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07/01/98 WED 15:24 FAX 612 885 5969 KRASS MONROE fj003 <br /> A senior rental project generally requires a significant amount of tax increment assistance because <br /> the tax rates for rental property have been substantially higher than owner occupied housing. The <br /> principal behind a co-op is that each unit of the co-op is treated as an owner occupied housing unit <br /> and receives the same tax classification (1%) as homesteaded housing. As a result, the need for <br /> tax increment assistance with a co-op project is substantially reduced. As the chart above shows, <br /> the taxes per unit for the co-op housing ($844) are less than half the taxes per unit for the rental <br /> project($1,705). As a result, the City should review the amount of tax increment assistance that <br /> is necessary to facilitate the development of the co-op housing project. <br /> It would be appropriate to review these issues with Silverview Estates to again determine what <br /> assistance is necessary to effectuate this revised development. We look forward to hearing from <br /> you. <br /> JRC/lrb <br /> Enclosures <br /> cc: Silverview Estates <br /> Attn: Marcel Eibensteiner <br /> G:\WPDATAMMOUNDS VIEW11\CORUOPKE.DOC <br /> •Page 2 <br />