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<br />The Elk River Vision <br />A welcoming community with revolutionary and spirited resourcefulness, exceptional <br />service, and community engagement that encourages and inspires prosperity. Updated: August 2020 <br />Request for Action <br /> <br /> <br /> <br /> <br /> <br />To <br />Joint Finance Committee <br />Item Number <br />4.1 <br />Agenda Section <br />General Business <br />Meeting Date <br />December 29, 2020 <br />Prepared by <br />Colleen Eddy, Economic Development Specialist <br />Item Description <br />Riverwalk Apartments TIF Discussion <br />Reviewed by <br />Cal Portner, City Administrator <br />Reviewed by <br /> <br /> <br />Action Requested <br />Review application and provide a recommendation to the Economic Development Authority to establish Tax <br />Increment Financing District. <br /> <br />Background/Discussion <br />Sun Rae Apartments, LLC applied for Tax Increment Financing to construct two 89-unit apartment complexes <br />located at 17354 Zane Street, Elk River. This project is proposed as a Redevelopment TIF District. <br /> <br />The developer’s original application included an approximate $31.556 million project funded through combination <br />debt and equity. Following receipt of additional information as requested from the September JFC meeting, the <br />developer provided updated sources and uses of funds with a revised total development cost of $34.1 million with <br />80% as debt financing and 20% as private equity. Financial assistance through pay-as-you-go tax increment <br />financing from the City of Elk River is requested to support the debt and project cash flow to repay annual debt <br />service payments. <br /> <br />Typical extraordinary redevelopment costs that cannot be supported solely by the project alone could justify the <br />need for public financial assistance and allow the project to proceed as proposed to provide appropriate upfront <br />funding and meet the minimum debt coverage requirements. The developer has indicated the receipt of city <br />financial assistance is necessary for the project to proceed. <br /> <br />Public Purpose <br />The City of Elk River will consider TIF for projects that achieve one or more of the following: <br />1. Demonstrate long-term benefits to the community. <br /> The proposed redevelopment project removes a long-standing blighted property <br /> The redevelopment project includes a park and trail opportunity for future generations <br /> The redevelopment will increase the housing stock by 178 units in Phase I and II <br />2. Retain local jobs and/or increase the number and diversity of jobs that offer stable employment and/or attractive wages and <br />benefits through: <br /> Diversification of the local economy <br /> Developer indicated a total of 4 jobs at approximately $20/hour would be created upon completion <br />of the project: <br />o Resident Manager