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Consider TIF Plan and Development Agreement, Riverdale Station Apartments
Matt Brown, Economic Development Coordinator
The EDA is asked to consider a TIF Plan, Interfund Loan, and Development Agreement related to a housing development adjacent to the Riverdale Transit Station along Northdale Boulevard.
In April 2016, the City Council approved a term sheet with Sherman Associates and a memorandum of understanding with the Anoka County Regional Rail Authority (ACRRA) to facilitate a transit-oriented development project adjacent to the Riverdale Transit Station along Northdale Boulevard. Sherman Associates proposes a first phase of 251 apartments in two buildings on about eight acres of the 16 acre site, as well as a small commercial building. A second phase will likely include senior housing on the balance of the site. In June 2016, the HRA entered into purchase agreements to facilitate the sale of the property to Sherman. The purchase agreements established that the HRA would purchase the entire site from ACRRA for $2.3 million. Sherman would immediately purchase the land for Phase I of the project for $1.5 million and would purchase the remainder of the land for $800,000 within three years of the closing date for Phase I. In June 2017, the closing date was extended to December 29, 2017. The Planning Commission approved a site plan for the project in June 2017 and the City Council will consider a plat at its July 18 meeting.
The term sheet established that Sherman would receive tax increment financing for each phase of the project. At least 20% of the housing units will meet the affordability requirements established by State Statutes for the use of TIF. While State Statutes would allow up to 26 years of increment to be collected, the HRA's purchase agreement with ACRRA limits the use of TIF to 10 years. A new housing TIF district will be established so that Sherman will receive incremental property taxes on a pay-as-you-go basis for Phase I of the project. The total amount of increment paid to Sherman is expected to not exceed $2,276,000. These funds would be used to repay two TIF notes and would finance the project. Staff has worked closely with the Ehlers', the City's financial advisor, on the financing structure of this project. Staff is comfortable with the proposed financial assistance, which corresponds to the actual need for gap financing.
The EDA is asked to adopt a resolution establishing TIF District 1-32 and adopting the TIF Plan, as well as a resolution approving an Interfund Loan, which allows the City to be reimbursed for administrative expenses related to the TIF District from tax increment. The EDA is also asked to adopt a resolution approving a Development Agreement, which establishes terms of the financial assistance. Staff and the EDA's legal counsel are finalizing the Development Agreement and may have a revised document at Tuesday's meeting.
Staff recommends that the EDA:
Adopt Resolution EDA 17-2 establishing TIF District 1-32 and adopting the TIF Plan.
Adopt Resolution EDA 17-3 approving an Interfund Loan related to administrative costs.
Adopt Resolution EDA 17-4 approving a Development Agreement substantially in the form provided.
Resolution EDA 17-2
Resolution EDA 17-3
Resolution EDA 17-4
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