Consider Request from PSD LLC for a Housing Subsidy

PURPOSE
Consider the attached request, and application, from PSD LLC for a “housing subsidy” to support the construction of a 122 unit apartment complex located within The COR.

BACKGROUND (PSD LLC/ Proposed Project)
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 planned to be a 122-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 122-unit apartment complex, is a nearly $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 was confident they could 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.


 

NA

Attached to this case are a number of observation documents.

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?

The PSD LLC application was underwritten from two separate perspectives.  If you would like to review, please see attached MEMOs.


 

Anoka County HRA/ EDA account or TIF #14.

Please see attached "Staff Notes" document.

Motion to recommend the City Council:
(direct or do not direct) staff to negotiate a business subsidy agreement with PSD LLC for $500,000 subsidy.

NOTE: staff is finalizing a recommendation on the funding source.  It will be ready for the City Council.