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63 Memo To: Mike Momson — City Manager From: Stacie Kvilvang Date: February 22, 2011 Subject: Phase IIIA Silver Lake Village — Dominium Rental Development Dominium has submitted a purchase agreement to Apache Redevelopment LLC (Master Developer) to purchase the JA Cadawallader site from them and the vacant Fannie Mae site from the City's Housing and Redevelopment Authority (PA covers both parcels). They are proposing to construct approximately 152 affordable, senior rental units on the site. The proposed purchase price is for approximately $1.52 million, or $10,000/unit (which is market for this type of development). The final purchase price will be based upon the actual number of units constructed, but will be no less than $1.4 million (i.e. if they only build 130 units, the purchase price would be $1.4 million, if they build 145 units, the purchase price would be $1.45 million, etc). Per the Development Agreement with the Master Developer, Apache Redevelopment LLC, the proceeds from the sale of the parcels would be prorated based upon the square footage of each parcel and paid to each party accordingly (to the Master Developer to pay off existing mortgage on their parcel and to the City to repay itself for the Fannie Mae loan). If we assume a 55/45 split (Cadawallader parcel/Fannie Mae parcel), the City would net approximately $675,000 in sale proceeds (The actual square footage percentage of each parcel will be calculated at a future date). Dominium will be seeking grant funds from Ramsey County for the project and in doing so is required to submit a resolution of support for the project from the City. In addition, Dominium may request other letters or resolutions of support from the City for other grant funds and/or assistance from the City in the form of pay-as-you-go TIF (like on The Landings). Staff has not committed any assistance from the City and has stated that any formal proposal for public assistance would need to be reviewed and discussed with the City Council. Staff has requested a $10,000 deposit from Dominium to cover city consultant costs so the process to negotiate a Development Agreement for development of the parcels can begin. Approval of the attached resolution will allow Dominium to apply for grant funds from Ramsey County and authorize the City Manager, City Attorney and consultants to commence negotiations with Dominium, To the extent Dominium is successful in obtaining outside grant resources for the project, the public assistance request to the City would decrease accordingly. Overall, any outside funding sources will assist in making the project financially feasible and successful for the long term. Please contact me at 651-697-8506 with any questions. E H L E RS 3060 Centre Pointe Drive _ Roseville, MN 55113-1105 LEADERS IN PUBLIC FINANCE Phone: 651-697-8506 Fax: 651-697-8555 skvilvang@ehiers-inc.com