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2008_0908_packet
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l <br />REQUEST FOR COUNCIL ACTION <br />I A <br />Department Approval <br />,tea . <br />Item Description.- Centennial Gardens Apartments Update <br />=9k 6, 1 <br />FWj a t e.- 09/08/2008 <br />Ftem No..- 13.z <br />City Manager Approval <br />2 In June of 2007,, the Roseville City Council authorized the issuance of tax-exempt bonds for Centennial <br />3 Gardens Apartments in the amount of $,12.5M to finance the acquisition and renovation of the <br />4 buildings. The tax-exempt bonds would be considered "conduit financing"' and have no fiscal impact <br />5 on the part of the City. All of the costs for debt issuance were paid by the applicant. <br />6 On August 11, 2008, Jack Cann of the Housing Preservation Project, addressed the City Council and <br />"7 raised concern regarding the recent rent increases and eviction notices that are occurring as part of the <br />8 rehab of the apartments. <br />9 After some discussion,, the City Council asked that staff look into the issues brought up by Mr. Cann <br />1 ('_) and report back to the City Council <br />DISCUSSION <br />12 When the City is considering issuing tax-exempt bonding under conduit financing, our bond counsel <br />13 reviews the information to ensure that all legal and financing requirements are met to qualify the bonds <br />14 as tax-exempt. The City does not get into the details of what is being proposed to be renovated, the <br />1 status of current tenants,, or what the future rents will be. As many multi-family housing projects, will <br />16 be tapping into state Minnesota Housing and Finance Agency (MHFA), funding, the applicant will need <br />1 ��7 to adhere to MHFA guidelines regarding affordability. <br />1 In reviewing information from the MHFA, it appears that in Centennial Gardens case,, rents were raised <br />19 but still met the affordability guidelines (i.e. 60% AMI). So while it is apparent that rents were raised <br />2o anywhere from $,75-$,150 per month, Centennial Gardens is still meeting the affordability guidelines as <br />2 'i regulated by the MHFA. Of the 190 units within the Centennial Gardens complex, 161 units are <br />22 considered affordable. <br />23 Mr. Norman Jones,, legal counsel for the owners of the Centennial Gardens Apartments, has indicated <br />24 that he will be in attendance at the September 8th City Council to answer any questions that the City <br />25 Council may have. <br />26 In taking a broader view, the City Council may want to consider certain policies and guidelines <br />27 regarding the use of conduit financing for multi-family projects. These policies and guidelines could be <br />28 based on affordability issues as an example. Presently, staff does not have any specific <br />29 recommendations,, but if the City Council is interested in pursuing the creation of conduit financing <br />%1.11 <br />Page I of 2 <br />
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