2019-10-09 CC Minutes - Approved

Home Browse Search

City of Centerville Council Meeting Minutes October 9, 2019 legal publication and both were complete. He introduced Ms. Tammy Omdal, Northland Securities to the Council. Ms. Omdal stated that no comments had been received from either Anoka County or the Centennial School District regarding the draft TIF plan and she stated that neither of the entities may prevent the creation of a TIF district. She also stated that the reason for the TIF District is that the City received a proposal for the construction of a 53 unit apartment building along with a small amount of commercial space within the same building to be located on Block 7 of the downtown area. Several developers proposed construction of the site; however, Trident Development, Inc. was chosen by the Council to complete the project. Trident Development requested the utilization of TIF for the project as they felt the project would not be viable without it due to the high costs of high-quality low to moderate-income housing and associated infrastructure required to support the facility. The developer also felt that without the assistance the initial up-front costs it would not be feasible for them to be able to charge the affordable rents required for low-to moderate- income residents required due to the City’s original purchase of the properties with Community Development Block Grant (CDBG) funds and the TIF requirements of providing at least 11 rental units which met the minimum of 20% of the rental units being affordable to persons at 50% or less of the area median gross income ($50,000 for a family of four). She stated that this met Minnesota law for this TIF district and the requirement of CDBG regulations. She also stated that rates charged would be a studio apartment (affordable - $875 and market rate - $1,100); 1-bedroom (affordable - $937 and market rate - $1,500); and 2-bedroom (affordable - $1,125 and market rate $1,775). Ms. Omdal explained the processes associated with the establishment of a TIF district and stated that the first item that needed to be adopted was a Tax Increment Financing Plan for the TIF District which provides information about the Project and authorizes the use of tax increment from the district to pay TIF project costs and other items. She explained that a tax increment financing district must be established by the City and within the boundaries of a Development District or project area. She stated that this was previously completed by the City with set boundaries of the District being contiguous with the boundaries of the City. She stated that the current Development Program Plan needed to be amended taking in to account the objectives for this Development District. She stated that the TIF plan and the Development Program may be written into the same plan but they are two (2) separate plans. She also stated that following the establishment of the TIF District a development (TIF) agreement with the developer may be considered by Council. Ms. Omdal stated that TIF District 1-8 is a housing district which must meet statutory requirements of the 20% of the units being leased to persons at 50% of the area median income and contains eight (8) parcels which would be platted into one by the developer once purchased by them. She stated that the TIF plan would provide $1.35 million of project costs incurred by the developer to be reimbursed over a period of 20 years solely from tax increment generated. She reported that it is estimated that the market value of the property following development would be $6.36 million which is less than the developer’s total preliminary estimated construction cost of $10.15 million. She reported that this is typical of similar types of projects. She also stated that being that the property is currently owned by the City it is tax exempt and not generating property taxes. She also stated that Page 2 of 16