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CC Memo 12-2-05 Housing Proposal/TIF Timeline CITY OF CHANHASSEN 7700 Market Boulevard PO Box 147 Chanhassen, MN 55317 Administration Phone: 952.227.1100 Fax: 952.227.1110 Building Inspections Phone: 952.227.1180 Fax: 952.227.1190 Engineering Phone: 952.227.1160 Fax: 952.227.1170 Finance Phone: 952.227.1140 Fax: 952.227.1110 Park & Recreation Phone: 952.227.1120 Fax: 952.227.1110 Recreation Center 2310 Coulter Boulevard Phone: 952.227.1400 Fax: 952.227.1404 Planning & Natural Resources Phone: 952.227.1130 Fax: 952.227.1110 Public Works 1591 Park Road Phone: 952.227.1300 Fax: 952.227.1310 Senior Center Phone: 952.227.1125 Fax: 952.227.1110 Web Site WWVI.ci .chanhassen. mn. us OJ -0 \ :2. MEMORANDUM TO: Todd Gerhardt, Executive Director FROM: Justin Miller, Assistant Executive DirectOl:'~,,^, o~. DATE: December 2, 2005 RE: Sand Companies Housing ProposalrrIF Timeline BACKGROUND Earlier this year, the Sand Companies approached the City asking for support of their affordable housing tax credit application for their proposed 48 unit apartment building to be located at the intersection of new Highway 212 and 10 1. At that time, the City Council tentatively gave support towards this project, dependent on several factors. One of these factors was that the developer successfully acquire tax credits for the project. In October, the city received notice that the Sand Companies had in fact been awarded tax credits through the competitive process that the Minnesota Housing Finance Agency awards. They are now looking to go through preliminary plat process (expected to be heard in January 2006) and to begin the Tax Increment Financing process. They would like to have their financing in place by this spring/early summer, and as such would need the TIF package to be finalized. When this proposal was initially brought before the City Council, staff recommended that TIF be used in the same manner as it was for the Presbyterian Homes project, where 90% of the increment generated would be returned to the developer for six years, with 50% being returned for another two years. Staff's initial analysis determined that this would amount to $316,800 (in today's dollars). A more detailed analysis will have to be done by our financial advisors, and this analysis will be presented to the EDA during the approval process. Attached is a draft timeline that staff and the developer are prepared to initiate. Staff is looking for confirmation that this is in fact the plan that the EDA had in mind and authority to begin the TIF process. Before any work begins, the developer will be required to submit a TIF application, as well as a $2000 fee and a $10,000 deposit that will be used for any fees the city incurs. The City 01 Chanhassen . A growing community with clean lakes, quality schools, a charming downtown', thriving businesses, winding trails, and beautiful parks. A great place to live, work, and play. CITY OF CHANHASSEN 7700 Market Boulevard PO Box 147 Chanhassen, MN 55317 Administration Phone: 952.227.1100 Fax: 952.227.1110 Building Inspections Phone: 952.227.1180 Fax: 952.227.1190 Engineering Phone: 952.227.1160 Fax: 952.227.1170 Finance Phone: 952.227.1140 Fax: 952.227.1110 Park & Recreation Phone: 952.227.1120 Fax: 952.227.1110 Recreation Center 2310 Coulter Boulevard Phone: 952.227.1400 Fax: 952.227.1404 Planning & Natural Resources Phone: 952.227.1130 Fax: 952.227.1110 Public Works 1591 Park Road Phone: 952.227.1300 Fax: 952.227.1310 Senior Center Phone: 952.227.1125 Fax: 952.227.1110 Web Site www.ci.chanhassen.mn.us June 27, 2005 Minnesata Hausing Finance Agency 400 Sibley Street, Suite 300 St. Paul, Minnesata 55101 Attentian: Multifamily Underwriting RE: Hausing Tax Credit Program & Super RFP. GATEWAY PLACE, CHANHASSEN. Dear Multifamily Develapment: The City af Chanhassen is a cammunity made up afresidents, businesses and institutians sharing a camman histary af sacial, ecanamic and palitical interests. One af the primary purpases af a cammunity is to. serve as a place af residence far its citizens.. Assuming this charge, affering a mix af life cycle hausing appartunities becames a challenge far lacal gavernments. .... '. " '. . . , The City is committed.ta.providingavariety.ofhausil1g styles ",ith hausing available far peapleofall.incalTIele"elstomeetthelifecyclehausipg needs af Chanhassen residyntsandlacalbusinesses. . Whilecamm.ittedta praviding life cycle hausing,. the City must ()vercame. ab~taclestotheirdevelaPIIlent.One ?f the mast difficult impedilTIentstapraviding.. ane. facet of life cycle.hausingand/ar affardable hausingis the high costaf land. Develapers or hausing proyidersillllst be partners in providing life cycle hausing. '. '. ..... ..... ........... .... ..... The propased 48 unit. develapment called.. G~tewayPlacejs...an.excellent' appartunity far the City ofChanhassen to. meet a. partian afaurhausing goals. Its lacatian is alang. new Highways.IOland. 2l2nearshapping,jabs .... andpuplic transpartatian. . TheJacatianafGateway Place meets the characteristics af Smart Growthdevelapment. ..' . The City' afChanhassen.'.propases.Significant.lacalfinancialassistanee far this project as part of itsendarselTIent.lf the projectis s~lectedfarfunding, the City Cauncil suppartsthe use aftro,eincrementfinansing(TIF) for the project in a manner similar tootheraffar?abl~h?using projectsthec;ity has offer~dassistance . in the past. The TIFstructureforpastprojects'.hasbeen 90% increment for the first five years and 50% increIIlentfortwoadditionalyears. As part of the tax increment financing, the project.will need to meet the state guidelines for tax The City of Chanhassen · A growing community with clean lakes, quality schools, a charming downtown, thriving businesses, winding trails, and beautiful parks. A great place to live, work, and play. increment financing including the "but for" test. The City of Chanhassen will also require the project to stay affordable for a specified period of time. Besides the financial assistance, the City supports fast-track permitting and flexibility in zoning and development standards. To accomplish this, the City used a Planned Unit Development (PUD) approval process to allow for this flexibility. On June 7, 2005, the City Planning Commission recommended approval of the PUD for the project and at our June 27, 2005 Council meeting, we approved these plans. As has been previously stated, the City of Chanhassen is committed to the development and completion of work force or life cycle housing within the City. We ask that you participate with us to help meet our common goal of affordable housing in Chanhassen by funding this development. Tom Furlong Mayor . , . . SCHEDULE OF EVENTS CHANHASSEN ECONOMIC DEVELOPMENT AUTHORITY AND THE CITY OF CHANHASSEN CARVER AND HENNEPIN COUNTIES, MINNESOTA FOR THE PROPOSED MODIFICATION TO THE REDEVELOPMENT PLAN FOR THE DOWNTOWN CHANHASSEN REDEVELOPMENT PROJECT AREA AND THE PROPOSED ESTABLISHMENT OF TAX INCREMENT FINANCING DISTRICT NO.9 (a housing district) Draft as of November 18.2005 February 3, 2006 Project information (property identification numbers and legal descriptions, detailed project description, maps, but/for statement, fiscal impacts to public works and police and fire services, and list of sources and uses of funds) for drafting necessary documentation sent to Ehlers & Associates. February _, 2006 EDA requests that the City Council call for a public hearing on the proposed Modification to the Redevelopment Plan for the Downtown Chanhassen Redevelopment Project Area and the proposed establishment of Tax Increment Financing District No.9. February 13, 2006 City Council calls for public hearing on the proposed Modification to the Redevelopment Plan for the Downtown Chanhassen Redevelopment Project Area and the proposed establishment of Tax Increment Financing District No.9. February 15, 2006 Ehlers & Associates confirms with the City whether building permits have been issued on the property to be included in Tax Increment Financing District No.9. February 24, 2006* Project information submitted to the Carver County Board for review of county road impacts if necessary* (at least 45 days prior to public hearing). *The County Board, by law, has 45 days to review the TIP Plan to determine if any county roads will be impacted by the development. If the City staff believes that proposed Tax Increment Financing District No.9 will not require unplanned county road improvements, the TIP Plan will not be forwarded to the Carver County Board 45 days prior to the public hearing. Please be aware that the Carver County Board could claim that tax increment should be used for county roads, even after the public hearing. [Ehlers & Associates will fax and mail on February 23 or 24, 2006.J February 28, 2006 Letter received by Carver County Commissioner giving notice of potential housing tax increment financing district (at least 30 days prior to publication of public hearing notice.) [Ehlers & Associates will fax and mail on February 24 or 27, 2006.J e I ~.~o~,~.t;t,~ .. . t .. SCHEDULE OF EVENTS - PAGE 2 CHANHASSEN ECONOMIC DEVELOPMENT AUTHORITY AND THE CITY OF CHANHASSEN CARVER AND HENNEPIN COUNTIES, MINNESOTA FOR THE PROPOSED MODIFICATION TO THE REDEVELOPMENT PLAN FOR THE DOWNTOWN CHANHASSEN REDEVELOPMENT PROJECT AREA AND THE PROPOSED ESTABLISHMENT OF TAX INCREMENT FINANCING DISTRICT NO.9 (a housing district) March 10, 2006 FiscaVeconomic implications received by School Board Clerk and Carver County Auditor (at least 30 days prior to public hearing). [Ehlers & Associates will fax & mail on March 8 or 9, 2006.J March 30, 2006 Date of publication of hearing notice and map (at least 10 days but not more than 30 days prior to hearing). [Chanhassen Villager publication deadline, March 23, 2006 - Ehlers & Associates or City of Chanhassen to submit notice and map to newspaper. If City chooses to submit notice and map to newspaper, Ehlers & Associates will provide language to the City by March 21, 2005.J March 21, 2006 Planning Commission reviews the Plans. March 22, 2006 Ehlers & Associates conducts internal review of Plans. April_, 2006 EDA considers the Plans and adopts a resolution approving the Plans. April 10, 2006 City Council holds public hearing at 7:00 P.M. on a Modification to the Redevelopment Plan for the Downtown Chanhassen Redevelopment Project Area and the establishment of Tax Increment Financing District No. 9 and passes resolution approving the Plans. [Ehlers & Associates will email Council packet information to the City by March 31, 2006.J By April 30, 2006 Ehlers & Associates files Plans with the MN Department of Revenue and the Office of the State Auditor, and requests certification of the TIP District with Carver County. ~ [ EHLERS ~ I ,ASSOC,ATESINC