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Work Session Agenda
Wednesday, November 13, 2019
5:30 p.m.
1. Trident Development Tax Increment Financing (TIF) Proposal for 2401 Lowry Ave
(current Bremer Bank). Stacie Kvilvang, Ehlers presenting
2. Adjournment
City of St. Anthony
CITY COUNCIL WORK SESSION
City Council Chambers
Minutes
October 15, 2019
Present:
Mayor & Council. Jerry Faust, Mayor; Hal Gray, Councilmember; Randy Stille, Councilmember, Thomas Randle,
Councilmember and Jan Jenson, Councilmember.
Absent:
None
Staff:
Mark Casey, City Manager, Shelly Rueckert, Finance Director and Charlie Yunker, Assistant to the City Manager.
Guest:
Sarah Tschida, Coordinator, University of Minnesota, and Kimberly Napoline, Graduate Student-Humphrey School
of Public Affairs Presenting
Call to Order:
Mayor Faust called the meeting to order at 5:30 pm
Resilient Communities Project (RCP):
Tschida and Napoline presented information about the RCP program and discussed their policy & research for
electric vehicles project. Findings will be presented at a future city council meeting.
Capital Improvement Plan (CIP):
Staff presented a memo, draft CIP, and PowerPoint. Upon consensus of the mayor and council, staff was directed
to bring forward to a future city council meeting.
2020 Utility Fees:
Staff presented a memo, PowerPoint, and draft ordinance. Upon consensus of the mayor and council, staff was
directed to bring forward to a future city council meeting.
2020 Fee Schedule:
Staff presented a draft 2020 Fee Schedule. Upon consensus of the mayor and council, staff was directed to bring
forward to a future city council meeting.
Adjourn:
The meeting adjourned at 7:46 p.m.
Minutes respectfully submitted by Mark Casey, City Manager.
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Memo
To: Mark Casey – City Manager
From: Stacie Kvilvang - Ehlers
Date: November 13, 2019
Subject: Trident Redevelopment – Terms of Assistance
Trident submitted a TIF application for redevelopment of the Bremer Bank site located at 2401 Lowry
Avenue NE. They are developing the site into 75 assisted living and memory care units and total
development costs are expected to be approximately $18.850 million. They are proposing to have
20% of the units affordable to persons at or below 50% of the area median income as noted in the
table below:
Unit Summary Affordable Market Total Percent
Studio - Memory Care 5 16 21 28%
1BR - Assisted Living 44 44 59%
1BR - Assisted Living 10 10 13%
Total 15 60 75 100%
Percent 20%80%
In order to provide units at a more affordable level, they have requested 15 to 17 years in tax
increment financing (TIF) in an amount of approximately $1.6 million. The City requested Ehlers
to review their application to determine how much TIF, if any is needed, the term and options to
retain affordability of these units longer.
TIF District Requirements
The City would create a Housing TIF District, which has a maximum term of 26 years. This type
of District requires the project to provide a minimum level of affordability at one of the following
two (2) levels:
• 20% of the units need to affordable to persons with incomes at or below 50% of the Area
Median Income (AMI); or
• 40% of the units need to be affordable to persons with incomes at or below 60% of AMI
As noted in the above table, Trident proposes to provide 15 units (20%) affordable to persons at
or below 50% of AMI, which translates to an annual income of $35,000 for an individual or $40,000
for a couple.
Why TIF is Needed
The difference in rents charged for the affordable units versus the market rate units and effect on
annual revenue is as follows:
Units Affordable
Rent
Market
Rent Difference
Per Unit Annual
Revenue
Difference
Annual Revenue
Difference
Studio - Memory Care $1,000 $5,000 ($4,000)($48,000)($240,000)
1Bdrm - Assisted Living $1,000 $3,627 ($2,627)($31,524)($315,240)
($79,524)($555,240)TOTAL
With 20% of the unit rents at affordable levels, the project’s potential rental income decreases by
approximately $550,000 annually. The lower revenue reduces the project’s ability to obtain and
carry debt and attract private equity investors, thereby creating a funding gap.
Recommendation
It is recommended to provide Trident with a PAYGO TIF Note of $1.5 million over a 9.5-year term
to make the project financially feasible. It will be paid with 90% of the TIF generated and will carry
an interest rate of 4%.
The project generates approximately $236,000/year in TIF. We also recommend that the City
require the affordability to be retained for the term of the TIF district. This would allow the City to
use future TIF generated (approximately $3.9 million from years 10 – 26), if desired, for other
affordable housing projects within the City. If the City does not desire to keep the District open
the full 26 years for this purpose, we would recommend that at a minimum, the affordability period
be 15 years.
Please contact me at 651-697-8506 with questions.