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Attachment A Extract of the City Council Meeting held on June 15, 2009 Public Hearing regarding AEON's request for establishment of TIF District 18 for Har Mar Apartments Economic Development Associate Jamie Radel provided a brief background summary of the request by AEON (Har Mar Apartments) for the City to consider establishment of a housing tax increment financing (TIF) District on the Development ParceL Ms. Radel noted that a policy discussion for the City Council had been tentatively scheduled for July 13, 2009, following the City's financial consultant, Springsted's, analysis of pro forma and background information provided by AEON, and their analysis of whether the project met housing TIF requirements based on income level criteria, once determined by the Minnesota Housing Finance Agency (1V�IFA). Ms. Radel advised that final details would be worked out, if the City Council decides to move forward to create TIF District 18 following the "but for" test analysis and financial projections for renovation of the 120 existing units of the existing building (Phase I) and potential increment over the life of the district with the addition of the new building in Phase II. Mayor Klausing opened the Public Hearing at 7:35 p.m. for proposed Tax Increment Financing (TIF) District No. 18; with consideration of the establishment of the TIF District to take place on July 13, 2009. Discussion among Councilmembers and staff included financial projections of TIF and relationship to the funding gap as detailed on the spreadsheet on Page 15, Attachment 2 of the staff report dated June 15, 2009; clarification that the District was not overlapping surrounding properties, as defined on the map, and exclusive to the Har Mar parcel itself, both for Phase I and Phase II; timing of the project to allow collection of increment on the existing renovations for Phase I and applying to the Phase II new construction; and housing district qualification tests determined by 1V�IFA through tax credits and their subsequent structuring. Further discussion included ownership of the complex and locking in of the affordability mix obligation by 1V�IFA based on tax credits; and deed restrictions for affordable housing going with the land for tax credits whether the property remained owned by AEON or another owner. Mayor Klausing thanked staff for the comprehensive information provided in the staff report. Ms. Radel noted that the City would need to discuss deviation from their TIF housing policy allowing for a term of 20 years; given that this analysis was done for 25 or 26 years; or retain the 20 year policy, and advise AEON that they would need to find another source to fill the remaining funding gap. Mayor Klausing closed the Public Hearing at 7:42 p.m.; with no one appearing for or against.