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• Letter of Support Review • In preparation for a new housing tax credit application to MHFA, SCI submitted a new letter of support in May. FPAC reviewed the revised letter at their May 6, 2010, meeting. FPAC did not recommend a particular course of action but indicated that the request for up to $575,000 was an appropriate number for the gap financing request. The $575,000 request was an increase from the $400,000 request made in September 2009, which is primarily related to SCI's proposal to sell the communications tower to the City. While SCI would technically donate the tower to the City for$1 and write-off the tower as a donation, the loss of revenue from the tower increased the funding need for the project. However, the increased support from the City adds points to SCI's housing tax credit application and increases their likelihood of being selected. If the City accepted SCI's tower sale proposal, the City could fund the $575,000 request through a combination of TIF, fee waivers, or direct payment. Under this scenario,the City would also take ownership of the tower. When the new letter of support was reviewed by FPAC and the City Council, the preliminary T1F calculations indicated that the project would generate approximately $184,000 over 15 years. It is important to remember that the TIF calculation was an estimate because a complete analysis will not be completed until 2011 prior to the start of construction. Based on SCI's $575,000 request,the remaining gap after TIF would be $391,000. The remaining$391,000 could be funded by a combination of fee waivers or direct payment from the City. The City Council reviewed the revised letter of support at their May 10, 2010, meeting. The Council expressed concern over the increased funding request. the discrepancy between the • funding request and estimated TIF generation, and the potential impact of a HOME grant from Ramsey County. Additionally, since the request for assistance had become intertwined with the potential sale of the communications tower,the Council felt it prudent to table the letter of support until the appraisal was completed and the letter of support could be clarified. The tower has since been valued at $500,000. Just prior to the City Council meeting, Ramsey County awarded Arden Village a $35,000 grant to support their housing tax credit application. The project may be eligible for up to $300,000 in additional grant money in 2011, but the County does not want to tie up 2010 grant money for a project that is not scheduled to start until 2011. When Ramsey County's support was discussed at the Council meeting, it was not clearly explained how that may impact SCI's request from the City. It was initially thought that it may reduce the SCI's request from the City. However, it has since been learned that money from Ramsey County would reduce the overall support from MHFA resulting in essentially no net gain to SCI. The primary benefit is that the County's contribution adds points to the housing tax credit application and increases the chance that this project is selected for housing tax credits. Additionally, Ramsey County HRA's mission is to add workforce housing units in Ramsey County, which is why they support the project. City of Arden Hills FPAC Meeting for June 8, 2010 I\Ahdocsl lah'AHdaiaPlanning'\Communih Derelop,nent!HousinglAffordable Housing Arden Village-Sand Companies',060810-FPAC Memo- Arden Village-Sand Companies.doc Page 2 of 4