Agenda - Council - 03/26/2013 - Laserfiche WebLink

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CC Regular Session 7. 1. Meeting Date: 03/26/2013 By: Tim Gladhill, Community Development Information Title: Consider Request for Local Contribution from MWF Properties for Apartment Development in The COR and Provide Staff Direction on Potential Sources Background: The City has been contacted by MWF Properties, located in Minneapolis, MN, regarding a potential development of Outlot B, RAMSEY TOWN CENTER 11TH ADDITION. The Property is currently owned by the City of Ramsey Housing and Redevelopment Authority (HRA). A case has been prepared for the HRA's consideration for March 26, 2013 as well. The Developer desires to construct an approximately 47-unit rental apartment development on the Property. 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). According to the MHFA website, the Housing Tax Credit is a reduction in tax liability to developers and investors in exchange for providing affordable housing. This is not assistance given directly to a tenant. The Housing Tax Credit is part of the Internal Revenue Service (IRS) Tax Code, and not a City funded program. The Developer is requesting a local contribution of $510,000. According to the Developer, a contribution of this amount 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. According to the Developer, the local contribution can be satisfied by a number of ways including, but not limited to (or combinations thereof) Tax Increment Financing (TIF), grants, reduction in land costs, and regulatory cost reductions. Staff discussed the Metropolitan Council's Livable Communities Act (LCA) as a potential funding source. The Developer has stated that they are somewhat concerned about timing of this program. The City could also consider utilization of the Anoka County Housing and Redevelopment Authority (ACHRA) levy as a potential funding source. The Developer also inquired as to whether the City would be interested in assisting through Tax Increment Financing (TIF). In addition, the Developer also inquired if the City would be willing to waive certain application, license, or development fees or fast track approval processes. Before continuing discussions with the Developer, Staff is seeking policy feedback as to whether the City Council is interested in pursuing TIF, LCA funding, land reduction, County HRA funding, or other options available through the Tax Credit program for the project. It should be noted that the Developer has noted implications of the required design guidelines for The COR. Staff has had some preliminary discussions with the Developer on alternative locations within The COR with design standards more complimentary to their current business model. The Developer seems generally interested in exploring alternative locations as well. Furthermore, the Developer has requested review with the City Council at this time due to timing of the Application. The Application is due in June, but will take a considerable amount of time on the Developer's part to prepare the Application. Notification: No notification required at this time.