Agenda - Council - 08/08/2023 - Laserfiche WebLink

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• $14 of private investment for every $1 in TIF • $8.3M in fees and taxes; $5.7M of which is "front loaded" in the project schedule. • Significant future tax revenue (Onboarding the developable portion of tax-exempt church property onto future tax rolls, $1.3M/yr. upon expiration of district). • New resident population to support local businesses as both customers and employees. • High quality housing, which includes a component of price -restricted units, supporting employees of existing local businesses, a high area of need. • Public access to on -site amenities (Pickleball courts). (Can be private or city owned) Assistance Request / Financial Analysis: The Developer originally requested 11.3M over 25 years in Pay Go Financing as evidenced in the attached Business Assistance Application. The business application scores 27.5 which is a moderate score. Based on the information provided and attached analysis conducted by Ehlers, Staff believes that 9.263M and a 20 year duration of assistance is appropriate for a project of this type and size. The reduction of the duration of the district also allows the City to receive tax revenue from the project sooner. The TIF assistance request would be the largest provided for a single project in Ramsey. Based on the proposed level of assistance, both Staff and Ehlers are recommending a look -back provision that would allow the City to reduce the TIF provided if the rate of return exceeds the projected rate of return if assistance is provided. Based on review of the Developer's pro forma and under current market conditions, the proposed development may not reasonably be expected to occur solely through private investment within the near future. Due to the costs associated with developing the property and constructing housing with affordable rents, this project is only feasible, in part, through public assistance. As such, this project does meet the "But -For" test needed for the provision of TIF and is not unduly enriching the developer. TIF assistance should be provided on a "pay-as-you-go" (PAYGO) basis. With PAYGO TIF assistance, the City does not provide any funding up -front. Instead, the City enters into an agreement to provide tax increment payments that are generated solely from the project's actual increased property taxes. The Developer uses those tax increment payments to obtain additional debt and/or support returns on investment. If the tax increment is insufficient to pay the $9.263 million in total TIF notes, the City does not make up the shortfall. The EDA recommended approval of the attached preliminary term sheet and to consider language identifying the number of units for each housing type. Alternatives: 1) Adopt Resolution #23-174 Resolution Approving Term Sheet for Presbyterian Homes Housing Project; Haviland Fields (as presented); subject to City Attorney review. 2) Adopt Resolution #23-174 Resolution Approving Term Sheet for Presbyterian Homes Housing Project; Haviland Fields (with changes); subject to City Attorney review. 3) Continue Negotiations with Presbyterian Homes on TIF Amount and duration for project and to bring it back to City Council and/or EDA for consideration. 4) Request for more information. 5) Something else. Funding Source: Pay -Go Tax Increment Financing Recommendation: The EDA met on July 13th and passed a motion recommending to the City Council to support the project and the terms of the preliminary term sheet and to consider language identifying the number of units for each housing type. Outcome/Action: