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3. Both Dominium and the City review the formal recommendation provided by Ehlers. Both parties consider if <br />they would like to move forward with a Purchase Agreement (PA) based on the suggested level of City assistance. <br />A PA would lock in both parties to certain performance items (i.e. a specific City Financial Assistance number). <br />It should be noted, Dominium is willing/ interested in applying for Metropolitan Council and Anoka County HRA <br />funding. However, it is their position, a commitment from the City is needed before a PA is executed; and before <br />they apply for other funds. Dominium is interested in a 2016 project if their identified financing gap can be <br />addressed. However, if Metropolitan Council funding isneeded for this project, it may be pushed to 2017 (due to <br />application and award timing). <br />ALTERNATIVES <br />Staff is looking for direction on two general items: <br />1. Does the general project concept fit the property/ is the overall development concept acceptable? <br />2. What level of financial assistance is the City Council comfortable with considering from a preliminary/ <br />conceptual perspective? <br />Below are alternatives for item #2 <br />(A) Counter offer Dominium before moving forward with step 1 above --staff recommendation (see next section for <br />details). Staff would like the City assistance request to be adjusted within the LOI to comparable projects within the <br />Twin Cities market. <br />(B) Accept the LOI as presented and move forward with step 1. <br />(C) Do not accept offer and end negotiations. <br />Funding Source: <br />NA <br />Recommendation: <br />Staff has reviewed this project, and process with Ehlers. Staff has asked that Ehlers provide recommended <br />guidelines for "maximum" City participation in a housing project. Please see attached. Ehlers will be at this <br />meeting to discuss this MEMO. This recommendation is based on review/ comparison of several other projects <br />located within the Twin Cities market; including Dominium projects. <br />Based on the attached MEMO, it is Staffs perspective that the City should counter offer Dominium before moving <br />to "Step 1." In other words, Staff believes the Dominium proposal for City financial assistance is currently too high <br />($2.2M - $2.6M, or 9.12% to 10.77% of total project costs from the City). Staff supports using 15 years of TIF as a <br />maximum threshold as outlined by Ehlers; and/or potentially discussing the sale price of land. NOTE: depending <br />on how the number is calculated, 15 years of TIF is expected to range from $850,00-$1.2M in present value terms. <br />Attached is a breakdown of the Dominium offer/ request and the Staff suggested "maximum" City assistance. <br />Action: <br />Provide a recommendation for City Council consideration. Please see alternatives and recommendation sections. <br />Staff is looking for direction on two general items: <br />1. Does the project concept fit the property/ is the overall development concept acceptable? <br />2. What level of financial assistance is the City Council comfortable with considering from a preliminary/ <br />conceptual perspective? <br />Staff recommendation: the City financial assistance request made by Dominium be adjusted to a level similar <br />to comparable projects within the Twin Cities market before an LOI is considered for execution. <br />Attachments <br />LOI <br />Subject Property <br />