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2 Lakeview Hills Tax CreditCITYOF 690 G9, Center Drive, PO Box 147 Chanhasse,. Min,esota 55317 ?hone 612.937. I900 General Fax 612.937.5739 f, gi,eedng Fax 612 937. 9152 Pub/lc Sari,O, Fax 612934.2524 ~[~b wwlt~ ci. chanhassen, mil. us MEMORANDUM TO: Todd Gerhardt, Acting City Manager FROM: Kate Aanenson, Planning Director DATE: February 12, 1999 SUB J: Minnesota Housing Finance Agency (MHFA) Tax Credit Real Estate Equities is requesting MHFA for the development of the Lakeview Hills property. The project is still owned by Mr. Steve Liefschultz, but Real Estate Equities is in the process of trying to acquire the entire property. It is their proposal to provide affordable housing through the development of this site (see attached proposal). At this time, the applicant is seeking city council support for their application for tax credits. The project still needs city approval for site plan, rezoning, etc. The applicants will likely request additional funding. Support of the tax credit does not bind the council to any furore approval of the project. RECOMMENDATION Staff supports the use of tax credits for any project that benefits affordable housing. g:\plan\ka\lakeview tax credits.doc The Citl, of Cha,thttsse,. /l,¢r~w.,'~,f commm#O, w/th cica, lakes, qt~a/ity schools, a cha,nin~ downtown, thrivinf businesses, and beautifid parks. A zreat place to live, zvork, and play. FEB &l '99 04=lSPM RERL ESTRTE EQUITIES P,2/7 REAL ESTATE EQUITIES ~¢AL [STATE ~CtUtTI~5 [NC., ~' [~EA[. ESTATE; ~QUITI[$ ~ROKERAGE Co, Febmary11,1999 Mt. Todd Ger_ha~dt Acting City Administrator City of Chasahassen 690 City Center Drive ChatS. assea, Minnesota 55317 LAK~ RILEY HOUSING PROJECT INTRODUCTION Real Estate Equities is curfendy m the pwcess of trying to purchase fred redevelop the Lake,~iew I-Is]ls site. One part of the proposed project is a $0-m'fit tRX credit rental toxv~house project on the north 4 acres of the site. Applications for tax credit projects axe due on Febmaxy 18, 1999. h~ order fox us to ~ubmit a competi6ve application, we need the City to endorse the project. R~QUEST We a~e requesting that the city pass a resolution endorsing the submission of a tax cred/t application to rite ~fitmesota I~Ious/ng Finance Agency 0IHFA). This ~e, olutlon will greatly erdmnce our application ,and the probability for fimding. This would be a non-binding e~dorsement of the p~oject and it does stat conmait dxe city to any future action, We would propose to come back to the City with a fore, al presentation and request for assistance ,,ithin the next couple of months, PROJECT CONCEPT The project is being developed m provide xvorker hous~g to help support the employers of the southwest indusee;a! corridor (primarily Chanhassen md ea,~tem Cat'vet County), The project will provide housLqg to a broad rxnge of f~ilies and individuals with rears ranging f. tom 40-50% of median income on fl~e existing 1704mit project to targets of 50-60% of median for the 30-mail tax credit project and 60-$0% of median for the 166-unit market rate project The project will consist of the following three components: 50 unit Low-Income Housing Tax Credit (LII-ITQ rental project on the four (4) acm pa~cd at the north end of the property. A townhome style project with 2,5, & 4 bedroom units taxgemd to larger fimilie~ (Like our Columbine project with ~ents la,gered at the 50% and 60% of median htcome level. 'FEB 11 '99 04:18PM REAL ESTATE EQUITIES 2. 170 unit 501(c)3 p~oject on the middle (existhg) eleven (I1) ac~e pa~:cel. Will be rehabilitation of the ex4~ting project ,and seine the s:~ne market it currently serves with tents at flxe 40% - 50% of median hicome taxage. This pa~ of the Project wilt continue to provide an affordable option to individuak~ and small families w~th limited household incomes. 166 unit Market Rate Rental pzoject on the ~ont seven (7) ac~e parcel at the south end o£ the pgoperty. 'illis coniponent will consist of the constsuction of 3/4 story zental buildings. It is ~xttt~tly proposed that the project will be financed using 501(c)5 tax exempt bonds and w~ll be secured by F/fi& mortgage imura~ce. The t~geted market will be general market rate occupancy with~ the guidelines established £ot tl~e issu~ce of tax exempt bonds axld FHA. Re£e£ to the attached preliminary site plan for a proposed layout o£the project on the site, PROJECT STATUS We cuetenfly of a Letter of ~a~tex~t xvith the current proper~ owner and hope to execute a purchase .agreement withh the next two weeks. \Ve have worked with a local investment banking f~n on sm~ctuting an initial fimmch~g program. To meet the timing o£the established funding cycle our next step is to apply to the M3~FA for tax credits on Febmasy 18, 1999. In M~atch, xve will proceed with ~urther due diligence md design with a target to dose on the property and start construction in the fall of 1999. REAL ESTATE EQUITIES Real Eselte Equities h~ been in die raultiffamJ,ly housing business ia the t~vin cities area fo~ oyez 25 'ye,an3. Attached, please fred our ctuxent corporate profile and prope~t3, po~ffolio £o~ your ~eview Thank you £ot your time and consideration. Sincerely, ~ PAGE 2 ~FEB 11 '99 04:19PM REAL ESTATE EQUITIES Po4/7 ~99 04:19P~ R£~L ~ST~T~ £QUI¥I~S I:~_E..~L ]::~STATE ]~QIJITIES Profile : EAL EST. TE EQUITIES/The Company REAL IdST..~.TIE 'I?]QIjITIE~ was formed in 1972 to provide business and management services for real estate ihvestment partnerships. Co-founders Robert S. Bisanz and Terrence E. Troy have been the managing partners for over $0 partnerships encompassing approximately 6,000 apartment units. ~:~I'?.AL Ids'rATE EOUITIII$ ha, extensive experience in all facets of project development, financial analysis, new project capitalization, real estate investment° refinance, low income hou$1ng tax credits, rehabilitation, proj eot stabilization, tax exempt bond issues, institutional joint ventures, reaI e~tate and asset management. Today, RE:XL F. STATE ~QUITIE$' diversified por~folio comprises over 4,000 apartment un{ts in 21 buildings with a market value of $150,000,000, consisting of class "A" institutionally financed projects, LIHTC projects, projects x¼th HUD-insured mortgages, Section 8 housing, tax-exempt bond-financed projects, and providing apartment management and mortgage brokerage services to institutional investors and other clients including: ':' Nlinnesota Mutual Life insurance Company. ".' Northwestern National Life Insurance Company oi- The Boston Financial Group 4- Northern States Power *:° Over 600 Private Investors and Various Financial Insd~utions~ I}Ez\l. ¥_b-"r~.Tl-2 }iOUITIIS$ ]=YROlf. Elq_xGE GO_vlP~XNY was formed in 1980 and offers a broad range of service$ to clients. Since ks formation in I985, Iq[E~.xr. ¥~$T..X'i-IE E©IZiTIES I"I,-.~NrYlAL SIERVIGE$ (.Jo~x. It>~.N'Y has brokered over $70,000,000 worth o~ loans for their real estate investment clients. In August of 1995, RE;xL E$n'~VfE EQUITIES Mz\_',-~%.GE_XlENT (3ON[P,.%N¥ (~%.~1'O). one of the Twin Gfie~ oldest and larges: private property management firms entered in:o a joint venture with l?dlage Green/Vianagemen: Company headquartered in Farm~ngton Hills, ~Michigan. Village Green is currently ranked in the nation's top $0 apartment managers with 22,000 apartments in eight/%Iidwestern stares. In addition to managing the exisdng RE.kL F?-q'I5%.TE ]~QUITIE$ portfolio and Village Green portfolio the new Twin Cities company, i~}E.~%.L ES~I'ATI~, EQI~-ITIIzl~/VILL.~C'%E OlqE~N, LLG w4_ll focus o~. the acquisition o£ management contracts and management companies in 1Vilnne~ota. REAL E$~ILXTE EOUITrES provides superior development, marketing, property and asset management semqces. Our reputation for integrity, excellent resident service and concern for people is evident in the a~partment communide~ we are involved with, and in our dealings wkh communities and associates in our industry. FEB 11 '99 04:20PM REAL ESTATE EQUITIES P.7/?' i~EAL ESTATE t~OUITIES/?h~ People Terrence E. Troy, C.P.M. - Chairman Mn Troy graduated-from St. Thomas M.ilit&,-y Academy in 1955, and from Da~mouth Collese in 1959. Mr. Troy began his career in the financial services indu-~tvy. He brought his investment and financial expertise to the business of real e~tate in 1972 by forming a partnership with Robert Bisanz in the field of real estate investment and m~nagement. He and his panner h&ve purch~aed and managed over $200 million of multi- family real estate projects in p~rtnership with instkutional investors, government bodies, and hundreds of /ndividual investors. Robert S. Bisanz, C.P.M. - Presiden~ Mr. Bi~anz at, ended Notre D~-rne University from 1~51 to 1966, and *ook hi~ B.A. de~ee in Business Adminis~adon at St. Thomas ~llege in 196~. ~. Bis~nz entered the veal estate indust~ in 1967, joinin~ ocher member~ nf his family in Bi~anz Brothers Development ~mpany, g&ining a ~vide rang~ of real experience during the next five years: planning, financing, developing, and selling commercial, residential, and ap~men~ p~openies. In 1972, ~. Bisanz formed a p~nnership with Terrenee E. Troy to enter the business of creatln~ ~nd man,lng investment re~ estate. P~ela J. George, C.P.M. - Chief Operat~g O~cer, ~set ~ement M~. George has worked in the multi-housing indus~ ~ince 1972. Since she j~ined Re~l ~e ~uifies in 1979, Ms, George h~ ~cted ~s ~ Prope~ M~n~en Director of Prope~ Operations, ~ce Presiden~ and A~et Man~en A~ COO, her responsibilities include pmpe~ m~n~emen; oversighg of Real Estate Equities from an ~set man~ement perspective, supe~ision of ~pproximately 30 pannerships, communications, ~d supe~ision of due diligence and finanei~ ~trueturin$ of new ~qui~itlon~ and prope~' Kei~ S. J~s -~ce President, D~velopment A~. Jans h~ been involved in th~ ve~ estate indus~ for ne~ly 15 ye~. He is ~ 1782 graduate or,he Univee~iw of Minnesota with a BS degree in Hou~in~. At Re~ Estate ~uitie$, ~. danz is r~ponsible ~cquiviug and developing rem estate projects; conducting fe~ibili~ due diligence; locating and s~c~vin~ projec~ finsncing, t~ credit inves~ent~ ~nd non-g~ credit investments; structuring ~ee ~an~ements ownership pa~icipation; and m~n~ing the developmen~ process. ~chael J. Semsch, C.EM. - Chief Operat~ Officer, Prope~ ~ement ~. Sera,eh has worked in the peope~ man~emene indu~ since 1~71. ~. S~m~ch 5oined Re~l Equities in December. 1989, Hi~ duties include: marketing Resl ~t~e ~ukies m~n~ement business: communic~n~ ~ owners sod prope~, m~n~emen~ client~; ~n~lyzing Re~ Estate ~uities' curren~ pvope~ man~ement systems; expanding Real Esm~ ~uities' commerei~ m~emen~ account b~e; and overseeing ~e $11 million rehabilitation of ~,~ l~ge ap~ment COmmunitle~ totalin$ 689 unit~. John ~ Se~er, C.P.A. -~ce President, Fin~ce - Chief ~cial O~cer Mr. Segner began his c~reer with the fi~ of KPMG Pe~t, M~ick in Minneapolis, Minnesota. Several his varied clients were real estate comp&nits. In 1990, ~. Segner moved tn the incentive marke6n$ fi~ of Blue--an and Associates, Inc.(B&A) ~ ~ce President of Finance ~nd Chief Finanei~ O~een At B&A, Stoner m~a~ed a mulfi-million, dollsv po~folio ~nd w~ in charge of the ~cc~unfing &nd MIS divisions. B&A cou~t~ ~on~ ehelr dien~ m~ny Fount 500 companies. At Re~l Estate ~uifies, ~. Segn~r is responsible for ~1 ~ccounting sod MIS run,ions while actively involved in co, orate and investor t~x e~mpl~ee i~sue~ ~ well as the low income housing t~ credit pro,am. ~ene Wright - Proj~t ~or~ator Ms. ~rfight he$~ her c~eer in the re~ es~te indus~ in 1981. She holds a BA degree in m~vkedng/ ~dve~ising from Me~opolitan S~te Universiw. Joining Re~ Estate ~ui~es in 1995, M~. Wright is responsible foe the creation ~d execution of eo~eate and project m~ke6n$ plan~; ~x credit compliance auditing; and, project development coordination.