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Economic Development Manager Sullivan replied that each project has its own merits. He noted <br />that the City is working with another developer that proposes to create a product that would exceed <br />these rental rates, which would fund that project. He stated that this applicant has a mission as a <br />nonprofit to provide some affordable housing as part of their projects and is one of the reasons the <br />subsidy is needed. He stated that the assistance would help to pay for the affordable units rather <br />than the market rate units and therefore did not see an issue with competition. <br />Member MacLennan commented that this project would bring in workers and capital dollars to the <br />community and that should be the focus for the EDA. <br />Member Johnson commented that putting a cap on the affordable units would not be something <br />that she would want. She commented that the market can change and would want to see the <br />developer have flexibility to provide affordable more units if that is something they desired. <br />Chairperson Wiyninger commented that having rates available below market rate does not make <br />financial sense beyond what is required, therefore he would be fine not having a cap. <br />Member Stewart commented that she believes the 20 percent cap would be wise with that many <br />single-family homes near this project in order to keep the integrity of the project. She commented <br />that in 20 or 30 years, she would not want to see 90 percent of the units deemed affordable as that <br />could impact the adjacent home values. <br />Member Riley asked if the years and dollar move together on the term sheet, using the example of <br />ten years versus 20 and asked if that would then reduce the financing by half as well. <br />Mr. Aarsvold confirmed that to be true. He commented that the dollars and term are based on <br />what the increment is projected to be during that time. He commented that ten years would equate <br />to a little over half of the total projected in the term sheet. <br />Motion by Member Stewart, seconded by Member MacLennan, to recommend to City Council to <br />support the project with the term sheet and assistance levels as proposed with the addition of a cap <br />of 20 percent on the number of affordable units. <br />Motion carried. Voting Yes: Chairperson Wiyninger, Members Stewart, MacLennan, and <br />Lindahl. Voting No: Members Howell, Johnson and Riley. Absent: None. <br />4.02: Consider Offers to Purchase and Develop a Portion of Outlot A, COR TWO <br />Economic Development Manager Sullivan presented the staff report. <br />Heather Lorch, Capstone Homes, commented that they have been following this parcel for almost <br />one year and are grateful to present a proposed project this morning. She provided details on <br />Capstone Homes and its mission. She reviewed the neighborhoods that Capstone has developed <br />in Ramsey and other metro communities. She also provided details on Capstone's commitment to <br />Homes for Hope, noting a dedication that will occur in Riverstone South later this morning. She <br />Economic Development Authority/ July 13, 2023 <br />Page 6 of 10 <br />