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HomeMy WebLinkAbout2016 [04] Apr 20 [Joint with CC] April 20, 2016 Page 1 of 2 Pursuant to due call and notice thereof,the St.Joseph City Councii and St.Joseph Economic Development Authority met in special session on Thursday April 20,2016 at 5:00 PM in the St.Joseph City Hall. City Council Members Present: Mayor Rick Schultz. Council Members Dale Wick, Bob Loso({eft at 5:28 PMj, Matt Killam, Renee Symanistz. Absent: Matt Killam EDA Members Present: Chair Daie Wick. Board Members Larry Hosch, Gary Osberg, Rick Schultz, Doug Danielson. Citv Representatives Present: City Administrator Judy Weyrens, Finance Director Lori Bartlett, Community Development Director Therese Haffner Others Present:Jason Aarsvold, Ehlers Investment Partners, Brian Kelm,Country Manor,Tom Opaiz, Fortitude Senior uving of St.Joseph Chair Dale Wick and Mayor Rick Schultz called the Joint St. Joseph City Council and Economic Development Authority meeting to order at 5:04 PM. Public Comments: No or►e present wished to speak. Aaenda Aoprovaf: Schultz made a motion to approve the agenda, removing the consent agenda, seconded by Danielson and passed unanimously by those present. Count►y Manor—Tax Abatement:Weyrens stated that previously Country Manor had approached the EDA about utilizing either Tax Increment Financing or Tax Abatement. Based on information provided by Jason Aarsvold, City Financial consultant, it was determined that the project would not qualify for TIF, but it would for Tax Abatement. At that time Country Manor had a different builder and did not have final plans. At this time property has besn purchased and preliminary plans have been developed. At this time, County Manor is requesting approval from the City Council and EDA to utilize Tax Abatement. Financial Consultant Jason Aarsvold approach the Joint Board to discuss the proposed use of financial incentives. Aarsvold indicated that Country Manor was seeking Tax Abatement to fifl a financing gap in the amaunt of 1.4 million dollars. The proposed development is for senior housing and the first phase would include 60 independent units,24 memory care units and 12 patio homes. Chair Wick requested clarification as to what action is being requested of the Joint Board, is it approval of the amount of abatement or approval to continue through the process. Weyrens stated that the action on this meeting is requesting to use Tax Increment Financing and continue with the process. Aarsvold stated that based on the preliminary application, a gap does exist and the project does qualify for financial assistance. TIF I not an option for this project as in order for housing to qualify for TIF,a minimum of 20%of the housing must serve the low to moderate income residents. It is his understanding this project will not meet those qualifications; therefore,tax abatement is the only financial tool that would be applicable. Aarsvold stated that with Tax Abatement,the County and School are not required to participate,whereas with TIF they are. Weyrens stated that staff will be meeting with both Stearns County and District 742 requesting participation in the abatement request. She also clarified that the City only utilizes pay-as-you-go assistance so there is not a financia{risk to the City. Loso questioned Aarsvold how it is determined if there is a gap and the amount of the project gap. Aarsvold stated they review the applicant's proforma and review the amount of private money invested and then compare to the total project costs. The difference between the revenue and project cast is the gap. Hosch questioned the mixed use and if the tax abatement includes the single family patio homes illustrated on the preliminary plans. Brian Kelm, Country Manor clarified that they are not seeking assistance for the construction of the patio homes. The patios homes will mast likely be a separate contractor, individually owned April 20,2016 Page 2 of 2 EDA ACTION Osberg made a motion to approve the utilization of Tax Abatement for Country Manor,scheduling the required hearings. The motion was seconded by Danielson and passed unanimously. CITY COUNCIL ACTION Wick made a rootion to approve the utilization of Tax Abatement for the Country Manor project for an amount to be determined based on the recommendation of the financial consultant and authorize the setting of the public hearing for a date to be determined. The motion was seconded by Symanietz and passed unanimously by those present. Fortitude Senior Livina of St.Josenh-Tax Increment Financina:Weyrens stated that she has received a request for utilization of Tax Increment Financing for a project entitled Fortitude Senior Living. The developer is Tom Opatz ant the proposal includes a 45 unit three story apartment building that aHows for aging in place. Developer Tom Opatz approached the Joint Board and stated that he purchased a parcel of tax forfeited land in Graceview Estates with the anticipation of building an aging in place apartment building. Unlike the Country Manor project,20 percent of the units will be dedicated for the low to moderate income. Therefore,ten of the units would be for the elde�ly waiver program for low income, which would meet the test to allow Tax Increment Financing. Aarsvold said they review financials just like with tax abatement but go through the but for test.7he TIF process is much mo�e extensive.TIF can extend up to 26 years and would be pay as you go as well. Osberg asked what the amount would be.Aarsvold said the request was for 26 years and has been annualized and amounts to about$60,000 annually.Aarsvold indicated that preliminary findings show there is a need. EDA ACTION Danielson made a motion to approve the utilization of Tax Increment Financing for Fortitude Senior Living,scheduling the required hearings. The motion was seconded by Schultz and passed unanimously. CITY COUNCIL ACTION Wick made a motion to approve the utilization of TIF far the Fortitude Housing project for an amount to be determined based on the recommendation of the flnancial consultant and authorize the setting of the public hearing for a date to be determined. The motion was seconded by Symanietz and passed unanimousfy by those present. EDA Director Reports Lodping Tax: Weyrens stated that the proposed ordinance wouid be brought forward and wouid be similar to Waite Park's. Julie Lunning with the St. Cloud Visitors Bureau can come to a future meeting fo discuss options. Development Updates:Weyrens said there continues to be interest in investing in St.Joseph as another senior facility has expressed interest as well as a specialty retail. In addition,the City Oifice staff continues to receive inquires for contact information for the senior projects. d'ourn: Danielson made a motion to adjoum at 5:33 PM;secanded by Hosch and passed unanimously. � Therese Haffner Community Development Director