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Springsted Incorporated <br /> 380 Jackson Street, Suite 300 <br /> Saint Paul,MN 55101-2887 <br /> Springsted <br /> Tel: 651-223-3000 <br /> Fax: 651-223-3002 <br /> www.springsted.com <br /> MEMORANDUM <br /> TO: Amanda Othoudt, City of Elk River <br /> FROM: Mikaela Huot,Vice President/Consultant <br /> DATE: April 25,2017 <br /> SUBJECT: Tax Increment Applications for Proposed Jackson Hill Residential Suites Housing Project and <br /> Elk River Lodge and Residential Suites, LLC <br /> The City of Elk River has received two applications for financial assistance through Tax Increment Financing (TIF)to <br /> assist with financing a portion of the development costs related to the construction of two projects. One is a 40-unit <br /> residential rental multi-family affordable housing project to be constructed by Jackson Hills Residential Suites, LLC. <br /> The other is a multi-phase project to be constructed by Elk River Lodge & Residential Suites, LLC. The second <br /> project would be constructed in multiple phases with the first phase including renovation of the Elk River Lodge <br /> building to include interior improvements, construction of a 25-unit garage and new parking lot. Future phases would <br /> include redevelopment of the former Saxon site into approximately 225 total units developed in three building phases. <br /> The developer of both sites has requested tax increment assistance to finance a portion of the costs associated with <br /> construction of the projects that includes redevelopment and renovation and providing a portion of the residential <br /> units as affordable. The purpose of this memorandum is to provide a summary of Springsted's review of the <br /> financials provided in conjunction with the applications for assistance and an update on the project status. The final <br /> review will be to assist the City with making a determination if the projects as proposed would be unlikely to proceed <br /> "but-for' the requested Tax Increment Financing (TIF) assistance, and also to determine the appropriate amount, if <br /> any, of public assistance. <br /> Background: Jackson Hill Residential Suites Housing Project <br /> The developer submitted a request for TIF assistance related to the proposed construction of an approximate 40 unit <br /> multi-family housing project in which a portion of the units would be affordable. The Sherburne County Assessor <br /> provided a new assessed value of the building to be approximately $3,310,000 (land and building). Assistance has <br /> been requested for financing a portion of the costs associated with construction of the project. The developer has <br /> proposed the$6 million project will be funded by an estimated $700,000 of equity and $4.8 million of private financing <br /> with a financial gap of $500,000 as requested to be financed through TIF funds. The developer's submitted <br /> information provides that the request for assistance would be pay-as-you-financing as reimbursement for <br /> Public Sector Advisors <br />