1.A Arden Village Workforce Housing Concept

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Local participation from the City can come in many forms from financial to flexibility in development standards along with letters of support. Of course, the more the City is willing to participate, the higher the project will score on the tax credit application. Some examples of assistance include tax increment financing, waiver of fees or assessments, density bonuses, flexibility in zoning or development standards and fast track approvals. One of the most common forms of City participation associated with our past work -force housing developments was the utilization of pay-as-you-go tax increment financing (TIF). We have successfully used this financing tool with projects in Lakeville, Albany, Chaska, Chanhassen, Jordan, St. Paul and White Bear Lake. This tends to be a tool that many cities utilize as it has no up -front costs for the City and also does not create any financial obligations. It is anticipated that Arden Village could support approximately $400,000 in pay-as-you-go TIF based on 17 years of increment (90%) returned to the development. Other cities such as Maple Grove, St. Michael, St. Joseph, Bloomington and Chaska have financially supported our tax credit applications by waiving fees such as local SAC/WAC, building permit and park dedication fees. Waiving a portion of these fees is a good option for participation and can be easier to administer versus TIF. Below are the projected sources & uses for Arden Village: Sources of Fund First Mortgage Equity Deferred Loans City ofArden Hills TOTAL SOURCES $ 1,950,00018% 7,200,000 64% 1,650,000 14% 400, 000 4% $ 11,200,000 100% Uses of Funds Land/Construction $ 9,068,654 Professional Fees 405,696 Soft Costs 1,245,883 Financing 479,766 TOTAL USES $ 11,200,000 With approximately $400,000 (4%) of total development cost in local support, Arden Village achieves a scoring benchmark which will help it get selected. This local leverage will also open the project up to more significant Federal and State funding. If the City agrees to take part in the project at the requested level, the Arden Village development will bring to the City approximately twenty-eight dollars of Federal, State and local monies for every one dollar of City participation. We feel this would be a good, long term investment for the City as Arden Village is committed to be affordable for 30 years. It is important to note that the TIF does not need to be in place for the tax credit application due in October. If the project is selected and moves forward, the project would only then go through the public hearings and establishment of the TIF district. The only thing needed for the application is a letter from the City supporting the uses of TIF or the waiver of fees. One of the attachments is a draft of a proposed letter we would be requesting for the application. Also attached for reference are letters from other cities that were part of previous selected tax credit applications. Arden Village Proposed Development 9