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Item No: 08F Meeting Date: Nov 22, 2021 Type of Business Council Business MOUNDtSIEWCity Administrator Review City of Mounds View Staff Report To: Honorable Mayor and City Council From: Brian Beeman, Assistant City Administrator Item Title/Subject: 1. Public Hearing Regarding Modification to the Development Program for The Mounds Economic Development Authority Project and Establishing Tax Increment Financing District No. 1-7 (Villas of Mounds View) Therein and Adopting a Tax Increment Financing Plan Resolution 9498, 2. Resolution Adopting a Modification to the Development Program for Mounds View Economic Development Authority Project; and Establishing Tax Increment Financing District No. 1-7 (Villas of Mounds View) and Adopting a Tax Increment Financing Plan Therefor Introduction: The applicant, The Villas of Mounds View, LP (MWF Properties), is proposing to redevelop the former Skyline Motel into The Villas of Mounds View, consisting of a 120-unit apartment building. The project will feature senior (55+), affordable housing. To make the project financially feasible, MWF submitted an application requesting TIF assistance for the project. EDA staff and Ehlers reviewed MWF's request for TIF and concluded the project showed a need for $1,770,000 in total TIF assistance Providing TIF assistance for the project requires creation of a new tax increment financing district and entering into a TIF agreement with MWF. Staff in coordination with MWF Properties, Ehlers, and Kennedy and Graven have prepared a TIF Plan, necessary for creation of a new TIF district, and a TIF agreement between the EDA and MWF. The TIF plan must be approved by the City Council after holding a public hearing. The purpose of this action is to consider approval of the TIF Plan and hold the required public hearing. In addition, the City Council will consider approval of an interfund loan in connection with the project. Discussion: Staff and Ehlers prepared a TIF Plan for TIF District #1-7 (Villas of Mounds View). The TIF plan is the document that spells out the objectives and policies for the district, identifies the geographic boundaries, and sets the maximum budgetary authority for the district. This planning document simply allows for the creation of a new TIF district. Approval of the TIF Plan does not grant any specific TIF assistance to the property owner in the district. This is done by separate action entering into a specific TIF Agreement. The EDA, not the City, will enter into this TIF agreement. TIF District #1-7 (Villas of Mounds View) is being established as a Housing TIF District. The project qualifies as a Housing TIF District because it will rent units to individuals and families meeting the necessary income requirements. In this case, at least 40% of the units must be set aside for those at or below 60% of area median income. For MWF's project, all the units will qualify under this income requirement. The TIF Plan sets up the district for the maximum duration The Mounds View Vision DOCSOPEN\MU205\52\763645.v2-11/18/21