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Consider Resolution EDA 19-3 Approving Development Agreement, Real Estate Equities
Matt Brown, Economic Development Coordinator
The EDA is asked to consider a resolution approving a development agreement related to Tax Increment Financing (TIF) assistance for a 168-unit workforce apartment building near 94th Avenue and Springbrook Drive.
Earlier this year, the City Council approved land use applications by Real Estate Equities for a 168-unit workforce apartment building on a vacant site near the intersection of 94th Avenue and Springbrook Drive. All units in the proposed building would be affordable to households earning 60% of area median income. In 2018, 60% of median income for a family of four was $56,580. The development will include several amenities, such as an outdoor patio with fire pit, bocce ball court, fitness center, tot lot, dog run, underground parking, solid surface countertops, stainless steel appliances, and in-unit laundry. Project financing will include federal tax credits, tax-increment financing, and conduit revenue bonds. Closing on the project is expected to occur by early September and construction will begin shortly thereafter.
In January 2019, the EDA approved a TIF Plan for the project and established TIF District 1-33. Staff has completed an anaylsis of the TIF request and has determined that the need for gap financing is justified. The proposed TIF assistance includes a maximum of $1.4 million in TIF, which amounts to approximately 15 years of the 26-year maximum district length. On a per-unit basis, the amount of assistance is on lower end of the spectrum of TIF assistance for recent apartment projects. The project would be structured as a pay-as-you-go TIF note, meaning that the incremental taxes would be used to reimburse the developer for their eligible expenses. The City, County and School District would continue to collect the base taxes. This is the same deal structure the city has used on other recent housing TIF projects, including the River North Apartments and Riverdale Station Flats. Closing on the project is expected to occur by early September and construction will begin shortly thereafter.
The EDA is asked to consider a resolution approving a development agreement for the project, which establishes the 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. The development agreement includes a provision related to reserving land for additional parking that was required by the City Council in its land use approval. The provision requires that the developer acquire an adjacent property on 94th Avenue an maintain as open space and future parking. The TIF agreement allows for the City to suspend TIF payments if the developer is asked to build additional parking, but refuses to do so. This remedy runs for the length of the TIF district (Year 2047).
Staff recommends that the EDA adopt Resolution EDA 19-3 approving a Development Agreement substantially in the form provided.
Resolution EDA 19-3
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