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�� <br />„�,, 1 � � � <br />REQUEST FOR COUNCIL ACTION <br />Date: 1/28/13 <br />Item No.: 7.m <br />Department Approval City Manager Approval <br />g <br />Item Description: Approve Agreement with Metropolitan Council Regarding Repayment of <br />LCDA/TBRA Grant Funds Made Available as Loans to the Sienna Green Project <br />BACKGROUND <br />In 2007, the Metropolitan Council awarded the City of Roseville two grants on behalf of Aeon's Sienna <br />Green Phase 1—a $305,000 Livable Communities Demonstration Account (LCDA) grant for <br />stormwater management and other on-site improvements and a$121,500 Tax Base Revitalization <br />Account (TBRA) grant to undertake asbestos abatement within the existing structures. <br />In 2009, in order to maximize the tax credits available to this project, the City and the limited <br />partnership entered into a mortgage agreement for the $426,500 in grant funds described above. If grant <br />dollars were received, the IRS would lower the amount of tax credits received, thus creating a financing <br />gap. In addition, the developer's tax-credit investor viewed grants as a project negative as they are <br />considered income into the project. <br />The loan to Sienna Green will incur interest at 3% compounding annually and the entire principal <br />balance and accrued interest will be due and payable on January 1, 2040. <br />This agreement will also cover the LCDA grant received in 2009 for the Sienna Green II in the amount <br />of $202,100. This loan is due and payable on December 15, 2042. <br />Due to the fact that the �rant was converted to a loan, Metropolitan Council is asking that the City enter <br />into an agreement requiring that the City pay back the loan proceeds and accrued interest once the <br />Sienna Green project pays back the City in 2040 and 2042. This agreement is necessary since the <br />original grant agreement executed in 2008 did not contain language regarding the loaning of grant <br />proceeds. <br />POLICY �BJECTIVE <br />The Sienna Green projected provided for new and improved affordable housing opportunities for <br />individuals and families. The Sienna Green development is consistent with the housing goals and <br />policies in the City's 2030 Coinprehensive Plan, specifically partnering with government agencies and <br />developers to provide affordable housing (Ch. 6, Policy 1.5). <br />Page 1 of 2 <br />