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Updated Preliminary TIF Review The City's financial consultant has revised the preliminary TIF analysis since the May meeting. The revised calculation indicates that the project would generate $201,000 over 15 years. Again, this is a preliminary calculation and the final number will not be determined until 2011. The TIF number currently does not include any adjustments for inflation over the life of the T1F district. Additionally,the applicant is considering opting out of the 4d tax classification,which is a reduced tax level for workforce housing. Either of these adjustments could increase the amount of TIF generated by the project. These decisions would be made during the complete TIF review in 2011. Updated Letter of Support Part of the Council's concern was SCI's increased request from $400,000 to $575,000. The primary source of the concern was that the City did not yet have the tower appraisal, and the preliminary TIF analysis indicated that the property would only generate$184,000(now $201,000)over 15 years. While the letter of support does not commit the City to any funding requirements or to purchasing the tower,the Council did not want to misrepresent the City's potential financial contribution in SCI's tax credit application to MHFA. In response to the Council's discussion in May, SCI has prepared a new letter of support that identifies two possible public subsidy strategies. 1. If the City does not purchase the communications tower, SCI is requesting up to $225,000 in assistance. Although the preliminary TIF analysis indicates that$201,000 would be generated, this is not a final number and it could change when the complete TIF review is completed in 2011 as noted in the previous section. 2. If the City purchases the communications tower, SCI is requesting up to $575,000 in assistance. This subsidy could be funded through TIF, a waiver of fees, and/or a cash payment. If the TIF generates $201,000,the City would need to fund the $374,000 gap. The gap would essentially represent the price of the communications tower. Although the appraisal valued the tower at $500,000, SCI is not requesting additional funding. If the City contributes$575,000 to the project, they will secure two additional points on their housing tax credit application and increase their chances of securing the tax credits. Without the housing tax credits, SCI does not consider the project to be viable. At the end of the third paragraph, a new line was added regarding the City's park dedication fee and SAC/WAC fees(it is underlined for your convenience). It is true that the City is not collecting the park dedication fee; however, SCI is constructing a nearly 1,700 foot long sidewalk along County Road to connect the property to Lexington Avenue. The estimated cost of the sidewalk is actually slightly more than the park dedication fee, and it has already been approved as part of the land use approvals. City ofArden Hills FPAC Meeting for June 8, 2010 Ahdocsl ah IAHdata Planning Development I Housing'Aff ordable Housing Arden Village-Sand Companies 10608/0-FPAC Memo- • Arden Village-Sand Companies.doc Page 3 of 4