Adopt Resolution Conveying Outlot C, RAMSEY TOWN CENTER 8TH ADDITION to The Seasons of Ramsey Limited Partnership, Related to a Proposed Major Plat Named SEASONS OF RAMSEY Located at the Northeast Intersection of Bunker Lake Boulevard and Town Center Drive within TOWN CENTER GARDENS 3RD ADDITION.

Outlot C, RAMSEY TOWN CENTER 8TH ADDITION, is a 'remnant' parcel located east of Town Center Drive, north of Bunker Lake Boulevard. Staff classifies this parcel as remnant, due to its inability to be developed as a permitted use under the current zoning classification (COR-4), unless combined with the surrounding area. The parcel could be used for additional right of way or utility needs; however, it is noted that the segment of Town Center Drive has already been completed, and remaining needs are proposed to be protected by drainage and utility easements (potentially trail easements).

The City has received a request from Podawiltz Development Corporation to convey Outlot C as a Local Contribution as part of their successful funding request to the Minnesota Housing Finance Agency. The City Council previously reviewed the request prior to the Developer submitting the request for funding to MHFA and entered into a Preliminary Agreement to Develop, which is attached hereto.

The MHFA Section 42 Tax Credit program is a competitive process. Potential Developers are awarded scoring points to prioritize the applications. Points are awarded, among other factors, on contributions by the local community. The Preliminary Agreement to Develop by and between the City and the Developer identified the donation of Outlot C as well as vacating 147th Circle NW in exchange for connecting 147th Lane NW to Town Center Drive NW, an important east/west connection north of Bunker Lake Boulevard between Town Center Gardens and The COR. The Developer was requesting a present day value of approximately $200,000. It was originally anticipated that there would be a slight gap in funding intended to be accomplished by grant dollars. However, the MHFA awarded the project based on the land donation alone (no additional cash contribution necessary).

Due to changes in Minnesota Housing Finance Agency (MHFA) award limits, which are scheduled to change on February 28th, the Developer is requesting that the Plat be approved and able to be recorded by February 28th, 2013. This step in the process is critical to ensure the Plat can be properly recorded, at least as presented. The Plat could be modified to not include this parcel, but with impacts to the approved local contribution amount. In order to proceed forward with the financing package as proposed, the Project needs to close on financing by February 28th, 2013 and be placed in service by December 31st, 2013. The Project could still move forward after February 28th, 2013, but would have a substantial financial impact on the pro-forma of the project. An excerpt from the MHFA Handbook is attached hereto outlining the impacts of the February 28th deadline.

No notification is required at this time. However, Staff has attempted to notify all Property Owners within 700 feet of the Subject Property of the Sketch Plan Review and Preliminary Plat Public Hearing. The Preliminary Plat Public Hearing was also published in the Anoka County Union.

Project Background

SEASONS OF RAMSEY is a proposed fifty (50) unit rental townhome development north of Bunker Lake Boulevard, east of Town Center Drive. The Development has been awarded financing from the MHFA, as indicated above. The conceptual site plan was reviewed by the City Council on March 13th, 2012, prior to the Developer submitting an application to MHFA. The Development is a re-plat of a portion of the existing TOWN CENTER GARDENS 3RD ADDITION. A portion of the roadway system was constructed, with a 'loop' roadway in lieu of a cul-de-sac. The Developer proposes to complete the connection of 147th Lane NW, so that a turn-around situation is no longer needed. As such, 147th Circle NW would be no longer needed for turn-around purposes. The previously built infrastructure limits the options available for development for the Plat. The Developer has stated the existing configuration, tailored to smaller, row-style townhomes, has posed a challenge in design of the Plat. The Developer has stated that he believes it has proposed a design that best balances today's market conditions and the options for design based on developable area.

The site plan and Final Plat are scheduled to be reviewed by the City Council on February 12th, 2013, so any action by the HRA should be made contingent on necessary approvals related to site plan and subdivision by the City Council. Language to that effect has been included in the proposed resolution, stating that the resolution cannot be executed until such time the site plan and subdivision are approved by the City Council.

Section 42 Tax Credits

This program is administered locally by the Minnesota Housing Finance Agency. Tax credits are provided for the Developer, and subsidies are not given directly to the renter. However, the Project as proposed was awarded points based on rent rates being income restricted. The attached presentation prepared by the Developer outlines the income levels proposed by the Developer. In addition, the Project will be on-site managed by the Developer for a minimum of 30 years. This arrangement will be protected by deed restriction. If the Developer chose to remove itself from the Project and remove the deed restriction, the tax credits would need to be repaid to MHFA.

The Section 42 Tax Credit Program has target incomes of $35,280 (1 person), $40,320 (2 person), $45,360 (3 person), $50,340 (4 person), $54,420 (5 person), $58,440 (6 person). The Developer has proposed rents at $779 per month (2 bedroom) and $469-$899 (3 bedroom).

Architectural Concerns

The Developer included conceptual drawings to the City as part of the request for the Preliminary Agreement to Develop. The Developer was amenable to Staff's initial concerns with architecture, and provided a revised product for review. At that time, it appeared that the City Council was generally acceptable of the architectural submittal; however some concern was raised and it was noted that the City may ask for additional architectural enhancements. Upon receipt of revised architectural renderings, Staff has noted to the Developer continued concerns with proposed architectural renderings based on previous feedback. Staff would recommend that additional architectural enhancements be provided as a contingency for recommendation for approval. These standards would also be reviewed by the City Council on February 12th.

Title Objections

The Developer has requested that the HRA clear certain title objections to Outlot C. The Developer is working with the HRA's legal counsel, Mr. Tom Bray, at the Developer's cost. It is anticipated that these objections will be resolved.

Housing Assistance Policy

The City Council previously directed Staff as part of this request to develop a Housing Assistance Policy to assist the HRA and City Council in ranking and prioritizing requests for financial or other assistance from housing developers. Staff is still in early stages of developing this draft and anticipates completion in 2013. If the HRA desires, Staff can reprioritize and make development of this policy a priority in the first quarter of 2013.

Staff has a framework prepared, utilizing a scoring system similar to the MHFA scoring spreadsheet, tailored to the requests on a policy level by the City Council. The format is proposed to also follow the City's Business Subsidy Policy, in terms of structure, with content tailored to the needs of the Housing Assistance Policy.

Staff has forwarded this request in advance of adoption of said policy due to timing constraints and previous direction and approvals, such as execution of the Preliminary Agreement to Develop.

Alternatives

The first alternative is to convey Outlot C to the Developer as requested. This alternative will allow the project to move forward as originally proposed. The City will receive benefit in terms of utilization of existing infrastructure currently unused and in various stages of deterioration. The City will receive fifty (50) housing units to its housing stock. These housing units are located within one-half mile of the Northstar Commuter Rail - Ramsey Station (another element awarding additional MHFA Points to the Project), and is anticipated to add ridership to that system. The City will also receive an important transportation connection north of Bunker Lake Boulevard, which will also improve connectivity (pedestrian and automobile) from the Town Center Gardens area to The COR (including North Commons and the Ramsey Station). The Developer has also agreed to relocate the driveway access for City Well #4 off Bunker Lake Boulevard to Town Center Drive, increasing the safety of access for City Staff to that well. The Project also provides housing for potential employees of the City's employment district, close to their place of employment.

The second alternative is to convey Outlot C in exchange for cash consideration. This alternative would reduce the points awarded by MHFA, and potentially result in the MHFA Award being terminated. The Developer has previously stated, as referenced in the March 13th, 2012 Work Session Minutes, that a local contribution is likely critical to a successful MHFA award.

The third alternative is to deny the request to convey Outlot C. This alternative would likely result in the Project being terminated, as noted in the second alternative above.

Staff recommends that the HRA adopt a resolution to convey Outlot C, RAMSEY TOWN CENTER 8TH ADDITION to The Seasons of Ramsey Limited Partnership as a local contribution as part of the MHFA Section 42 Tax Credit, subject to Final Plat and Site Plan approval by the City Council and contingent upon compliance with City architectural requirements.

All costs associated with processing the Application are the responsibility of the Developer.

Motion to adopt a resolution to convey Outlot C, RAMSEY TOWN CENTER 8TH ADDITION to The Seasons of Ramsey Limited Partnership as a local contribution as part of the MHFA Section 42 Tax Credit, contingent on Final Plat and Site Plan approval by the City Council and contingent upon compliance with City architectural requirements.