CC PACKET 03241992 - Laserfiche WebLink

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Development for 1.991 was $291,784, the amount of the tax increment derived from the Development for 1992 is projected to be $275,586. S I. 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. J. 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. K. To finance the acquisition and construction of the Development by LaNel, the City issued its $10,750,000 Housing Development Revenue Bonds (St. Anthony LaNel Project), Series 1988 (the "Bonds") under and pursuant to Minnesota Statutes, Chapter 462C, and loaned the proceeds of the Bonds to LaNel (the "Loan"), under and pursuant to a Loan Agreement, dated September 1, 1988, between the City and LaNel (the "Loan Agreement"). Under.the Loan Agreement, LaNel is obligated to repay the Loan in amounts sufficient to pay the principal of and interest on the Bonds when due. 3 •