinmetz, Economic Development Specialist Item Title/Subject: Housing Replacement Program Review Background About the Program The Mounds View Economic Development Authority (EDA) created the Housing Replacement Program in May of 1996 (14 years ago). The program allows the EDA to provide Tax Increment Financing (TIF) assistance to homeowners or developers for demolition or acquisition assistance through the program. The intent of the program is to replace blighted homes with new homes that increase and maximize the value of the individual property and increase the value of the surrounding neighborhood. The program is a traditional neighborhood revitalization program. • The financial assistance provided by the EDA through the Housing Replacement Program is a ten-year/forgivable deferred loan. In other words, if the homeowner or developer owns the property for ten years after the contractor builds the home, the EDA completely forgives the loan. The Housing Resource Center administers the program on behalf of Mounds View. The City pays an annual fee to the Housing Resource Center to administer this program and to provide other housing-related services to Mounds View residents. Attached is a list of programs available to residents through the Housing Resource Center. Program Usage Since the program's inception in 1996, the EDA has been involved with the acquisition and/or demolition of about five homes in Mounds View. To date, the EDA has received twelve formal applications for the program and two informal applications. Residents submitted the informal applications and asked the EDA to discuss the acquisition of their homes but did not want to apply for the program. Program Amendments Per the attached program history, the EDA has amended the program several times. The last time the EDA discussed the program was in late 2008 when the EDA considered updating the outdated list of parcels eligible for the program. The EDA declined to do so because the City's public finance advisors estimated the cost of updating the list would be $3,000.