Agenda Packets - 1997/04/07 - Laserfiche WebLink

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- - - `. 1 r\VI'I I-I-Dr RCNL G�1HIG. tivt... bIG .fib 4bbb P. 6 • • SUBSIDIZED FUNDING We have applied for $905,000'in equity proceeds from the Holman Decree. This substantial funding level is critical to maintaining the quality level we have proposed. In exchange for the Holman Equity investment, we would be required to set aside seven units for rent to families on the Minneapolis Public Housing waiting list, and another three units would be set aside for Mounds View residents. It is critical to keep in mind that we are not required to accept any potential residents for these (or any of our) units unless they meet our rigorous screening standards. All residents must pass a criminal background check, have good credit history, have strong references from past landlords, and be able to afford the rents we charge. In order to receive the Holman equity investment, the City must approve the "Holman Units". We estimate the taxes payable on these ten units would be approximately S300/unit/year x 10 units = $3,000�ve . Obviously the taxes on the remaining 58 units would be at a higher rate. EDA LAND/CITY LOAN . We are requesting that the EDA sell its .6-acre parcel of land to MSP at a market price (estimated at $35,000), and make a. 1% deferred loan of$230,000 from available increment generated from existing TIF districts. This loan would help fund costs of land assemblage • and extensive land improvements. Thus the net loan request from the City would be $230,000 - $35,000 = $195.000. This funding will offset the costs of land assembly and reconfiguring the project entrance and parking areas to help portray a quality image to the community and residents. This 5195,000 investment spurs over $5,500,000 of total investment. LEASEHOLD COOPERATIVE/REAL ESTATE TAXES State Statutes allow homestead tax treatment of rental properties if ownership provisions of a Leasehold Cooperative are met. Our plan is to meet the statutory requirements and thus receive the benefit of homestead tax treatment, Based on preliminary discussions with the - Ramsey County Assessor we are estimating the following real estate tax levels: • Value 58 units aQ $55,000/unit $3,190,000 Homestead Tax Classification x 1.0% $31,900 Estimated Tax Rate x 1.37 Annual Taxes on 58 units $43,700 4110 Payment-in-lieu of tax on 10 units $3.000 Total Tax (Estimated) 54,700 Thii property will thus be adding to the City's tax base, as the current taxes for these properties is•$33,903/year.