CC WORKSESSION 11111985 - Laserfiche WebLink

Home Browse Search

r -5- Mr. Soth explained that the impending Internal Revenue Service ruling on tax incre- ment bonds would probably call for an amendment of the Redevelopers Agreement with Arkell to indicate the City would not enforce the developer's guaranty beyond 5% of the bond issue. He indicated he perceived the $400,000 Letter of Credit would back up the guaranty in the agreement, among other things, that the developer would make good on any tax increment shortfall . Mr. Treptow speculated that the City might not be able to enforce $300,000 of that guaranty. Councilmember Ranallo said he woul.d like to get some positive aspects of the proposal from the developers, especially how they proposed to proceed with the project without the delays they had encountered when construction financing had become a problem for the Kenzington. Mr. Arkell told him he perceived that, after the Woodlake and Kenzing- ton projects, the developers had a "better handle" on how to proceed successfully with this proposal . He said Housing Revenue Bonds would provide the financing and, with $200,000 in services in the building, the $800 rents would not be too high, especially when you considered the number of new buildings in Roseville which are renting for $1 ,200 or more. The same quality service package as had been provided in the Kenzington and the Richfield projects should assure that none of the quality proposed for the condominiums would be diminished for the rental project, the . developer said. Councilmember Ranallo said it was not uncommon to see homes in St. Anthony selling for $100,000 and even with 8% interest rates, the $800 rents should be no problem. Mr. Yurick told Councilmember Makowske that it would not be necessary for all 300 potential senior families to move into this project from St. Anthony alone because the senior demographics all around St. Anthony are better than any other place in the • country outside one of the closest in Chicago suburbs. He said he perceived there was a prime senior market within a four or five mile radius of the Kenzington project because studies have shown that within that radius there are between 23,000 and 25,000 families, 55 and over, whose annual income is in excess of $15,000. Eight percent of that figure is already housed in senior facilities which left, what the developer termed, an adequate number of prospective renters considering a 2-1/2 or 3% capture rate. Councilmember Ranallo added, however, that he perceived a large number of those people might spend three or four months in another geographic area, which might lead to a preference for owning a condominium over renting. Councilmember Marks indicated he believed, "we have a really good project here," and he speculated that the shops in this project might even prove to be an inducement to rent since residents wouldn't have to go outside to get some services. The Councilmember said he didn't perceive the square footage involved would be great enough to adversely impact the existing shopping center. He also perceived that the somewhat circular configuration of the buildings around the parking areas might especially appeal to that particular age group of tenants. However, the Councilmember's one concern was whether the market could absorb that additional number of rentals in the time anticipated by the developers. Mr. Yurick indicated that was why the project was proposed in two phases with only 150 units having to be absorbed in from 10 to 12 months. When Councilmember Marks indicated he would like to see the units built so they could easily be converted to condominiums after ten years if the market changed in the meantime, Mr. Arkell said he wasn't certain the bonding restrictions would permit an expression of that intent. Mr. Gilligan confirmed that "there could be that intent".