2018.03.07 EDC - Laserfiche WebLink

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• Rents under a 4% tax credit project are set as affordable at or below 60% AMI (area median income). Developers believe market rents in our area are comparable to the affordability criteria under the 60% AMI already. • Market rate multi-family may be viable, but the construction costs per square foot exceed market rents in the area. New construction costs are over $2/SF with market rate rents in the area at approximately $1.80/SF. TIF, grants or land write-down could close this gap. • Most developers are not concerned about competing projects in Arden Hills, Roseville, or Shoreview, especially on the affordable projects, due to high demand. • Dominium shared that units priced at 60% AMI are most cost effective for their model of new construction, and for every 10% reduction in AMI (so going from 60% AMI to 50% AMI) comes a needed public subsidy of an additional $35,000/unit. • Demand remains for the townhome product Pulte built in The Enclave at New Brighton Exchange. The average sale price of these units was approximately $300,000. • Land likely could sell between $5,000/unit - $15,000/unit, depending on product-type and other financial details. Learning what we’ve learned thus far, the City will likely need to create a TIF district to realize an affordable project, a market rate project, and even owner-occupied units. However, the length the district would need to be open to repay the City’s investment and/or provide additional subsidy varies greatly across product-types. Following in-person meetings with developers, staff sent emails to the 12 interested developers on March 1, 2018, asking for the following information: • A written narrative explaining what would be proposed to be built, timing of construction, typical development amenities, and level of interior and exterior finishes, • A concept site plan depicting what property would be requested (all or only a portion) and how the developer would envision laying building(s) out on the site, • A rough idea on what the developer would propose paying for the land, and • Funding sources and funding gap requests. This information is being requested by March 26, 2018. The intent is to review received proposals internally by the end of March, then with the EDC on April 4, 2018. The EDC will be tasked with making a recommendation on a development partnership for Council consideration later in April. Staff will prepared to address questions regarding the information contained in this memo and advises the Commission to review this information and provide any feedback for group discussion.