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REQUEST FOR HRA ACTION Date: May 17, 2011 Item No.: 9.b. Executive Director Approval Item Description: Consider Amendment to Sienna Green Tax Increment Financing District (TIF District No. 18) B ACKGROUND On March 11, 2009, Aeon, the owners of the Sienna Green Apartment (formerly known as Har Mar Apartments), submitted a formal request to the City for the consideration to establish a housing tax increment financing (TIF) district on their parcel. The purpose of their request was to create a funding source to fill the projected financial gap in the second phase of their initiative to revitalize this aging apartment property. Under Phase II of the development, Aeon will construct a new 50-unit apartment building consisting of a combination of affordable two- and three-bedroom, units. On July 13, 2009, the Roseville City Council established TIF District #18 to assist the project. The TIF Plan identified that the District would generate approximately $2,194,515 over the maximum term of 26 years of the district, with a present value of $934,481. At the time of the TIF District creation, it was estimated that AEON’s gap was $913,610. In late 2010, AEON has secured funding from the MHFA and is now ready to move ahead with the development. Now that the state funding is in place, staff and AEON have been working on the TIF Agreement. As part of that discussion, it has become clear that the original TIF plan needs to be amended for several reasons. First and foremost, AEON has acquired a triangular piece of land that previously contained a MnDOT easement over it as part of the Hwy. 36 construction. The triangular piece of land has been incorporated as part of the development and will have a very small portion of the new building on it. Therefore we need to modify the boundary of the TIF District to include the triangular piece of land. Second, with the completion of Sienna Green Phase I, (the rehab of the existing units), the City now has received information from Ramsey County that the values of the rehabbed units are higher than originally estimated. Because of that, the TIF Plan should be amended to reflect the greater amount of TIF that will be generated. Finally, with all of the other financing in place, AEON has identified that actual gap for the Phase II project. Initially, it was estimated that AEON would need $913, 610 in assistance. It has now been determined that the gap is $938,610. In order for the project to be successful, the TIF Plan budget will need to be amended. Changes to the TIF plan will require a public hearing prior to being amended. The City Council has set a public hearing for June 13, 2011. Page 1 of 2