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M (��- In]c <br />To: Brian Beeman, Business Development Coordinator <br />City of Mounds View <br />From: James Lehnhoff and Jason Aarsvold, Ehlers <br />Date: January 16th, 2018 <br />Subject: MWF Properties Housing TIF Review <br />2685 Highway 10 NE <br />In March 2017, MWF Properties LLC, (the "Developer") submitted a request to the City of <br />Mounds View Economic Development Authority (the "EDA") for Tax Increment Financing <br />assistance to construct 60 new affordable apartments at 2685 Highway 10 NE. The $14.65 <br />million project includes a mix of 1, 2, and 3 bedroom units. The Developer requested a <br />resolution of support from the EDA to supplement their application to the Minnesota Housing <br />Finance Agency requesting the majority of the project funding needs. <br />The EDA approved a resolution of support in May 2017 for the project for up to $546,000 of Tax <br />Increment Financing ("TIF") assistance, subject to all standard statutory and local review <br />requirements, including a detailed analysis of the project's costs, funding sources, income, and <br />expenses—commonly referred to as a pro forma. The Developer submitted their funding <br />application to Minnesota Housing in June 2017 and was subsequently selected for funding in <br />October 2017. The Developer has since submitted their updated pro forma to the EDA for <br />analysis. The purpose of a pro forma analysis is to determine if a project demonstrates a funding <br />gap. <br />Ehlers conducted a thorough review of the Developer's current pro forma based on industry <br />standards for construction, land, and project costs; affordable rental rates and operating expenses; <br />developer fees; available funding sources; underwriting criteria; and, project cash flow. Based on <br />the results of the pro forma analysis, the project does demonstrate a funding gap of at least <br />$546,000. The requested TIF assistance helps address a funding gap to make the project <br />financially feasible. If approved, the development is projected to generate the requested <br />$546,000 of TIF assistance over an estimated 15 -year term. <br />Pro Forma Analysis <br />The development pro forma information generally meets the expectations of a rental housing <br />project utilizing 4% low-income housing tax credits ("LIHTC") and other sources of public <br />funding. The proposed summary sources and uses include: <br />EHLERS <br />LEADERS IN PUBLIC FINANCE <br />www,ehlers-inc.com <br />Minnesota phone 651-697-8500 3060 Centre Pointe Drive <br />Offices also in Wisconsin and Illinois fax 651-697-8555 Roseville, MN 55113-1122 <br />toll free 800-552-1171 <br />