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4 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 l�'�, Jy REQUEST FOR COUNCIL ACTION Date: July 13, 2009 Item No.: 12.b Department Approval City Manager Approval � �s�r� � �� Item Description: Approve a Modification to the Development Program for Development District No. 1, Establish Tax Increment Financing (TIF) District No. 18, and Approve Tax Increment Financing Plan for TIF No. 18 1.O BACKGROUND On March 11, 2009, Aeon (the developer) , the owners of the Har Mar Apartments, submitted a formal request to the City to consider the establishment of a housing t� increment financing (TIF) district on its parcel. The purpose of this request is to create a funding source to fill the projected financial gap in the second phase of its initiative to revitalize this aging apartment complex. As the Phase 2 project is proposed, Aeon would construct a new 48-unit apartment building consisting of a combination of affordable two- and three-bedroom units with underground parking. In its pro forma submitted as part of the TIF application, the developer identified a$913,610 financial gap remaining after exhausting other funding sources. In order to create a TIF district, the City must follow the process that is prescribed in Minnesota Statute 469.175. The following is the list of required tasks and the date accomplished. • Set Public Hearing Date: April 20, 2009 (Resolution 10703) • Notification to Countv Commissioner: April 8, 2009 • Impact letter and draft TIF Plan to Countv and School District: May 14, 2009 • Public hearing notice: June 2, 2009 (published in Roseville Review) • Public hearin�: June 15, 2009 • Adopt TIF plan: July 13, 2009 (tentative) On June 15, 2009, the City Council held the required public hearing to allow for public comment on the proposed TIF district. Although nobody from the public comment on the project, City Council members asked several questions on the financial gap faced by the developer, future revenue of the project, and the affordability requirements. Attachment A provides the meeting minutes from that discussion. In its June 15, 2009 report, staff indicated that there were three affordability levels to qualify as a Housing TIF district-20 percent of the units are occupied by individuals whose incomes are 50 percent or less of the area median income (20-50 test), 40 percent of the units are occupied by individuals whose incomes are 60 percent or less of the area median income (40-60 test) , or 50 Page 1 of 4