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• Councilmember Elvig questioned if MHFA doesn't believe that half the building could sustain <br />market rate don't they have ability to chose what the market rate would be. <br />Mr. Johnson replied that he believes the units would be able to achieve market rates once the <br />Ramsey Town Center is fully built out, but not as it sits today. And in order to be successful <br />they would have to charge $1.00 per square foot for the market rate units. <br />Councilmember Elvig replied the key is when Ramsey Town Center is up and running. <br />Mr. Johnson stated that the difficulty is MHFA has the say on financing. <br />Councilmember Elvig stated that now that the City has an agreement in place for the new <br />Ramsey Crossing that should improve their opinion on whether or not they could sustain market <br />rate units. <br />Mr. Johnson replied that is something they could note in the application. <br />Councilmember Elvig inquired if a 50/50 building would bring in more revenue versus an all <br />affordable housing project. <br />Mr. Johnson replied no. <br />• Councilmember -Elect Look inquired if there would be some resistance to mixing income levels. <br />Mr: Johnson explained that the trend over the past several years has been to try and mix different <br />levels of income together. He explained that this project did receive enough points to be funded <br />but MHFA chose not to fund the project at this time because they did not feel the units could <br />carry the market rate and the commercial portion had not been determined. In order to fund this <br />project it will have to be done as all affordable units and a'commercial partner would need to be <br />identified. <br />Councilmember Elvig questioned if timing was an issue why would they choose to go all <br />affordable now rather than all market rate if they feel that the Town Center will bring that draw. <br />He questioned what role the MHFA funding played into the project. <br />Mr. Johnson explained that MHFA would finance 75 -80% of the project if it were built as all <br />affordable housing. <br />Councilmember Elvig suggested that maybe there are people willing to invest into the project as <br />market rate units. <br />Mr. Johnson stated the question needs to be asked if this particular location will offer the features <br />necessary to make market rate units successful. The problem with this particular location is the <br />parking, which is something that is going to be a downfall for people seeking market rate units. <br />City Council Work Session / December 4, 2006 <br />Page 3 of 9 <br />—73— <br />