7E, Arden Village Letter of Support Request

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option would use pay-as-you-go repayment terms. A new TIF district would be in place just long enough to cover the requested $400,000 in assistance. The existing Cottage Villas TIF district is set to expire on December 31, 2009, but could be extended up to ten years for "low to moderate income housing." The Cottage Villas TIF district is projected to produce $545,000 over that ten year period. Alternatively, the City could reduce or waive the development fees. Based on the preliminary design and project value, the estimated building permit fee is $72,500. City sewer and water access charges (SAC/WAC) would be an additional $34,600. Since they intend to subdivide the existing antenna from the rest of the lot, it would be subject to the park dedication fee. Based on a 2009 market value of $715,600 from Ramsey County, the park dedication fee is estimated at $71,560. The base cost for the Comprehensive Plan amendment, rezoning, planned unit development, and subdivision application is $3,000. The total estimated cost for all City related development fees is $181,660. The Metropolitan Council will also charge a sewer availability charge of $110,000. The City is responsible for collecting this charge and remitting it to the Metropolitan Council. While the City could pay the fee on behalf of the development, it would be an actual charge to the City. While waiving all or a portion of the fees can be simpler than creating a new TIF district, Staff would be concerned about waiving or significantly reducing the fees because that represents a direct cost to the City for services that would still be provided. Without the fees, the costs would need to be absorbed elsewhere in the budget. Conversely, a new TIF district requires additional front end footwork but the costs are supported by the project itself through property taxes. As with any TIF district, the new increment of property taxes would go to the development instead of being distributed out to the City, county, and school district. Comprehensive Plan and Rezoning As discussed at the August 19 work session, this project would require a Comprehensive Plan amendment and rezoning. Given the size of the property and the type of proposal, a Comprehensive Plan amendment is likely to receive Metropolitan Council approval through their administrative review process. Additionally, the project helps the City advance the affordable housing goals described in the 2030 Comprehensive Plan. Timeline and Letter of Support The deadline for the housing tax credit application is October 1, 2009. In order to meet that deadline, SCI would need the letter of support from the City by September 14 so that they can complete the other application requirements, including a housing market study that is specific to this property. MHFA will make its determination by January 29, 2010. If the tax credits are City of Arden Hills City Council Meeting for September 14, 2009 IlMetro-inetlardenhillslAdminlCouncilUgendas & Packet Info rmation12009W9-14-09 RegularlPacketIn0rmationl7E 091409 - CCMemo - Arden Village -Sand Companies. doc Page 2 of 3