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<br /> <br />Memo <br /> <br />To: Mark Casey, City Manager <br />From: Keith Dahl and Stacie Kvilvang, Ehlers <br />Date: May 18, 2020 <br />Subject: Development 65 Project – Analysis of Financial Request <br /> <br /> <br />Development 65 applied for TIF assistance in the approximate amount of $4.9 million to fill a <br />development gap for a senior independent living and assisted living/memory care community. <br />They’ve proposed to construct a 125-unit facility with 83-units of independent living, 26-units of <br />assisted living, and 16-units of memory care. The project would consist of studio, alcove, 1, and <br />2-bedroom units (the “Project”) with 5% of the independent living units (6 units) affordable to <br />residents at or below 50% AMI. <br /> <br />This memo has been prepared, at the request of the City, to conduct a review of their application <br />and determine how much TIF assistance, if any, is warranted. Below is a summary of our findings. <br /> <br />1. Extraordinary costs (costs above what a typical development would encounter) for <br />redeveloping the site are anticipated to be $789,059 as detailed below: <br /> <br />Demolition $ 63,610 <br />Site Utilities $ 500,000 <br />Roads & Walks (City Extension) $ 96,709 <br />Soil Remediation $ 137,740 <br /> <br />Note: Land is not considered an extraordinary cost even though the Developer is <br />paying approximately $34,000/unit. Prior projects for this site were paying <br />approximately $18,000/unit as is the Trident project (Doran project was <br />approximately $13,000/unit). <br /> <br />2. Impact of affordability over 15-years is estimated to be $689,251: <br /> <br /># of Units Unit Type Rent Type Rent Difference Annual Difference <br />6 Studio Affordable $ 867 $ 861 $ 61,992 Market $ 1,728 <br /> <br />Recommendation: <br />Based on our review, the requested TIF assistance is more than what is necessary. We conclude <br />that TIF assistance in the amount of $1.5 million over an anticipated term of 6.5 years is supported <br />for this Project to cover the above referenced costs. We’d recommend providing this assistance <br />in the form of a PAYGO Note at an interest rate of 4% and repayable from 90% of the available <br />tax increment. We also recommend that the affordability be maintained for a minimum term of 15 <br />years. <br /> <br />Please contact Stacie at 651-697-8506 with questions.