2021.10.26 CC Packet - Laserfiche WebLink

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VI. Business Items A. Financial Needs, Analysis for proposed Tax Increment Financing Redevelopment (TIF) District No. 35 (US Bank Redevelopment Project) Michaela Huot, Baker Tilly representative, provided the EDC with an annual review on the City's TIF financing, provided a summary on the fundamentals of TIF, and described the City's existing TIF districts. The value growth in the TIF districts was reviewed, along with current property market value. Ms. Huot explained the City of New Brighton received an application from North Shore Development Partners requesting financial assistance through Tax Increment Financing (TIE) to assist with financing redevelopment of the former US Bank building located at 2299 Palmer Drive. As part of the project the developer is proposing that 14 of the units (approximately 10%) will be affordable to occupants with incomes no greater than 60% median income. TIF is requested to support these affordable units and to help with some extraordinary development costs like demolition. The developer has identified TIF-eligible expenditures equaling approximately $5,422,000 (breakdown included in the report). Staff's financial analysis of the project has identified approximately $2,650,000 of eligible expenditures that could be considered 'extraordinary' to the project and a barrier to redevelopment occurring. Based on current tax increment projections, we estimate it would take approximately 9 to 11 years of increment collections to repay staff's identified costs. If approved for TIF, the developer would finance the total development costs of$33 million upfront and would be reimbursed for a portion of those costs on an annual basis using future tax increment revenues. Discussion included: • The Commission recommended a cost certification be completed on the proposed costs for the building demolition and budget for the project. • Extraordinary and eligible costs for the project were more clearly defined. • Staff discussed the Mixed-Use Regional land use with the Commission and described the uses that were allowed. • The Commission suggested potential mixed use be considered for the US Bank development. • The Commission appreciated there would be some level of affordability within the proposed housing project. • Staff discussed the differences between City funded TIF versus a pay as you go note. Motion by Commissioner Fynewever, seconded by Commissioner Pledger to recommend the City Council move forward with a TIF District in an amount not to exceed $2.65 million for the US Bank Redevelopment project as recommended by staff. Approved 7-0