9A, Letter of Support for Arden Village MHFA Tax Credit Application and Extension

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Mayor Grant felt it would be difficult for the City to offer the same amount of TIF year after year as developments and initiatives throughout the community change. He questioned if $100,000 were offered by the City if Sand Companies could make up the difference. Jamie Thelen, Sand Companies, indicated Sand Companies has been investigating other funding sources to assist with the project. Councilmember Holmes asked for the estimated net profit for the first year of operation. Mr. Belisle anticipated the development would make approximately $50,000 in the first year after paying all operating expenses and debt services. He explained the units had to remain affordable for 30 years. City Administrator Klaers questioned if it would be appropriate to have Ehlers review the information and determine an appropriate level of TIF for the proposed development. Community Development Director Hutmacher explained the "But For" analysis from Ehlers could provide the Council with additional information on the proposed development and its overall financing. Mayor Grant asked if staff knew the expense of the "But For" analysis. City Administrator Klaers estimated this to be a $5,000 expense and would be paid for by the developer. City Planner Beekman indicated if the TIF funds were granted, the assistance would be available to the developer for 12 years. After that time, full property taxes would be paid. Mayor Grant stated the City could also take TIF from Cottage Villas and apply it to this project. That would allow the tax revenue from this project to be collected from Day 1. The advantage of using these funds was that it was slated for affordable housing. City Planner Beekman stated this would be an option and the City would see some cost savings by not creating a new TIF district. Mayor Grant questioned if the Council wanted to proceed with the $225,000 in TIF or allocate a lesser amount. He was willing to provide TIF funds to the development but was uncertain if the full amount was necessary. Councilmember Tamble stated he was in favor of the development but was unable to commit to a dollar amount. Councilmember Holden agreed. Councilmember Holmes indicated she too supported the project.