7.1 HRSR 03-03-2014 - Laserfiche WebLink

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' S Pt =te Springsted Incorporated 380 Jackson Street, Suite 300 Saint Paul, MN 55101 -2887 Tel: 651 - 223 -3000 Fax: 651 - 223 -3002 www.springsted.com TO: Members of the Housing and Redevelopment Authority of the City of Elk River Brian Beeman, Economic Development Director FROM: Mikaela Huot, Vice President Tom Denaway, Analyst DATE: October 3, 2013 SUBJECT: But -For Analysis for proposed Blackhawk Woods Senior Living Development The City of Elk River has asked Springsted to evaluate the tax increment financing (TIF) request submitted by Senior 30 Elk River Limited Partnership (the developer) for the proposed development of a senior housing rental project consisting of approximately 84 one -level townhome units, We have reviewed the project assumptions and general rationale for TIF assistance submitted by the developer. It is our understanding that the developer is in the process of assembling financing for the project, including tax credits and permanent financing from HUD and is currently working on finalizing those commitments necessary to proceed with the project, It has been indicated that project funding would be at least partially contingent on City tax increment financing assistance and that a TIF Note is necessary to provide sufficient cash flow to meet the annual debt service coverage requirements in the operating proforma. Based on this information, the City could be justified in making a "but for" finding that the anticipated development would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future. We recommend, however, that the City also consider an appropriate level of TIF assistance for reimbursement of certain eligible project costs based on the developer's information. The purpose of this memo is to outline our analysis of the project including review of the developer's request for assistance, tax increment revenue projections, review of the developer's project proforma and projected rates of return as provided by the developer, Background The application for Tax Increment Financing proposes the development of a senior living townhome community, The Developer is proposing to construct an 84 -unit townhome development, containing 49 one - bedroom units, 35 two - bedroom units, and a clubhouse activity center. Additionally, each unit will include an attached garage. The Public Sector Advisors