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Housing and Redevelopment Authority Minutes Page 3 <br /> December 19, 1991 <br /> • that typically, Minnesota receives one or two additional projects as a <br /> result of this pooling activity. If this occurs again in 1992, Elk <br /> River would be the first project to receive funding. <br /> At this time, Mr. Larson explained the alternatives available to the <br /> HRA: <br /> 1. Do nothing; <br /> 2. Acquire the redevelopment properties and hold them in <br /> inventory until the developer receives funding from Farmers Home; <br /> or, <br /> 3. Consider a joint application under a non-profit designation <br /> which would allow for the immediate funding of the project and <br /> possible spring of 1992 construction. <br /> Commissioner Schuldt then asked if the HRA considered an application <br /> under the non-profit status, would that mean that the HRA would become <br /> the landlord of the project. Mr. Larson stated that the HRA would own <br /> the property under a co-general partner agreement. However, as a <br /> result of tax credit eligibility requirements, Metcalf and Larson would <br /> insist that the property be managed under their direction. In <br /> addition, after the fifteenth year, it is likely that the developers <br /> • would step out of the project and allow for the HRA to own the project <br /> entirely. Commissioner Schuldt also asked if Tax Increment Financing <br /> was a requirement or a contingency of the project. Mr. Larson <br /> indicated that it was. After explaining how a project like this is <br /> eligible for certain tax credits, Mr. Larson explained that if the HRA <br /> developed the project, it would eventually be exempt from paying real <br /> estate taxes. This would occur after the HRA recovered its up front <br /> expenses from the project. Commissioner Kropuenske stated that he <br /> desired to assist the developer but had some concerns over the tax <br /> exempt status of the project. If Metcalf and Larson were to develop <br /> the project themselves, property taxes would continue to be paid after <br /> a TIF District was dissolved. <br /> Commissioner Schuldt stated that his first concern is securing the <br /> property. Commissioner Duitsman asked the developer what guarantees he <br /> would be willing to provide if the HRA were to acquire the property and <br /> hold it in inventory. Mr. Larson stated that his commitment would be <br /> conditioned upon Farmers Home Administration funding only. <br /> Commissioner Toth stated that the City or HRA needs certain guarantees <br /> from the developer if no Farmers Home Funding occurs. In addition, <br /> Commissioner Duitsman indicated that he was not personally supportive <br /> of the HRA owning a 23 unit project in light of the fact that no taxes <br /> would be paid after the HRA recovered its expenses. Both Chairman <br /> Hinkle and Commissioner Kropuenske stated that they did not believe the <br /> BRA should be the owner of this project. <br /> • At this time, the purchase agreements for the two properties were <br /> reviewed by the HRA Commissioners. The acquisition of one parcel is <br /> $53,100 and the second parcel is at $82,100. The circumstances of one <br /> of the owners is dictating that the agreement may not be extended <br />