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