The URL can be used to link to this page

2.1. HRSR SPEC JNT 12-02-2013 Request for Action To City Council/Housing and Redevelopment Authority Item Number 2.1 Agenda Section General Business Meeting Date December 2, 2013 Prepared by Brian Beeman, Director of Economic Development Item Description Discuss Housing Survey and Develop Housing TIF Scoring Worksheet Reviewed by Jeremy Barnhart, Deputy Director, CODD Reviewed by Cal Portner, City Administrator Action Requested Receive summary results of Springsted’s housing survey and housing policy discussion. Complete housing policy discussion. Background/Discussion On November 4, 2013, the City Council and Housing and Redevelopment Authority discussed the preliminary results of Springsted’s housing survey, distributed the week prior. Based on this discussion, a second joint Council/HRA meeting was deemed necessary to complete development of the policy. Springsted has prepared a draft housing score sheet that attempts to capture the goals of the HRA and Council and will be present for discussion. Financial Impact None Attachments  Results of survey  Springsted staff memo dated December 2, 2013  Draft Housing TIF review worksheet  Affordable housing flow chart City of Elk River, Minnesota Business Subsidy, Tax Increment Financing and Tax Abatement Policy and Procedures Pre-Session Questions: Summary of Responses Dated: November 4, 2013 I. Strengths Identify the top three to five strengths of the City; Specifics are not needed; key phrases, ideas and observations desired.  Land availability  Strong community values  Affordability of Land  Proximity to Twin Cities  City owned municipal utilities  Moderate property taxes  Availability of incentives  Location  Quality of life  Small Community atmosphere  Well-managed growth  Business parks  Designated EDA staff  Availability of financial incentives II. Issues and Challenges Identify the top three to five issues or challenges of the City; specifics are not needed; key phrases, ideas and observations desired.  Present economic status  High Taxes  High Tax Rates  Regulatory Customer Service  Physical location  Availability of lots with city services  Council is very cautious with use of TIF and tax rebates  Economic development/job creation  Affordable senior housing  Infrastructure including roads, sewer, wastewater treatment  Staff turnover  Shortage of light industrial property III. Short Term Outcomes (1-3 years) Identify outcomes and results you want to achieve in the short term (1 to 3 years). In three years what clear and distinct development successes do you want to achieve?  Increase of city tax base  Adequate local housing for labor force  Incentives to promote industrial development  Bring in more businesses and grow our tax base  More industrial building and jobs  Retention of local business  Further expansion of Nature’s Edge Business Park  Credit rating upgrade  Utilize available tools to be competitive  Expand wastewater facility  In-fill existing business parks IV. Mid-Term Outcomes (3 to 10 years) Identify outcomes and results you want to achieve in the mid-term (3 to 10 years). During this timeframe what clear and distinct development successes do you want to achieve?  Retention and expansion of present industrial base  An increase of local information as to what the city has to offer for job opportunities as word of mouth is great promotion tool  Look outside of area for ventures to promote the city’s attributes  Bring in more businesses and grow our tax base  Industrial job growth  Open new industrial park either city owned or private  Fill business parks  Downtown redevelopment  Community center/ice arena  Transportation/road improvements  Creation of affordable senior housing  Purchase property for next business park V. Long Term Outcomes Identify outcomes and results you want to achieve in the long term. Consider these legacy decisions that you may not be directly involve d in, but your decisions in the next few years will create an environment or opportunity for the City to capitalize on them in the long term.  Long term retention of present tenants will be a sign of good local stability  Target undeveloped lands for future industrial and business expansion  Maintain and increase availability of local amenities, such as shopping and personal needs facilities  Create a well-defined plan for an increased population housing demand  Bring in more businesses and grow our tax base  Add Jobs in ER  Retention of local business  Downtown redevelopment/rehabilitation  Regional park systems  Business park development/employment opportunities  Environmentally friendly  Extend utilities to ‘gravel pit’ area for long-term commercial and industrial growth VI. Overall Priorities We are interested in knowing what your overall priorities are for development, including housing. Please identify the top three to five priorities you want to achieve (regardless of timeframe).  Industrial and business expansion  Retention of present tax base  Maintain and look to future housing needs  Housing: Not Sure  Business retention and growth  Fill unoccupied space  Appropriate mix of housing types  Continued growth of industrial and commercial tax base  Business development/job creation  Utilize City financing tools to support senior housing  Develop and maintain personal contacts and relationships with TC industrial/commercial broker VII. Role of City in Development We are interested in knowing how active or passive you desire the City to be in development, including housing, activities. Please identify the top three to five roles and activities the City should undertake and those that the City should not undertake. Explain why but limit response to bullet points or key phrases.  Use of TIF for certain projects in industrial, business and maybe housing. Housing only to meet needs of community  Programs used need to be of benefit to the City and meet its needs  Well thought out planning and execution is of the most importance  No city involvement in development of new housing  City involvement in redevelopment areas and undesirable neighborhoods  City involvement in providing good and price competitive city sewer and water/ streets and parks to the residents  Not active in housing development  TIF not used for housing  Own shovel-ready light industrial lots DRAFT MEMORANDUM – FOR DISCUSSION TO: Members of the City Council Members of the HRA Calvin Portner, City Administrator Brian Beeman, Economic Development Director FROM: Mikaela Huot, Vice President/Consultant DATE: December 2, 2013 SUBJECT: Policy Discussion and Facilitation for Joint HRA/City Council Meeting The Elk River City Council and Housing and Redevelopment Authority (HRA) held a joint meeting on Monday, November 4, 2013 to discuss the City’s existing tax increment financing (TIF) policy that was initially created in 1991 and later amended in 2000 and 2006. The policy contains the purpose, objectives of tax increment financing, policies for use of tax increment financing, project qualifications, application for TIF, and application review worksheet. The policy lists many City objectives regarding the use of tax increment financing, including creation of affordable housing; however the application review worksheet does not align with the scoring and review of potential housing projects. As a result, the City Council has asked staff and Springsted to provide additional information regarding the review of affordable housing projects that may include a policy and review worksheet update. The purpose of this memo is to provide a summary of the results of the joint meeting that was held on Monday, November 4, 2013. Generally a majority of the HRA and City Council members supported the inclusion of affordable housing in the City’s tax increment financing policy. There was interest in creating life cycle and senior housing opportunities for the City’s residents with the use of tax increment financing. Some members indicated a desire that any housing projects receiving tax increment/ City assistance also needs to meet other objectives of the City including the following:  Proximity to market area  Assist commercial development  Redevelopment of desired target areas  Existing infrastructure Springsted Incorporated 380 Jackson Street, Suite 300 Saint Paul, MN 55101-2887 Tel: 651-223-3000 Fax: 651-223-3002 www.springsted.com Summary comments from the joint meeting that resulted in an updated housing rating worksheet has been created and included for review and discussion: 1. Keep housing as an objective in tax increment financing policy 2. Not define development/redevelopment 3. Specific rating score sheet for housing projects 4. City policy currently focuses on industrial – all jobs based 5. More focus on housing 6. Projects receiving assistance must meet but-for test 7. Need life cycle housing 8. Mix of housing (retain families) needs to be available 9. Focus on available infrastructure sites 10. Focus on providing affordable senior housing 11. Housing TIF must meet one or more other objectives of city a. Close to market area b. Assist commercial c. Redevelopment 12. Housing need in the City 13. New evaluation criteria 14. Housing to support jobs and employers 15. Lifecycle housing 16. Live closer to home 17. Mix of housing for variety of incomes – senior and family Issues to consider in conjunction with housing and affordable housing: 1. Type of affordable housing a. Owner-occupied b. Multi-family c. Senior i. Independent Living ii. Assisted Living iii. Memory Care 2. If affordable housing a. Minimum income requirements b. Additional requirements 3. Location of housing within city a. Near existing jobs, transportation, recreation, retail 4. Jobs created in conjunction with housing a. Assisted Living b. Memory Care Thank you for the opportunity to be of assistance to the City of Elk River. We look forward to continuing the discussion at the next scheduled joint meeting on Monday, December 2. I can be reached at 651-223-3036 or mhuot@springsted.com with any questions or comments. VIII. TAX INCREMENT FINANCING APPLICATION REVIEW WORKSHEET- HOUSING PROJECTS 1. The project meets the criteria set forth in Section IV of the City’s Tax Increment Financing policy. a) Meets minimum thresholds for size, value, and tax revenue. b) Meets at least one of the objectives in Section II and satisfies the provision set forth in Section III. c) Demonstrates need for TIF with the but-for analysis. e) Consistent with all city plans and ordinances. f) Serves at least two public purposes as defined in Section IV. 2. Ratio of Private to All Public Investment in Project: Points: _____ $ Private investment 5:1 5 $ Public Investment 4:1 4 Ratio Private : Public Financing 3:1 3 2:1 2 Less than 2:1 1 3. Job Creation in the City of Elk River: Points: _____ Number of new jobs as a result of the project. 20+ 5 Number of existing/retained jobs divided by 10. 15+ 4 Total 10+ 3 5+ 2 Less than 5 1 4. Wage Level of new jobs created/retained: Points: _____ Minimum hourly wage Over $25/hour 5 of jobs created/retained: $21-25/hour 4 $17-20/hour 3 $14-16/hour 2 Under $14/hour 1 5. Market Value/Tax Base Generation: Points: Project will result in an estimated market value per unit $135,000/Unit 5 (land and building)of $125,000/Unit 4 $115,000/Unit 3 $105,000/Unit 2 $ 95,000/Unit 1 6. Project provides housing that is restricted Points: to persons 55 years and older: 3 7. Project provides that at least 30% of the total units Points: TO BE COMPLETED BY CITY STAFF Page 2 of 2 are three-bedroom or more: 2 8. Project proposes rehabilitation of existing housing, housing stock, and maximizes utilization of existing infrastructure: Points: 4 9. Project proposes a location near existing jobs, transportation, recreation, retail services, social services, and schools: Points: 4 10. Type of Project: Points: _____ 100% Owner Occupied 2 Investment Property 1 11. Use: Points: _____ Manufacturing 5 Research & Development 4 Commercial Redevelopment 3 Warehouse/Distribution 2 Housing 1 12. Likelihood that the project will result in Points: _____ unsubsidized, spin-off development. High 5 Moderate 3 Low 1 11. Bonus Points Bonus Points: _ The project will be 100% Pay-as-you-go TIF. 3 points The project contributes to the goals of Energy City. 2 points  Product promotes sensible use of energy, OR  Project utilizes significant energy efficient design &/or materials in construction. Sub - Total Points: of a possible 45 points. Total Points: Overall project analysis: High 45-38 points Moderate 37-29 points Low 28-20 points Not Eligible 19-0 points Affordable Senior Housing Flow Chart Showing How, by Providing Seniors with an Affordable Housing Alternative also Creates Affordable Housing Opportunities for Families & Generates Economic Benefits to Local Businesses  Fixing Up House; Buys Supplies from Menards  Buying Sundries From Target, Groceries From Cub  Eating Out at Local Restaurants  Needing Car Repairs & Gas  Buying Clothing & School Supplies  Visiting Local Doctors & Dentists  Supporting Children's Sports & Activities  Establishing Local Banking Needs  Etc...Etc...Etc. This is an important example of how a community, at little or no cost, can help revitalize its Neighborhoods by implementing just one element of a comprehensive Housing Plan. Deferred Maintenance Seniors Move Out and Into Senior Housing Older Family Home New Family Buys Home No Need To Shop New Affordable One‐Level Rental New Families Revitalize Neighborhoods By: