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, Minutes of the Arden Hills Regular Council Meeting, 12-30-91 Page 2 I PUBLIC ~ nick Petersen, 3322 Katie Lane, ~essed interest relative to the proposed merger of Arden Hills and the city of Shoreview. He stated his OWOSition to the merger and requested Council ccmnnents on the proposal. Petersen advised he was an observer when the original corporate documents of Arden Hills were drafted. Mayor Sather e>q>lained the fo:rmer Mayor of Shoreview had made the suggestion at a Shoreview Council meeting. He advised such a merger does not appear to be beneficial to the city of Arden Hills and CouncilmeInbers have not e>q>ressed interest in discussing this matter. REQUFSl' TIF Council was referred to the memorandum fram the Clerk FINANCING ; Administrator dated 12-24-91 and attachments, relating to NORIH RIDGE the request for Tax Increment Financing for the North APARIMENI'S Ridge Aparbnent OCIIIplex development, Continental Development Corporation. Charles Cook, President of Continental Development Corporation, e>q>lained the project received POD approval from Arden Hills in January 1990. He advised that the carq;mly aggressively searched for conventional financing for the project for approxilnately one year, without sua::ess, and has now applied for HUD financing. Cook stated that HUD acx:epted the application in May of 1991 and issued their fornal conditional commitment on october 28, 1991, which is a smaller mortgage amount than initially anticipated. Ii'! " .':';. ... Cook advised there is no risk to the city under the TIF program and the city assistance is provided on an annual basis, payable only if the project pays it's - property taxes. He reviewed the proposal and discllssed the handouts presented to CouncilmeInbers relating to the feasibility of the project, the financial structure of the HUD insured mortgage and a cost estilnate infornational sheet. Councilmember Mahowald questioned what percentage. of occupancy is necessary to insure the feasibility of the project. -'! 1 S ,', <~, Cook indicated the project requires approx:iJnately 80 percent occupancy to "break evenll. Council referred to the "Sources and Uses" ,sheet distrihrted by the developer and questioned how the "Builders and ~::PtOfit and Risk"'lifle item is ,. calculated. J'~, Cook advised the figure is estilnated by HUD. Financial Consultant James Casserly explained that HUD only allows the amount calculated to be taken from the projeCt, if this amount is'initially put into the project. , Casserly e>q>lained that HUD is nomally comfortable that the market will support a project before granting approval for financing. He further stated there is no - risk to the city and all dOCllJl1eIltation could be designed with language to insure no risk to the city. -- 'Ihere was discussion relative to the feasibility of the project and why conventional financing is not available for the project.