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04-24-1997
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04-24-1997
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Packets
Date
4/24/1997
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3-27-1997 3:21PM FROM MSP REAL ESTATE, INC. 612 336 4565 P. 6 <br /> Ill <br /> SUBSIDIZED FUNDING <br /> We have applied for $905,000 in equity proceeds from the Holman Decree. This substantial <br /> funding level is critical to maintaining the quality level we have proposed. In exchange for <br /> the Holman Equity investment, we would be required to set aside seven units for rent to <br /> families on the Minneapolis Public Housing waiting list, and another three units would be set <br /> aside for Mounds View residents. It is critical to keep in mind that we are not required to <br /> accept any potential residents for these (or any of our) units unless they meet our rigorous <br /> screening standards. All residents must pass a criminal background check, have good credit <br /> history, have strong references from past landlords, and be able to afford the rents we charge. <br /> In order to receive the Holman equity investment, the City must approve the "Holman Units". <br /> We estimate the taxes payable on these ten units would be approximately $300/unit/year x 10 <br /> units = $3,000/vear. Obviously the taxes on the remaining 58 units would be at a higher rate. <br /> EDA LAND/CITY LOAN <br /> We are requesting that the EDA sell its .6-acre parcel of land to MSP at a market price <br /> (estimated at $35,000), and make a 1% deferred loan of $230,000 from available increment <br /> • generated from existing TIP.districts. This loan would help fund costs of land assemblage <br /> and extensive land improvements. Thus the net loan request from the City would be <br /> $230,000 - $35,000 = $195.002. This funding will offset the costs of land assembly and <br /> reconfiguring the project entrance and parking areas to help portray a quality image to the <br /> Community and residents. This $195,000 investment spurs over $5,500,000 of total <br /> investment. <br /> LEASEHOLD COOPERATIVE/REAL ESTATE TAXES <br /> State Statutes allow homestead tax treatment of rental properties if ownership provisions of a <br /> Leasehold Cooperative are met. Our plan is to meet the statutory requirements and thus <br /> receive the benefit of homestead tax treatment. Based on preliminary discussions with the - <br /> Ramsey County Assessor we are estimating the following real estate tax levels; <br /> jj <br /> x',� �,�VO Value 58 units @ $55,000/unit $3,190,000 _ b • <br /> Homestead Tax Classification x 1.0% I , . <br /> I .J ,1\\,y , <br /> $31,900 <br /> Estimated Tax Rate x 1.37 r\Ve il) <br /> ,--1------- "yw <br /> Annual Taxes on 58 units $43,700 <br /> iio1 / ,. <br /> . , -, Payment-in-lieu of tax on 10 units $3,000 v <br /> Total Tax (Estimated) $4700 <br /> -,UL Y IF of <br /> This property,will thus be adding to the City's tax base, as the current_taxes_ffor these <br /> properties is'$33,903/year. . , ; 1 <br /> yY t r( <br />
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