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Department Approval ,a ,��q- � Item Description 1.O BACKGROUND l�'�, Jy REQUEST FOR COUNCIL ACTION Date: April 20, 2009 Item No.: 12.a City Manager Approval Set Public Hearing Date for Potential Establishment of Har Mar Apartments Tax Increment Financing District (TIF District 18) 1.1 On March 11, 2009, Aeon, the owners of the 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 this request is to create a funding source to fill the projected financial gap in the second phase of their initiative to revitalize this aging apartment complex. As proposed, Aeon would construct a new 48-unit apartment building consisting of a combination of affordable two- and three-bedroom units. 1.2 Aeon is seeking a wide variety of funding sources to assist them with their revitalization effort. In late-June 2009, they will be applying to Minnesota Housing for housing t� credits to finance a significant portion of this project. In order to bolster their application, Aeon would like to demonstrate that other sources of funding are available to this project, such as TIF. 1.3 In order to create a TIF district, the City must follow the process that is prescribed in Minnesota Statute 569.175. For a housing TIF district, cities must notify the applicable county commissioner of its intention to hold a public hearing 30 days prior to publication of the hearing (�569.175, Subd. 2a) and provide the county and school district a copy of the proposed t� increment financing plan 30 days prior to the public hearing. To accomplish these required tasks and have the district created prior to the submission of Aeon's t� credit application, the City Council is being requested to set a public hearing date at this meeting. See Attachment A: Process Timeline to review the required tasks and milestones. 1.4 2.0 The setting of the public hearing date is the first step in this process and does not obligate the City Council to approving the creation of a TIF district. POLICY OBJECTIVE 2.1 Sy setting a public hearing date to consider the creation of TIF District 18 prior to Aeon's t� credit application for their Phase 2 project, the City will potentially help the developer leverage additional resources to this project. 3.0 3.1 BUDGET IMPLICATIONS The City has received the required TIF application fee from Aeon to pay for staff and consulting costs associated with the analysis and planning required to create a TIF Page 1 of 2