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HomeMy WebLinkAbout06-08-10 Chair James Ostlund 1245 W. Highway 96 Committee Members Jeff Johnson 'ARQE HILLS Arden Hills, MN 55112 651.792.7800 • Arlene Mitchell Arden Hills www.ci.arden-hills.mn.us John Braun (Vacant Seat) (Vacant Seat) Financial Planning and Council Liaison BrendaAnalysis Committee Holden June 8, 2010 City Vision A strong community that values its unique environmental setting, strong residential neighborhoods, vital business community, well-maintained infrastructure, fiscal soundness, and our long-standing tradition as a desirable City in which to live, work, and play. Agenda Regular Committee Meeting Convenes 6:00 PM Call to Order 1. APPROVAL OF THE AGENDA 2. MINUTES A. May 6, 2010 - Regular Meeting 3. UNFINISHED AND NEW BUSINESS A. Communications Tower Discussion and Recommendation to the City Council • B. Arden Village Workforce Housing Revised Letter of Support Recommendation to City Council C. Trinity Lutheran Church and Hazelnut Park Land Discussion 4. REPORTS A. Report from the City Council B. Financial Planning and Analysis Committee Comments and Requests 5. ADJOURNMENT A quorum of the City Council may be present at this meeting. MINUTES �`IwNHILLS • FINANCIAL PLANNING & ANALYSIS COMMITTEE Thursday, May 6, 2010 6:00 P.M. Second Level Conference Room,Arden Hills City Hall CALL MEETING TO ORDER AND ROLL CALL The meeting was called to order by Jim Ostlund at 6:00 pm. MEMBERS PRESENT: John Braun;Jeff Johnson;Arlene Mitchell;Jim Ostlund MEMBERS NOT PRESENT: Brenda Holden,Council Liaison OTHERS PRESENT:Sue Iverson;Patrick Klaers; Sands Company Representatives Call to Order 1. APPROVAL OF THE AGENDA Motioned: Jeff Johnson Seconded:Arlene Mitchell 2. APPROVAL OF APRIL 13, 2010 MINUTES; Motioned:Jeff Johnson Seconded: Arlene Mitchell 3. UNFINISHED AND NEW BUSINESS''::;:::. • A. Arden Village Workforce Housing Reined Letter of Support Recommendation to City Council (Representatives from Sands C mpanywill be present to answer questions on the Project and Tower) " . ,. The Committee deloped Y _following recommendation: "The Financial PlUiming and Analysis Committee recommends that the City ofArden Hills issue a letter of siipp it for up to$575,000 of assistance for the Workforce Housing Project on County Road F''This$575,000 does appear to be an appropriate amount of gap financing needed for this$10,400,000 project. It is anticipated that the funding for this support would come from the following potential sources; Ramsey County, cell tower proceeds or TIF." Iverson will bring this recommendation to the Council at the May 10th Council meeting. B. Next meeting agenda—Communication Tower Discussion 4. REPORTS A. Report from the City Council No report B. Financial Planning and Analysis Committee Comments and Requests 5. ADJOURNMENT Motioned: Jeff Johnson Seconded:John Braun • Jim Ostlund,Chair Susan K. Iverson, Finance Director City of Arden Hills 1245 West Highway 96•Arden Hills Minnesota 55112 Phone 65 t_792.7800•Fax 651.634.5137 www.ci.arden-hills.mn.us • EN HILLS MEMORANDUM DATE: June 8,2010 Item. 3.A TO: Financial Planning and Analysis Committee Sue Iverson,Acting City Administrator FROM: James Lehnhoff,Community Development Director SUBJECT: Communications Tower Discussion and Recommendation to the City Council Action Request Provide the City Council with a recommendation on whether or not to pursue a purchase of the Reiling Communications Tower located at 1296 County Road F from Sand Companies, Inc. Background • Earlier this year, Sand Companies Inc. (SCI)proposed to donate the Reiling Communications Tower to the City for$l. In return, SCI was requesting that the City provide $575,000 in public assistance for the 55 unit workforce housing project that is to be constructed at 1296 County Road F. The public assistance could be in the form of Tax Increment Financing(TIF), waived fees, and/or direct payment. The most recent preliminary TIF analysis has indicated that the project would generate$201,000 over 15 years. Assuming that TIF is awarded, that leaves a gap of$374,000 in SCI's request. That gap could be filled by waiving fees or providing cash to the project. While this gap may not directly represent the price of the communications tower it is essentially what the City would be paying for the communications tower. According to SCI, if the City does not purchase the communications tower,their request for assistance would decrease to $225,000. SCI is not saying that the communications tower should be valued at$350,000. However,the higher contribution from the City will increase their likelihood of receiving the housing tax credits. Without the tax credits, SCI does not consider the project to be viable. City of Arden Hills FPAC Meeting for June 8,2010 IlAhdocsllahlAHdatalPlanninglCommuniry Developmeml Wireless Communication TowersiReiling Tower 060810-FPAC Memo-Reding Tower • Purchase.doc Page 1 of 4 Appraisal S The City commissioned Nicollet Partners to complete an appraisal of the Reiling Communications Tower. Using an income approach, the appraiser valued the tower at$500,000. The income approach considers the net present value of the net income over a ten year time period to determine the value. The appraiser also evaluated the leases, including lease length and the risk of lease termination. This tower is considered desirable due to its location and height, which reduces the risk of lease termination. The appraiser estimated the replacement cost of the tower to be between $275,000 and $325,000. Due to confidential data within the appraisal, only the executive summary is attached (Attachment A). General Lease Provisions The tower currently has four tenants: Verizon, Nextera, American Messaging, and Clearwire Communications. As previously discussed, the leases are considered confidential data and the details cannot be released at this time. The four tenants produce a total annual rent of approximately $76,000. The tower is at just over 97 percent capacity, but the capacity could be increased with upgrades to the tower structure. Communication Tower Costs • Insurance Based on a value of$500,000,the City's insurance agent quoted an annual insurance premium of$4,000. Maintenance Dale Romsos at Omni Contracting reviewed the tower and provided a general cost estimate for maintaining the communications tower. He indicated that the maintenance for these types of towers is fairly straightforward and that this tower is in good condition. The maintenance for this type of tower typically involves the following: o Annual inspection - $3,000 to $4,000 o Annual light bulb replacement -$600 o Grounds maintenance (mowing, plowing) - $800 o Repainting every 15 years- $12,000 to$15,000 o Lighting electrical system replacement(if ever needed) - $12,000 to $15,000 City ofArden Hills FP,AC Meeting for June 8, 2010 i L4hdocsllahiAHdatalPlanninglConununity Development)Wireless Communication TowerslReiling Tower1060810-FPAC Memo-Reding Tower Purchase.doc4110 Page 2 of 4 • When one light bulb is replaced, it is common to replace all of the bulbs because a majority of the cost is for the person to go up and down the tower. Mr.Romsos did not find any electrical issues with tower and did not expect the lighting electrical system to need replacement anytime soon. The paint is in good condition,though there is some minor peeling. During the annual inspections,the condition of the paint would be reviewed to determine when painting is needed. The appraisal notes that it is reasonable to expect this tower to have at least an additional 30 years of useful life with proper maintenance. Assuming costs are on the higher end,the annual maintenance cost would be $7,200. This annual cost includes new light bulbs,the annual inspection, grounds maintenance and saving$2,000 per year for painting and lighting electrical replacement. Utilities The property owner is currently paying the utilities, including electricity. The utilities are estimated at$300 per month for a total cost of approximately $3,600 per year. Property Taxes The below values are based on the entire property at 1296 County Road F, which 111111 includes the proposed Arden Village site. o 2010 Total Market Value= $903,300 O 2010 Land Market Value= $715,600 o 2010 Building Market Value= $187,770 o 2010 Total Tax Payable= $30,892 The appraiser estimated the property taxes on the tower property would be $3,500 per year. If the City purchases the communications tower property, the land portion will become tax exempt. However,the tenants are still responsible for paying personal property taxes for the equipment on the tower. The City would continue to collect the local portion of the taxes, and a significant change in tax collection is not anticipated. City Staff Costs The cost of City staff time could vary considerably from year to year, primarily depending on if a new lease needs to be negotiated. While it is difficult to estimate the cost of staff time, 20 hours per year at a rate of$30 per hour for a total cost of$600 per year is reasonable. City ofArden Hills FPAC Meeting for June 8, 2010 IlAhdocs11ah1AHdatalPlanninglCommunity DevelopmentlWireless Communication Towers Reding Tower1060810-FPAC Memo-Reding Tower 411 Purchase.doc Page 3 of 4 • Estimated Annual Costs and Income The estimated costs are estimated as follows: o Insurance: $4,000 o Maintenance: $7,400 o Utilities: $3,600 o City Staff Costs: $600 o Total estimated annual cost: $15,600 o Annual revenue $76,000 o Estimated Net Annual Income: $60,400 Although this calculation only considers estimated first year expenses and income, the appraisal evaluated revenue and expenses over a ten year period. The leases include an annual rent increase. Attachment A. Communication Tower Appraisal Executive Summary B. Communication Tower Sale Proposal 111 City of Arden Hills FPAC Meeting for June 8, 2010 'AhdocsllahlAHdata'',P/anninglCommnnity DevelopmentlWire/ess Communication Towers Rei/ing Tower1060810-FPAC Memo-Reiling Tower Purchase.doc • Page 4 of 4 • MARKET VALUE APPRAISAL of the ARDEN HILLS COMMUNICATION TOWER PROPERTY located in the northeast quadrant of I-694 and IIIIIIHam line Avenue in Arden Hills, MN 41111 ©2010 by Nicollet Partners Real Estate Advisors Ms. Sue Iverson May 19`", 2010 City Administrator/Finance Director City of Arden Hills 1245 West Highway 96 Arden Hills, Minnesota 55112 STEVEN M.DECASTER MAI In re: Market Value Appraisal of the Arden Hills Communications Tower Property located in the ROBERT G.LUNz northeast quadrant of 1-694 and Hamline Avenue in CRE,MAI Arden Hills, MN TODD M.REID MAI Dear Ms. Iverson: EVERETT D.STRAND Pursuant to your request, we have completed an analysis of the above MAI referenced property to determine an opinion of its market value as of • DOUGLAS J.WAGEMAN May 17`h, 2010. The real property rights considered in this appraisal are MAI those of the leased fee estate ownership interest in the real estate as defined in the body of the report. The client and intended user of this JEROME D.BUECHLER appraisal is the City of Arden Hills. The City of Arden Hills will use the MAI opinion of value evolved to potentially acquire the communications 1221 ON THE NICOLLET MALL tower property. Furthermore, an intended user of appraisal is Sand SUITE 700 Companies, the prospective buyer of the larger parcel for a multifamily MINNEAPOLIS,MN 55403 development and seller of the communications tower property if the 612.340.1236 larger parcel is acquired. This report has no other purpose or intended Facsimile 612.340.1848 www.nicolletpartners.com users. This appraisal report has been prepared in conformity with the Code of Professional Ethics and Standards of the Professional Appraisal Practice of the Appraisal Institute, and the Uniform Standards of Professional Appraisal Practice(USPAP). This appraisal report presents all known information about the subject property, market conditions, and available data. This report is conveyed in a summary report format that complies with the reporting requirements set forth under Standards Rule 2-2(b) of the USPAP for a Summary Appraisal Report. As such, it presents only summary discussions of the data, reasoning, and analyses that were used in the appraisal process to develop the appraisers' opinion of value. • ©2010 by Nicollet Partners MEOW Ms. Sue Iverson May 19th, 2010 City of Arden Hills page two • This appraisal assignment and the opinions of value are subject to the following specific requirements, assumptions and limiting conditions, as well as others described in the following appraisal report: ➢ The market value opinion for the subject property has an effective date of May 17th, 2010. The subject property was inspected on May 17th,2010. ➢ The communication tower structure and equipment is considered personal property by the Ramsey County Assessor's Office and is thus not subject to property taxes. The owner of the land beneath the communication tower also owns the communication tower structure. This market value opinion for the real estate includes the personal property associated with communication tower structure (required to produce the income stream) but excludes the related antennas and telecommunication equipment owned by the tenants. ➢ The subject communications tower property is part of a larger parcel located at 1296 County Road F West in Arden Hills (Tax Id. No. 273-023-12-0002). The communications tower property is located in the southern most part of the larger parcel. The subject land parcel is estimated to have a land area of 21,536 square feet, or 0.494 acre when it is subdivided from the larger parcel. It is our opinion that the market value of the leased fee estate interest in the Arden Hills 110 Communications Tower Property as of May 17t , 2010 is: FIVE HUNDRED THOUSAND DOLLARS S500,000 Please call if you have any questions or comments after reading this appraisal report. It has been a pleasure being of service on this assignment. Cordially, NICOLLET PARTNERS,INC. '-'04/14.4"-N. mykreay....., Douglas J. Wageman, MAI Darren L. Browen Principal Senior Associate Appraiser Certified General Real Property Appraiser Certified General Real Property Appraiser Appraisal License#4003297 MN License No. 20306483 4111 ©2010 by Nicollet Partners ;k:1: ty • February 22, 2010 Sent Via E-Mail Transmission Sand ompanies, Mc. 366 South Tenth Av cline Mr. Stan Harpstead PO ii7- 7?_i Waite Park, MN 563r-0727 Honorable Mayor Office: (320)202-3100 City of Arden Hills Fax: (320) 202-3139 1245 West Highway 96 E-mail: SC1(ri:SandCompanies.coin vlebsite: SandCompames.com Arden Hills, Minnesota 55112 RE: Sale of Tower at 1296 County Road F West. Arden Hills, Minnesota. Dear Honorable Mayor Harpstead: As you are aware,Arden Village, LLC is proposing to develop a housing project located at the above address called Arden Village. With our purchase of the land for our proposed development, the site includes a tower and other improvements that we are proposing to separate from our project. The operation of a tower is not a business we are familiar with or are very interested in pursing. Our goal is to develop and own a quality housing development that will help meet some of the housing needs and goals for the City of Arden Hills. With the City already in this business with the water tower antennas, we are proposing to offer the tower and related improvements to the City. Some of the more significant terms and conditions of the proposal are as follows for the sale from Arden Village, LLC or assigns ("Seller")to the City of Arden Hills ("Buyer"): 1. Property. The sale will include the tower and corresponding leases agreements, related improvements and the real property encompassing approximately 0.50 acres, herein referred to as the "Property". 2. Access& Platting. Seller shall provide access to the Property through a perpetual easement and shall construct a driveway to the Property at Seller's cost. Any improvements on the Property will be at the cost of the Buyer. Seller and Buyer shall enter into a maintenance agreement for the improvements within the easement area. Seller shall pay for all costs relating to platting including surveying and engineering and Buyer shall waive the City's platting fees. 3. Sale Price. The sale price will be determined from an appraisal of the Property by an independent, third party appraiser and payable in the following manner: cash at closing from the Buyer in the amount of $1.00 and the balance will be deemed as a charitable donation from Seller to the Buyer. The cost of the appraisal will be paid by Seller. Construction �, Property Management • Deveh pmeni Limit Opportunity Employer .frs ''�.�„�+34... ,_ �#t'�'.€+ � �. �'tx .>, � �„ev.,,a�4r n"r. . _Vie. .ta. ,.-�'<•r" ``�__-y".` -z -. .-.- _" - 4. Closing. Closing shall take place simultaneously with Seller's closing on the financing for Arden Village with Minnesota Housing. Buyer shall pay for the cost of the title policy, the closing fee and pay the recording cost of the deed. Seller shall pay for state deed tax and recording documents clearing title to the Property. 5. Real Estate Taxes. Real estate taxes due and payable in the year of closing shall be prorated on a calendar year basis. 6. Seller Contingencies. Sale shall be contingent on Seller obtaining all necessary local approvals, an award of federal tax credits from Minnesota Housing and the approval of pay-as-you-go tax increment financing for Arden Village. Tax increment financing shall be over a period of time necessary to finance not less than $575,000. In lieu of tax increment financing or a combination thereof, participation could include waived fees or cash_ The costs for the tax increment financing shall be paid 50% by each Buyer and Seller. The Arden Village development will need to meet all statutory requirements of tax increment financing including the "but for test". If there are any questions or comments on this proposal, please do not hesitate to contact me with questions. If the City is interested in pursuing the purchase of the • tower, the next step would be to enter into a purchase agreement that we would draft. Thank you for your consideration. Sincerely, Sand Companies, „c. Jamie Thelen Chief Executive Officer • • • i 1296 Count Road F '", r '"�£, '5�;,, .ram ;. ;�,*;„ ,` 3, � `� -e, ;�,• E4 :'�d' Sr.,``:¢ 7z' `,�l'�. `°'�SC7 ��" •r'>„ �"-~ ."xa •� "<1' ^.,sE .is»'" - '�� � µme:�<,�+►iF"'n!t": fit z rrs"r, ;`:c ; % ," ram. :At ;3.,w,. ,.,, ..„,::;'°;;A .; .%., x"< -;;,ti;;t„',,, 5. 1 .E • '- "• ;aau°„„'-',w 1 Fr <f, 4 t '!" �' - r 3..,; $:1 ,X'' ,,0.• -: ;-,-, rT ' 'x" R g,,°�'%!•' }'ta' y •,`,S�w�' ,�i'g"�'f,<, a-u , ,Y,,;x ,S. 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S I IS EN HILLS MEMORANDUM DATE: June 8,2010 Item 3.B TO: Financial Planning and Analysis Committee FROM: James Lehnhoff, Community Development Director SUBJECT: Arden Village Workforce Housing Revised Letter of Support Recommendation to City Council Action Request Review the revised request from Sand Companies, Inc for a letter of support for public assistance for a housing tax credit application with the Minnesota Housing Finance Agency. Recommend a course of action to the City Council. Background • At the September 14, 2009, City Council meeting,the Council approved a letter of support for Sand Companies, Inc.'s (SCI) housing tax credit application to the Minnesota Housing Finance Agency for the 55 unit Arden Village workforce housing project at 1296 County Road F. That letter of support offered up to$400,000 in public assistance, which could be in the form of Tax Increment Financing(TIF), waived fees,or a combination of sources. The letter did not guarantee$400,000 in support since financial reviews had not yet been conducted. The $400,000 request was used based on SCI's experience with similar projects. More importantly, applications with community financial support score higher and have a better chance of obtaining the housing tax credits, which are a key part of making the building affordable. The Minnesota Housing Finance Agency (MHFA)announced their awards at the end of January 2010; however,the Arden Village proposal was not selected for tax credits at that time. MHFA encouraged SCI to resubmit their application for the next funding awards in fall 2010. The Arden Village proposal received all necessary land use approvals at the March 8, 2010, City Council meeting. SCI subsequently informed the City that they would submit a new housing tax credit application to MHFA. The housing tax credit applications are due by June 15, 2010. The applicants do not consider the project to be viable without the housing tax credits City ofArden Hills FPAC Meeting for June 8. 2010 lAhdocsllah'✓1Hdata,Planning1Connnunih Dereloptnent,Housing4ffordable HonsingArden Village-Sand Companies!060810-FPAC Memo- Arden Village-Sand Companies.doc Page 1 of 4 • Letter of Support Review • In preparation for a new housing tax credit application to MHFA, SCI submitted a new letter of support in May. FPAC reviewed the revised letter at their May 6, 2010, meeting. FPAC did not recommend a particular course of action but indicated that the request for up to $575,000 was an appropriate number for the gap financing request. The $575,000 request was an increase from the $400,000 request made in September 2009, which is primarily related to SCI's proposal to sell the communications tower to the City. While SCI would technically donate the tower to the City for$1 and write-off the tower as a donation, the loss of revenue from the tower increased the funding need for the project. However, the increased support from the City adds points to SCI's housing tax credit application and increases their likelihood of being selected. If the City accepted SCI's tower sale proposal, the City could fund the $575,000 request through a combination of TIF, fee waivers, or direct payment. Under this scenario,the City would also take ownership of the tower. When the new letter of support was reviewed by FPAC and the City Council, the preliminary T1F calculations indicated that the project would generate approximately $184,000 over 15 years. It is important to remember that the TIF calculation was an estimate because a complete analysis will not be completed until 2011 prior to the start of construction. Based on SCI's $575,000 request,the remaining gap after TIF would be $391,000. The remaining$391,000 could be funded by a combination of fee waivers or direct payment from the City. The City Council reviewed the revised letter of support at their May 10, 2010, meeting. The Council expressed concern over the increased funding request. the discrepancy between the • funding request and estimated TIF generation, and the potential impact of a HOME grant from Ramsey County. Additionally, since the request for assistance had become intertwined with the potential sale of the communications tower,the Council felt it prudent to table the letter of support until the appraisal was completed and the letter of support could be clarified. The tower has since been valued at $500,000. Just prior to the City Council meeting, Ramsey County awarded Arden Village a $35,000 grant to support their housing tax credit application. The project may be eligible for up to $300,000 in additional grant money in 2011, but the County does not want to tie up 2010 grant money for a project that is not scheduled to start until 2011. When Ramsey County's support was discussed at the Council meeting, it was not clearly explained how that may impact SCI's request from the City. It was initially thought that it may reduce the SCI's request from the City. However, it has since been learned that money from Ramsey County would reduce the overall support from MHFA resulting in essentially no net gain to SCI. The primary benefit is that the County's contribution adds points to the housing tax credit application and increases the chance that this project is selected for housing tax credits. Additionally, Ramsey County HRA's mission is to add workforce housing units in Ramsey County, which is why they support the project. City of Arden Hills FPAC Meeting for June 8, 2010 I\Ahdocsl lah'AHdaiaPlanning'\Communih Derelop,nent!HousinglAffordable Housing Arden Village-Sand Companies',060810-FPAC Memo- Arden Village-Sand Companies.doc Page 2 of 4 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 After discussing the housing tax credit application with SCI,staff is supportive of SCI's request for a fee waiver of$2,000 from the City's sewer access charge(SAC)and water access change410 (SAC). This is a new request from the previous letter of support. The total SAC/WAC fee is estimated at$148,000, of which $115,500 is paid to the Metropolitan Council for sewer access. The $2,000 is a relatively minimal waiver for gaining another point on the tax credit application. A letter of support is not an approval of tax increment financing, the proposal to sell the tower to the City,or any other form of public assistance. The project must still meet all TIF statutory requirements and undergo a detailed financial review by the City. However, the letter of support is a good faith commitment from the City to provide the requested support if the housing tax credits are approved by MHFA and if the project can demonstrate the need in accordance with the City's Business Subsidy Policy. Public Subsidy Review Process The deadline for the housing tax credit application is June 15, 2010. MHFA will make its determination by October 28, 2010. If the tax credits are approved,the City would begin the formal TIF review in spring 2011. The TIF review would be completed before construction starts and likely certified by June 30, 2011. Attachment Proposed Letter of Support • City of Arden Hills FPAC Meeting for June 8,2010 'Ahdocsl'ahlAHdatalPlanning\Communhv DevelopmentlHousinglAffordable HousingUArden Village-Sand Companies1060810-FPAC Memo- Arden Village-Sand Companies.doc Page 4 of 4 • (CITY OF ARDEN HILLS LETTERHEAD) • June 14,2010 Minnesota Housing Finance Agency 400 Sibley Street,Suite 300 St.Paul,Minnesota 55101 Attention: Multifamily Underwriting RE: Housing Tax Credit Program& Super RFP. ARDEN VILLAGE—ARDEN HILLS. Dear Multifamily Development: The City of Arden Hills is a community made up of residents,businesses and institutions sharing a common history. One of the primary purposes of a community is to serve as a place of residence for its citizens. Assuming this charge, offering a mix of life cycle housing opportunities becomes a challenge for local governments especially in suburban markets. The City has a strong desire to support affordable and work-force housing and is an active participant in the Livable Communities Program. The City's 2030 Comprehensive Plan sets goals that emphasize the development of a variety of housing types that are suitable for a mix of incomes including work-force housing. Developers and the City must be partners to cooperatively develop housing plans to provide life cycle housing in Arden Hills. To promote and participate in rental housing opportunities, the City has provided incentives for affordable housing developments. As a cost reduction measure to endorse Arden Village, the 4111 City has approved the project with a density bonus, flexibility in zoning and fast track permitting and approval. The City will also not be collecting the approximate $71,560 park dedication fee and also waiving$2,000 in City SAC/WAC fees. PARAGRAPH OPTION 1 (No Tower): The City of Arden Hills also proposes significant local financial contributions for this project as part of its participation and endorsement. If the project is selected for funding, the City Council supports the use tax increment financing (TIF) for the project or other funding means to achieve up to$225,000 in assistance. As part of the TIF,the project will need to meet all state guidelines for TIF, including the"but for test". The project also must be reviewed under the City's business subsidy policy. PARAGRAPH OPTION 2(With Tower): The City of Arden Hills also proposes significant local financial contributions for this project as part of its participation and endorsement. If the project is selected for funding, the City Council supports the use tax increment financing (TIF) for the project or other funding means to achieve up to$575,000 in assistance. As part of the TIF,the project will need to meet all state guidelines for TIF, including the"but for test". The project also must be reviewed under the City's business subsidy policy. The proposed development is an excellent opportunity for the City of Arden Hills to meet a large portion of its housing goals. This endorsement is based upon the findings that the project will meet locally identified housing needs and that the proposed housing is in short supply in the local housing market. This need is evidenced by the gap between the local supply and demand for the proposed type of housing. • The City Council's endorsement is evidenced by this letter of support for the proposed development. We respectively request funding approval for this needed development in the City of Arden Hills. 110 Sincerely, Stan Harpstead Honorable Mayor • • O -ARZEN HILLS MEMORANDUM DATE: June 8, 2010 Item 3.0 TO: Finance Planning and Analysis Committee FROM: Patrick Klaers, City Administrator SUBJECT: Hazelnut Park Representatives of Trinity Lutheran Church have approached the City regarding the possibility of the City leasing or purchasing property from the Church. The Church has what it feels is excess property that it no longer needs or uses. The property under discussion is mainly used by the City for park and recreation purposes and boarders Hazelnut Park. The relationship between the City and the Church for the City's use of Church property started out as a"handshake deal" and more recently moved to a brief written agreement 40 that mainly deals with the parking lot. For numerous reasons the Parks, Trails and Recreation Commission believes that it is in the City's best interest to address this situation in a more permanent manner. As time allows, I would like to share with the FPAC a map that show the property in question and talk about the pros and cons for a possible purchase or long term lease or combination purchase and parking/access agreement. One of the challenges with this issue is finding comparable sales and especially comparable leases.No appraisal has been completed for the Church property and the only land value data that is available comes from the County Assessor's office. Attached for your information is some background material on this issue. • , „' a;7e' �, x '3 `...tv3,..A ', i r .4 4 v-,k ` r ', ',01 I{' {s,4,�' ' A i 'r }�c. r s i x , EX a n. mod ,} : ii..;',,, �{ N� AjN + tix ..�,". b ' '� xg p},,eMt =t , ; t';k,�'�4`,v ¢ i"c?.' ";'c ti "M ?ginrt .�y ,p r js�,1 x � < x�a' ',,,+3'"Ptr-H,. ` ` `, ,y$ F'_,,,. • y C'"�` �'. 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SOURCES:Ramsey County(June 2,2010),The Lawrence Group;June 2,2010 for County parcel and property records data;June 2010 for commercial and residential data;April 2009 for color aerial imagery:All other • -A EN HILLS MEMORANDUM DATE: May 10, 2010 Item 1.B TO: Honorable Mayor and City Council Members FROM: Patrick Klaers,City Administrator SUBJECT: Hazelnut Park On Thursday May 6th I met with Trinity Lutheran Church representatives Pat Nygaard and Mille Bruss to discuss the Park and Church properties. I then met with City staff members to update them on this meeting. The City uses Church property for signage, access, parking and a soccer field. The City pays the Church a small amount for snow plowing (and general use of their land) and the City does some minimal maintenance on the parking lot. The Church would now like for the City to consider purchasing some of their excess land and to enter into a long term use agreement for the parking lot. It seems to be in the City's best interest to resolve this . situation for the long term_ The Church is providing us with an appraisal that they recently had completed. Staff is looking at access, parking, park usage, and funding options. The Church is scheduled to be at the July 19`h City Council work session. I would like to briefly talk with the City Council about the merit of getting a more long term arrangement set up with the Church and about sending some material to FPAC for their review and comment. Page 1 of 1 Sue Iverson • From: jandpnygaard@comcast.net Sent: Friday, January 15, 2010 10:10 AM To: Sue Iverson , Cc: Milly Bruss Subject: Lease agreement with Trinity Sue I have assembled the highlites of the process so far to help bring you up to date. Trinity Lutheran of Lake Johanna, 3245 New Brighton Rd. was founded in 1941 on 4 3/4 acres, and has a long history of partnering with the City of Arden Hills. When AH's Pk Dir., John Buckley, coordinated the development of Hazelnut Pk with Pastor Beltz, they made a verbal agreement that park users could use Trinity's parking lot. This use continued until 2000 with no financial or in-house maintenance from the city. For the past 10 years we have had a written contract with the city to pay us $1000 a year towards snow plowing and seal coating and striping when AH was doing work in the surrounding streets. The church also agreed to let the city use some of our land for soccer fields. 11-14-08: *On 11-14 Millie Bruss & I met with AH staff, Michelle Olson and Megan Beekman to discuss the city purchase or lease of land now being used by the city for soccer field etc. Also held a neighborhood meeting on 12-2-08 attended by Michelle and Megan, to inform residents of our plans. Residents were vehemently opposed to us developing any of our property. They strongly supported continued use for park purposes. Fall, 2009: I met with Ron M. to discuss a long term lease rather than a purchase, of the soccer field and adjacant land. Also would include the parking lot joint use in the lease. Ron requested a dollar amount for the lease. Jan. 2010: After researching how to determine the value, for the lease, we decided that a 5-10 year lease, at $12,000-$15,000 a year should be the starting point for discussion between us. I am confident we can work together to come up with an arrangement that works for both the city and the church. Would putting it on council work session in April work? If you think that is possible, please let me know the date so I can put it on my calendar. If you have any questions please feel free to contact me by e-mail or phone (651-492-8234). Sincerely, Pat Nygaard, Dir., of Outreach 1/15/2010 F• HILLS MEMORANDUM DATE: July 10, 2006 AGENDA ITEM: 7F TO: Mayor and City Council FROM: Michelle Wolfe, City Administrator SUBJECT: Joint Use Agreement for Trinity Lutheran Parking Lot BACKGROUND In 2003 the City entered into a Joint Use Agreement with Trinity Lutheran of Lake Johanna. This agreement commenced on January 1, 2003 and terminated December 31, 2003. Hazelnut Park is located adjacent to Trinity Lutheran, and the park does not have its own parking lot. Trinity Lutheran has allowed park users to use the church's parking lot. In exchange for this arrangement, the parties entered into a joint use agreement. DISCUSSION The agreement included the following key understandings: • Arden Hills is allowed to use the parking lot in conjunction with activities at Hazelnut Park. • The City will sweep the surface of the parking lot and shall re-stripe the lot after it has been reconstructed or seal coated. • The City will make payment to Trinity for snow plowing services ($1000 in the most recent contract). • Trinity will be responsible for reconstructing the parking lot as it deems appropriate. Although the agreement technically expired in 2003, staff continued to administer payment to the church in 2004 and 2005. The church recently contacted me about the 2006 payment, which they had not received. They forwarded me a copy of the most recent agreement. Upon reviewing the document, staff noted that it had expired at the end of 2003. Therefore, we felt it was time to bring it back to City Council for consideration. Staff feels that the terms in the agreement are quite reasonable in exchange for the on-going use of the parking lot. Therefore, in this revised agreement, we have left the terms the same with the only change being made in regards to duration. We are proposing that the new agreement be for five years, unless one of the parties provides required notice of intent to terminate to the other party. • Page 2 of 2 • REQUESTED ACTION Motion to approve the Joint Use Agreement for Trinity Lutheran Parking Lot effective January 1,2005. MW Ilmetro-inetlardenhillslAdminlCity Administrator1Memo12006I7-10-06 Memo RE Trinity Parking Lot.doc • • JOINT USE AGREEMENT TRINITY LUTHERAN OF LAKE JOHANNA PARKING LOT 1.0 Parties. This Agreement is dated the day of July, 2006 (Anniversary Date), and is entered into by and between the City of Arden Hills, a Minnesota statutory city("Arden Hills")and Trinity Lutheran of Lake Johanna, a Minnesota non-profit corporation ("Trinity"). 2.0 Recitals. A. Trinity is the owner of certain real property which has a postal address of 3245 New Brighton Road, Arden Hills, Minnesota 55112("Trinity Site"). B. Arden Hills is the owner of a park and recreational area ("Hazelnut Park") • which is located adjacent to the Trinity Site. C. An improved parking surface ("parking lot") is located on the Trinity Site. D. Arden Hills and Trinity wish to formalize what has heretofore been an informal understanding regarding the joint use of the parking lot. 3.0 Terms and Conditions. In consideration of the mutual understandings expressed herein, the parties agree: A. Arden Hills is allowed to use the parking lot in conjunction with Arden Hills' activities at Hazelnut Park, seven days a week during the hours of 8:00 a.m. to 10:00 p.m. B. Arden Hills, at its cost, shall sweep the surface of the parking lot when it performs similar maintenance activities on adjacent streets and shall re- stripe the parking lot after it has been reconstructed or seal coated. C. Upon execution of this agreement by the parties, and upon each anniversary date thereafter, Arden Hills shall pay Trinity$1,000 for the cost of snow plowing the surface of the parking lot. D. Trinity shall be responsible for reconstructing the parking lot as it deems • appropriate. Duration. This agreement shall commence on the date hereof and shall continue until • terminated by the parties as provided herein. Either party may terminate this agreement upon six months written notice to the other party. IN WITNESS WHEREOF,the parties have hereunto set their hands the day and year first above written. Pursuant to City Council action CITY OF ARDEN HILLS taken on July 10, 2006. Beverly Aplikowski, Mayor Michelle A. Wolfe, City Administrator • Dated this day of July, 2006 TRINITY LUTHERAN OF LAKE JOHANNA llmetro-inetlardenhillslAdminlDeputy C1erklContracts AgreementsiTrinity Lutheran Joint Use Agreement doe t