10.1. SR 02-05-2018 - Laserfiche WebLink

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Springsted MEMORANDUM — DRAFT FOR REVIEW TO: Amanda Othoudt, City of Elk River FROM: Mikaela Huot, Vice President/Consultant DATE: January 25, 2018 Springsted Incorporated 380 Jackson Street, Suite 300 Saint Paul, MN 55101-2887 Tel: 651-223-3000 Fax: 651-223-3002 www.springsted.com SUBJECT: Tax Increment Applications for Proposed Jackson Hill Residential Suites Housing Project and Elk River Lodge and Residential Suites, LLC The City of Elk River has received two applications for financial assistance through Tax Increment Financing (TIF) to assist with financing a portion of the development costs related to the construction of two projects. One is a 40 -unit residential rental multi -family affordable housing project to be constructed by Jackson Hills Residential Suites, LLC. The other is an additional residential rental multi -family affordable housing project managed by Elk River Lodge & Residential Suites, LLC that would include the renovation of the existing Elk River Lodge building to include interior improvements, construction of a 25 -unit garage, new parking lot and other exterior improvements. The developer of both sites has requested tax increment assistance to finance a portion of the costs associated with construction and renovation of the projects to provide a portion of the residential units as affordable. The purpose of this memorandum is to provide a summary of Springsted's review of the proposed projects to determine project eligibility, financial feasibility and to understand the need for assistance. The review will be used to assist the City with making a determination if the projects as proposed would be unlikely to proceed "but -for" the requested Tax Increment Financing (TIF) assistance, and also to determine the appropriate amount, if any, of public assistance. The developer had submitted applications for assistance for both projects approximately 6 months ago under the City's previous TIF Policy and Application. Developer applications were resubmitted following City approval of an updated Policy and supplemental application. As a result, information analyzed has been a combination of originally submitted materials, as well as the documents provided in the newly submitted applications. Background: Jackson Hill Residential Suites Housing Project The developer submitted a request for TIF assistance related to the proposed construction of an approximate 40 unit multi -family housing project in which a portion of the units would be affordable. The Sherburne County Assessor provided a new assessed value of the building to be approximately $3,310,000 (land and building). Assistance has been requested for financing a portion of the costs associated with construction of the project. The developer has proposed the approximate $5.9 million project will be funded by an estimated $1.179 million of equity and $4.719 million of private financing with tax increment financing used to provide annual cash flow. The developer's submitted Public Sector Advisors