7.1. SR 05-03-2021Request for Action
To Item Number
Mayor and City Council 7.1
Agenda Section Meeting Date Prepared by
Public Hearing May 3, 2021 Colleen Eddy, Economic Development Specialist
Item Description Reviewed by
Tax Increment Financing District No. 27 Cal Portner, City Administrator
Reviewed by
Zack Carlton, Planning Manager
Action Requested
Continue public hearing to hear comments regarding the proposed establishment of Tax Increment Financing
District No. 27, Riverwalk Apartments Project.
Background/Discussion
Staff was directed at the March 1, 2021, Work Session to obtain a third-party appraisal, in accordance with the city
policy, of the property located at 17354 Zane Street, Elk River, as well as financial documents.
The public hearing was advertised for April 19, 2021. The hearing was open and continued to May 3, 2021.
The city’s financial consultant received a verbal appraisal estimating the property value at $1.9 million less
demolition costs for a value of $1.75 million. This is consistent with appraisal submitted with the original TIF
application.
The applicant is seeking a 20-year TIF which exceeds the city policy of 15-year TIF for housing. The Council
should consider the implications of deviating from our policy standards prior to acting on the request.
The city’s financial consultant will provide an overview of the financing and project timeline.
Financial Impact
N/A
Mission/Policy/Goal
The City of Elk River shall utilize TIF to encourage desirable development or redevelopment that would not
otherwise occur but for TIF.
Attachments
N/A
The Elk River Vision
A welcoming community with revolutionary and spirited resourcefulness, exceptional
service, and community engagement that encourages and inspires prosperity.
Updated: August 2020
City of Elk RiverMay 3, 2021District No. 27Financing (Redevelopment) Public Hearing on Tax Increment City Council
1.(Redevelopment) District No. 27Proposed Tax Increment Financing phase requires policy deviationDeveloper request for 20 years of TIF assistance for each 5.Establishment of Redevelopment
TIF District4.Total estimated development cost of $34.7M3.buildings for total of 180 unitsunit market rate rental apartment -Construction of two 902.former Saxon site as The Delta ApartmentsStonewoo
d Development LLC proposing redevelopment of
Considerations for level of public assistance parameters (Redevelopment) District No. 27Proposed Tax Increment Financing Extraordinary costs•Public assistance (TIF) and private equity•Public
to private investment•TIF policy guidelines•Financial gap•include:
•Financing Assistance?What Drives The “Gap” Or Need For Public for’ assistanceDevelopment would not occur ‘but•be supported by development alone without assistanceFinancing of public
and private improvements that could not •Determine need for and amount of public assistance•Extraordinary redevelopment costs
TIF Plan Discussion$7,369,836TotalInterest$7,369,836Subtotal$736,988Administrative expensesUtilities$6,632,848Site improvements/preparation costsLand/building acquisitionAmountEstimated
Public Costs$7,369,836Tax increment revenueAmountSources of Revenue
TIF Eligible Project Expenses$7,734,523Total$305,000Landscaping$445,000Masonry/precast$220,986Driveway$3,902,650Concrete work$860,887Excavating/grading$2,000,000Land acquisitionAmountSite
Improvements/Preparation Costs
Expected Terms of Assistance$6,632,848Total estimated TIF assistance$3,316,424Phase 2: 20 Years of TIF assistance$3,316,424Phase 1: 20 Years of TIF assistanceAmountSite Improvements/Preparation
Costs
Assistance for TIF is required to meet the uses identified by City of Elk River TIF Policy Statements Legal, administration, and engineering•Demolition•Site preparation and improvement•Loans•Land
acquisition and land write down•Public improvements•statute including, but not limited to the following:
TIF District’s shall be limited to the minimum term necessary to City of Elk River TIF Policy Statements Request for 20 years rolling for each phase•Redevelopment District 15 Years (Max
is 26)•will be considered to exceed the following general thresholds:Only projects exceeding the objectives identified in the policy meet the project needs.
•City of Elk River TIF Policy Considerations determine the fair market value of the landappraiser agreed upon by the city and developer will party property price is in excess of fair
market value. A thirdTIF will not be used in circumstances where land and/or •TIF will not be used to supplant cash equityof ten percent (10%) cash equity investment in the project.
Developers receiving TIF assistance shall provide a minimum •determine the need for and level of assistancefor” test to Each project is required to meet the “but
•Next Steps May 17, 2021•Up to $6,632,848 of revenues•Agreement) based on 20 years of assistance for each phaseConsideration of Contract for Private Development (TIF •start demolition
on project siteFollowing TIF District approval by City Council, Developer can
Mikaela Huot, Director 12 Questions Email: Mikaela.Huot@bakertilly.com2533 (cell)-368-6513036 (office)-223-Phone: 651St Paul, MN 55101380 Jackson Street, Suite 300Baker Tilly