EDA 1999 06 10ECONOMIC DEVELOPMENT AUTHORITY MINUTES
JUNE 10, 1999
]Note: Although the audio system was on, including the micro cassette recorder, nothing
was on the two tapes. Additions/deletions are welcome. I will ensure that Nann is present
on July 29, 1999.]
Vice-Chairman Jim Bohn called the meeting to order at 6:30 p.m.
MEMBERS PRESENT: Jim Bohn, Nancy Mancino, Mark Senn, and Steve Labatt.
MEMBERS ABSENT: Mark Engel, Gary Boyle, and Linda Jansen.
STAFF PRESENT: Don Ashworth, Economic Development Director
APPROVAL OF MINUTES: Mancino moved, Labatt seconded to approve the minutes of May
24, 1999. All voted in favor and the motion carried.
VISITOR PRESENTATIONS: No presentations were made.
OLD BUSINESS--NONE
LAKE SUSAN HILLS HOUSING PROJECT: Mr. Ashworth presented the staff report
discussing the meetings that had occurred between staff and Sheldon Wert and Lynn Wyffels from
Group Three Properties. That meeting ended with Mr. Wert and Ms. Wyffels being aware of the
fact that staff would be recommending that the only level of assistance to the project should be the
rent differential for the approximate 33 units proposed to be affordable.
The Chair then recognized Sheldon Wert who wished to discuss the proposed development/
necessity for assistance. Mr. Wert distributed a revised proposal. Mr. Wert began his
presentation by describing and actually reading from the City's policy regarding tax increment. He
then took the Authority through the request presenting a written request. Mr. Wert highlighted
two sheets out of the proposal that reflected the rate of return with solely rent differential subsidy
of $175,000 over 25-years plus inflation, as well as if an additional $40,000 could be infused into
the project over a 15-year period to cover excess costs..
Vice Chair Bohn asked staff to respond to Mr. Wert's revised proposal. Ashworth stated that
staff had not had an opportunity to review the revised materials presented by Mr. Wert this
evening. Staff would strongly suggest that the revised proposal be forwarded to Mark Ruff of
Ehlers and Associates for his analysis and comment. Additionally, Ashworth preferred reviewing
the revised proposal with City Manager Scott Botcher recognizing the precedent that would be
set if tax increment was allowed to be used for anything other than the cost differential between
market and affordable.
Economic Development Authority Minutes
June 10, 1999
Page 2
Vice Chair Bohn then requested comments from EDA members.
of the questions asked as well as responses given:
The following represents some
· Question: How do you justify requesting an additional $40,000 for 15 years?
Response: Mr. Wert restated that this needs to be a quality project, but to be competitive,
rents cannot be raised further than shown in the Performa. The project does cash flow if
$40,000 is infused into the project. An alternative would be to have the EDA pay
approximately $300,000-$400,000 in city fees. Mr. Wert then distributed a copy of a
letter prepared by Lynn Wyffels on April 14, 1999. Attached to the letter were cost
comparisons completed by Kraus-Anderson including additional costs that the project
would be incurring that could be seen as in excess of normal. Mr. Wert again reiterated
that if Chanhassen fees were similar to the three cities they had surveyed, project costs
would be about $300,000 to $400,000 less. If the city would consider paying that
$300,000 to $400,000 differential, the project would also work and the $40,000 would
not be required.
Staff was asked to respond to the fee comparison report. Ashworth stated that three cities
probably do not represent an adequate sample base. Staff will prepare a fee analysis as a
part of the next packet when this item is considered again.
Question: Could we get an analysis of who might logically live in one of the affordable
units? Does the state/metro levels of affordable rent allow a receptionist, secretary,
laborer, etc. to live in one of these units?
Response: Ashworth stated that he would ensure that information was included in the
next packet.
Vice Chair Bohn thanked Mr. Wert for being present and stated that given the fact that many
EDA members were absent as well as the fact that additional staff input was needed, the item
would be continued to the next meeting. No action was taken.
APPROVAL OF THE BILLS: Commission members stated that they would like to see
more detail associated with the bills. Mr. Ashworth stated that he would provide such.
ADJOURNMENT: Vice Chair Bohn adjourned the meeting at 8:30 p.m.
Don Ashworth
Economic Development Director