7.5.
CC Regular Session
- Meeting Date:
- 09/22/2015
- Submitted For:
- Patrick Brama
- By:
- Patrick Brama, Administrative Services
Information
Title:
Consider Request from PSD LLC for a Housing Subsidy
Purpose/Background:
PURPOSE
Consider the attached request from PSD LLC to apply for a $500,000 subsidy to support the construction of a 121 unit apartment complex located within The COR.
BACKGROUND (PSD LLC/ Proposed Development)
PSD LLC is a significant land owner and well established developer in the City of Ramsey. PSD LLC recently purchased about 15 acres of City owned land located within The COR for $1.89M. It is proposed, PSD LLC will develop their new property in three phases. The first phase of their development is proposed to be a 121-unit market rate apartment complex.
The proposed apartment complex will feature a tuck-under heated and secured parking on half of the first floor, quality entrance area (fire place, couches, chandeliers), high quality detached garages, a small park (including a playground), a community garden, a mix of 1-2-3 bedroom apartments, a full size workout facility, quality community grills/ patios/ seating, community room/ game room, and quality interior design (granite counter tops, granite window sills, wood blinds, vinyl plank wood floors, stainless steel appliances, quality solid-wood cabinetry design, full-size in-unit washer/ dryers, triple pane high energy efficiency windows, garbage chutes). The proposed project will front The Draw park along Ramsey Parkway, and will comply with the City's zoning regulations (i.e. architecture).
PSD LLC estimates the first phase of their development, a 121-unit apartment complex, is nearly a $20M investment. Attached to this case is the most recent site plan and visuals of the proposed apartment complex.
BACKGROUND (Assistance Request)
PSD LLC has experienced an unanticipated hike in project costs; and feels City assistance is needed in order to move the proposed project forward. PSD LLC is confident they can prove a financial gap exists in their pro-forma and was willing to have a third party underwrite their project (Ehlers); including paying the required $7,000 fee. Staff accepted a complete application from PSD LLC on September 10.
Consider the attached request from PSD LLC to apply for a $500,000 subsidy to support the construction of a 121 unit apartment complex located within The COR.
BACKGROUND (PSD LLC/ Proposed Development)
PSD LLC is a significant land owner and well established developer in the City of Ramsey. PSD LLC recently purchased about 15 acres of City owned land located within The COR for $1.89M. It is proposed, PSD LLC will develop their new property in three phases. The first phase of their development is proposed to be a 121-unit market rate apartment complex.
The proposed apartment complex will feature a tuck-under heated and secured parking on half of the first floor, quality entrance area (fire place, couches, chandeliers), high quality detached garages, a small park (including a playground), a community garden, a mix of 1-2-3 bedroom apartments, a full size workout facility, quality community grills/ patios/ seating, community room/ game room, and quality interior design (granite counter tops, granite window sills, wood blinds, vinyl plank wood floors, stainless steel appliances, quality solid-wood cabinetry design, full-size in-unit washer/ dryers, triple pane high energy efficiency windows, garbage chutes). The proposed project will front The Draw park along Ramsey Parkway, and will comply with the City's zoning regulations (i.e. architecture).
PSD LLC estimates the first phase of their development, a 121-unit apartment complex, is nearly a $20M investment. Attached to this case is the most recent site plan and visuals of the proposed apartment complex.
BACKGROUND (Assistance Request)
PSD LLC has experienced an unanticipated hike in project costs; and feels City assistance is needed in order to move the proposed project forward. PSD LLC is confident they can prove a financial gap exists in their pro-forma and was willing to have a third party underwrite their project (Ehlers); including paying the required $7,000 fee. Staff accepted a complete application from PSD LLC on September 10.
Notification:
NA
Observations/Alternatives:
Attached to this case are a number of observation documents.
The PSD LLC application was underwritten from two separate perspectives. (1) Financially. Is the PSD LLC reasonable and justifiable? Please see attached MEMO from Ehlers. (2) Qualitatively. How does the proposed PSD LLC request relate to the City's housing assistance policy? Please see attached "Staff Scoring" document.
The PSD LLC application was underwritten from two separate perspectives. (1) Financially. Is the PSD LLC reasonable and justifiable? Please see attached MEMO from Ehlers. (2) Qualitatively. How does the proposed PSD LLC request relate to the City's housing assistance policy? Please see attached "Staff Scoring" document.
The attached "Staff Notes" document provides a mix of qualitative and financial perspectives on the PSD LLC request.
Staff Notes (attached):
(1) Can PSD LLC justify a financing gap actually exists?
(2) Is this request reasonable in comparison to other projects in the TC Metro?
(3) Financially, does this request make sense for the City of Ramsey?
(4) Does the City have reasonable funding source available for the requested assistance?
(5) How does this compare to the City's Housing Assistance Policy?
(6) Outside of question #3, how does this project help the City of Ramsey?
(7) What happens if this project doesn't move forward now?
(8) Why wouldn't the City consider the assistance request?
(9) What amenities does this project include?
(10) Why not tell PSD LLC to simply add more equity to the project to fill the gap?
(11) How does the timing of this request work with construction/government regulations?
Funding Source:
Subsidy Application, PSD LLC
Assistance, TIF District #14
Assistance, TIF District #14
Recommendation:
Please see observations section for Staff comments (and attached "Staff Notes" document).
The EDA reviewed this case on 09/17. In summary, they were in favor of drafting a TIF Agreement for $500,000 of pay-go assistance to PSD LLC.
The EDA reviewed this case on 09/17. In summary, they were in favor of drafting a TIF Agreement for $500,000 of pay-go assistance to PSD LLC.
Action:
Motion to (direct or do not direct) staff to draft a TIF Agreement with PSD LLC for $500,000 subsidy.
Attachments
- PSD LLC Request Letter
- PSD LLC Housing Subsidy Application
- Staff Notes
- Ehlers MEMO
- Staff Scoring of PSD LLC Housing Subsidy Application
- Layout and Visuals
- Funding Source (Why TIF)
- EDA Meeting Minutes DRAFT 09172015
Form Review
| Inbox | Reviewed By | Date |
|---|---|---|
| Brian Hagen | Tim Gladhill | 09/17/2015 03:09 PM |
| Kurt Ulrich | Jo Thieling | 09/17/2015 03:10 PM |
- Form Started By:
- Patrick Brama
- Started On:
- 09/02/2015 11:25 AM
- Final Approval Date:
- 09/17/2015