4.9. SR 03-03-2014 City of
Elk - Request for Action
River O.
To Item Number
Mayor and City Council 4.9
Agenda Section Meeting Date Prepared by
Consent March 3, 2014 Brian Beeman,Director of Economic
Development
Item Description Reviewed by
Resolution Calling for Public Hearing for Black Jeremy Barnhart,Deputy Director, CODD
Hawk Housing Tax Increment Financing Reviewed by
Cal Portner, City Administrator
Action Requested
Establish, by motion, a public hearing for Monday,April 21, 2014, for proposed Tax Increment
Financing (Housing) District No. 24 (Black Hawk Woods Housing Project) as recommended by the
Housing and Redevelopment Authority (HRA).
Background/Discussion
With the recent development of a Housing TIF policy and scoring sheet,the Black Hawk woods project
is moving through the review process.
Springsted has reviewed and re-scored the Black Hawk Senior living project utilizing the newly updated
housing TIF scoring worksheet.The project scored on the low end of the moderate scale with a rating of
22. This is enough points to bring the project forward for consideration. As part of the TIF process, a
public hearing held by the City Council is required. The county and school are also required to be
notified.
A description of the Black Hawk project is outlined in the attached March 3, 2014, regular HRA meeting
staff memo.
Staff requests the City Council to set the public hearing date for this project. Springsted, the city's
financial consultant,will be available if needed to answer any questions pertaining to the project.
Financial Impact
N/A
Attachments
• HRA Black Hawk Housing TIF Packet, dated March 3, 2014
• Resolution Calling for Public Hearing for proposed TIF District No. 24
P a w E A E U s r
NaA f RE]
ECty lk - _ Request for Action
River
To Item Number
Housing& Redevelopment Authori 7.1
Agenda Section Meeting Date Prepared by
General Business March 3, 2014 Brian Beeman, Director of Economic
Development
Item Description Reviewed by
Recommend Setting Public Hearing for Black Jeremy Barnhart, Deputy Director, CODD
Hawk Housing Tax Increment Financing Reviewed by
Action Requested
Authorize by motion, recommending to the City Council setting a Public Hearing for Monday,April 21,
2014, for proposed Tax Increment Financing (Housing) District No. 24 (Black Hawk Woods Housing
Project).
Background/Discussion
The City Council approved an update to the TIF policy on February 18, 2014. Springsted has reviewed
and re-scored the Blackhawk Senior living project utilizing the newly updated housing TIF scoring
worksheet. The project scored on the low end of the moderate scale with a rating of 22;however, this is
enough points to bring the project forward for consideration. As part of the TIF process, a Public
Hearing held by the City Council is required. The County and School are also required to be notified.
A description of the Black Hawk project is outlined in the attached October 7, 2013, regular HRA
meeting staff memo.
Springsted, the city's Financial Consultant,will be available if needed to answer any questions pertaining
to the project.
Financial Impact
N/A
Attachments
• Springsted TIF 24 Memo
• Black Hawk Woods Application (re-scored)
• Resolution Recommending Calling for Public Hearing for proposed TIF District No. 24
• HRA Black Hawk Housing TIF Packet, dated October 7, 2013
r pI1EIEI 11
NATUREJ
Springsted Incorporated
380 Jackson Street, Suite 300
$p Saint Paul,MN 55101-288Springsted
Tel: 651-223-3000
Fax: 651-223-3002
www.springsted.com
MEMORANDUM
TO: Members of the City Council of the City of Elk River
Members of the Housing and Redevelopment Authority of the City of Elk River
Brian Beeman, Economic Development Director
FROM: Mikaela Huot,Vice President
DATE: February 25, 2014
SUBJECT: Tax Increment Financing Application Review Worksheet: Blackhawk Woods Housing Project
The City of Elk River has asked Springsted to evaluate the tax increment financing (TIF) request submitted by Senior
30 Elk River Limited Partnership (the developer) for the proposed development of a senior housing rental project
consisting of approximately 84 one-level townhome units. The City's Tax Increment Financing Policy also requires
that the Tax Increment Financing Application Review Worksheet be completed to evaluate the project and ensure it
meets the criteria of the City's policy.
The application for Tax Increment Financing proposes the development of a senior living townhome community. The
Developer is proposing to construct an 84-unit townhome development, containing 49 one-bedroom units, 35 two-
bedroom units, and a clubhouse activity center. Additionally, each unit will include an attached garage. The
development is proposed for persons of low and moderate income;which will result in income limitations for potential
residents and reduced rental rates. The Developer will be undertaking both the construction and operation of the
proposed development.
Attached to this memo are the results of Springsted's review based on information provided by the Developer and the
City's updated Tax Increment Financing Policy and Application that includes a Review Worksheet specifically
focusing on proposed housing projects. Our review of the project and completion of the housing review worksheet
would rank this project as moderate based on a high, moderate, low and not eligible scale. With this information, we
believe the City Council could proceed with calling for a public hearing and consideration for approval of a TIF District
as the proposed project meets the `moderate' criteria of the City's Tax Increment Financing Application Review
Worksheet and Policy.
Thank you for the opportunity to be of assistance to the City of Elk River. Please contact me at (651) 223-3036 or
mhuot(cDspringsted.com with any questions or comments.
Public Sector Advisors
TAX INCREMENT FINANCING APPLICATION REVIEW
WORKSHEET- HOUSING PROJECTS:
BLACKHAWK WOODS SENIOR HOUSING PROJECT
TO BE COMPLETED BY CITY STAFF
1. The project meets the criteria set forth in Section IV of the City's Tax Increment
Financing policy.
X a) Meets minimum thresholds for size,value, and tax revenue.
X b) Meets at least one of the objectives in Section II and satisfies
all of the provisions set forth in Section III.
X c) Demonstrates need for TIF with the but-for analysis.
X d) Consistent with all city plans and ordinances.
X e) Serves at least two public purposes as defined in Section IV (f).
2. Ratio of Private to All Public Investment in Project: Points: 5
$9,077,786 Private investment 5:1 5
$996,871 Public Investment 4:1 4
9:1 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: 1
3 Number of new jobs as a result of the project. 20+ 5
Number of existing/retained jobs divided by 2. 15+ 4
3 Total 10+ 3
5+ 2
Less than 5 1
4. Wage Level of new jobs created/retained: Points: 5
Minimum hourly wage Over $25/hour 5
of As created/retained: $25.00 $21-25/hour 4
$17-20/hour 3
$14-16/hour 2
Under$14/hour 1
5. Market Value/Tax Base Generation: Points: 1
Project will result in an estimated
market value per unit $135,000/Unit 5
(land and building) of $97,000 $125,000/Unit 4
$115,000/Unit 3
$105,000/Unit 2
$ 95,000/Unit 1
6. Project provides housing that is restricted Points: 5
to persons 55 years and older:
5
7. Project proposes rehabilitation of existing
housing, housing stock, and maximizes
utilization of existing infrastructure: Points: 0
4
8. Project proposes a location near existing
jobs, transportation, recreation, retail services,
social services, and schools: Points: 0
2
9. Type of Housing Project: Points: 1
100% Owner Occupied 2
X Investment Property 1
10. Likelihood that the project will result in Points: 1
unsubsidized, spin-off development. High 5
Moderate 3
X Low 1
Sub -Total Points: of a possible 38 points.
11. Bonus Points Bonus Points: 3
X The project will be 100%Pay-asyougo T1F. 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.
Total Points: 22
Overall project analysis: High 38-30 points
Moderate 29-22 points
Low 21-13 points
Not Eligible 12-0 points
City of Elk River Tax Increment Financing Policy&Application P B W E A E B B
Amended February 2014 INAWRil
Page 2 of 15
TAX INCREMENT FINANCING APPLICATION REVIEW
WORKSHEET- HOUSING PROJECTS:
BLACKHAWK WOODS SENIOR HOUSING PROJECT
TO BE COMPLETED BY CITY STAFF
1. The project meets the criteria set forth in Section IV of the City's Tax Increment
Financing policy.
X a) Meets minimum thresholds for size,value, and tax revenue.
X b) Meets at least one of the objectives in Section II and satisfies
all of the provisions set forth in Section III.
X c) Demonstrates need for TIF with the but-for analysis.
X d) Consistent with all city plans and ordinances.
X e) Serves at least two public purposes as defined in Section IV (f).
2. Ratio of Private to All Public Investment in Project: Points: 5
$9,077,786 Private investment 5:1 5
$996,871 Public Investment 4:1 4
9:1 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: 1
3 Number of new jobs as a result of the project. 20+ 5
Number of existing/retained jobs divided by 2. 15+ 4
3 Total 10+ 3
5+ 2
Less than 5 1
4. Wage Level of new jobs created/retained: Points: 5
Minimum hourly wage Over $25/hour 5
of As created/retained: $25.00 $21-25/hour 4
$17-20/hour 3
$14-16/hour 2
Under$14/hour 1
5. Market Value/Tax Base Generation: Points: 1
Project will result in an estimated
market value per unit $135,000/Unit 5
(land and building) of $97,000 $125,000/Unit 4
$115,000/Unit 3
$105,000/Unit 2
$ 95,000/Unit 1
6. Project provides housing that is restricted Points: 5
to persons 55 years and older:
5
7. Project proposes rehabilitation of existing
housing, housing stock, and maximizes
utilization of existing infrastructure: Points: 0
4
8. Project proposes a location near existing
jobs, transportation, recreation, retail services,
social services, and schools: Points: 0
2
9. Type of Housing Project: Points: 1
100% Owner Occupied 2
X Investment Property 1
10. Likelihood that the project will result in Points: 1
unsubsidized, spin-off development. High 5
Moderate 3
X Low 1
Sub -Total Points: of a possible 38 points.
11. Bonus Points Bonus Points: 3
X The project will be 100%Pay-asyougo T1F. 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.
Total Points: 22
Overall project analysis: High 38-30 points
Moderate 29-22 points
Low 21-13 points
Not Eligible 12-0 points
City of Elk River Tax Increment Financing Policy&Application P B W E A E B B
Amended February 2014 INAWRil
Page 2 of 15
City of
Elk ---_�
River
Resolution No. 14-
Resolution Calling for a Public Hearing on a Modification to the
Development Program for Development District No. I, Establishment
of Tax Increment Financing District No. 24, and the Adoption of a Tax
Increment Financing Plan Therefor
BE IT RESOLVED by the City Council (the "Council") of the City of Elk River,Minnesota (the
"City"), as follows:
Section 1. Public Hearing. This Council shall meet on April 21, 2014, at approximately 6:30
P.M., to hold a public hearing on a proposed modification to the Development Program for
Development District No. 1 (the "Modification"),the proposed establishment of the Tax Increment
Financing District No. 24 (a Housing District) (the "TIF District"), and the proposed adoption of a
Tax Increment Financing Plan for the TIF District (the "TIF Plan"),pursuant to Minnesota
Statutes, Sections 469.174 to 469.1794, as amended.
Section 2. Notice of Public Hearing, Filing of Plans. City staff and consultants are directed
and authorized to prepare the Modification and TIF Plan and to forward such documents to the
appropriate taxing jurisdictions,including Sherburne County and Independent School District No.
728 (Elk River). The City Clerk is authorized and directed to cause notice of the hearing in
substantially the form attached as Exhibit A hereto,together with an appropriate map as required by
law, to be published at least once in the official newspaper of the City not less than 10,nor more
than 30, days prior to April 21, 2014, and to place a copy of the Modification and TIF Plan on file in
the City Clerk's office at City Hall and to make such copy available for inspection by the public.
Adopted: March 3, 2014
John J. Dietz,Mayor
ATTEST:
Tina Allard, City Clerk
432923v1 JSB EL185-22
City of
Elk EXHIBIT A
River Notice of Public Hearing
NOTICE IS HEREBY GIVEN that the City Council of the City of Elk River, Sherburne
County, State of Minnesota,will hold a public hearing on April 21, 2014, at approximately 6:30 P.M.
at the City Hall, 13065 Orono Parkway, Elk River,Minnesota, relating to (1) the proposed adoption
of a Modification to the Development Program for Development District No. 1 (the
"Modification"), (2) the proposed establishment of the Tax Increment Financing District No. 24 (a
Housing District) within Development District Project No. 1, and (3) the proposed adoption of a
Tax Increment Financing Plan (the "TIF Plan") therefor,pursuant to Minnesota Statutes, Sections
469.174 to 469.1794, as amended. Copies of the Modification and TIF Plan are on file and available
for public inspection at the office of the City Clerk at City Hall.
The property to be included in the Tax Increment Financing District No. 24 is located
within Development District No. 1 and the City of Elk River. A map of Development District No.
1 and Tax Increment Financing District No. 24 is set forth below. Subject to certain limitations,tax
increment from the Tax Increment Financing District No. 24 may be spent on eligible uses within
the boundaries of Development District No. 1.
[When publishing INSERT MAP of Development District Project No. 1,
and Tax Increment Financing District No. 24]
All interested persons may appear at the hearing and present their views orally or prior to the
meeting in writing.
BY ORDER OF THE CITY COUNCIL OF
THE CITY OF ELK RIVER,MINNESOTA
City Clerk
432923v1 JSB EL185-22