2008_0908_packet - Laserfiche WebLink

Home

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