5.3. SR 09-14-2009 - Laserfiche WebLink

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Concept Review -Elk River Station Apartments City Council 9.14.09 Page 2 of 2 Request for City Support Duffy Development is seeking support from the city for the benefit of its Section 42 Tax Credit application which is to be submitted to the MN Housing Finance Agency (MHFA). The Housing Tax Credit Program provides a 10-year reduction in income tax liability to owners and investors in eligible affordable rental housing units produced as a result of new construction. The application for tax credits is reviewed based on a scoring system in a variety of categories as established by MHFA and are included in the attached list of requests proposed by the developer. The developer is able to achieve points in most of the categories by way of flexibility in zoning code requirements currently allowed under the PUD or by ordinance. MHFA also scores based on financial support provided by the city in the minimum form of waivers, reductions or deferrals of fees. The estimated local government fees for the proposed project are $500,000 (includes SAC/WAC, park dedication and building permit). The developer is requesting the following forms of financial support from the city: • A 5% reduction of local government fees in the amount of $25,000 • A 1-year deferral of SAC/WAC fees (equal to a project savings of $7,732) At its September 8, 2009, meeting the Elk River Municipal Utilities Commission approved the developer's request for aone-year deferral of WAC fees, contingent on City Council approval of the remainder of the incentives to the developer. Like the city, ERMU indicated concern about the precedent this sets. While various independently issued market studies support the need for additional affordable housing in Elk River, the city has not identified its role in supporting such developments (e.g. financial assistance, additional conditions of the developer/development, etc). The city has not typically provided financial assistance toward affordable housing developments, except for the Jackson Place apartments which was primarily for the purpose of redevelopment goals and the incentives were achieved through tax increment financing. Attachments • Elk River Station Apartments -Preliminary site plans • Duffy Development Company -Background • Elk River Station Clarification of City Support S:\EDA\HRA\HOUSING\9 14 09 ER Station Apts.doc