05-03-2021 HRA MIN - Laserfiche WebLink

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Housing and Redevelopment Minutes May 3, 2021 Page 7 Moved by Commissioner Ovall seconded by Commissioner Chuba to approve the proposal from American Engineering Testing, Inc., in the amount of $3,000 for Geotechnical Exploration/soil borings at the Main and Gates Redevelopment site as outlined in the staff report. Motion carried 5-0. Councilmember Wagner addressed Commissioner Chuba's comment, stating all HRA members agreed that the quote the city received for reseeding was for work that was significantly more than what was needed or recommended. She stated this topic was discussed during the council work session; it was very clear that the city was held to the same standard as a private developer would be held. She noted the quotes were more than what was needed or required by ordinance and the city tries to be good stewards of city funds. Mr. Portner stated the goal of reseeding was miscommunicated. 7.6 The Delta Apartments Housing TIF Application Mr. Portner along with Mikayla Huot with Baker Tilly presented the staff report. They explained the TIF application request, outlined in the staff report, by Stonewood Development, LLC's proposal to construct two 90 -unit residential apartment buildings on the former Saxon Auto site with underground parking. Phase 1 is expected to commence construction in 2021. The applicant intends Phase 2 shortly thereafter but has indicated construction could start 2-3 years after Phase 1. Ms. Huot explained the request is for assistance to include 90% of incremental tax revenues for up to 26 years. Consistent with the original application submitted by Sun Rae Apartments, LLC, the application includes an approximate $31.556 million project funded through a combination of debt and equity. The applicant's supporting financial information includes updated sources and uses of funds with a revised total development cost of $34.7 million with 80% as debt financing and 20% as private equity. She explained this financial assistance through pay-as-you-go TIF would provide additional revenues to support the required level of debt and project cash flow to repay annual debt service payments. Typical extraordinary redevelopment costs that cannot be supported solely by the project alone could justify the need for public financial assistance and allow the project to proceed as proposed to provide appropriate upfront funding and meet the minimum debt coverage requirements. The applicant indicated city financial assistance is necessary for the project to proceed. She stated because city policy limits redevelopment project assistance to 15 years it requires deviation from the policy. She said the Joint Finance Committee reviewed the request on February 23, 2021 and the committee consensus was to recommend HRA approval of a 20 -year TIF district for Phase 1 and 20 years for Phase 2 with an aggregate of 26 years. The group states that the deviation was due to exuberant circumstances that this project would not be completed with the maximum 15 years allowed per the policy. Chair Toth asked if they are approving this proposal without some of the final paperwork.