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t CITY OF ST. ANTHONY • . MINUTES OF HOUSING AND REDEVELOPMENT AUTHORITY SPECIAL MEETING October 29, 1985 The meeting was convened at 5:40 P.M. with Chairman Sundland, Secretary/Treasurer Marks, and Commissioner Makowske present. Absent: Vice Chair Enrooth (arrived at 5:50 P.M.) and Commissioner Ranallo. Also present: David Childs, Executive Director; William Soth, Attorney; and Jerry Gilligan, Bond Consultant. Mr. Gilligan first addressed the bonding issues he perceived would be involved if rental apartments were constructed instead of condominiums in the_fina.Lphases_of the Kenzie Te_rr_ace Redevelopment project, as proposed by Arkell Development Company,—the developers. He said the fact that the developers would be taking a $400,000 risk on the project, should establish it as a credible tax increment project rather than a -last minute attempt to get bonding which could be stored away for some future use. The bonding consultant agreed the timing was essential since there was a bill pending in Congress which could change the law governing the tax exempt status of tax increment bonds effective January 1st, and could place restrictions on that type of financing even to the point of requiring 50% rather than 20% occupancy by • low or moderate income families after the first of the year. The availability of this type of financing would also be lessened to some degree if the funds were placed in a state pool for allocation along with IDB's. Chairman Sundland said the information both he and Commissioner Makowske have been getting from the Ramsey County League and other sources, certainly supported the developers' contention that rental apartments had replaced condominiums as the most viable housing alternative forepersons 55 end-ov'er. �� In reply to the question of whether the City could still qualify for the funding if the project were transferred to another developer, Mr. Soth said, typically the bond"s would-be assumable by a replacement developer. He also said such a deal would present no financial risk to the City, but might, to some bond holder, if such a deal were struck. The Attorney then told Secretary/Treasurer Marks the biggest political risk might be incurred if the development never went through at all. Mr. Childs said he perceived the City would be in a better position if the bonds for the rental apartments were sold, than it had been when the Kenzington had been started and the developer hadn't had the financing for the project. The Executive Director indicated he believed the greatest risk would be whether the City could acquire the property at a low enough price and whether the cash flows for tax increment financing were there. The Chair commented that he perceived those risks were present without any change in use. Mr. Soth said the developer would be at almost a million dollar risk with the incurrence of about $600,000 in points for issuance of the bonds and the $400,000 Letter of Credit, which would probably lessen the chances he would not do the project. is Vice Chair Enrooth arrived at 5:50 P.M.