5.4. ERMUSR 09-08-2009ha
ver
MEMORANDUM
TO: Lori Johnson, City Administrator
Elk River Municipal Utilities Commission
FROM: Catherine Mehelich, Director of Economic Development
DATE: September 3, 2009
SUBJECT: Request for Deferral -Elk River Station Apartments
Attachment
• Elk River Station Request fox City Support
Action Requested
The Utilities Cornmission is asked to approve a 1-year deferral of the WAC fees for the
proposed Elk River Station Apartments, contingent on City Council support of the financing
application.
Background
Duffy Development Company is proposing to construct a 53-unit apartment building on
Outlot D, Elk River Station. The developer is making application to MN Housing Finance
Agency (MHFA) for tax credits to finance the proposed affordable rental housing
development. MHFA's scoring criteria requires city support in the form of WAC/SAC
waiver or deferrals, among other items the developer has proposed in the attached Request
for City Support. The City Council will discuss the request at its September 14 work session,
and consider final action at its September 21 meeting.
Staff has estimated the following WAC fee for the project:
WAC (53x2000)x.8 = $84,800
ELK RIVER STATION
REQUEST FOR CITY SUPPORT
1. Waiver of local government development fees
With 53 units, the City of Elk River is asked to reduce the $192,867
park dedication fee by 13% for a project savings of $25,000.
2. Reduction of infrastructure costs
The city is allowing a reduction in the number of parking stalls that
their code requires. This will allow more grass areas that would have
been impervious surface for a savings of 2,650 sf at $3/sf totaling
$7,950.
3. Density bonus
The City of Elk River zoning code allows for only 38 units buildable
acre. Through the PUD process, we are allowing 53 units. Adding 15
units at $15,000/unit equals $225,000.
4. Flexibility in zoning code requirements
The project has been rezoned from single family to multi-family
through our PUD process. This would allow 38 rather than 8 units to
be built on the site. Adding 30 units at $15,000/unit equals a
$450,000 savings in land costs.
5. WAC/SAC reductions
The City of Elk River assesses the development a $172,950 SAC fee
and Elk River Municipal Utilities assesses the development a $84,800
WAC fee at the time of building permit. By deferring both fees for
one year a 3% interest, we realize a project savings of $7,732.
6. Fast-tract permitting
The City of Elk River is assisting the development by fast-tracking the
approval process. All plans and studies would normally have had to
be in by Aug 10th to be heard at our Sept. 21st council meeting.
We've accepted plans, reports and studies in late Aug. and waived
others to get the required action before the state deadline.