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REQUEST FOR COUNCIL ACTION Date: July 22, 2013 Item No.: 14.a Department Approval City Manager Approval Item Description: Discuss Redevelopment of the Hagen Property at 2785 Fairview Ave. and Authorize Application for a Minnesota DEED grant. B ACKGROUND 1 The Hagen property, located at 2785 Fairview Ave, currently contains a multi-tenant trucking terminal. 2 In 2009, the City purchased approximately 2.05 acres of the property for future Twin Lakes right-of- 3 way. The City was recently approached by representatives of the property and a developer regarding 4 the redevelopment of the remaining 5.83 acres of the Hagen property. 5 6 The developer, Sherman Associates, Inc. is proposing to construct a three-phase project over a three- 7 year period beginning in the spring of 2014. Phase 1 would result in approximately 110 units of market 8 rate rental housing. Phase 2 would feature approximately 6,000 square feet of office/retail. Phase 3 9 would provide approximately 65-80 units of mixed-income rental housing. All units of housing would 10 be non-age restricted. Approximately 80% of the housing units in Phase 3 will be market rate, with the 11 remaining 20% targeted for households earning at or below 50% of area median income (AMI). A 12 project narrative, site plan, and company background are included in Attachment B. 13 As part of the preliminary discussion with staff, the developers have identified a financing gap to 14 construct the project as proposed. As one way to help close the financial gap, the developer and staff 15 have been working on an application for a redevelopment grant from the Minnesota Department of 16 Employment and Economic Development (DEED). The application is still being completed, but it is 17 anticipated that the request will be for $440,000 to pay for the demolition of buildings on the site 18 (including the building owned by the City), abatement of any hazardous material in the buildings, and 19 stormwater management infrastructure. A local match is required under the grant program, which will 20 be provided by Sherman and Associates. DEED requires the City to pass a standard resolution of 21 support to be included in the grant application. (Attachment C). 22 Staff and the developer will also look at pursuing other grants from the State, Metropolitan Council, 23 and Ramsey County as they become available. It is anticipated that there will be additional financial 24 gaps for the project and the developer would like to have the City Council consider utilizing TIF from 25 the Twin Lakes district for the project. 26 th At their July 16 meeting, the Roseville HRA reviewed the project and passed a resolution of support 27 for the project stating that the redevelopment will be meeting the housing needs identified in the 28 Roseville HRA Strategic Plan and the recently completed Housing Market Study. (Attachment D). 29 Page 1 of 2