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<br />Item No: 6B <br />Meeting Date: November 22, 2021 <br />Type of Business: EDA <br />Administrator review: _______ <br />City of Mounds View Staff Report <br />To: EDA President and Commissioners <br />From: Brian Beeman, Assistant City Administrator <br />Item Title/Subject: MWF (Villas of Mounds View) redevelopment of SKYLINE Property <br /> Background <br /> <br />MWF Properties is proposing a 120 unit Affordable Senior Apartment development at the old <br />Skyline Motel site. To make the project financially feasible, MWF submitted an application <br />requesting TIF assistance for the project. EDA staff and Ehlers reviewed MWF’s request for TIF <br />and concluded the project showed a need for $1,770,000 in total TIF assistance. <br /> <br />Providing TIF assistance for the project requires creation of a new tax increment financing district <br />and entering into a TIF agreement with MWF. Staff in coordination with MWF Properties, Ehlers, <br />and Kennedy and Graven have prepared a TIF Plan, necessary for creation of a new TIF district, <br />and a TIF agreement between the EDA and MWF. The purpose of this action is to consider <br />approval of the TIF Plan and TIF agreement. <br /> <br />Discussion <br /> <br />TIF Plan: <br /> <br />Staff and Ehlers prepared a TIF Plan for TIF District #1-7 (Villas of Mounds View). The TIF plan is the <br />document that spells out the objectives and policies for the district, identifies the geographic boundaries, <br />and sets the maximum budgetary authority for the district. This planning document simply allows for the <br />creation of a new TIF district. Approval of the TIF Plan does not grant any specific TIF assistance to the <br />property owner in the district. This is done by separate action entering into a specific TIF Agreement. <br /> <br />TIF District #1-7 (Villas of Mounds View) is being established as a Housing TIF District. The project <br />qualifies as a Housing TIF District because it will rent units to individuals and families meeting the <br />necessary income requirements. In this case, at least 40% of the units must be set aside for those at or <br />below 60% of area median income. For MWF’s project, all the units will qualify under this income <br />requirement. The TIF Plan sets up the district for the maximum duration of 26 years to provide flexibility, <br />although the anticipated obligations in the district are anticipated to be repaid sooner than that. <br /> <br />The maximum budgetary authority in the district just over $5.4 million. This is a maximum budget <br />intended to provide flexibly. It includes 3% annual inflation and assumes the TIF district runs for the full <br />26 years. The actual assistance to the property owner is anticipated to be approximately $1,770,000. <br />Based on current projections, this could be repaid within 23.5 years. <br /> <br />The TIF Plan assumes Pay-As-You-Go assistance to the property owner. Pay-As-You-Go TIF requires <br />the Developer to seek its own financing secured by all or a portion of the tax increments generated by <br />the project. In this scenario, the City does not provide the funding up front, but enters into an agreement <br />to provide tax increment payments from the increased taxes from the project up to a specific dollar <br />amount over time. If tax increment is not sufficient to repay the property owner, the City does not make <br />up the difference.