CC PACKET 03241992 - Laserfiche WebLink

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$221,100. In actuality, the amount of the tax increment derived from the • Development for 1991 was $291,784, the amount of the tax increment derived from the Development for 1992 is projected to be $275,586. The amount of the real estate taxes per unit for the Development have resulted in unforeseen and excessive tax burdens to LaNel which have impaired its ability to pay mortgage interest and other expenses of operating the Development. Without some relief in such costs or financial assistance, LaNel may be required to significantly increase rental rates, which will make the apartment units in the Development less affordable to individuals of low and moderate income and may increase vacancies in the Development. Section 6.1 of the Redevelopment Contract requires the minimum tax increment generated by the Development to be $1,100 per unit, and Section 2.2(c) of the Redevelopment Contract states that the minimum improvements will be constructed so as to have an assessed value of at least $5,700,000. LaNel has complied with these requirements and contends that it was the intention of all parties that the real estate taxes on the Development would not be more than $1,200 per unit. Based upon.the foregoing facts, LaNel has requested payment by the HRA to LaNel of any excess tax increment from the District up to the amount of $50,000 per year to assist LaNel in the payment of interest on the financing for the Development and allow rental rates to remain at a level which is affordable to individuals of low and moderate income. The HRA has concluded that it would be in the public's best interest to maintain the occupancy and quality of the Development and provide affordable rental housing to individuals of low and' moderate income by establishing an interest reduction program (the "Interest Reduction Program") under Minnesota Statutes, Section 469.012, Subd. 7 with respect to the excess tax increment available from taxes payable with respect to the Development in the years 1991, 1992 and 1993. By these 1992 Amendments to the Redevelopment Plan and Financing Plan (the "Amendments") the Commissioners of the HRA establish the Interest Reduction Program and amend the Redevelopment Plan and the Financing Plan to the extent necessary to provide for the establishment of the Interest Reduction Program and to authorize the expenditure of tax increment revenues derived from the District for costs incurred and to be incurred by the City or HRA in connection with the establishment, development and administration of the Interest Reduction Program. These Amendments are approved by the Commissioners of the HRA and the City pursuant to Minnesota Statutes, Chapter 469.012, subdivision 7, and Minnesota Statutes, Section 469.175, subdivision 4. II. STATEMENT OF NEED AND OBJECTIVES The establishment and carrying out of the Interest Reduction Program is consistent with the objectives of the HRA as stated in the Redevelopment Plan all of which will meet the needs specified in the Redevelopment.Plan. -2-