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Economic Development Manager Sullivan asked for details on the term sheet. <br />Mr. Aarsvold provided details on the preliminary term sheet which is a nonbinding document <br />under which the City would consider entering into a TIF agreement with the developer. He stated <br />that if support is indicated for the term sheet, it would provide support for the developer to continue <br />going forward on the project and this would then come back at a later date for approval of a more <br />formal TIF agreement. He stated that action today does not approve the project but provides <br />support or lack of support for the proposed project and provided an ov iew of what is included <br />in the term sheet. <br />Member Riley acknowledged the work that has gone into the process thus far. He asked what is <br />driving the need for assistance. <br />Mr. Aarsvold replied that every apartment project is ittle Ifferent any ` ; ost to build the <br />projects is then different. He stated that this is fairl resentative of a class A « m- t project. <br />He stated that while the rents are projected abo msey market, that is sti enough to <br />offset the debt service costs of the loan and the const ction costgNHe commen. i that some of <br />the units would be rent restricted which generates less income or the project. He stated that those <br />are the primary drivers for financial assistance. He noted tha financial lookback would ensure <br />that the assistance remains in line with actual project costs rath n the estimates to ensure the <br />developer is not unduly enriched with public tax dol_, s. <br />Member Riley asked if the units were not incoicte whether there would still be a need for <br />financial assistance. <br />Mr. Aarsvold replied that it could 1e possible t could be enough to offset the gap, but the <br />developer did not feel that would be enough on its c - n to fill that gap. He commented that the <br />only opportunit ey have to use TIF as a tool is through a housing district and a housing district <br />is only ava. le to use as a tool if 20 percent of the units are designated at 50 percent AMI. <br />Meng Stewart asked if the prelimirm sheet proposes $9,200,000 in support. <br />Mr. Aarsvo1 confirmed that to be true between the two phases of assistance. <br />Member Howell asked if there is anything preventing an increase or decrease on the number of <br />affordable units for the project <br />Mr. Aarsvold replied that there could not be a viable TIF district if the percentage of affordable <br />units went below 20 percent. <br />Mr. Fletcher commented that there is a floor for the minimum number of affordable units but there <br />is not necessarily a ceiling. <br />Economic Development Manager Sullivan commented that all parties have been working together <br />to present this in a clear manner. He stated that the options this morning would be to support or <br />Economic Development Authority/ July 13, 2023 <br />Page 4 of 10 <br />