Move to approve the consent agenda.

Second.

Moved by Councilmember Keene, seconded by Councilmember Doring.

All in favor say aye.

Aye.

Aye.

Any opposed, say nay.

Uh moving on to we have one agenda item uh in under reports and recommendations, which is a development assistant agreement, restoration Glenn project, and this will be presented by Mr.

Brent Fenby.

Please step forward.

Good evening.

EDA President Streaming, EDE members, uh Brent Smith Community Development here this evening asking the council to adopt a resolution that would um allow for the intern into a development assistance agreement between the EDA and um Restoration Glen LLP.

Um in regards to a project called Respiration Glen.

Um Restoration Glen is a 48 unit apartment building.

It did receive housing tax credits back in 2023.

Um of the 48 units, 12 of the units are restricted to incomes at 30% AMI or less, and then the remaining 36 units are income restriction at 60% AMI or less.

I should mention that the project is a partnership between Three Rivers Community Action and Bear Creek Development Center.

Um the development assistance that we are recommending that the ED approve in the agreement is providing the development with um pooled TIFF.

Um basically it's increment that we have collected off of some open TIFF districts.

Um we are recommending that we provide them with a amount of 285,000.

Um it is being done as a mortgage loan.

So basically, um the way it's written now that um when the mortgage comes due, which is 30 years from 2027, sorry 2057, um they would repay that um loan back to the city um at in the amount of 285,000.

Um that's the way it's written now.

Doesn't mean that 30 years from now they're gonna they may come back and ask us to forgive that loan or something like that.

So but who knows?

But currently it's written that it would be repayable to the city um 30 years from 2027.

Um I do have some stuff in the RCA form itself in regards to pooled TIFF.

Um we do have six or seven TIFF districts where um the city is collecting pooled increment, which is allowed by state statute.

Um currently we have about 900,000 dollars that um are pooled for DMs DMC types of activities, and about $800,000, I think, and um pooled increment for affordable housing projects.

Um we are currently we do have one other project where we're using the pooled increment um for affordable housing project, which is basically right across the street from this project, the mailwood project.

Um that would that TIF is being collected off of the increment collected off of the River Rock project, which is right by Mail Field.

In that situation, the city is providing the developer $310,000 of pooled increment for that project.

So this project is a little bit less.

Um that's all the developer needed to make the project work with some other financing from the housing coalition and also a deferred loan from Minnesota Housing.

Any questions?

Questions, council member Palmer.

Why a loan?

Why not just do a grant?

That's they that they that's where they came to us, and that's a they they wanted it as a loan, I think, through Minnesota Housing.

That's a that's what they're requiring them to do as a loan.

So okay.

Councilmember Keene.

You sort of alluded it to my question at the end, but are we familiar or like understand the funding stack on this and who else is contributing and how it came to be?

We come to tax credits, yep.

Uh Rochester Housing uh Housing Coalition does also defer loan from Minnesota Housing also in their stack.

So and so the Minnesota uh I'm just I'm just trying to understand that stack to the point that this is actually looks very you know, this is under six thousand dollars per unit, and those are numbers dramatically lower than we used to looking at.

But I think I I want to call out this discussion that this is happening this way because this is gonna get low, it's gonna get special tax treatment as low income, so there's no value in giving MTF.

Well, correct me, this in essence it's using proceeds from TIFF for this project, and um all they need it based on all the other loans they've gotten from other agencies like housing coalition, Minnesota Housing, the gap they had to close about was about 285,000.

So I I guess the thing I'm trying to bring into the public eye is that we're used to seeing things come to us for TIFF support.

Right, and we're not seeing that because of their other way of treating this is a fully affordable thing that's gonna get tax advantage treatment uh uh in the out years.

So this group providing TIFF is d doesn't end up adding up to much anymore.

And uh yeah, and I'll yeah, I'll also add to that is basically with the um classification for photo housing projects going to the 4D classification.

The project does not generate that much in TIFF increment if it was done as a TIFF district.

I think when I calculated it as about 250,000 over 25 years in potential TIFF that the project would generate.

So and would you do you consider that to be a program run through the state and executed by the county?

Well, the state has a 4D tax license.

Yep.

So any project that gets housing tax credits automatically gets that classification, and then the city county has a program for the 4D program.

And the county's rules are this fits well into the county's project.

Yeah, no, I just I wanted to make that point because it it to me this came oddly towards us, and I I was looking for the changes, and I think I understand it now, but uh I I'm supportive of what we're doing here.