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Home My WebLink About6.h. Schafer Richardson CDA TIF Resolution of Support EXECUTIVE SUMMARY City Council Regular Meeting Date: January 17, 2023 AGENDA ITEM: CDA TIF Resolution of Support – Schafer Richardson AGENDA SECTION: Consent PREPARED BY: Adam Kienberger, Community Development Director AGENDA NO. 6.h. ATTACHMENTS: Resolution of Support, Request and Project Narrative Letter APPROVED BY: LJM RECOMMENDATION: Motion to approve the attached resolution of support to have the Dakota County CDA create an affordable housing tax increment financing district for an affordable multifamily housing development within Prestwick Place BACKGROUND Schafer Richardson is pursuing development of a workforce housing multifamily project within the Prestwick Place development at the northeast corner of Akron Avenue and Connemara Trail. As part of their development plans they are requesting financing assistance via the Dakota County CDA in the form of tax increment financing (TIF). The CDA requests a resolution of support from the city prior to accepting and reviewing the request for TIF. A project narrative provided by the developer is attached along with site renderings from their approved development plans for 164 units to be restricted to those making less than or equal to 50 and 60% of the area median income (AMI). This proposal is in conformance with the City’s comprehensive plan and zoning code and aligns with the City Council’s goal of growing Rosemount with a diversity of housing options. The final site and building plans along with a preliminary plat were reviewed and approved by the Planning Commission and City Council in late 2022. The Port Authority discussed this item at their meeting on January 17th, prior to the City Council meeting. Staff recommends the Port Authority provide a supporting recommendation to the City Council. RECOMMENDATION Staff recommends the City Council adopt the attached resolution of support to have the Dakota County CDA consider creation of an affordable housing tax increment financing district for an affordable multifamily housing development within Prestwick Place, subject to the conditions noted in the resolution. CITY OF ROSEMOUNT DAKOTA COUNTY, MINNESOTA RESOLUTION NO. 2023-XX A RESOLUTION AUTHORIZING THE ESTABLISHMENT OF A TAX INCREMENT FINANCING DISTRICT FOR AFFORDABLE HOUSING IN CITY OF ROSEMOUNT BY THE DAKOTA COUNTY COMMUNITY DEVELOPMENT AGENCY WHEREAS, pursuant to Minnesota Statues, Section 383D.41, the Dakota County Community Development Agency (the “Agency”) is authorized to exercise the powers and duties of housing a redevelopment authority under the provisions of the Municipal Housing and Redevelopment Act, including the establishment of a tax increment financing plan and a tax increment financing district to provide monies to finance such a program; and WHEREAS, a proposal has been made to the Agency by Schafer Richardson (the “Developer”) that the Agency (a) undertake a tax increment financing program for Akron & 145th Affordable Housing Development (the “Project”) located in the City of Rosemount on the real property legally described on Exhibit A attached hereto (the “Site”) and (b) create a tax increment financing district and plan including such real property in order to finance the costs of said tax increment financing program. NOW THEREFORE BE IT RESOLVED, by the City Council of the City of Rosemount, Dakota County, Minnesota, as follows: 1. The development of the Project is consistent with the local and regional comprehensive plans, policies and goals. 2. Based on information as previously submitted by the Developer and contingent on the Developer’s pro forma demonstrating to the Agency the Project’s financial feasibility, the amount of financial assistance for the Project is approved in concept only. 3. The actual tax increment committed to the Project and number of years the Project receives tax increment financing will be determined by the Agency through a final financial analysis demonstrating the Projects financial need and shall be subject to the Agency’s policies. 4. The Agency is hereby authorized to take all actions necessary to create such tax increment financing district and related tax increment financing plan on the property legally described on Exhibit A, subject to and not before the Developer complies with all the following terms and conditions: a. The Developer must submit documentation outlining proof of a firm financing commitment of the Project that is submit to review and approve by the Dakota County Community Development Agency and its financial consultants. The form of tax increment financing assistance for the Project shall be determined based on a financial analysis of the Project’s need. b. The Developer agrees to enter into a Development Agreement with the Agency outlining all terms and conditions associated with the Project, including those outlined in this Resolution, as well as those otherwise deemed appropriate by the Agency. c. The Developer must secure all site plan, public utilities, and building code approvals from the City of Rosemount and all other associated and related governmental approvals. Nothing in this Resolution is deemed to obligate the City of Rosemount to approve any portion of the site plan, public utilities, and building code review process, nor is adoption of this Resolution considered approval of the foregoing. d. All terms, conditions, and obligations as outlined in this Resolution shall expire on January 17, 2024, unless all conditions herein have been satisfied. ADOPTED this 17th day of January 2023, by the Port Authority of the City of Rosemount. ______________________________ Jeffery D. Weisensel, Mayor ATTEST: ______________________________ Erin Fasbender, City Clerk 900 North Third Street, Minneapolis, MN 55401 612.371.3000 .3000 sr-re.com January 10, 2023 Adam Kienberger Community Development Director City of Rosemount 2875 145th Street West Rosemount, MN Re: 145th & Akron, Prestwick Place, Outlot A – Affordable Housing Development TIF District Dear Mr. Kienberger, Schafer Richardson is pleased to present the City of Rosemount with this narrative to supplement our request for a Resolution of Support for the creation of TIF housing district at the Akron & 145th Affordable Housing Development. The district would be implemented by the Dakota County CDA (“CDA”) Schafer Richardson (and/or affiliates) is planning a two-phase housing development of 12.44 acres at the northeast corner of Akron Avenue & Connemara Trail in the City of Rosemount. The project as a whole, will consist of two separate multifamily structures that will be built in phases; the eastern portion of the site will be comprised of 141 market rate apartments and the second phase will provide a 164-unit affordable housing community. Both the market rate and affordable housing would function as one community with shared underground utility connections, stormwater, paved roadways, and site amenities such as a dedicated pet park and pocket park. The site is guided for high-density residential, and the 305-unit project received Planned Unit Development Final Site and Building Plan approval from the Planning Commission on October 25, 2022 and Preliminary Plat approval from the City Council on November 15, 2022. The TIF structure proposed in the application before the CDA, known as TIF Pooling, would create a 25-year Housing TIF District, structured as a “pay-as-you-go” note, that incorporates both the affordable and the market rate housing in the same district. The intent is to direct the full benefit of the tax increment solely to the affordable housing to fund construction debt for the project. The proposal is for 70% of the tax increment to go towards the affordable project, with the remaining 30%, and anything above and beyond the project’s TIF payment obligation, reverting to the CDA for its affordable housing programming. Internal estimates of a TIF note with this structure equate to approximately $5,000,000 in principal (net present value calculation) with an estimated total amount of tax increment generated for the benefit of the CDA at roughly $4,000,000 over the 25-year term. Thank you - Schafer Richardson is grateful for your consideration of support for this request. We are looking forward to speaking on behalf of the project and can answer any questions in the meantime. Sincerely, Peter Orth Development Manager Schafer Richardson EXHIBIT A Housing Diversity & Affordability *Income and rent limits are based on amounts published annually by HUD. Proposed Rent Levels (2022) Unit Mix # Units Monthly Rent 1 Bed 1 Bath - 50% of Area Median Income 15% 25 $1,068 1 Bed 1 Bath - 60% of Area Median Income 16% 27 $1,288 2 Bed 2 Bath - 60% of Area Median Income 41% 67 $1,539 3 Bed 2 Bath - 60% of Area Median Income 27% 45 $1,772 Total 164 Income Limits by Household Size (2022) 50% of Area Median Income 60% of Area Median Income 1-Person $ 41,100 $ 49,320 2-Person $ 56,950 $ 56,340 3-Person $ 52,800 $ 63,360 4-Person $ 58,650 $ 70,380 5-Person $ 63,350 $ 76,020 Site Layout Building A (Eastern Building) Building B (Western Building)