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Department Approval <br />l�'�, <br />Jy <br />REQUEST FOR COUNCIL ACTION <br />Date: 12/07/2009 <br />Item No.: 12 . b <br />City Manager Approval <br />o � . <br />� <br />Item Description: Extend Memorandum of Understanding for LCDA and TSRA Grants and <br />Approve A Mortgage and Subordination and Disbursement Agreements for <br />Sienna Green Phase 1 LCDA/TSRA Loan <br />BACKGROUND <br />A. Memorandum of Understandin� <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 T� Sase Revitalization <br />Account (TSRA) grant to undertake asbestos abatement within the existing structures. <br />In April 2008, the City and Aeon executed a Memorandum of Understanding (MOU) that outlined the <br />responsibilities for each party in relationship to the awarded grants. (Attachment A is a copy of this <br />MOU.) <br />In July 2009, in accordance with the MOU, Aeon requested an extension for both the LCDA and TSRA <br />grants as they were set to expire on December 31, 2009, and they did not anticipate completing the <br />work prior to the expiration of the funding. Staff worked with Aeon and the Metropolitan Council on <br />this request, and in August 2009, the Metropolitan Council approved an extension, which extended the <br />grants until December 31, 2010. <br />Item D. 4. of the MOU sunsets this agreement on December 31, 2009, unless an extension is agreed to <br />by both parties. With the City receiving an extension for the grant funds, the MOU should be extended <br />in order to carry forward this agreement until the expiration of the grants. (See Attachment S to review <br />the language of the proposed extension.) <br />S. Mortga�e, Master Subordination Agreement, and Master Disbursement Agreement <br />Sienna Green 1 Limited Partnership, which will be Aeon's ownership entity for the Phase 1 project, is <br />planning to close on its financing on December 18, 2009. In order to m�imize the tax credits available <br />to this project, the developer has requested that the City and the limited partnership enter into a <br />mortgage agreement with them for the $426,500 in grant funds described above. If grant dollars are <br />received, the IRS will lower the amount of t� credits received, thus creating a new gap. In addition, the <br />developer's t�-credit investor views grants as a project negative as they are considered income into the <br />project. <br />Page 1 of 3 <br />