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City of Mounds View Staff Report February 26, 1998 . Page 2 amount of assistance typically approved for these types of projects. This would equate to 4 years increment for the office portions of the project and 9.5 to 14 years of increment for the senior housing portion. I have also attached a copy of a preliminary TIF Analysis Worksheet which indicates that based on the information submitted that 5 years of increment would be appropriate.The TIF Analysis Worksheet is useful but in this case does not tell the whole story. It does not address the housing portion of the program and does not account for the difficulty of making a market rate rental senior housing project work.The proposal is generally consistent with the City's tax increment policy. A copy of the tax increment policy is attached for your use also. Economic Development Commission Review and Recommendation: The EDC reviewed this matter at their February 26, 1998 meeting. The developers were present at the meeting and indicated that they could accept the reduced level of assistance suggested by city staff and consultant with one exception. They said that there were potential soil problems on the site of the single story office building which may require addtional expense. They requested that the maximum amount of assistance for the office portion of the development be increased from $167,000 to$240,000 to allow for potential soil correction costs. The developers indicated that they are seeking HUD financing for the project which would require that 25% of the units be affordable. They are also considering whether or not to have a mix of both assisted and independent living units in the senior housing project. They are having a market study done to help them with this decision. The EDC approved Resolution No. 98-EDC2 I recommending that the Economic Development Authority approve pay-as-you-go tax increment financing assistance for the project as follows: Office Portion of Project: 90% of the increment generated not to exceed $240,000. The offices must be completed within 2 years and a maximum of 5 years of increment provided. The assistance must be used for TIF eligible uses limited to land acquisition, site preparation, soil correction, site utilities, public improvements, professional fees, contingencies, and pond grading. Senior Housing: 90% of the increment generated by the project for the life of the district (distict ends in 2014) not to exceed $830,000. The assistance must be used for TIF eligible uses limited to land acquisition, site preparation, soil correction, site utilities, public improvements, professional fees, contingencies, and pond grading. RECOMMENDATION: Staff recommends that the City Council review this matter and provide direction to staff. City staff will prepare a resolution for EDA consideration on March 9, 1998. ick Joke, Co nmunit Development Director p Y P N:\DATA\USERS\RICKJO\SHARE\030298A.RPT