Laserfiche WebLink
<br /> <br /> Memo <br />To: Brian Beeman, Business Development Coordinator <br />City of Mounds View <br />From: Jason Aarsvold and James Lehnhoff, Ehlers <br />Date: March 29, 2018 <br />Subject: The Triton Apartments TIF Request <br /> <br /> <br /> <br />Newport Midwest LLC, (the “Developer”) submitted a request to the City of Mounds View <br />(the “City”) for $350,000 in Tax Increment Financing (TIF) assistance to construct 61 new <br />affordable apartment units at 4889 Old Highway 8 (Skyline Hotel Site). The $15.7 million <br />project includes a mix of 1, 2, and 3-bedroom units. The Developer is currently requesting a <br />resolution of support from the City Council to supplement its application to Minnesota <br />Housing for an allocation of Low Income Housing Tax Credits. The tax credits will provide <br />most of the funding for the project. <br /> <br />The Developer’s numbers are still preliminary and shifting as of the date of this <br />memorandum. Ehlers did, however, conduct a thorough review of the Developer’s current <br />pro forma based on industry standards for total development costs, financing structure, <br />revenue and operating expenses. Based on the results of the pro forma analysis, the <br />project does demonstrate a funding gap of at least $350,000. <br /> <br />This preliminary review establishing a gap in the project is sufficient to proceed with a <br />resolution of support for TIF in the requested amount. We recommend, however, that if the <br />project receives its tax credit funding, that there is an analysis of the final numbers. This <br />would happen before creating a TIF district and entering into an agreement with the <br />Developer to provide TIF assistance. <br /> <br />Tax Increment <br /> <br />The requested $350,000 of TIF assistance represents approximately 2% of total project <br />costs. Depending on the project type, TIF assistance for LIHTC projects is commonly in the <br />range of 4-10% of total project costs. This project is also seeking other outs ide funding and <br />is doing some additional fundraising, which is limiting the need for TIF assistance. <br /> <br />The City would provide TIF assistance on a “pay-as-you-go” basis with interest at the lesser <br />of 5.25% or the developer’s actual financing rate. Based on our tax increment projections <br />for this project, we estimate this assistance could be repaid within 10 to 11 years. <br /> <br />Please reach out with any questions at 651-697-8512. <br /> <br />