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06/20/97 07:22 COMMUNITY PARTNERS INC. 4 16127843462 NO.077 P003 a. As discussed previously, further detail relating to the terms associated with the Source of Funds proposal is needed, particularly debt financing (First Mortgage, HOME, TIF participation, and MHFA funding). b. Further detail and description of the Use of Funds is also needed to evaluate the request for TIF funds. Of particular importance are the assumptions and expectations relating to Relocation (Displacement) and Land Acquisition. c. New TIF laws redefine "tax increment" and could apply here depending upon the details of participation. 2. The issues which must be addressed by the City of Mounds View'include zoning/permits, Livable Communities, TIF request/details, the Leasehold Cooperative, Holman request, and the sale of land owned by the Economic Development Authority. If the City of Mounds View is generally supportive of the proposed development concept, it would appear that the issues could be resolved, subject to further discussions with the Developer and the suggested "financing partners." 3. The Legislature has authorized a new property tax class for "low-income" housing. CIass 4d provides for a 1% class rate (same as the Leasehold Cooperative) subject to income limits, five (.5) year rent restriction agreement with MHFA, and compliance with minimum housing standards. This option could be pursued by the Developer. 4. The March 27, 1997 proposal suggested that of the 28 townhome units built., 93%® would be 3 bedroom and 7% would be 4 bedroom. The June 9, 1997 proposal suggests that 16 townhome units will be built with 75% being 3 bedroom and 25% having 4 bedrooms. In that the City of Mounds View has been asked to become a financial partner , it would be helpful to review the market study findings relating to the project, including rents, unit mix and need. •