Agenda - Council Work Session - 01/10/2012

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CC Work Session Meeting Date: 01/10/2012 By: Tim Gladhill, Community Development Title: Review Development Proposal from Podawiltz Development for Town Center Gardens 3rd Addition 2.2. Background: The City has been contacted by Podawiltz Development regarding a potential development in an already platted portion of Town Center Gardens 3rd Addition. The Property was platted as 58 townhome units. The Property is currently owned by 21 st Century Bank. The Developer desires to construct an approximately 40 unit rental townhome project on the Property. In addition, the Developer desires to modify the approved and recorded Plat, resulting in a net reduction in the number of units. The Developer is also seeking City financial participation as part of an application to the Minnesota Housing Finance Agency (MHFA) for Section 42 tax credits, a competitive financing opportunity also known as the Housing Tax Credit (HTC). The Developer is requesting between $201,000 and $471,000 in local contribution. According to the Developer, a contribution of $201,000 would provide two (2) selection points and a contribution of $471,000 would provide four (4) selection points. The Developer will present background on the HTC Application and the forecasted range of points that would be necessary for a successful application. Staff discussed the Housing and Urban Development (HUD) Community Development Block Grant (CDBG) or the Metropolitan Council's Livable Communities Act (LCA) as potential funding sources. The Developer also inquired as to whether the City would be interested in assisting through Tax Increment Financing (TIF), and has stated that TIF assistance will likely be necessary in order to score high enough to secure the requested tax credits. Finally, the Developer also inquired if the City would be willing to waive certain application, license, or development fees or fast track approval processes. Mike Podawiltz of Podawiltz Development will present a business plan to the City Council. Before continuing discussions with the Developer, Staff is seeking policy feedback as to whether the City Council is interested in pursuing TIF, CDBG, or LCA funding for the project. Notification: No notification required at this time. A Public Hearing would be held on any proposal to re -plat the Property. Observations: Mike Podawiltz, of Podawiltz Development Corporation, will be presenting the project proposal to the City Council. There are multiple site plan review items that need to be addressed, which will be addressed at a future date if necessary. At this time, Staff is seeking feedback on potential City participation prior to Staff spending additional time discussing and reviewing further with the potential Developer. The Developer is seeking Section 42 tax credits, administered through the Minnesota Housing Finance Agency (MHFA). The Developer is asking that the City participate financially in order to increase the chance of successful award of said financing. Evaluation of the HTC Applications are based on a points system, and City participation includes additional points. A copy of the most recent HTC Self Scoring Sheet is attached for the City Council's review. At minimum, it appears that the Developer would need to score at least 30-40 points to be considered. In initial discussions with the Developer, it appears a score even higher than that will be required for a successful application. The City could participate with outside funding opportunities such as CDBG or LCA funds, both competitive processes. The City could also participate through the creation of a new TIF District, as the Property currently lies