2020-03-11 CC Minutes - Approved

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City of Centerville Council Meeting Minutes March 11, 2020 Mr. Brian Beert, 1829 Houle Circle, stated that he has lived in Centerville since 1993. Asked what is the population of Centerville? Administrator Statz stated about 4,000. He questioned about the TIF 80% and 20% is that a lock at the 20% or can they go above. Administrator Statz stated that there would be no incentive to go above 20%. This is different than Section 8 housing and is not a voucher type program. They have to demonstrate that they are offering this in these apartment at a discounted rate. A one bedroom apartment is approximately $1,600 a month and the affordable rate would be approximately $900 a month. The developer would have to document to the State because the State runs the TIF program that they offer those at a reduced rate. Mr. Beert asked if the taxpayer is paying the difference. Administrator Statz replied that the developer is paying the difference. Mr. Beert asked if they checked with other cities to see if they have complete TIF projects and how their reaction has been to it. Administrator Statz stated that the City of Lexington completed a project with the use of TIF and they have other developments in town that are not using TIF. He stated roughly half of the apartment buildings constructed in the past 10 years in this area have used TIF. Mayor Paar added that the City of Lino Lakes utilized TIF funding for several developments (ex. Kohls – Target area). Administrator Statz stated that currently the city does not have any active TIF districts and the last district was Northern Forest Products. Mr. Beert stated that he had received an email from Rep. Linda Runbeck mentioning blight and do we have to prove blight? Administrator Statz stated that there are multiple types of TIF districts and one type of TIF funding is for blighted areas. He stated that the City reviewed this type of TIF for the area and determined that it did not qualify/would not be eligible due to the parcels being vacant. He also stated that the alternative was this housing district which required the 20% affordable housing component. Mr. Beert questioned that the project would cost $10 million and the developer was short $1.34 million and the shortage is causing the discussion for TIF as an avenue to keep the development viable? Administrator Statz answered correct. Mr. Beert asked if the City did not desire to provide TIF would the development be smaller. Mayor Paar stated when Trident originally came to the City requesting TIF and Council asked if they could construct without TIF. Trident Development felt that if the TIF was secured a lender would be more apt to consider borrowing them the remainder of the funding. Some members of Council felt that TIF would be a viable option for the developer. Mayor Paar stated that Council discussed options for providing the developer with alternative concessions (waiving of fees, etc.) which would offset the shortfall of the developer. Council has reviewed numerous options along with the Finance Director completing an analysis that showed that TIF was the best funding source for the developer and less risk for the City. Mayor Paar stated that there are smaller project that could be completed with or without TIF. He stated that the Beard Group years ago had proposed townhomes surrounding the core of downtown but the economic downturn caused that developer not to redevelop the area. He also stated that Trident Development completed a study that showed that there is a demand for apartments for seniors, single individuals and millennials. He stated that Council liked the proposal and chose to go with Trident as the developer. The TIF was the gap that they needed to make the project work. Mayor Paar stated that Page 5 of 18