Consider Recommendation for Tax Increment Financing Assistance for Trident Development

The purpose of this case is to have the EDA review Tax Increment Financing Application by Trident Development and to provide a formal recommendation on level of Tax Increment financial assistance to the City Council.

Background
At the March 10th City Council Work Session, Council consensus generally supported the proposed project at the new location next to the VA. In addition to general project support, council consensus was for Staff to negotiate a lesser TIF amount and potentially a shorter duration to a proposed new TIF Housing District. Staff has negotiated a deal with Trident Development which reduces both the amount of TIF and the duration of the TIF district. The proposal presented to the Council at the March 24, 2026 work session was for a 95/5% split in TIF for 18 years of increment. This proposal is approximately $1.3M dollars less in gross tax increment and 7 years less in TIF District duration previously discussed with the City Council. The TIF request by the Developer was 4.182M (previously 5.54M) with a present value of approximately 2.48M. (previously $2.63M).   Staff and Ehlers have drilled down more on the numbers and the Raw TIF will be closer to 4.15M with a present value of 2.35M.  At the March 24, 2026 the Council reached consensus in support of the TIF Amount, percentages and duration of TIF district. The next step in the TIF approval process is to obtain a recommendation from the EDA and to start the TIF District creation process.

Project Description and Valuation
Trident Development is proposing to build a 2-story 78-unit Senior Assisted Living (AL) building, a 1-story 24-unit Memory Care (MC) building and a 4-story 84-unit Independent Living (IL) building adjacent to the VA Clinic on 6.05 acres in the COR. The proposed project is being built on all of Outlot B (28-32-25-42-0023) and part of Outlot A (28-32-25-42-0022), Ramsey Town Center 12th Addition. The property is owned by Deal Family Holdings LLC. The proposed project is different, and broader than the project proposed by Trident two years ago which included only 14 MC units and 60 AL units and did not include a non-TIF IL building along Sunwood Drive. City Staff provided the Anoka County Assessor project information and the Assessor has provided an estimated assessed valuation and tax information for the proposed project that includes 2 buildings. The County Assessor project a Low, Middle and High valuation estimates for each building based on varying costs based on the quality of materials used to construct the structure and on the level of facade finish illustrated below:

Parcel A – 84-unit independent living apartment building sitting on 83,168 sf of land
Low - $17,220,000 or $205,000/unit
Mid - $19,320,000 or $230,000/unit
High - $21,420,000 or $255,000/unit

Parcel B – 78-unit assisted living apartment building with a 24-unit dementia care building sitting on 180,540 sf of land
Low - $19,890,000 or $195,000/unit
Mid - $22,440,000 or $220,000/unit
High - $24,990,000 or $245,000/unit

For the purposes of this case and TIF projections, Staff is using the Middle estimated assessed valuations for the preliminary TIF and future property tax analysis. All data will be reviewed by Ehlers during the TIF District creation process if the project moves forward.

Taxes and TIF
The parcel is not in TIF 14 district. Trident has requested the creation of a new 18(20) year Housing Tax Increment District and to retain 95% of the available increment. The estimated annual property taxes for the completed projects are $306,617 for the AL/MC building (TIF) and $263,986 for the IL building (not included in TIF). Currently, the land proposed for the MC/AL project is generating $23,211 in property taxes annually and the IL Land is generating $10,708 in annual property taxes. The Developer is seeking tax increment financing for the MC/AL project only. Under the $22.44M tax assessed valuation scenario for the MC/AL project, it would generate approximately 250K annually and 4.38M in Raw TIF over the 18-year TIF Housing District. Under the 95% (developer) / 5% (City) scenario, this would equate to 237K (Trident) and 12.5K (City) annually. Please note that the City does not anticipate any costs to be incurred by the city as a result of this project other than administrative costs to create and maintain the district for upping the percentage for the developer does not financially hurt the city. Based on recent negotiations, Staff has put together an updated TIF Estimate showing the current 18-year proposal. Staff and Ehlers have also put together an attached summary TIF document that provides, estimated valuation, taxes and estimated TIF for the AL/MC project for reference.  Ehlers has put together a memo analyzing the project and the need for assistance which is highlighted in the Observation section of this memo.

Zoning
The proposed development property is currently zoned COR-1 (mixed use core sub-district) which is zoned appropriately for the proposed project. Staff has communicated the design standard for the COR 1 district, which requires the highest level of materials and connectivity to the street. The proposed memory care and assisted living use traditionally does not typically see a lot of mobility outside the building to adjacent businesses by its residents, although visitors will be coming and going to the site on a regular basis which could visit businesses in the COR. However, the 84-unit independent living project proposed along Sunwood Drive NW will include active seniors that will provide many customers for businesses in the COR.

None required at this time.  In the future, a Public Hearing will need to be scheduled for the Creation of TIF District 20 (Trident). A schedule of upcoming steps to create he TIF district is attached to this memo.

Time Frame/Observations/Alternatives:
The Developer is planning to submit a site plan this year and to commence construction shortly after the approval of TIF requested herein. Trident has provided a Demand Assessment for Senior Housing in Ramsey Study which has identified the following demand for 130 Independent Living units, 62 Assisted Living units and 47 Memory Care units by 2030.  This addition to the COR will help fill a need and provide housing options that are not already provided within the COR.  The revised raw TIF ask is for 4.147M in raw TIF with a present value of 2.35M. The City Council, through consensus at the March 24, 2026 Work Session, was supportive of the project as presented but formal review by the EDA and official Council action will be needed to move it forward.

Staff has reviewed and scored the attached TIF application.  Staff has received the $4000 TIF Application Fee and will also be receiving a $10,000 escrow to help finance the legal and financial work by Ehlers and TAFT Law.  The TIF application is geared more toward industrial users, but this project does score a 31 which is considered a moderate to high score. It is anticipated that the combined project (AL,IL and MC) will bring over 40 new jobs to Ramsey with wages ranging from $40,000 to $80,000 a year.  The two projects AL/MC/IL are estimated to generate a combined $570.603 in annual property taxes.

In summary, the Ehlers memo, and its third-party analysis, concludes that all the metrics are within industry market standards and that the assistance is not unduly enriching the developer.  This project will require the creation of a Housing District and is not subject to Business Subsidy law and a public hearing.  Jason Aarsvold from Ehlers will be present to provide a summary of the memo and to answer questions.

Alternatives :
1) Recommendation from EDA to City Council supporting the project and providing 4.147M raw TIF, 2.35M present value to Trident Development (as presented)
2) Recommendation from EDA to City Council supporting the project and providing 4.147M raw TIF, 2.35M present value to Trident Development (with changes)
3) Something else

Tax Increment Financing District 20 (Needs to be created)

$4,000 TIF application fee by Trident

$10,000 Legal Escrow by Trident

Recommendation from EDA to City Council supporting the project and providing 4.147M raw TIF, 2.35M present value to Trident Development (as presented)

Motion to recommend to City Council support for the project and provision of 4.147M raw TIF, 2.35M present value to Trident Development (as presented)