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

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On March 8, 2010, the City Council gave land use approvals for the Arden Village project including Conditional Use Permit Amendment, Rezoning, Comprehensive Plan Amendment, Preliminary and Final Plat, and Master and Final Planned Unit Development. The Council also approved a development agreement. Section 5.0 Subd A.2 of the Development Agreement required Arden Village to obtain a building permit for the development on or before June 30, 2011. Letter of Support Subsequent to the land use approvals, SCI requested a letter of support for tax increment assistance. Although the request for tax increment assistance was relatively small in relation to total projects costs, local financial assistance is very important in leveraging tax credits, grants, and loans from other funding providers. SCI needed a letter of support prior to its application for tax credits from the Minnesota Housing Finance Agency (MHFA). On June 14, 2010, the Council approved a letter of support for Arden Village that included up to $225,000 in TIF assistance. Since the initial approval of the project, Arden Village has moved forward with purchasing the parcel, and has filed the Final Plat to subdivide the property with the County. Arden Village is continuing to working with MHFA on an application for housing tax credits that would allow the project to be constructed. Arden Village did not receive funding in the first MHFA funding cycle, and in May 2011, requested a one year extension on their building permit deadline, as well as a second letter of support for the next MHFA funding request. On May 9, 2011, the City Council approved both requests. The second letter of support also included up to $225,000 in TIF. Minnesota Housing Finance Agency Tax Credit Application Arden Village did not receive funding in 2011, and SCI intends to submit another funding application for this year's MHFA tax credit funding cycle. As part of their application, an updated letter of support is needed. The Council reviewed the Arden Village development, and met with SCI at the March 19, 2012, Council work session (Attachment C). At that meeting the Council indicated ongoing support for the project, but hesitancy over the continued $225,000 in TIF. SCI stated that they were seeking an alternative funding source for the project that may replace the TIF. At this point it appears that SCI has secured funding from the Greater MN Housing Fund, and as a result their letter of support (Attachment A) does not include an offer of TIF from the City. In order to use the Greater MN Housing Fund resources, SCI must begin construction of Arden Village on or before December of 2012, as they would have to obtain a certificate of occupancy by December 30, 2013. As a result of this timeline, a sentence has been added to the letter of City of A rden Hills City Council Meeting May 9, 2011 Page 2 of 3