7.2. HRSR 07-06-2020 - Laserfiche WebLink

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�� Request for Action Elk - River To Item Number Housing and Redevelopment Authority 7.2 Agenda Section Meeting Date Prepared by General Business July 6, 2020 Amanda Othoudt,EDD Item Description Reviewed by Hillside Heights Apartments Cal Portner, City Administrator Reviewed by Action Requested Approve or deny,by motion,a Resolution of Support for the proposed use of Tax Increment Financing for Hillside Heights Apartments. Background/Discussion Community Housing Development Corporation (CHDC) proposes to construct a new, three-story affordable apartment building on the southeast corner of Twin Lakes Road NW and 175"'Avenue NW. The building will consist of approximately 55 units with 13 one-bedroom units,28 two-bedroom units, 14 three-bedroom units and approximately 60 parking spaces. Common amenities proposed include storage, a roof deck, fitness / physical therapy room, library, community room,patio area, ball court,playground, and community garden. On May 26, 2020, the Joint Finance Committee reviewed a Housing TIF application for Hillside Heights. The developer requested$450,000 for land acquisition and$330,000 for site improvements for a total of$780,000, or 4.6% of the total project cost of$16,908,377. The developer is proposing apay-asyougo method for eligible costs as reimbursement. To qualify as a Housing TIF District, at least 20% of the units would be occupied by persons or families with incomes no greater than 50% of county median income or at least 40% of the units would be occupied by persons or families with incomes no greater than 60% of county median income for the duration of the district. Per city policy, the estimated gross increment available is $1,818,810 ($121,254 annually) over 15 years,the maximum term allowed. The developer may be eligible to receive up to 90% of the gross tax increment over 15 years. The estimated total net (90%) amount of tax increment over the 15-year maximum period would be $1,636,935 ($109,129 annually). The estimated present value of the net tax increment is projected to be $1,125,475 assuming 4%interest and would exceed the developer's request. Current estimates indicate it may take only 10 years to meet the developer's full requested amount assuming a 4%interest rate. On May 26, the Joint Finance Committee recommended the HRA consider a letter of support for the project through TIF, subject to the applicant receiving an allocation of tax credits and a continued demonstrated need The Elk River Vision A n elcoming community n ith revolutionary and spirited resourcefulness, exceptional p D W E H E D D Y service, and community engagement that encourages and inspires prosperity /` UR