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ARDEN HILLS CITY COUNCIL—May 10, 2010 6 7.C. Sand Companies, Inc. Request for a Letter of Support for Housing Tax Credits with the Minnesota Housing Finance Agency for up to $575,000 in Public Assistance as Proposed in the May 10, 2010, Memorandum (continued) County Road F. This $540,000 does appear to be an appropriate amount of gap financing needed for this $10,400,000 project. It is anticipated that the funding for this support would come from the following potential sources; Ramsey County, cell tower proceeds and TIF. The request for support increased for three primary reasons. First, the City's approval of the project required additional stone on the exterior of the building and additional amounts of fencing around the property. Secondly, the increased amount of funding will translate into a higher point allotment on the application to the MHFA resulting in a higher likelihood that the project will be awarded. Lastly, the higher request takes into account the proposal to sell the tower to the City, which results in a loss of revenue to SCI. If the tower is not sold to the City, the need for public assistance would be reduced. SCI is also applying for a HOME grant from Ramsey County and according to Mary Lou Egan at Ramsey County Community Development, SCI may receive a small amount of funding, perhaps $35,000, in 2010 to support their tax credit application to MHFA. The project may be eligible for up to $300,000 in support from the County, but they will not tie up the funds in 2010 for a project that is not scheduled to start until 2011. SCI will not know if additional County funds are awarded until May 2011. Grants received by SCI would be factored into the public subsidy evaluation and would reduce any requested need from the City. Councilmember Holden asked if it was a sure thing that Sand Companies would receive the $35,000 from Ramsey County. City Planner Beekman stated Ramsey County has agreed to send a letter of support for $35,000 as part of the application but nothing is guaranteed. Councilmember McClung clarified if Sand Companies were to apply for and receive more funding from Ramsey County then the public funding being requested would be reduced. He also clarified that SCI is asking the City to support $540,000 and Ramsey County is supporting $35,000 at this time. City Planner Beekman stated this is correct. Ramsey County is sending a letter of support for $35,000 this year and they are encouraging SCI to apply next year, when they start construction, for a larger amount from Ramsey County. Councilmember McClung asked if the tower was something the City decided not to pursue then the amount the City was being asked to support would be reduced by the amount of the tower. City Planner Beekman stated at this time the appraisal of the tower is not complete so the City and SCI have been using a figure of$175,000 as an estimated figure when calculating the amount of support being requested. Once an appraisal is received then the City would have a clear amount to work with.