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ARDEN HILLS CITY COUNCIL WORK SESSION — FEBRUARY 9, 2026 5 kind of subsidy. In other cities, tax increment financing (TIF) is common. They have done tax credit projects, which starts another conversation. He isn't sure if that is a discussion today. On the other side there is grant money and soft funds. In addressing affordability their thought is, instead of providing artificially capped rents, they are looking at providing more supply to the market. The other projects in Shoreview perform really well and are able to continue increasing rents because there is no additional supply in the market. The employers in the area need places for their employees to live. If they bring in a new housing supply to the market, it will ultimately put downward pressure on the overall ecosystem of housing. If that continues to happen, there will be a stable middle -ground on market rents. If developed with affordable units, Minnesota's 4d tax treatment means the property doesn't pay property taxes. In the proposed scenario, the property would be paying full property taxes, that will probably be about $500,000, or more per year. He said he believes that's 10 times what the property is currently paying. There are other mechanisms that can be implemented. Inclusionary zoning in Eden Prairie requires that 20% of the units are 50% area median income (AMI). They hire a financial consultant and they offset it with a TIF District. Councilmember Weber asked him to speak to the benefit of the residents of Arden Hills, if it isn't affordability. Mr. Asta said it is increasing the tax base and increasing housing options. He said the newest apartment building in town is at least 10 years old. If someone wants to work, live and play in Arden Hills, it would mean living in an older house or older apartment. Simply increasing the tax base allows other residents to have a lesser tax burden. Councilmember Weber said this is a significant increase in density, to more than 25% over the maximum. Not knowing how this pencils out for them, wouldn't the same benefits come from someone who stays within that density guideline? Mr. Asta said to a lesser extent. Fewer units equals lesser tax base. He can't say for certain, but he would be surprised to learn that someone could get the numbers to work with something like that. It goes back to the cost of construction, land and capital markets. Councilmember Weber said it sounds like there is some competition for this property. He looked up this property on the Ramsey County site and he believes this property pays taxes. So this is an increase in taxes due to improvements. Mr. Asta believes they paid $60,000 in taxes last year. Mayor Grant said Catholic United isn't a huge building. It's a huge parking lot with a sizeable chunk of land. Discussion ensued that Catholic United Financial owns the entire property and Transwestern is the broker. Mayor Grant said his assumption is there is more than one interested party. He asked if he is wrong about that. Community Development Director Reilly said he has been approached by at least four separate residential multi -family developers to talk through requirements and hurdles. He gave them all the