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HRA Regular Session <br />Meeting Date: 08/27/2013 <br />By: Jo Thieling, Administrative Services <br />Title: <br />Discuss Subsidy Alternatives for Assisted Living Projects <br />Tools available to the City for housing assistance include: <br />Information <br />- tax increment financing (up to 25 year district) <br />-tax abatement (city's portion of 37% of tax bill for up to 20 years) <br />- grants and /or loans from the HRA (County) <br />- state tax credits <br />- Livable Community Grants through the Metropolitan Council <br />- write -down on the price of the land <br />- reductions on City development fees <br />5. 2. <br />Background: <br />The purpose of this case is to get HRA direction on the type of subsidy alternatives, if any, would be acceptable to <br />the HRA for an assisted living project at this time. <br />The City currently has two parcels pending consideration by the City for one -level assisted living projects. It is <br />clear that both project would require significant assistance from the City. The developer has indicated that they <br />would be working on a timeframe to begin construction next year if an acceptable fianancial package could be put <br />together. <br />Observations /Alternatives: <br />Comments regarding subsidy alternatives: <br />- tax increment financing (up to 25 year district) <br />TIF is prohibitied for new projects under the interim Housing Assistance Policy (HAP). Furthermoremore, TIF <br />District 144 is currently not generating any revenue and a new TIF housing district would need to be created to <br />make this option viable. This would be subject to income guidelines. <br />- tax abatement (city's portion of 37% of tax bill for up to 20 years) <br />The City could only abate 37% of the tax bill which is its portion. Taxes could be abated for up to 20 years. The <br />property would need to be removed from the TIF distict in order to do tax abatement. From a policy perspective, it <br />should be noted that assisted living provides additional housing options for residents, but also would be a user of <br />City services. <br />- grants and /or loans from the HRA (County) <br />Remaining one time fund balance monies from the County HRA could be used as a grant or loan. These funds are <br />limited, but could be replenished if the two recent property acquisitions are sold. <br />- state tax credits <br />State tax credits may be available for construction in 2015, if income guidelines can be met. <br />- Livable Community Grants through the Metropolitan Council <br />May be available in the spring of 2014, also subject to income guidelines. <br />- write -down on the price of the land <br />