Agenda Packets - 2010/08/09 - Laserfiche WebLink

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Mounds View City Council July 12, 2010 Regular Meeting Page 4 Finance Director Beer stated that the City Council was introduced to the economic development 1 tool of the conduit debt financing at the May work session. Select Senior Living of Mounds 2 View, LLC, had requested the Council consider this financing tool for their senior housing 3 project. The Council was supportive of moving forward with the use of conduit debt financing. 4 There are a number of steps that will need to happen before housing revenue bonds can be 5 issued. 6 7 Finance Director Beer indicated the Council needs to grant preliminary approval and authorize 8 submission of an application to the Minnesota Office of Management and Budget for an 9 allocation of bonding authority from the State pool. Staff recommends the Council review the 10 information and approve the Resolution. 11 12 Council Member Mueller questioned what this program could do for the City of Mounds View. 13 She understood the City was not liable for the performance of the bond. 14 15 Jenny Boulton, Kennedy & Graven, stated the City would be acting as a gateway to the developer 16 and would give the developer access to tax exempt bonds. The borrower would be responsible 17 for making all payments. 18 19 Mayor Flaherty questioned what the City’s debt service was at this time. Finance Director Beer 20 explained the debt service could not exceed 3% of the City’s tax capacity. In addition, the City 21 could have $30 million in bank debt. Ms. Boulton explained the conduit debt financing would 22 not qualify as bank debt and, thus would not limit the City’s debt service. 23 24 Council Member Stigney asked who selected Ms. Boulton to represent the City. Finance 25 Director Beer indicated he and the City Administrator selected Kennedy & Graven to represent 26 the City. 27 28 Council Member Stigney questioned how many assisted living units were within the senior 29 housing development. Joel Larson, representing Select Senior Living of Mounds View, stated 30 there would be 32 independent assisted living units with 95 units in total. 31 32 Council Member Stigney asked how many people would be within each unit. Mr. Larson 33 explained each unit could have two people per unit. 34 35 Council Member Mueller questioned when construction would begin. Mr. Larson indicated he 36 would like to break ground in September and anticipated the building to be ready for occupancy 37 in September of 2011. 38 39 Council Member Mueller asked how many jobs would be brought into the City through the 40 senior housing project. Mr. Larson estimated that 40 part-time/full-time positions would be 41 needed to run the senior housing development. 42 43 Mayor Flaherty indicated he received positive feedback from neighboring communities when 44 discussing conduit debt. He questioned if the City had an administrative fee established for the 45