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ltma,— <br />�iAZEN HILLS <br />ws'.� <br />CITY OF ARDEN HILLS <br />MEMORANDUM <br />DATE: September 4, 2009 <br />TO: Mayor and City Council <br />FROM: James Lehnhoff, Community Development Director <br />SUBJECT: Arden Village — Business Subsidy Policy <br />BackLyround <br />At the August 17, 2009, City Council work session, Sand Companies Inc. (SCI) presented a <br />concept proposal for a 55 unit affordable housing building at 1296 County Road F. As part of <br />that proposal, SCI is requesting a letter of support from the City Council for a Housing Tax <br />Credit application with the Minnesota Housing Finance Agency (MHFA). Housing Tax Credit <br />applications have a greater chance of approval with support from the local government unit. The <br />proposal to the City includes a preliminary request for $400,000 in public assistance in the form <br />of Tax Increment Financing (TIF). An alterative to TIF is a waiver or reduction of development <br />fees such as building permit fees, SAC/WAC, and/or park dedication. The project would also <br />require a Comprehensive Plan amendment and rezoning. <br />Letter of Support <br />The deadline for the Housing Tax Credit application is October 1, 2009; however, SCI would <br />need to be working on the application well in advance of the deadline. In order to move forward <br />with this funding cycle, the City Council would need to make a decision on the letter of support <br />no later than the September 14, 2009, Council meeting. MHFA would make its determination on <br />the Housing Tax Credits by January 29, 2010. <br />It is important to note that a letter of support is not an approval of the project or public <br />assistance. However, the letter would be a good faith commitment from the City to provide the <br />identified support if the Tax Credits are approved by MHFA. Even with the good faith <br />commitment, the project would need to meet all TIF statutory requirements, including the "but <br />for" test. The City would not begin processing a TIF request or any other part of the <br />City of Arden Hills <br />Arden Village — Preliminary Business Subsidy Policy Review <br />Page 1 of 2 <br />