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98-422ORIGlNAL Council Eile # a 4 aa Green Sheet # �'7'�-S(p si Presented By Re£erred To Committee: Date RESOLUTION OF THE C'ITY COUNCII. OF Tf� CITY OF SAINT PAUL APPROVING (A) A MULTIFAMII,Y RENTAL HOUSING DEVELOPMENT PROJECT FOR THE ELDERLY AND A HOUSING PROGRAM T`HEREFORE, AND AU7'HORIZING THE HOUSING AND REDEVELOPMENT AUTHORITY TO EXERCISE THE POWERS GRANTED IN NIINNESOTA STATIJ'i'ES, SECTION 462C.01 TO 462C.08 IN CONNECT'ION THEREWIIT3; AND (B) T'I� CREATION OF THE SUPERIOR STREET COTTAGES HOUSING TAX INCREMENT FINANCING DISTRICT AND TFTE TAX INCREMENT FINANCING PLAN RELATING THERETO BE IT RESOLVED by the Council of the City of Saint Paul, Minnesota (the "Council'�,as follows: 2 Secfion 1. Recitals 3 1.01. On August 6, 1996, the Council adopted its Resolufion C.F. No. 96-891 approving a loan of 4 STAR funds in the amount of $400,000 to Superior Street Cottages, LLC, (the "Developer'�, for the 5 purposes of fuiancing the acquisition, construction and equipping of a 23-unit multifamily rental 6 housing facility for the elderly (the "FrojecP') in the City of Saint Paul (the "City"). 7 1.02. The Housing and Redevelopment Authority of the City of Saint Paul (the "HRA") has also 8 passed a resolution authorizing a loan of $245,929 of UDAG repayment funds to the West 7th/Fort 9 Road Federation for the purposes of making a loan to the Developer, and a$753,000 HOME loan to 10 the Developer. 11 1.03. Minnesota Statutes, Chapter 462C (the "Housing AcP') confers upon ciries, or housing and 12 redevelopment authorities authorized by ordinauce to exercise on behalf of the City the powers 13 conferred by the Housing Act, the power to issue revenue bonds to finuice a progrun for the putposes 14 of planniug, aduiinistering, making or purchasing loans with respect to one or more mulrifamily 15 housing developments within the boundaries of the City. 16 1.04. The I�ZA has received from the Developer, a Muuiesota limited liability company, a proposal 17 thax the HRA undertake a progr�n (the "Program") to finance the Project, through the issuance of 18 revenue bonds or obligarions in one or more series (the "Bonds") pmsuant to the Housing Act and the 19 TIF Act, as defined below. 20 1.05. The City desires to encourage the development of housing facilities desi�ed for occupancy �� v � 1 � 21 primarily by elderly persons within the City and enwurage the development of under-utilized land 22 within the boundazies of the City; and the Project will assist the City in achieving these objectives. 23 1.06. A public hearing on the Progaui and the issvance of Bonds for the Project was held by the City 24 Council on May 13,1998, followivg duly published notice, at which time all persons that desired to 25 speak were heard. 26 1.07. In connection with the Project, it has also been proposed tha# the HRA establish the Superior 27 Street Cottages Housing Tax Increment Financing District (the "District") and, in connection 28 therewith that the City approve the creation of the IJistdct and the Tax Increment Financing Plan (the 29 "TIF Plau � relating thereto, all pursuant to and in accordance with Miunesota Statutes, Section 30 469174 tbrough 469.179, inclusive (the "TIF' AcP�; and that the HRA create a housing development 31 project pursuant to and in accordance with Minuesota Statutes, Sections 469.001 through 469.047, 32 inclusive (the "HI2A AcP�. 33 1.08. The I3RA has investigated the facts and has caused to be prepazed the proposed TIF Plan. 34 1.09. The HItA and/or the City, as applicable, have performed all acfions required by law to be 35 performed prior to the adoption of the Progrun, the establishment of the District and the adoption of 36 the TIF Plan, including, but not limited to delivering a copy of the Progr�uil to the Metropolitan 37 Council for their review and notification of Rauisey County and School District No. 625 ha�ing 38 taxing jurisdiction over the properiy to be included in the Dishict, and the holding of public hearings 39 after published notice as required by the TIF Act and the Housing Act. 40 1.10. Certain written reports (the "Reports") relating to the TIF Plan and to the activities 41 contemplated therein have heretofore been prepared by HRA and City staff and submitted to the 42 Council, the Board of Commissioners of the I�2A and/or made a part of the City or HRA files and 43 proceedings in connecrion with the Project. The Reports include data, information and/or 44 substantiation constituting or relating to the basis for the findings and determinations made in this 45 resolution. The Council hereby confulns, ratifies and adopts the Reports, which aze hereby 46 incorporated into and made as fully part of this resolution to the same extent as if set forth in fiill 47 herein. 48 Section 2. Approval of Housiu�Proarani and Authorization for I3RA to enter into Memorandum of 49 Understanding and to Exercise Powers. 50 2.01. The City hereby approves the Progcain for the fuiancnig of the Project and, pursuant to Section 51 72 of the Saint Paul Admiiustrative Code, authorizes the F3IZA to (i) exercise the powers granted in 52 Minnesota Statutes, Sections 462C.01 to 462C.08 for the purpose of financing the Program and (ii) 53 enter into a Memorandum of Understanding with the Developer in connection with the Project. 54 2.02. Neither the HRA nor the City shall be liable on the Bonds issued pursuant to the Program, and 55 the Bonds shall not be a debt of the HRA or the City within the meannig of any state constitutional 56 provision or statutory lnnitation, and will not constitute or give rise to a charge against the general 57 credit or taxuig power of the City or the I II2A or a pecuniary liability of the City or the III2A, nor 58 shall the Bonds be payable out of any funds or properiy other than those provided as security 59 therefore. 60 2.04. The issuance of the Bonds shall be subject to final detenuination by the HRA of the terms and �� 61 conditions of the Bonds, and neither this resolution nor any new resolution of the HRA shzll 62 constitute an urevocable commitment on the part of the City or the I3I2A to issue the Bonds. 63 Section 3. Findings bv the City far the A�proval of the Tas Increment Financin� Plan for the Su�erior 64 Street Cotta�es Housin� Tax Increment Financin� District. 65 3.01. The Council hereby finds that the District is a housing district pursuant to Muuiesota 66 Sfahrtes, Section 469174, Subd. 11. 67 3.02. The Council hereby finds that the District, and the approval of the TIF Plan relating 68 thereto, aze intended and, in the judgment of this Council, the effect of such acrions will be, to 69 provide an unpetus for housing development in the District and to further the public purposes and 70 accomplish certain objectives as specified in the TIF Plan. 71 3.03. The Ciiy does not elect to compute the t� increments in accordance with Muuiesota 72 Statutes, Section 469.177, Subd. 3, ciause (b), meaning that tas increments wiil be detern 73 before the application of the fiscal disparities provisions of Mivnesota Statutes, Chapter 473F. 74 3.04. As a qualified housing district within the meaning of Minnesota Statutes, Section 75 273.1399, subd. 1, the District is not subject w the state aid losses set forth in Section 273.1399. 76 3.05. The Council further fmds, declares and detemunes that the City made the above 77 findings stated in pazagraphs 3.01 flu�ough 3.03 above and has set forth the reasons and supporting 78 facts for each det�+ination in writing, attached hereto as Attackunent A. 79 Section 4. A�proval of the TIF Plan and Further pocumentation. 80 4.01. The TIF Plan, as presented to the Council on this date, is hereby approved and 81 adopted, and shall be placed on file in the office of ttte Executive Director of the FII2A. 82 4.02. The staff of the City, the City's advisors and legal counsel aze authorized and directed 83 to cooperate as necessary with the I�2A in the unplementation of the Plan and for tlus purpose to 84 negotiate, draft, prepare and present to this Council for its consideration a11 fiu�ther plans, resolutions, 85 documents and contracts which may be deemed necessary for this purpose. 86 4.03. The auditor of Ramsey County is requested to certify the original net tax capacity of 87 the Disirict, as described in the TIF Plan, and to certify in each year thereafter the amount by which 88 the original net tax capacity has increased or decreased; and the I is authorized and directed to 89 forthwith transmit this request to the counry auditor in such form and content as the auditor may 90 specify, together with a list of all properties within the District for which building permits have been 91 issued diuin� the 18 months immediately preceding the adoption of trus resolution. 92 Section 5. Desia�afion of Bond CounseL Leonard, Street and Deinard is hereby retained as 93 Bond Counsei for the issuance of the Bonds, and Norwest Investment Services, Inc. is selected as the 94 investment banker for the Bonds. Leonard, Street and Deinard and Norwest Inveshnent Services, Inc. 95 aze hereby authorized to assist in the preparation and review of necessary documents relating to the 96 Project and the Prograui therefore, and the creation of the TIF' District, to consult with the City 97 Attorney, Developer and Purchasers of the Bonds as to the maturities, interest rates and other temvs �.�,y 98 and provisions of the Bond and as to the covenants and other provisions of the necessary document�n � � 99 and submit such documents to the FIRA for final approval. �� 100 Section 6. Ratification of Prior Actions. All activities previously undertaken by I IRA and 101 City staff in preparing and finaliziug the TIF' Plan and the Program, in forwazding the TIF Plan to the 102 appropriate ta�cing jurisdiction including Rawsey County and Independent School Dislrict No. 625, 103 and forwazding the Program to the Metropolitan Council, are hereby ratified and aff.umed. i o4 Arrac�IIv�.rrT a d�� t��`� 105 RESOLUTTON # � 106 The reasons and facts supporting the findings for the adoption of the Tas Increment 107 Financing Plan (the "Plan") for the Superior Slreet Cottages Housing TaY Increment Pinancing 108 Dishict (the "District") as required pursuant to Minnesota Statutes, Section 469.175, Subdivision 3 109 aze as follows: 110 111 112 113 114 115 116 117 118 119 120 121 122 123 124 125 126 127 1. Finding that the District is a housing district as defined in Minnesota Stc�tutes, Section 469.174, Subc1 11. The City finds that the District is a housing district pursuant to Minuesota Statutes, Section 469.174, subd. l l because (i) the Project is intended for occupancy, in part, by persons or families of low and moderate income, as defined in Mivuesota Statutes, Chapter 462A, Tifle II of the National Housing Act of 1934, the National Housing Act of 1959, the Unitecl States Housing Act of 1937, as amended, Tide V of the Housing Act of 1949, as amended, other similar federal, state, or municipal legislafion, and the regulations promulgated under any of those Acts; and (ii) fair market value of the improvements which shall be conshucted for commercial uses or for uses other than low and moderate income housing consists of not more than 20°/a of the total fair mazket value of the planned improvement in the development plan or agreement. Specifically, at least 40% of the units in the Project will be occupied by individuais whose income is 60% or less ofthe area median gross income, adjusted for family size. In addition, the City finds that the District meets the requirements of the housing dishict pursuant to Miimesota Statutes, Secrion 469.176, subd. 4(d) because 100% of the revenues derived from the tas increments from the Dishict will be used to finance the cost of the housing project as defined in Section 469.174, subd. 1 i, including the cost of public improvements directly related to the housing project and the allocated administrative ea�aenses of the HRA or the City. 128 In addition, the City finds that the District meets the requirements of a housing district pursuant to 129 Mirnzesota Statutes, Secfion 469.1761, subd. 1 and subd. 3 because, for the duration of the Distaict, 130 either (i) the Project will satisfy the income requirements for a qualified residential rental project as 131 defined in Section 142{d) of the Internal Revenue Code, or (ii) at least 50% of the residential units 132 in the Project will be occupied by individuals whose income is 80% ar less of area median gross 133 income. 134 2. Finding that the Tax Increment Financing Ptan conforms to the general plan for the 135 development or redevelopment of the municipality as a whole. 136 The proposed Project has been reviewed by the Metropolitan Council and the Metropolitan Council 137 has determined that the Program fixrthers local and regional housing policies and is consistent with 138 the Metropolitan Development Guide, and that the Prograui is comparible with the housing portion 139 of the comprehensive plan of the City. 140 3. Finding that the Taz Increment Firaavtcing Plan for the District will afford maximum 141 opportunity, consistent with the sound needs of the City as a whole, for the development of the 142 District by private enterprise. 143 The establishxnent of the District will result in the facilitation of the development of affordable �' �� 144 multifamily housing for the elderly in Saint Paul. 145 146 4. Finding that the City does not elect to compute the tcrc increment in accordance with Minnesota Statutes, Section 469.177, subdivision 3, clause (b). 147 The failure to elect to calculate increments in accordance with the above referenced statute 148 results in a greater amount of increment to be captured from the District, which will facilitate 149 the financing of the Project. ORCG1NAl. Nays Requested b�ep�rtment oi: Plannin Economic De elo� ent By ('� '1 Adopted by Council: Date (V��\V93' Adoption Certified by Council Secretasy By: Approved Z By: cil Form Ap� r e by Cit ttorney By: qr-ya�� Allen Carlson 266-6616 May 13, 1998 TOTAL # OF SIGNATURE PAGES 1 No 64256 u oerµ�rortwtoR �_ � a.rcw.c� _ 0 � ��.�❑ arv.r.owtY rnvamc _ ❑warsuu.amur.ESOUt ❑wuur��mninctrc G 4❑ Wn,R�ae,worr,p 1❑ Kimberlv / (CLIP ALL L TIONS SIGNATURE) ��SNUU'CT""A PIIBLIC HEARING to coxisider adoption of the attached resolution which: 1. Establishes the Superior Street Cottages Aousing Tax Increment District and Ta�c Incremen Financing Plan 2. Authorizes the HRA Board to issue up to $1,400,000 of tax exempt 501(C)(3) revenue bonds to finance the construction of a 23 unit senior rental development 3. Authorizes staff enter into a memorandum of understanding with developer which states te and conditions towards final approval and issuance of bonds. (see attached memo for details PL4NNING CAMMISSION CIB COMMITTEE CIVIL SERVICE COMMISSION Has this person/firtn everMOrlced untler a conhact for Mis deparGneM� YES NO Has fhis persoNfi�m eexr been a city empbyeeT YES NO Does this persanlfirm possess e sitill rwt npmallyposse&sed by any curtent city employee? VES NO is Mis D�soMrtn atargetetl vsndoR YES NO %ain ail ves answers on seoa2te sheet and attach to areen sheet West ?th/Fort Road Federation and Lyngblomsten Services, Inc, propose to construct a 23 unit senior reatal development at Duke and Superior Streets. City Council has approved a$400,00 STAR loan zad HRA has approved a$753,000 loan using HOME funds and loan of UDAG Repayment funds in the zmount of $245,929 to the project. The $1,400,000 of bond proceeds will complete the financing of the project. However, in order to have sufficient revenues to rep y the debt on the bonds a housin tax increment district mu t -- - -- --- 4NTAGESIFAPPROVED increments generated from the district wi11 go towards repayment of the bonds. The City will add to its sock of afffrodable senior rental housing. �'" �� ' i .°€- IFAPPROVED The City will possibly fore-go increased property ta�ces should the progerty be developed The proposed project is not financially feasible without tax increment financing. AMOUNT OF TRANSACTION f_ _ N�A �.# INFORMATION (IXPWM �{A� 41998 COSNREVENUEBUOGETED(CIRCLEON� YES NO ACTNITY NUMBEft �� '�� ; � ,,. r �, � DEPAR"1'MENT OF PLANNING & ECONOMIC DEVELOPMENT Pamela Wheefock Oirector CTTY OF SAINT PAUL Norm Coleman, Mayor T�: FROM: Council President Bostrom Councilmember Blakey Councilmember Harris Councilmember Benanau Councilmember Lantry Councilmember Reiter Councilmember Coleman Allen Carlson � 25 Wes[ Fourth Saeet Saint Paul, MTI SS102 q�-y}� TeZephone: 612•266-6700 Facsimile: 6T 2 228-3220 SUBJECT: May 13,1998 City Council Public Hearing regarding Establishment of the Superior Street Cottages Housing Tax Increment Financing District, Approvai of Tas Increment Financing Plan, Approval of Housing Plan and Preliminary Approval to Issue 501(c)(3) Multifamily Revenue Bonds DATE: April 28, 1998 Purpose The purpose of this report is to request the City Council to approve the attached resolution related to the development of the Superior Street Cottages elderly housing development to be located at the Northwest corner of Superior and Duke Streets in District 9: The resolution approves: A Housing Program pursuant to MN Statutes, chapter 462C which describes issuance of up to $1,400,000 of 501(c)(3) tas exempt revenue bonds (the `Bonds") to finance the acquisition and construction of a 23-unit senior rental housing development at the Northwest corner of Superior and Duke Streets (the "Project") by Superior Street Cottages LLC (the `Borrower"). 2. Preliminary issuance of up to $1,400,000 of 501(c)(3) tax exempt revenue bonds to finance the Proj ect and gives the Housing and Redevelopment Authority of the City of Saint Paul, Minnesota (fIRA) final authority to issue the Bonds. 3. Establishment of the 25 year Superior Street Cottages Housing Tax Increment Financing District (the "TTF District'� and Tax Increment Financing Plan (the "TIF Plan'�, in which the tax increments generated will be pledged to partially repay the Bonds. q8'-y��.- 4. Staff to enter into a memorandum of understanding with the Borrower which stipulates terms and conditians towazds the final issuance of the Bonds. 5. Leonard, Street and Deinard Professional Association as bond counsel and Norwest Investment Services, Inc. as investment banker for the Bonds. Before the above resolution may be approved, the City Council must open the meeting to the public for discussion regarding the approval of the Housing Program, establishment of the housing tax increment district and preliminary approval of the issuance of tax esempt revenue bonds. A notice of public hearing was published in the Saint Paul Pioneer Press on Apri128,1998 pursuant to NIN Statute requirements. It is also at this time that the County and School District may comment on establishment of the TIF District and TIF Plan. Background The West 7th/Fort Road Federation and Lynblomsten Services, Inc. formed the Superior Slreet Cottages LLC to construct the 23-unit Superior Street Cottages senior rental housing development at the Northwest corner of Superior and Duke Streets in District 9(the "ProjecP'). This is the site of the former Holm & Olsen nursery. The Project is comprised of 4 restricted- income one bedroom units, 3 market rate one bedroom units, 5 restricted-income two bedroom units and 11 market rate two bedroom units. The proposed gross monthly rents for the one and two bedroom restricted-income units is $504 and $644, respectively. The proposed gross monthly rents for the one and two bedroom market rate units is $675 and $795, respectively. The affordable units aze required due to federal funding provided to the project. The total estimated cost of the project is $2,898,554. The City Council adopted resolution No. 96-891 which authorized a loan of STAR funds in the amount of $400,000 to the Borrower. On November 26, 1997, the Housing and Redevelopment Authority (I�2A) adopted resolution No. 97-11/26-4 authorizing a loan of federal HOME funds in the amount of $753,000 and a loan of UDAG Repayment funds in the amount of $245,929 to the Borrower. The Borrower is investing $100,000 into the Project. As approved by the HRA Boazd, part of the STAR funds were disbursed in March to the Borrower in order to purchase the Project site. In order to complete the financing of the Project, the Borrower is requesting the HRA to issue up to $1,400,000 of 501(c)(3) ta�c exempt revenue bonds. The Bonds will be retired over a 25 year period and have an annual debt service requirement of appro�mately $102,000-$105,000 per year assuming an interest rate of biis%-63is% The Bonds will be primarily repaid from revenue from the Project. However, Project revenues wili only cover about 80%-85% of the annual debt service requirement. Therefore, the Borrower is also requesting the City Council to establish a housing ta�c increment financing district and approve a tax increment fivancing plan which will create tax increments that can be pledged to repay the Bonds. The boundary of the TIF District will be contenninous with the Project boundary. Housing tax increment districts aze not subject to state- aid penalties. The project will generate approxnnately $38,883 per year in real estate t�es of wl�ich approximately $26,17830,000 as captured increments may be used to repay the Bonds. Current real estate tases are appro�mately $6,700 per yeaz. The TIF district will be in effect for 98-yz�- 25 years or until the Bonds aze repaid, whichever is shorter. Attached is a copy of the TIF Plan which details the unpact upon the taxing jurisdicfions and addresses the statutory requirements showing that but for the establishment of the tas increment financing district and tax increment financing plan, the Project would not be financialiy feasible. Pursuant to Minnesota Statutes copies of the proposed TTF Plan were sent to the School District and County for comment April 13, 1998, thirty days prior to the CiTy Council's public hearing of the TIF Plan. Pursuant to Minnesota Statutes copies of the proposed TTF Plan were sent to the School District and County for comment April 13, 1998, thirry days prior to the City Council's public hearing of the TIF' Plan. In regazds to the issuance of the Bonds, neither the HRA or City shall be liable on the Bonds and the Bonds shall not be a debt of the HRA or City withiu the meaning of any state constitutional provision or statutory limitation, and will not constitute or give rise to a charge against the general credit or taxing power of the City or the HRA or a pecuniary liability of the City or the HR, nor shall the Bonds be payable out of any funds or properry other than those provided as security therefore. Recommendafion Staff recommends adoption of the attached resolution which: 1. Approves a Housing Program as required prior to issuance of Bonds. 2. Establishes the TIF District coterminous with the Project boundary and the TIF Plan to partially fmance acquisifion and construction of the Project from taY increments generated by the TIF District. 3. Authorizes the HRA to issue 501(c)(3) revenue bonds in an amount up to $1,400,000 to finance the Project. 4. Authorizes staff to enter into a memorandum of understanding with the Borrower which stipulates terms and conditions towards the final issuance of the Bonds. Authorizes Leonard, Street and Deinard Professional Associafion as bond counsel and Norwest Investment Services, Inc. as investment banker for the Bonds. Attachments 1. City Council Resolution 2. Housing Program Tax Increment Financing Plan for Superior Street Cottages Tax Increment Financing District The attached resolution is sponsored by Councilmember Coleman cc: Pamela Wheelock, 5usan Kimberly \�PED\SYS2\SHARED\CARLSOAP\WEST7FED\CC513.MQ�4 °I�- yz� CITY OF SAINT' PAUL, MINNESOTA PROGRAM FOR A MULTTFAMII,Y SENiOR HOUSING DEVELOPMENT (SUPERIOR STREET COTTAGES) Introductiou. This housing finance program (the "Program") under Minnesota Statutes, Chapter 462C (the "Ac�') describes the proposed issuance by the Housing and Redevelopment Authority of the City of Saint Paul, Minnesota (the "FIItA") of up to $1,400,000 of revenue bonds (the `Bonds") to fmance, in part, the acquisition and construction of a senior rental housing development for the eiderly (the "Project") by Superior Street Cottages, LLC (the "Borrower"). The Bonds will be revenue obligations, secured by the repayment obligation of the Borrower, mortgages and other security interests in property owned by the Borrower, and a first lien on tax increments (the "TaY Increments") to be derived from the Superior Street Cottages Housing TaY Increment Financing District (the "DistricP'), as described below. The Bonds will not be a general obligation of the City of Saint Paul, Minnesota (the "City") or the HRA, nor will any assets or revenues of the City or HRA be pledged to the payment of the Bonds other than as described above. Issuer. The issuer of the Bonds will be the HRA. Under Chapter 72 of the Saint Paul Legislative Code, the HRA is authorized to exercise the powers of the City under the Act upon approval by the City of the Program and delegation by the City to the HRA of those powers for the purposes of the Program. T� Increment District and Housing Development Project. In wnnection with the Project, the HRA will establish the District. The HRA has prepared a tax increment financing plan for the District, pursuant to Minnesota Statutes, Sections 469.174 through 469.179, as amended (the "TIF Ac�'). The TIF Act requires that a tax increment district be established within a"project azea". Therefore, the HRA will aiso create a"housing development projecP' within the meaning of Minnesota Statutes, Sections 469.001 to 469.047, as amended (the "I�2A Act"), and this Program constitutes the program required by Section 469.0171 of the IIRA Act. The boundaries of the housing development project azea, for purposes of the TIF Act, aze coterminous with the boundaries of the District, and are set forth on the map attached hereto as E�ibit A. Housing Plan and Program. This Program will be undertaken pursuant to the Act and the Aousing Pian of the City required by the Act. The Housing Plan, as amended, was adopted by the City in March of 1990. This Program will be adopted after review by the Metropolitan CouncIl, and a public hearing on the Program, held after notice is given, all as required by Section 462C.04 of the Act. The Program is consistent with both the Housing Plan (and other housing plans of the City developed under other laws), and is consistent with development guides applicable within the City and developed by the Metropolitan Council. Borrower. The bonower is Superior Street Cottages, LLC, a Mivnesota limited liability company, whose members aze initially Lyngblomsten Services, Inc. and the West 7th/Ford Road 1649786.01 HousrtigArogam qY -ya'' Federation. During the term of the Bonds the sole member of the Bonower will be Lyngblomsten Services, Inc. Project Superior Street Cottages will be a 23-unit rental housing project for the elderly. The Project will be newly constructed, with consttuction to begin shortly after the Bonds aze issued. The Project is a multifamily housing development within the meaning of Section 462C.05 of the Act. The Project will be a rental housing development, and will be designed and intended to be occupied primarily by the eiderly. The Project will be located on the northwest comer of Duke and Superior Streets in the City. The amount of Bonds attributable to the Project is expected to be appro�mately $1,400,000. The Project complies or will comply with all applicable building code, zoning and land use planning requirements. Need for the Project; Income and Rent Limitations. The development of the Project will provide needed additional rental housing opportuniries within the City for the elderly. Under the Act, and under Section 145 of the Internal Revenue Code of 1986, as amended, which will govem the Bonds, no income limits apply to residents of the Project. However, the TIF Act imposes certain requirements in connection with the creation of a housing taJ{ increment district, and in order to comply with such requirements, at least 40% of the units in the Project will be occupied by individuals whose income is 60% or less of the area median gross income, adjusted for family size. The statutory authority for various sources of subordinated financing also impose income or rent limits, or both, wluch may be more restrictive than the TIF' Act. The Project will comply with the most restrictive limitations. The Boirower, and any subsequent owner of the Project, will not azbitrarily reject an application from a proposed resident because of race, color, creed, religion or national origin, sex, afFectional preference, marital status, or status with regazd to public assistance or disability. Bonds. The FIItA will issue the Bonds, in one or more series, in an aggregate original principal amount of up to $1,400,000. Substantially all of the proceeds of the Bonds attributable to the Project will be applied to pay or reimburse for the costs of constructing, installing and equipping the Project. "Substantially all" means all of the proceeds of such Bonds, less amounts deposited in a debt service reserve fund or used to pay the costs of issuance of the Bonds. It is �pected that the Bonds will have a term of not more than 25 yeazs, and will mature serially or be subject to sinking fund payments, The Bonds will beaz interest �cludable from gross income for federal income tax purposes, and, to the same extent, �cludable from the gross and taxable net income of individuaLs, estates and husts for Minnesota ta�c purposes. The Bonds will be special, limited obligations of the fIRA, payable solely from (a) tas increment and (b) revenues provided by the Borrower under one or more revenue agreements with the HRA. The Bonds will be further secured by mortgages and other security interests in the property owned by the Botrower. The Bonds will not be a general obligation of the City ar the T3RA, nor will 1649786.01 . Housmg Rogam qK-yZS any revenues or assets of the City or HRA (other than those of the Borrower and the T� Increments) be pledged to the payment of the Bonds. The City or HItA may require the Borrower to provide evidence satisfactory to the City or HRA of the ability and inteution of the Borrower to complete the construction of the Project, and evidence satisfactory to the City or HRA of compliance with the standards and requirements for the making of the financing established by the I3RA, as set forth herein and in connection tkierewith, the City, the HRA or its representatives may inspect the relevant books and record of the Bonower in order to confum such ability, intenrion and compliance. In addition, the City or HRA may periodically require certification from the Borrower or such other person deemed necessary conceming compliance with various aspects of this Program. The provisions of this Program aze severable and if any of its provisions, sentences, clauses or pazagraphs shall be held unconstitutional, contrary to statute, exceeding the authority of the City or the HRA or othenvise illegal or inoperative by an court of competent jurisdiction, the decision of such court shall not afFect or impair any of the remaining provisions. The City shall not amend ihis Program, while the Bonds authorized hereby aze outstanding to the detriment of the holders of such Bonds. Adopted: May 13, 1998 1649786.01 3 Housv�g Pro�am qd' - y?'' . �: [Map of District and Project Area] 1644/86.01 A-1 xousmg Progmn ° � -y��- HOUSING AND REDEVELOPMENT AUT7 OF T'HE CTI'Y OF SAINT PAUL,IVIINNE TAX INCREMENT FINANCING PLAN SUPERIOR STREET COTTAGES HOU TAX INCREMENT FINANCING DLSTJ l�l Introduction A. Background The Superior Street Cottages Housing Tas Inc ment Financing Aistrict (the "District") shall consist of an approximately 86,900 squaze fo parcel located at the northwest corner of Duke and Superior Streets and formerly occu ed by the Holm & Olson Nursery (the "Property"), in the City of Saint Paul, County of Ramsey, State of Minnesota and legally described in Attachment A attached hereto and ' corporated in this plan. The Housing and Redevelopment Au rity of the City of Saint Paul, Minnesota (the "I-IKA") proposes a plan for the development of the strict consisting of the acquisition of land, demolition of struchu'es, and the consiruction of a 23- t low income rental housing facility for the elderly (the "Project") on the Properiy to be own by Superior Street Cottages, LLC, a Minnesota limited liability company. B. Creafion of This taY increment Subd. 11 of the Superior Sta C. Need and Street Cottages H�ousing Tas Increment District to the creation, under Minnesota Staiutes Section 469.174, Housing Taac Increment District (the."District"). " Purpose i. To incre the supply of adequate housing within the community for elderly persons of a11 in me levels including rental housing for seniors of low and moderate income. ii. To p vide such housing on land or in azeas which qualify as redevelopment projects wi emphasis upon lands potentially usefizl for contributing to the public welfare, but w ch by reason of special probiems or wnditions, haue not reached full development tential by the ordinary operations of private entetprise. iii./ carry out the provision of housing and development of underdeveloped lands within the City consistent with the general land use pian and other components of the City's Comprehensive Plan. Ta assist in the provision of rental housing to elderly persons of low and moderate income at prices or rents within their means and to make advance commitments to q�-y��- such rental assistance in low and moderate inwme units in order to assist in securing financing for housing improvements. v. To finance a portion of the development costs of the Project by m of ta3� increment generated by Project improvements and development. vi. To finance housing development by a combination of private an public financing under authority and subject to the requirements of federal, sta and local law and ordinance for the provision of revenue bond financing for hous" g purposes. It is necessary ihat the HRA exercise its powers under state law develop, impiement, and finance a program designed to encourage, ensure and facilitate the deve pment of affordable housing for its low- and moderate-income elderiy residents. The Project ' further accomplish the public purposes specified in this paragraph. I� area. A. Provide afforda6le housing for low- d moderate-income elderly residents of Saint Paul. As a result of an extensive neighborho review process confirmed by a market study conducted by M�eid Reseazch Group, the believes there is a mazket for tental housing for the elderly of the type being proposed for the Dis ct. B. � To redevelop The Property was of Interstate 35 and the r no longer a viable con deteriorated. Currently, to the public welfaze, as operations of private en�,@ C. It is increase by ; viousl,�"operated as a nursery and greenhouse. Due to� the extension ting�`oss of access to a commercial frontage road, the Property was rc�a1 property, and the buildings located on the Property had �ropezty is vacant. The construction of the Project will contribute Property has not reached its development potential by the ordinary the tax base of the City of Saint Paul. that the t�able mazket value of parcels an the taY increment district will ely $1,141,700 once the new housing facility is placed in service. 2 � D. Remove blight within Saint Paul. The Superior Street Cottages site is located in the West Seventh azea of Saint Paui e substandard buildings previously located on the property have been removed, and will be eplaced with a new 23-unit low income rental housing facility for the elderly, substantially ' oving the West Seventh area of St. Paul. III, Classification of the District The HRA and the City, in determining the need to create a tas incre ' t financing disUict in accordance with Section 469.1'J4, fmd that the District is a housing distri pursuant to Minnesota Statutes, Section 469.174, Subd. 11 because (1) the project which comp,- es the District is intended for occupancy, in part, by persons or families of low and moderate in me, as defined in Minnesota Statutes, Chapter 462A, Title II of the National Housing Act of 19 , the National Housing Act of 1959, the United States Housing Act of 1937, as amended, Title of the Housing Act of 1949, as amended, other similaz federal, state, or municipal legislation, the regulations promulgated under any of those acts; and (2) the fair mazket value of the impro� ments which shall be constructed for commercial uses or for uses other than low and moderate i me housing consists of not more than 20 percent of the total fair mazket value of the planned provement in the development plan or agreement. The fair mazket value of the impmvements �mprising the Project was determined using the cost of construction method of esumating maz 't value. At least 40% of the units wi11 be occupied by individuals whose income is 60°/a or s of the azea median gross income, adjusted for family size. f Tn addition, the District meets the r uirements of a housing district pursuant to Minnesota Statutes, Seetion 469.176, Subd. 4d, becau 100% of the zevenues derived from taY increments from . the District will be used to finance the t, of a housing project as defined in Section 4b9.174, Subd. I 1, including the cost of public improy�ments directly related to the housing project and the allocated administrative expenses of the , Finally, the District m, ' ts the requirements of a housing district pursuant to Minnesota Statutes, Section 469.1761, S d. 1 and Subd. 3 because, for the duration of the District, either (a) the project which comprises District will satisfy the income requirements for a qualified residential rental project as defined � Section 142(d) of the Intemal Revenue Code (the "Code or (b) at least 50 percent of the resi ntial units in the project which comprises the District will be occupied by individuals whose i me is 80 percent or less of azea median gross income. In this case, as mentioned above, least 40% of the units will be occupied by individuals whose incame is 60% or less of the aze median gross income, ad}usted for family size, which satisfies the income requirements f a residenual rental project as defined in Section 142(d) of the Code. 3 ��- �. Descripfion oF the develonment �rogram for the Superior Street Cottages Proieet The development program consists of the development of a 23-unit low and moderate in e rental housing facility for the elderiy (the "Projec�') in the District and the fmancing of the P}ect The Project will be owned by Superior Street Cottages, LLC, a Miunesota limited liability mpany (the "Develope�"). This will require acquiring land, installing infrastruchue, co acting for professional services essential to redevelopment activities, incuning financing rela �penses and funding administrative functions, ali as described in more detail below. All of th�sts listed below aze re�ected in the project budget, and there are no additional public improvement costs. A. Acquire property. The land has been purchased by the Developer for agproxint2tely $215,000. In addition, project costs will include approximately $9,200 of property taxes ayable in 1998 on the acquired property. B. Reimbursement for Demolition of Structur '. Demolition of the structures which w e previously located within the District cost appro�mately $12,500. �" C. Undertake and install site and utilities. Site improvements will include sewer ccess at a cost of approximately $16,500. D. . Contracts for profession ' services essenfial to the redevelopment activifies. Professional services will testing, legal, civil engineering, a� design. The total cost for pro " $215,000. E. of Project ; land surveys and tide work, real estate, environmental , accounting, developer's fee, consultants and azchitectural services, other than bond issuance costs, is estimated at The actual co truction of the Project, and the funding of operating reserves, replacement reserves and debt s ice reserves therefore, and the cost of furnishings and equipment for the Project, is expect to total approximately $2,230,000. F. cur costs and expenses connected with financing activities. Th shall issue ta�c exempt ta�c lri�rement revenue obligations to finance approximately $1,400,00 of total project costs. Bond issuance costs plus other financing related costs (including 4 c�g� - y y' ' costs incurred in connection with other sources of funds set forth in Section VII.C.), construction period interest and insurance, legal expenses, printing and undenvriter's di anticipated to total approzcimately $102,000. V. � The following, as required by Section 469.175, Subd. 1(3), is a list of de lopment activities that are proposed to take piace within tbe District for which contracts have b n entered into at the time of the preparation of this plan, inciuding the names of the parties to e contract, the activity govemed by the contract, the cost stated in the conuact, and the expect .date of completion of that activity. � a. Glendening Architectural Services, Inc. Architect Fstimated Cost: $82,115 Fstimated completion date: February, 1 b. Gabler Housing Solutions Corporation �' Consultant J Estimated Cost: $34, 0 Estimated completion date: Fe ary, 1999 1�l� Development activities in the wiil consist of activities necessary anc in Section II above. � � Increment District. which may require the �penditure of ta�c increments, � to promoting and maximizing the objectives set forth The following, as�i by Secrion 469.175, Subd. 1(5), are esrimates of the (i) cost of the Project, including adm� "istrauon expenses; (ii) amount of bonded indebtedness to be incuired; (iii) sources of revenue t,f nance or othenvise pay the costs of the Project; (iv) the most recent net taY capacity of taa�able real property within the tax increment financing district; (v) the estimated captured net tax capacity of�the tax increment financing district at completion; and (vi) the duration of the ta�� increment finan�in� district's existence. 5 c,� � - 4 ��- A. Cost of the Projeet, induding administrative expenses. The total cost of the Project is estimated at $2,898,554, which igcludes $25,000 of blic improvement costs (see C.vi. below). In addition, the HItA may use an amount up to 10% tbe taY increment expenditures to pay for its costs in administering the Dist[ict. B. Amount of bonded indebtedness to be incurred. The HRA shall be the issuer of one or more series of t� exempt housi g revenue obligations by the end of the year 1998 in an aggregate amount not to exceed $1,400�00. The taac increments will be pledged to the payment of the bonded indebtedness. The HRA y, after the initiai issuance of bonds, issue refunding bonds for purposes of refinancing such bonde indebtedness. C. Sources of revenue to finance or otherwise pay �roject costs. The following aze the likely sources for funding the to�Project: Tax Increments Tax increments, net of up to 10% for�'dministrative expenses, are anticipated to equal approximately $26,178 annually. All taY �crements will be first pledged to the payment of debt service on the bonds described in B�bove. t ii. Inveshnent income ` � � Certain interest eamings�f'fom bond proceeds, if any, will be a source of revenue to gay project costs. A cwrent estiinate of such earnings is not auailable. iii. Aeveloper �apital The Developer�ill contribute $1OQ000 for construction of the housing faeility. � r. iv. Federal HO� Loan a On Nov¢mber 26, 1997, the HRA Board approved a loan to the Developer of federal HOME funds�n the amount of $752,625. v. 'On August 6, 1996, by Resolution No. 96-891, the City Council approved a$40Q000 the Developer from STAR funds. �y'y vi. PED Public Improvement Funds PED public improvement funds in the aznount of $25,000 will be contributed,�Po the Project. vu. Federal Home Loan Bank Affordable Housin� Grant A Federal Home Loan Bank Affordable Housing Grant has beefi� awazded to the Proj ect in the amount of $100,000. � viii. UDAG Re�yment Funds The City Council has passed a resolution authorizing ,�"loan of $245,929 of LTDAG repayment funds to the West Seventh/Fort Road Federation f,�{�r the purposes of making a loan to the Developer. ,� i/ D. The most recent net tax capacity of taai ble real property within the tax increment financing district �' As of January 31, 1998 the total tax capacity o��iroperry pazcels to be included in the District was $fi,726, a11 of which is attributable to vacant 1"�d. However, two parcels in the District were exempt from taY because they were owned by the or the HRA. The market value attributable to the land is assumed to remain constant. The o gmal ta�c capacity and Tax Rate are calculated in accordance withMinnesota Statutes, Sectiori 4, .174, Subd. 7 and Section 469.177, Subd. 1. E. The estimated captured�iiet ta�c capacity of the tax increment financing district at completion. F� r� The Project will consist of �'23-unit low and moderate income rental housing facility for the elderly with an aggregate assume "mazket value of $1,380,000, including land value. The increase in market value is estimated at $1 41,700. Applying a 1.0% taY capacity rate to the low income units and 2.5°/u ta�c capacity rate ,�� the mazket rate units results in an estimated captured taY capacity of approximately $19,970 as�sed in the year 1999 and payable in the year 200Q the year following expected compietion of,;fionstruction of the project. This captured tax capacity is calculated in accordance with Minqesota Statutes, Section 469.174, Subd. 4 and 469.177, Subd. 2. F. 'I'h¢ duration of the tax increment financing district's egistence. The Dlstrict will be certified in 1998. The first taY increments are anticipated to be generated fa taYes payable in the year 2000. Pursuant to Section 469.176, Subd. lb(a)(5), the duration of��the District will run 25 yeazs from the first receipt by the HRA of taz� increments, 7 q�-��Y which will be through calendar yeaz 2025. The HRA does, however, reserve the decertify the District prior to the legally required date. ►� 11 . canaciiies of all taging jurisdictions. The taxing jurisdictions in which the District is located in whole or in pa�re as follows: a. Independent Schooi District #625, whose boundaries��cgifemunous with those of the City of Saint Paul. j b. The County of Ramsey, wherein the City of Saint �� is located. c. The Housing and Redevelopment Authority,�'pf the City of Saint Paul, whose boundaries aze cotemunous with those of the City of 5aint P� d. The Port Authority of the City of Saint�'ul, whose boundazies are coteiminous with those of the City of Saint Paul and whose powers to le,c� and use property tases are limited. e. Metropolitan authorities, such as,?the Metropolitan Council, Metropolitau Aiiports Commission, Metropolitan Waste Control Coirimission, and the Metropolitan Mosquito Control District Of these, only the Metropolitau C�rtncil and the Metropolitan Mosquito Control District currently levy taa�es on real estate. �f The HRA is required by Minnesota �S�`tutes Section 469.175, Subd. 1(a)(6) to make statements relative to the alternate 'estimates of the impact of the tax increment fmancing on the net taz� capacities of all taxing jurisdicCiq` s in which the tax increment fmancing district is locaYed in whole or in part. ° Impact on Taxing Jurisdictions Under the the taxing jurisdic these taxing jurisi Table 1 below. tion that the estimated captured net tax capacity would be available to ithout creation of the District, creation of the District will sezve to deny the taxes from the captured net tax capacity in the amount estimated in E o��-yza— Table 1 Taxine huisdiction �� X. City of St Paut Raznsey County School Dishict #625 Other flntentionaily Omitted.l 36.910 42.008 60203 6.532 145.653 F-�r at�t Annval Loss rD ia,�;�o Pe�cent Caphtted Increment Iurisdictions 2534 28.84 4133 4.49 100 $ 6,634 $165,8 7,550 18 , 50 10,819 Q475 1,175 29375 $26.178 $654.450 Attached hereto in Attachment A is a list of the Pr , erty Identification Numbers for all properties to be included in the Disirict, a map showing the -'oject azea and the District, and a legal description identifying the boundaries of the District. XI. District administration and annual disciosur�e. � Administration of the District will be the, esponsibility of the HRA. Tax increments will be deposited into interest beazing accounts separ e and distinct from other funds of the Hittl. Tas increments will be used only for activities d nbed in this tax increment plan. The HRA will report annuall to the State Auditor, county boazd, school board and Department of Revenue regazding tivities in the District as required by Section 469.175, subdivision 5 and subdivision 6 an ill include information with regard to the District in the data necessary to comply with subdivis' n 6a. XII. In accordance w,�h Minnesota Statutes, Section 469.175, Subd. 4, any refluction or enlargement of the ge '� azea of the Project or tax increment financing district; increase in amount of bonded in tedness to be incurred, including a determination to capitalize interest on debt if that determinati was not a part of the original plan, or to increase or decrease the amount of interest on the de ` to be capitalized; inerease in the portion of the captured taY capacity to be retained by the City; i rease in total estimated taY increment expenditures; or designation of additional property to b acquired by the City sha11 be approved upon the notice and after the discussion, public hearing an findings required for approval of the original plan. The geographic area of a ta�c incremen'financing district may be reduced, but shall not be enlarged after five years following the date of rtification of the original tax capacity by the county auditor. Ciment T.C. Rario E �,r ya XIII. Administrative Ex�enses In accordance with Ivfinnesota Statutes, Sections 469.174, Subd. 14 and 469 6, Subd. 3, administrative e�penses means all expenditures of an authority other than amo ts paid for the purchase of land or aznounts paid to contractors or others providing materials an ervices, including azchitecharal and engineering services, directly connected with the physical elopment of the real properiy in the District, relocation benefits paid to or services provid or persons residing or businesses located in the District or amounts used to pay interest on, a reserve for, or sell at a discount bonds issued pursuant to Section 469.178. Administrative penses also include amounts paid for seroices provided by bond counsel, fiscai consul , and planning or economic development consultants. Administrative expenses of the Distri � 1 be paid from tas increments; provided that no taat increment shall be used to pay any admi �` ative expenses for the Proj ect which exceed ten percent of the total taY increment expenditures a orized hy the t� increment financing p1an or the tatal taac increment expenditures for the Pro}e _ hichever is less. Pursuant w Minnesota Statutes Section pay for the county's actual administrative expe: county may require payment of those expenses expenses were incurred. ,�,a XIV. � 6, Subd. 4h, tas increments may be used to mcurred in connection wath the District. The February 15 of the year following the yeaz the No taa� increment shall be paid�5 the HRA after three years from the date of certification of the original net tax capaciry by the Co,,�nty Auditor unless within the tt�ree-year period: (1) bonds have been ' sued in aid of the Project pursuant to Section 469.178 of the TiF Act or any o law, except revenue bonds issued pursuant to Minnesota SYatutes, Section G69, to 469.165; (2) the (3) the acquired property within the District; or has constructed or caused to be constructed public improvements within the The bo�ds must be issued, or the HRA must acquire property or construct or cause public °ment,�to be constructed by approximately May, 2001. to Minnesota 5tatutes, Section 469.176, Subd-. fi, if, after four years from the date of certifzcation of the original tca capacity of the taz increment fznancing district pursuant to �nnesota Stafutes Section 469.17� no demolifran, rehabilitation or renovation of property or other site prepcaation, including qual�ed 10 iszszzs.oz �B'-ti�s-- improvement of a sireet adjacent to a pa7cel but not ins7alZution of utility service including sewer or water syslems, has been commenced on a parcel loarted within a tar increment financing district by the authority or by the owner of the pcvicel in accordance with the tctt increment fznrnzcing plan, no additioncrl tax increment may be faken from that p el and the original tar capacity of thcrt parcel shall be excluded from the original tca c city of the tar inct financing disirict. If the authorify or the owner of the p el subsequently commences demolifron, rehabilitation or renovation or other site prep tion on that parcel including improvement of a street adjacent to that parcel, in ac ordance with the tmc increment fznancing plan, the authority shall cerlify to the cou '�auditor in the anrnral disclosure report that the activity has commencecl The county, " ditor shall certify ihe fax capacity thereof as most recenily certified by the commissio �of revertue and add it to the original tar capacity of the tctt increment financing district. -7'lee caunty auditor must enforce the provisions of this subdivision.. For purposes of this ibdivision, qual�ed improvements are limited to (I) corrslrucfion or opening of a new et, (2) relocafron of a street, and (3) substantial recon.slnsction or rebuilding of crn existin�street. The F3RA or a property owner must begin by approximately May, 2002. Pursuant to Minnesota Statutes, increments are considered to have been foliowing occurs: improvements to pazcels within the District 469.1763, Subd. 3, revenues derived from taY an activity within the District only if one of the 1. Before or within fzve ye after certiftcation of the District, the revemres are actually paid to a third party with respect to t� activity; 2. Bonds, the, to a third pariy, before or v repay the BontLr, and the eayected to be spent befo; temporary period within,� Reverrue Code, or depo�e� rocee of which must be used to finance the activity, are issued cmd sold [hi�ff'ive years ttf[er certi: fication of the Disirict, the reverrues are spent to � ceedr of the Bonds either.are, on the date of issuance, reasonably the end of ihe latter o, f(i) the fzve year perioc� or (ii) a reasonable meaning of ihe use of that term under Section 148(c)(1) of the Internal in a rea.sonably required reserve or replacement fund,' 3. Bi 'ng conii-acts with a third party are entered into for performcmce of the activity before or within ve yerns after certification of the District and the revemres are spent under the contractual ob ation; or r / 4. ,� Costs with respect to the acfrvity are paid before or wifhin ftve years after certification of fhe D', trici and the reve�rues are spenf to reimburse a party for payment of the costs, including interes 'n unreimbursed costs. Therefore, one of tke above four events mustoccur by ap�xoximately May, 2003. il qs�-wa�-- XV. Use of Tax Increment All revenues derived from taY increment shall be used in accordance with fmancing plan, and pursuant to Minnesota Statutes, Section 469.176, Subdivisions � XVI. Notificaiion of Prior Planned Improvements aY mcrement 4d. Pursuant to Minnesota Statutes Section 469.177, Subd. 4, the C' has reviewed the area to be included in the District and has not found properties for which buil, ng pennits haue been issued during the 18 months immediately preceding approval of ihe Plan by, e City. XVII. Eacess Taa 7ncrements Pursuant to Minnesota Statutes Section 469.176�ubd. 2, in any year in which the taac increment exceeds the amount necessary to pay the � authorized by the tax increment plan, including the amount necessary to cancel any tas le �as provided in Minnesota Statutes, Section 475.61, Subd. 3, the City shall use the excess amount� o do any of the following: 1. prepay the outstanding bonds; � 2. discharge the pledge of taac in ement therefor; 3. pay into an escrow account �dicated to the payment of such bonds; or 4. retum the excess to the C nty Auditor for redistribution to the respective taxing jurisdictions in proportion of their tax `pacity rate. 11 Since the District is a Section 273.1399, Subd. 1, th without making a local contcil XIX. The City and in accordance with � XX. 3 housing district" within the meaning of Minnesota Statutes, i5 therefore exempt from the LGA/fIACA state aid reduction, EIRA have elected to compute Fiscal Disparities conhibution for the District m 469.177, subdivision 3, paragraph a. Purs t to Minnesota Statutes Section 469.176, subd. 5, no more than 1�%, by acreage, of the pro rty to be acquired in the District as set forth in this Tax Increment Financing Plan shall at time be owned by the IIRA or the City as a result of acquisition with the proceeds of bonds i ued pursuant to Section 4b9.178, without the HRA or City having, prior to acquisiUon 12 �$' y�'�-- in excess of 10% of the acreage, concluded an agreement for the development or redevelopment of the property acquired and which provides recourse for the HRA or City should the development not be completed. XXI. Assessment A�reement. Pursuant to Minnesota Statutes Sections 469.175, Subd. 1(b) and 46��17, subd. 8, the HRA or City may enter into an agreement in recordable form with the Developer of property within the Disuict which establishes a minimum market value of th�land and completed improvements for the duration of the District. The assessment agree�ent shall be presented to the assessor who shall review the plans and specifications for thenmprovements constructed, review the market value previously assigned to the land upon whie�the unprovements aze to be constructed and, so long as the minunum mazket value conta�d in the assessment agreement appeazs, in the judgment of the assessor, to be a reasonable�tamate, the assessor may certify the minnnum mazket value agreement. 13 ��-4a� A'I°TACHMENT A [list of parcels, legal description and map o£ district and project area� The land referred to is situated in the State of Minnesota, County of Ramsey, and is de�ibed as follows: ,� Parcel 1: ID-01-28-23-33-0097 All that part of the following described tract: All of Blocks 1 and 2 of Norwood Addition to the City of Ss��Paul, excepting therefrom the following: A certain tract of real estate situated in th�Northwest comer of Block 1 of Norwood Addition to the City of St. Paul, which is agcurately and correctly described as follows, namely: Commencing at an iron monume at the North line of said Block 1, 136.25 feet Southwest from the Northeast corner o said Block aforesaid, and from said starting point running South in a line parallel w' h the Easterly line of said Block 1 a distance of 40 feet to a hub or iron monument; ence Southwest 93 feet to a point on the West line of said Block 1 and on the Easte y line of Erie Street, distant 15 feet South from the Northwest corner of said Bl 1; thence running North 15 feet to the Northwest comer of said Block 1; then�running Northeast along the I3ortherly line of said Block 1, 108.77 feet to the point,6f beginning; also all that portion of said Norwood Addition to the City of St. Paul e�'�raced within the original limits of Croodhue Street lying between Duke $treet andiErie. Street and which was vacated by the Commou Council of the City of St. Paul� Resolution approved April 25, 1905; which lies Southerly of therfollowing described line: Beginning at a point n the West Line of the above mentioned tract, distant 335 feet North of the South st corner of said Block 2; thence run Northeasterly to a point on the East Iine of said ove described tract; distant 450 feet North of the Southeast corner of said Block 2 an there terminating. Except all right of access, being the right of ingzess to and egress om Trunk Highway 1Vo. 35E. (Torrens �roperty-Certificate No. 341566) ID-01-28-23-33-0022 i D�a[iict and Project azea are coterminous. ' � 14 q�r_Wz� Q Lots 5, 6 and 7, Block 3, Norwood Addition to St. Paul, according to the piat thereof on file and of record in the office of the County Recorder in and for Ramsey County, Minnesota. (AbstractProperty) ID-01-28-23-33-0001 That part of Lot 4, Block 4, Norwood Addition to St. Paul beginning at,�''starting point on the Southerly line of Lot 4 51.11 feet West of the SE comet ,'�f Lot 4; thence Northeasterly along a line to the NE corner of Lot 4; thence Southe y along the Eastern line of Lot 4 to the SE comer of said Lot 4; thence along the S�uthern line of Lot 4 to the starting point. � (Vacated Erie Street) That part of Erie Street lying North of the Addition to St. Paul and South of the right o line of Lot 7, Block 3, Norwood of Trunk Highway 35E. IS RFR-08-1993 15:52 PED 14TH FLOOR 612 223 32c9 P.05 �l , . . , _ � . , . •� .. .. �� • r . . � a � .. y " _ '` � Y, � :`?. .�' . ' ' `� ?' .. , ( ' ' ' �� : �° - ' ' • . T � AC E `' � ` . = �' l R � . .�' •—' k— � � - `-. _ P J6` : ( � ,� ' '� , ,I _ _'�� ' q ° ` .A ,_., .:, ,> .. -- • _ ; P N . '`' . •� ; ,u l_ .... '•' ._ M1 � Y' _,�. " � L:� . � ^' 3 f -_ ... (} ' _ ' e_ ' . _ ' _ - ' ¢ 'v .. 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This housing finance program (the "Program") under Minnesota Statutes, Chapter 462C (the "Act") describes the proposed issuance by the Housing and Redevelopment Authority of the City of Saint Paul, Minnesota (the "HRA") of up to $1,400,000 of revenue bonds (the `Bonds") to finance, in part, the acquisition and construction of a senior rental housing development for the elderly (the "ProjecP') by Superior Street Cottages, LLC (the `Borrower"). The Bonds will be revenue obligations, secured by the repayment obligation of the Borrower, mortgages and other security interests in property owned by the Borrower, and a first lien on tax increments (the "Tax Increments") to be derived from the Superior Street Cottages Housing TaY Increment Financing District (the "District"), as described below. The Bonds will not be a general obligation of the City of Saint Paul, Minnesota (the "City") or the HRA, nor will any assets or revenues of the Ciry or HRA be piedged to the payment of the Bonds other than as described above. Issuer. The issuer of the Bonds will be the HRA. Under Chapter 72 of the Saint Paul Legislative Code, the HRA is authorized to exercise the powers of the City under the Act upon approval by the City of the Program and delegation by the City to the HRA of those powers for the purposes of the Program. Tax Increment District and Housing Development Project. In connection with the Project, the HRA will establish the District. The HRA has prepazed a tas increment financang plan for the District, pursuant to Minnesota Statutes, Sections 469.174 through 469.179, as amended (the "TIF Act"). The TIF Act requires that a tax increment district be established within a"project azea". Therefore, the HRA will also create a"housing development project" within the meaning of Minnesota Statutes, Sections 469.001 to 469.047, as amended (the "T�ItA Act"), and this Program constitutes the program required by Section 469.0171 of the H12A Act. The boundaries of the housing development project area, for purposes of the TIF Act, are coterminous with the boundaries of the District, and are set forth on the map attached hereto as E�ibit A. Housing Plan and Program. This Program will be undertaken pursuant to the Act and the Housing Plan of the City required by the Act. The Housing Plan, as amended, was adopted by the City 3n March of 1990. This Program will be adopted after review by the Metropolitan Council, and a public hearing on the Program, held after notice is given, all as required by Section 462C.04 of the Act. The Program is consistent with both the Housing Plan (and other housing plans of the City developed under other laws), and is consistent with development guides applicable within the City and developed by the Metropolitan Council. q � _y a2- Borrower. The bonower is Superior Street Cottages, LLC, a Minnesota limited liability company, whose members aze initially Lyngblomsten Services, Inc. and the West 7th/Ford Road Federation. During the term of the Bonds the sole member of the Borrower will be Lyngblomsten Services, Inc., or another �liated entity. Project. Superior Street Cottages will be a 23-unit rental housing project for the elderly. The Project will be newly constructed, with construction to begin shortly after the Bonds are issued. The Project is a multifamily housing development within the meaning of Section 462C.05 of the Act. The Project will be a rental housing development, and will be designed and intended to be occupied primarily by the elderly. The Project will be located on the northwest comer of Duke and Superior Streets in the City. The amount of Bonds attributable to the Project is expected to be approximately $1,400,000. The Project complies or will comply with all applicable building code, zoning and land use planning requirements. Need for the Project; Income and Rent Limitations. The development of the Project will provide needed additional rental housing opportunities within the City for the elderly. Under the Act, and under Section 145 of the Internal Revenue Code of 1986, as amended, which will govern the Bonds, no income limits apply to residents of the Project. However, the TIF Act imposes certain requirements in connection with the creation of a housing tas increment district, and in order to comply with such requirements, at least 40% of the units in the Project will be occupied by individuals whose income is 60% or less of the area median gross income, adjusted for family size. The statutory authority for various sources of subordinated financing also impose income or rent limits, or both, which may be more restrictive than the TIF Act. The Project will comply with the most restrictive limitations. The Borrower, and any subsequent owner of the Project, will not arbitrarily reject an application from a proposed resident because of race, color, creed, religion or national origin, sex, affectional preference, mazital status, or status with regazd to public assistance or disability. Bonds. The HRA will issue the Bonds, in one or more series, in an aggregate original principal amount of up to $1,400,000. Substantially all of the proceeds of the Bonds attributable to the Project will be applied to pay or reimburse for the costs of constructing, installing and equipping the Project. "Substantially all" means all of the proceeds of such Bonds, less amounts deposited in a debt service reserve fund or used to pay the costs of issuance of the Bonds. It is expected that the Bonds will have a term of not more than 25 years, and will mature serially or be subject to sinking fund payments. The Bonds will bear interest excludable from gross income for federal income tax purposes, and, to the same extent, excludable from the gross and taxable net income of individuals, estates and trusts for Minnesota tax purposes. The Bonds will be special, limited obligations of the HRA, payable solely from (a) tax increment and (b) revenues provided by the Borrower under one or more revenue agreements ��l "�� with the IIRA. The Bonds will be further secured by mortgages and other security interests in the property owned by the Borrower. The Bonds will not be a general obligation of the City or the HRA, nor will any revenues or assets of the City or HRA (other than those of the Borrower and the Tax Increments) be pledged to the payment of the Bonds. The City or HRA may require the Borrower to provide evidence satisfactory to the City or IIRA of the ability and intention of the Borrower to complete the construction of the Project, and evidence satisfactory to the City or HRA of compliance with the standazds and requirements for the making of the financing established by the HRA, as set forth herein and in connection therewith, the City, the F3RA or its representatives may inspect the relevant books and record of the Bonower in order to confirm such ability, intention and compliance. In addition, the City or HRA may periodically require certification from the Bonower or such other person deemed necessary concerning compliance with various aspects of this Program. The provisions of this Program are severable and if any of its provisions, sentences, clauses or paragraphs shall be held unconstitutional, contrary to statute, exceeding the authority of the City or the I-IRA or otherwise illegal or inoperative by an court of competent jurisdiction, the decision of such court shall not affect or impair any of the remaining provisions. The City shall not amend this Program, while the Bonds authorized hereby are outstanding, to the detriment of the holders of such Bonds. Adopted: May 13, 1998 Q� -'� �-ti EXHIBIT A jMap of District and Project Area] RFR-02-i�3�3 2.:52 ==� i�PH P�nOP. 612 2c� 323� P.�5 � a�-�2-2- � . .. � � . - . y ° ' � �.�' ,. :� . `{ -. _ T �'��,4c � � ]l in ., . ' • , � � . ' " "` � • ,--� t �_ o \ 1 . ... .' '` -' . - -ue' - ` 6- T ..,y �F :�\ �� T ` y . _ aR O' i<. '\`� 1 ( .. ,1� > j ' ��"o '," ,:."=' . 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' . . -•�N�.,i \ ^ ' •�si� � C � � 3rrY . 1 ; • \ i%/�/�,4:.K,t�tf:: n„ O � 1 j "� . },y _Q� ' .�y . �� t0 � !��a•� .1' � r'.% '.��.. �ii.7nH4,'i✓illi�ra� .d,1�w�c%�✓�d'.+l� I'wTy�,�.�,Xt -�s��j� Q •c—^_. .i �i �saS � , � °� LJ. 1:' ' ' . � �--•',�`i._'- �4, � � : ;?�+, 8 t I � � ��\ ( � :, . �' 3 � �Y �V � ��' ��L_:.�Y, .�i�' S? +C�� ,�'!� /� Lv . ..'al� e.r�. �~ iL_/ t' O.f _ "'"�_..tt?�tA_�� V �"-'� '� - . ��!��r. � �b...u•r-,..9:Or..�o. v� LE '�� ;� P�QY �� aPR S�9° 15:_a 62z 2?8 3c<c Fr�,E.fw75 �l8 -y� �- A. Cost of the Project, including administrafive egpenses. The totai cost of the Project is estimated at ^— $2,837,578 which includes $25,000 of public improvement oosts (see C.vi, below). In additioq the HRA may use an amount up to 10% of the tas increment expenditures to pay for its costs in administering the Distdck. B. Amount of bonded indebtedness to be incurred. The �IRE1 shall be the issuer of one or more series of ta7c exempt housing revenue obligations by the end of the year 1998 in an aggregate amount not to exceed $1,400,000. The taY increments will be pledged to the payment of the bonded indebtedness. The HRA may, after the initial issuance of bonds, issue refunding bonds for purposes of refinancing such bonded indebtedness. C. Sources of revenue to finance or otherwise pay project costs. The following are the likely sources for funding the total Project: T� Increments TaY increments, net of up to 10% for administrative expenses, are anticipated to equal approximately $26,178 annually. All taY increments will be first pledged to the payment of debt service on the bonds described in B above and anv excess shall be pledged to the repayment of the STAR Loan referred to in C.v. below ii. Investment income Certain interest earnings from bond proceeds, if any, will be a source of revenue to pay pzoject costs. A cuaent estimate of such eamings is not available. iii, Developer Ca�ital The Developer will contribute $100,000 for construction of the housing £acility. iv. FederaI HOME Loan On November 26, I997, the HRA 33oard approved a loan to the Developer of federal HOME funds in the amount of $752,625. b 1525225 ORIGlNAL Council Eile # a 4 aa Green Sheet # �'7'�-S(p si Presented By Re£erred To Committee: Date RESOLUTION OF THE C'ITY COUNCII. OF Tf� CITY OF SAINT PAUL APPROVING (A) A MULTIFAMII,Y RENTAL HOUSING DEVELOPMENT PROJECT FOR THE ELDERLY AND A HOUSING PROGRAM T`HEREFORE, AND AU7'HORIZING THE HOUSING AND REDEVELOPMENT AUTHORITY TO EXERCISE THE POWERS GRANTED IN NIINNESOTA STATIJ'i'ES, SECTION 462C.01 TO 462C.08 IN CONNECT'ION THEREWIIT3; AND (B) T'I� CREATION OF THE SUPERIOR STREET COTTAGES HOUSING TAX INCREMENT FINANCING DISTRICT AND TFTE TAX INCREMENT FINANCING PLAN RELATING THERETO BE IT RESOLVED by the Council of the City of Saint Paul, Minnesota (the "Council'�,as follows: 2 Secfion 1. Recitals 3 1.01. On August 6, 1996, the Council adopted its Resolufion C.F. No. 96-891 approving a loan of 4 STAR funds in the amount of $400,000 to Superior Street Cottages, LLC, (the "Developer'�, for the 5 purposes of fuiancing the acquisition, construction and equipping of a 23-unit multifamily rental 6 housing facility for the elderly (the "FrojecP') in the City of Saint Paul (the "City"). 7 1.02. The Housing and Redevelopment Authority of the City of Saint Paul (the "HRA") has also 8 passed a resolution authorizing a loan of $245,929 of UDAG repayment funds to the West 7th/Fort 9 Road Federation for the purposes of making a loan to the Developer, and a$753,000 HOME loan to 10 the Developer. 11 1.03. Minnesota Statutes, Chapter 462C (the "Housing AcP') confers upon ciries, or housing and 12 redevelopment authorities authorized by ordinauce to exercise on behalf of the City the powers 13 conferred by the Housing Act, the power to issue revenue bonds to finuice a progrun for the putposes 14 of planniug, aduiinistering, making or purchasing loans with respect to one or more mulrifamily 15 housing developments within the boundaries of the City. 16 1.04. The I�ZA has received from the Developer, a Muuiesota limited liability company, a proposal 17 thax the HRA undertake a progr�n (the "Program") to finance the Project, through the issuance of 18 revenue bonds or obligarions in one or more series (the "Bonds") pmsuant to the Housing Act and the 19 TIF Act, as defined below. 20 1.05. The City desires to encourage the development of housing facilities desi�ed for occupancy �� v � 1 � 21 primarily by elderly persons within the City and enwurage the development of under-utilized land 22 within the boundazies of the City; and the Project will assist the City in achieving these objectives. 23 1.06. A public hearing on the Progaui and the issvance of Bonds for the Project was held by the City 24 Council on May 13,1998, followivg duly published notice, at which time all persons that desired to 25 speak were heard. 26 1.07. In connection with the Project, it has also been proposed tha# the HRA establish the Superior 27 Street Cottages Housing Tax Increment Financing District (the "District") and, in connection 28 therewith that the City approve the creation of the IJistdct and the Tax Increment Financing Plan (the 29 "TIF Plau � relating thereto, all pursuant to and in accordance with Miunesota Statutes, Section 30 469174 tbrough 469.179, inclusive (the "TIF' AcP�; and that the HRA create a housing development 31 project pursuant to and in accordance with Minuesota Statutes, Sections 469.001 through 469.047, 32 inclusive (the "HI2A AcP�. 33 1.08. The I3RA has investigated the facts and has caused to be prepazed the proposed TIF Plan. 34 1.09. The HItA and/or the City, as applicable, have performed all acfions required by law to be 35 performed prior to the adoption of the Progrun, the establishment of the District and the adoption of 36 the TIF Plan, including, but not limited to delivering a copy of the Progr�uil to the Metropolitan 37 Council for their review and notification of Rauisey County and School District No. 625 ha�ing 38 taxing jurisdiction over the properiy to be included in the Dishict, and the holding of public hearings 39 after published notice as required by the TIF Act and the Housing Act. 40 1.10. Certain written reports (the "Reports") relating to the TIF Plan and to the activities 41 contemplated therein have heretofore been prepared by HRA and City staff and submitted to the 42 Council, the Board of Commissioners of the I�2A and/or made a part of the City or HRA files and 43 proceedings in connecrion with the Project. The Reports include data, information and/or 44 substantiation constituting or relating to the basis for the findings and determinations made in this 45 resolution. The Council hereby confulns, ratifies and adopts the Reports, which aze hereby 46 incorporated into and made as fully part of this resolution to the same extent as if set forth in fiill 47 herein. 48 Section 2. Approval of Housiu�Proarani and Authorization for I3RA to enter into Memorandum of 49 Understanding and to Exercise Powers. 50 2.01. The City hereby approves the Progcain for the fuiancnig of the Project and, pursuant to Section 51 72 of the Saint Paul Admiiustrative Code, authorizes the F3IZA to (i) exercise the powers granted in 52 Minnesota Statutes, Sections 462C.01 to 462C.08 for the purpose of financing the Program and (ii) 53 enter into a Memorandum of Understanding with the Developer in connection with the Project. 54 2.02. Neither the HRA nor the City shall be liable on the Bonds issued pursuant to the Program, and 55 the Bonds shall not be a debt of the HRA or the City within the meannig of any state constitutional 56 provision or statutory lnnitation, and will not constitute or give rise to a charge against the general 57 credit or taxuig power of the City or the I II2A or a pecuniary liability of the City or the III2A, nor 58 shall the Bonds be payable out of any funds or properiy other than those provided as security 59 therefore. 60 2.04. The issuance of the Bonds shall be subject to final detenuination by the HRA of the terms and �� 61 conditions of the Bonds, and neither this resolution nor any new resolution of the HRA shzll 62 constitute an urevocable commitment on the part of the City or the I3I2A to issue the Bonds. 63 Section 3. Findings bv the City far the A�proval of the Tas Increment Financin� Plan for the Su�erior 64 Street Cotta�es Housin� Tax Increment Financin� District. 65 3.01. The Council hereby finds that the District is a housing district pursuant to Muuiesota 66 Sfahrtes, Section 469174, Subd. 11. 67 3.02. The Council hereby finds that the District, and the approval of the TIF Plan relating 68 thereto, aze intended and, in the judgment of this Council, the effect of such acrions will be, to 69 provide an unpetus for housing development in the District and to further the public purposes and 70 accomplish certain objectives as specified in the TIF Plan. 71 3.03. The Ciiy does not elect to compute the t� increments in accordance with Muuiesota 72 Statutes, Section 469.177, Subd. 3, ciause (b), meaning that tas increments wiil be detern 73 before the application of the fiscal disparities provisions of Mivnesota Statutes, Chapter 473F. 74 3.04. As a qualified housing district within the meaning of Minnesota Statutes, Section 75 273.1399, subd. 1, the District is not subject w the state aid losses set forth in Section 273.1399. 76 3.05. The Council further fmds, declares and detemunes that the City made the above 77 findings stated in pazagraphs 3.01 flu�ough 3.03 above and has set forth the reasons and supporting 78 facts for each det�+ination in writing, attached hereto as Attackunent A. 79 Section 4. A�proval of the TIF Plan and Further pocumentation. 80 4.01. The TIF Plan, as presented to the Council on this date, is hereby approved and 81 adopted, and shall be placed on file in the office of ttte Executive Director of the FII2A. 82 4.02. The staff of the City, the City's advisors and legal counsel aze authorized and directed 83 to cooperate as necessary with the I�2A in the unplementation of the Plan and for tlus purpose to 84 negotiate, draft, prepare and present to this Council for its consideration a11 fiu�ther plans, resolutions, 85 documents and contracts which may be deemed necessary for this purpose. 86 4.03. The auditor of Ramsey County is requested to certify the original net tax capacity of 87 the Disirict, as described in the TIF Plan, and to certify in each year thereafter the amount by which 88 the original net tax capacity has increased or decreased; and the I is authorized and directed to 89 forthwith transmit this request to the counry auditor in such form and content as the auditor may 90 specify, together with a list of all properties within the District for which building permits have been 91 issued diuin� the 18 months immediately preceding the adoption of trus resolution. 92 Section 5. Desia�afion of Bond CounseL Leonard, Street and Deinard is hereby retained as 93 Bond Counsei for the issuance of the Bonds, and Norwest Investment Services, Inc. is selected as the 94 investment banker for the Bonds. Leonard, Street and Deinard and Norwest Inveshnent Services, Inc. 95 aze hereby authorized to assist in the preparation and review of necessary documents relating to the 96 Project and the Prograui therefore, and the creation of the TIF' District, to consult with the City 97 Attorney, Developer and Purchasers of the Bonds as to the maturities, interest rates and other temvs �.�,y 98 and provisions of the Bond and as to the covenants and other provisions of the necessary document�n � � 99 and submit such documents to the FIRA for final approval. �� 100 Section 6. Ratification of Prior Actions. All activities previously undertaken by I IRA and 101 City staff in preparing and finaliziug the TIF' Plan and the Program, in forwazding the TIF Plan to the 102 appropriate ta�cing jurisdiction including Rawsey County and Independent School Dislrict No. 625, 103 and forwazding the Program to the Metropolitan Council, are hereby ratified and aff.umed. i o4 Arrac�IIv�.rrT a d�� t��`� 105 RESOLUTTON # � 106 The reasons and facts supporting the findings for the adoption of the Tas Increment 107 Financing Plan (the "Plan") for the Superior Slreet Cottages Housing TaY Increment Pinancing 108 Dishict (the "District") as required pursuant to Minnesota Statutes, Section 469.175, Subdivision 3 109 aze as follows: 110 111 112 113 114 115 116 117 118 119 120 121 122 123 124 125 126 127 1. Finding that the District is a housing district as defined in Minnesota Stc�tutes, Section 469.174, Subc1 11. The City finds that the District is a housing district pursuant to Minuesota Statutes, Section 469.174, subd. l l because (i) the Project is intended for occupancy, in part, by persons or families of low and moderate income, as defined in Mivuesota Statutes, Chapter 462A, Tifle II of the National Housing Act of 1934, the National Housing Act of 1959, the Unitecl States Housing Act of 1937, as amended, Tide V of the Housing Act of 1949, as amended, other similar federal, state, or municipal legislafion, and the regulations promulgated under any of those Acts; and (ii) fair market value of the improvements which shall be conshucted for commercial uses or for uses other than low and moderate income housing consists of not more than 20°/a of the total fair mazket value of the planned improvement in the development plan or agreement. Specifically, at least 40% of the units in the Project will be occupied by individuais whose income is 60% or less ofthe area median gross income, adjusted for family size. In addition, the City finds that the District meets the requirements of the housing dishict pursuant to Miimesota Statutes, Secrion 469.176, subd. 4(d) because 100% of the revenues derived from the tas increments from the Dishict will be used to finance the cost of the housing project as defined in Section 469.174, subd. 1 i, including the cost of public improvements directly related to the housing project and the allocated administrative ea�aenses of the HRA or the City. 128 In addition, the City finds that the District meets the requirements of a housing district pursuant to 129 Mirnzesota Statutes, Secfion 469.1761, subd. 1 and subd. 3 because, for the duration of the Distaict, 130 either (i) the Project will satisfy the income requirements for a qualified residential rental project as 131 defined in Section 142{d) of the Internal Revenue Code, or (ii) at least 50% of the residential units 132 in the Project will be occupied by individuals whose income is 80% ar less of area median gross 133 income. 134 2. Finding that the Tax Increment Financing Ptan conforms to the general plan for the 135 development or redevelopment of the municipality as a whole. 136 The proposed Project has been reviewed by the Metropolitan Council and the Metropolitan Council 137 has determined that the Program fixrthers local and regional housing policies and is consistent with 138 the Metropolitan Development Guide, and that the Prograui is comparible with the housing portion 139 of the comprehensive plan of the City. 140 3. Finding that the Taz Increment Firaavtcing Plan for the District will afford maximum 141 opportunity, consistent with the sound needs of the City as a whole, for the development of the 142 District by private enterprise. 143 The establishxnent of the District will result in the facilitation of the development of affordable �' �� 144 multifamily housing for the elderly in Saint Paul. 145 146 4. Finding that the City does not elect to compute the tcrc increment in accordance with Minnesota Statutes, Section 469.177, subdivision 3, clause (b). 147 The failure to elect to calculate increments in accordance with the above referenced statute 148 results in a greater amount of increment to be captured from the District, which will facilitate 149 the financing of the Project. ORCG1NAl. Nays Requested b�ep�rtment oi: Plannin Economic De elo� ent By ('� '1 Adopted by Council: Date (V��\V93' Adoption Certified by Council Secretasy By: Approved Z By: cil Form Ap� r e by Cit ttorney By: qr-ya�� Allen Carlson 266-6616 May 13, 1998 TOTAL # OF SIGNATURE PAGES 1 No 64256 u oerµ�rortwtoR �_ � a.rcw.c� _ 0 � ��.�❑ arv.r.owtY rnvamc _ ❑warsuu.amur.ESOUt ❑wuur��mninctrc G 4❑ Wn,R�ae,worr,p 1❑ Kimberlv / (CLIP ALL L TIONS SIGNATURE) ��SNUU'CT""A PIIBLIC HEARING to coxisider adoption of the attached resolution which: 1. Establishes the Superior Street Cottages Aousing Tax Increment District and Ta�c Incremen Financing Plan 2. Authorizes the HRA Board to issue up to $1,400,000 of tax exempt 501(C)(3) revenue bonds to finance the construction of a 23 unit senior rental development 3. Authorizes staff enter into a memorandum of understanding with developer which states te and conditions towards final approval and issuance of bonds. (see attached memo for details PL4NNING CAMMISSION CIB COMMITTEE CIVIL SERVICE COMMISSION Has this person/firtn everMOrlced untler a conhact for Mis deparGneM� YES NO Has fhis persoNfi�m eexr been a city empbyeeT YES NO Does this persanlfirm possess e sitill rwt npmallyposse&sed by any curtent city employee? VES NO is Mis D�soMrtn atargetetl vsndoR YES NO %ain ail ves answers on seoa2te sheet and attach to areen sheet West ?th/Fort Road Federation and Lyngblomsten Services, Inc, propose to construct a 23 unit senior reatal development at Duke and Superior Streets. City Council has approved a$400,00 STAR loan zad HRA has approved a$753,000 loan using HOME funds and loan of UDAG Repayment funds in the zmount of $245,929 to the project. The $1,400,000 of bond proceeds will complete the financing of the project. However, in order to have sufficient revenues to rep y the debt on the bonds a housin tax increment district mu t -- - -- --- 4NTAGESIFAPPROVED increments generated from the district wi11 go towards repayment of the bonds. The City will add to its sock of afffrodable senior rental housing. �'" �� ' i .°€- IFAPPROVED The City will possibly fore-go increased property ta�ces should the progerty be developed The proposed project is not financially feasible without tax increment financing. AMOUNT OF TRANSACTION f_ _ N�A �.# INFORMATION (IXPWM �{A� 41998 COSNREVENUEBUOGETED(CIRCLEON� YES NO ACTNITY NUMBEft �� '�� ; � ,,. r �, � DEPAR"1'MENT OF PLANNING & ECONOMIC DEVELOPMENT Pamela Wheefock Oirector CTTY OF SAINT PAUL Norm Coleman, Mayor T�: FROM: Council President Bostrom Councilmember Blakey Councilmember Harris Councilmember Benanau Councilmember Lantry Councilmember Reiter Councilmember Coleman Allen Carlson � 25 Wes[ Fourth Saeet Saint Paul, MTI SS102 q�-y}� TeZephone: 612•266-6700 Facsimile: 6T 2 228-3220 SUBJECT: May 13,1998 City Council Public Hearing regarding Establishment of the Superior Street Cottages Housing Tax Increment Financing District, Approvai of Tas Increment Financing Plan, Approval of Housing Plan and Preliminary Approval to Issue 501(c)(3) Multifamily Revenue Bonds DATE: April 28, 1998 Purpose The purpose of this report is to request the City Council to approve the attached resolution related to the development of the Superior Street Cottages elderly housing development to be located at the Northwest corner of Superior and Duke Streets in District 9: The resolution approves: A Housing Program pursuant to MN Statutes, chapter 462C which describes issuance of up to $1,400,000 of 501(c)(3) tas exempt revenue bonds (the `Bonds") to finance the acquisition and construction of a 23-unit senior rental housing development at the Northwest corner of Superior and Duke Streets (the "Project") by Superior Street Cottages LLC (the `Borrower"). 2. Preliminary issuance of up to $1,400,000 of 501(c)(3) tax exempt revenue bonds to finance the Proj ect and gives the Housing and Redevelopment Authority of the City of Saint Paul, Minnesota (fIRA) final authority to issue the Bonds. 3. Establishment of the 25 year Superior Street Cottages Housing Tax Increment Financing District (the "TTF District'� and Tax Increment Financing Plan (the "TIF Plan'�, in which the tax increments generated will be pledged to partially repay the Bonds. q8'-y��.- 4. Staff to enter into a memorandum of understanding with the Borrower which stipulates terms and conditians towazds the final issuance of the Bonds. 5. Leonard, Street and Deinard Professional Association as bond counsel and Norwest Investment Services, Inc. as investment banker for the Bonds. Before the above resolution may be approved, the City Council must open the meeting to the public for discussion regarding the approval of the Housing Program, establishment of the housing tax increment district and preliminary approval of the issuance of tax esempt revenue bonds. A notice of public hearing was published in the Saint Paul Pioneer Press on Apri128,1998 pursuant to NIN Statute requirements. It is also at this time that the County and School District may comment on establishment of the TIF District and TIF Plan. Background The West 7th/Fort Road Federation and Lynblomsten Services, Inc. formed the Superior Slreet Cottages LLC to construct the 23-unit Superior Street Cottages senior rental housing development at the Northwest corner of Superior and Duke Streets in District 9(the "ProjecP'). This is the site of the former Holm & Olsen nursery. The Project is comprised of 4 restricted- income one bedroom units, 3 market rate one bedroom units, 5 restricted-income two bedroom units and 11 market rate two bedroom units. The proposed gross monthly rents for the one and two bedroom restricted-income units is $504 and $644, respectively. The proposed gross monthly rents for the one and two bedroom market rate units is $675 and $795, respectively. The affordable units aze required due to federal funding provided to the project. The total estimated cost of the project is $2,898,554. The City Council adopted resolution No. 96-891 which authorized a loan of STAR funds in the amount of $400,000 to the Borrower. On November 26, 1997, the Housing and Redevelopment Authority (I�2A) adopted resolution No. 97-11/26-4 authorizing a loan of federal HOME funds in the amount of $753,000 and a loan of UDAG Repayment funds in the amount of $245,929 to the Borrower. The Borrower is investing $100,000 into the Project. As approved by the HRA Boazd, part of the STAR funds were disbursed in March to the Borrower in order to purchase the Project site. In order to complete the financing of the Project, the Borrower is requesting the HRA to issue up to $1,400,000 of 501(c)(3) ta�c exempt revenue bonds. The Bonds will be retired over a 25 year period and have an annual debt service requirement of appro�mately $102,000-$105,000 per year assuming an interest rate of biis%-63is% The Bonds will be primarily repaid from revenue from the Project. However, Project revenues wili only cover about 80%-85% of the annual debt service requirement. Therefore, the Borrower is also requesting the City Council to establish a housing ta�c increment financing district and approve a tax increment fivancing plan which will create tax increments that can be pledged to repay the Bonds. The boundary of the TIF District will be contenninous with the Project boundary. Housing tax increment districts aze not subject to state- aid penalties. The project will generate approxnnately $38,883 per year in real estate t�es of wl�ich approximately $26,17830,000 as captured increments may be used to repay the Bonds. Current real estate tases are appro�mately $6,700 per yeaz. The TIF district will be in effect for 98-yz�- 25 years or until the Bonds aze repaid, whichever is shorter. Attached is a copy of the TIF Plan which details the unpact upon the taxing jurisdicfions and addresses the statutory requirements showing that but for the establishment of the tas increment financing district and tax increment financing plan, the Project would not be financialiy feasible. Pursuant to Minnesota Statutes copies of the proposed TTF Plan were sent to the School District and County for comment April 13, 1998, thirty days prior to the CiTy Council's public hearing of the TIF Plan. Pursuant to Minnesota Statutes copies of the proposed TTF Plan were sent to the School District and County for comment April 13, 1998, thirry days prior to the City Council's public hearing of the TIF' Plan. In regazds to the issuance of the Bonds, neither the HRA or City shall be liable on the Bonds and the Bonds shall not be a debt of the HRA or City withiu the meaning of any state constitutional provision or statutory limitation, and will not constitute or give rise to a charge against the general credit or taxing power of the City or the HRA or a pecuniary liability of the City or the HR, nor shall the Bonds be payable out of any funds or properry other than those provided as security therefore. Recommendafion Staff recommends adoption of the attached resolution which: 1. Approves a Housing Program as required prior to issuance of Bonds. 2. Establishes the TIF District coterminous with the Project boundary and the TIF Plan to partially fmance acquisifion and construction of the Project from taY increments generated by the TIF District. 3. Authorizes the HRA to issue 501(c)(3) revenue bonds in an amount up to $1,400,000 to finance the Project. 4. Authorizes staff to enter into a memorandum of understanding with the Borrower which stipulates terms and conditions towards the final issuance of the Bonds. Authorizes Leonard, Street and Deinard Professional Associafion as bond counsel and Norwest Investment Services, Inc. as investment banker for the Bonds. Attachments 1. City Council Resolution 2. Housing Program Tax Increment Financing Plan for Superior Street Cottages Tax Increment Financing District The attached resolution is sponsored by Councilmember Coleman cc: Pamela Wheelock, 5usan Kimberly \�PED\SYS2\SHARED\CARLSOAP\WEST7FED\CC513.MQ�4 °I�- yz� CITY OF SAINT' PAUL, MINNESOTA PROGRAM FOR A MULTTFAMII,Y SENiOR HOUSING DEVELOPMENT (SUPERIOR STREET COTTAGES) Introductiou. This housing finance program (the "Program") under Minnesota Statutes, Chapter 462C (the "Ac�') describes the proposed issuance by the Housing and Redevelopment Authority of the City of Saint Paul, Minnesota (the "FIItA") of up to $1,400,000 of revenue bonds (the `Bonds") to fmance, in part, the acquisition and construction of a senior rental housing development for the eiderly (the "Project") by Superior Street Cottages, LLC (the "Borrower"). The Bonds will be revenue obligations, secured by the repayment obligation of the Borrower, mortgages and other security interests in property owned by the Borrower, and a first lien on tax increments (the "TaY Increments") to be derived from the Superior Street Cottages Housing TaY Increment Financing District (the "DistricP'), as described below. The Bonds will not be a general obligation of the City of Saint Paul, Minnesota (the "City") or the HRA, nor will any assets or revenues of the City or HRA be pledged to the payment of the Bonds other than as described above. Issuer. The issuer of the Bonds will be the HRA. Under Chapter 72 of the Saint Paul Legislative Code, the HRA is authorized to exercise the powers of the City under the Act upon approval by the City of the Program and delegation by the City to the HRA of those powers for the purposes of the Program. T� Increment District and Housing Development Project. In wnnection with the Project, the HRA will establish the District. The HRA has prepared a tax increment financing plan for the District, pursuant to Minnesota Statutes, Sections 469.174 through 469.179, as amended (the "TIF Ac�'). The TIF Act requires that a tax increment district be established within a"project azea". Therefore, the HRA will aiso create a"housing development projecP' within the meaning of Minnesota Statutes, Sections 469.001 to 469.047, as amended (the "I�2A Act"), and this Program constitutes the program required by Section 469.0171 of the IIRA Act. The boundaries of the housing development project azea, for purposes of the TIF Act, aze coterminous with the boundaries of the District, and are set forth on the map attached hereto as E�ibit A. Housing Plan and Program. This Program will be undertaken pursuant to the Act and the Aousing Pian of the City required by the Act. The Housing Plan, as amended, was adopted by the City in March of 1990. This Program will be adopted after review by the Metropolitan CouncIl, and a public hearing on the Program, held after notice is given, all as required by Section 462C.04 of the Act. The Program is consistent with both the Housing Plan (and other housing plans of the City developed under other laws), and is consistent with development guides applicable within the City and developed by the Metropolitan Council. Borrower. The bonower is Superior Street Cottages, LLC, a Mivnesota limited liability company, whose members aze initially Lyngblomsten Services, Inc. and the West 7th/Ford Road 1649786.01 HousrtigArogam qY -ya'' Federation. During the term of the Bonds the sole member of the Bonower will be Lyngblomsten Services, Inc. Project Superior Street Cottages will be a 23-unit rental housing project for the elderly. The Project will be newly constructed, with consttuction to begin shortly after the Bonds aze issued. The Project is a multifamily housing development within the meaning of Section 462C.05 of the Act. The Project will be a rental housing development, and will be designed and intended to be occupied primarily by the eiderly. The Project will be located on the northwest comer of Duke and Superior Streets in the City. The amount of Bonds attributable to the Project is expected to be appro�mately $1,400,000. The Project complies or will comply with all applicable building code, zoning and land use planning requirements. Need for the Project; Income and Rent Limitations. The development of the Project will provide needed additional rental housing opportuniries within the City for the elderly. Under the Act, and under Section 145 of the Internal Revenue Code of 1986, as amended, which will govem the Bonds, no income limits apply to residents of the Project. However, the TIF Act imposes certain requirements in connection with the creation of a housing taJ{ increment district, and in order to comply with such requirements, at least 40% of the units in the Project will be occupied by individuals whose income is 60% or less of the area median gross income, adjusted for family size. The statutory authority for various sources of subordinated financing also impose income or rent limits, or both, wluch may be more restrictive than the TIF' Act. The Project will comply with the most restrictive limitations. The Boirower, and any subsequent owner of the Project, will not azbitrarily reject an application from a proposed resident because of race, color, creed, religion or national origin, sex, afFectional preference, marital status, or status with regazd to public assistance or disability. Bonds. The FIItA will issue the Bonds, in one or more series, in an aggregate original principal amount of up to $1,400,000. Substantially all of the proceeds of the Bonds attributable to the Project will be applied to pay or reimburse for the costs of constructing, installing and equipping the Project. "Substantially all" means all of the proceeds of such Bonds, less amounts deposited in a debt service reserve fund or used to pay the costs of issuance of the Bonds. It is �pected that the Bonds will have a term of not more than 25 yeazs, and will mature serially or be subject to sinking fund payments, The Bonds will beaz interest �cludable from gross income for federal income tax purposes, and, to the same extent, �cludable from the gross and taxable net income of individuaLs, estates and husts for Minnesota ta�c purposes. The Bonds will be special, limited obligations of the fIRA, payable solely from (a) tas increment and (b) revenues provided by the Borrower under one or more revenue agreements with the HRA. The Bonds will be further secured by mortgages and other security interests in the property owned by the Botrower. The Bonds will not be a general obligation of the City ar the T3RA, nor will 1649786.01 . Housmg Rogam qK-yZS any revenues or assets of the City or HRA (other than those of the Borrower and the T� Increments) be pledged to the payment of the Bonds. The City or HItA may require the Borrower to provide evidence satisfactory to the City or HRA of the ability and inteution of the Borrower to complete the construction of the Project, and evidence satisfactory to the City or HRA of compliance with the standards and requirements for the making of the financing established by the I3RA, as set forth herein and in connection tkierewith, the City, the HRA or its representatives may inspect the relevant books and record of the Bonower in order to confum such ability, intenrion and compliance. In addition, the City or HRA may periodically require certification from the Borrower or such other person deemed necessary conceming compliance with various aspects of this Program. The provisions of this Program aze severable and if any of its provisions, sentences, clauses or pazagraphs shall be held unconstitutional, contrary to statute, exceeding the authority of the City or the HRA or othenvise illegal or inoperative by an court of competent jurisdiction, the decision of such court shall not afFect or impair any of the remaining provisions. The City shall not amend ihis Program, while the Bonds authorized hereby aze outstanding to the detriment of the holders of such Bonds. Adopted: May 13, 1998 1649786.01 3 Housv�g Pro�am qd' - y?'' . �: [Map of District and Project Area] 1644/86.01 A-1 xousmg Progmn ° � -y��- HOUSING AND REDEVELOPMENT AUT7 OF T'HE CTI'Y OF SAINT PAUL,IVIINNE TAX INCREMENT FINANCING PLAN SUPERIOR STREET COTTAGES HOU TAX INCREMENT FINANCING DLSTJ l�l Introduction A. Background The Superior Street Cottages Housing Tas Inc ment Financing Aistrict (the "District") shall consist of an approximately 86,900 squaze fo parcel located at the northwest corner of Duke and Superior Streets and formerly occu ed by the Holm & Olson Nursery (the "Property"), in the City of Saint Paul, County of Ramsey, State of Minnesota and legally described in Attachment A attached hereto and ' corporated in this plan. The Housing and Redevelopment Au rity of the City of Saint Paul, Minnesota (the "I-IKA") proposes a plan for the development of the strict consisting of the acquisition of land, demolition of struchu'es, and the consiruction of a 23- t low income rental housing facility for the elderly (the "Project") on the Properiy to be own by Superior Street Cottages, LLC, a Minnesota limited liability company. B. Creafion of This taY increment Subd. 11 of the Superior Sta C. Need and Street Cottages H�ousing Tas Increment District to the creation, under Minnesota Staiutes Section 469.174, Housing Taac Increment District (the."District"). " Purpose i. To incre the supply of adequate housing within the community for elderly persons of a11 in me levels including rental housing for seniors of low and moderate income. ii. To p vide such housing on land or in azeas which qualify as redevelopment projects wi emphasis upon lands potentially usefizl for contributing to the public welfare, but w ch by reason of special probiems or wnditions, haue not reached full development tential by the ordinary operations of private entetprise. iii./ carry out the provision of housing and development of underdeveloped lands within the City consistent with the general land use pian and other components of the City's Comprehensive Plan. Ta assist in the provision of rental housing to elderly persons of low and moderate income at prices or rents within their means and to make advance commitments to q�-y��- such rental assistance in low and moderate inwme units in order to assist in securing financing for housing improvements. v. To finance a portion of the development costs of the Project by m of ta3� increment generated by Project improvements and development. vi. To finance housing development by a combination of private an public financing under authority and subject to the requirements of federal, sta and local law and ordinance for the provision of revenue bond financing for hous" g purposes. It is necessary ihat the HRA exercise its powers under state law develop, impiement, and finance a program designed to encourage, ensure and facilitate the deve pment of affordable housing for its low- and moderate-income elderiy residents. The Project ' further accomplish the public purposes specified in this paragraph. I� area. A. Provide afforda6le housing for low- d moderate-income elderly residents of Saint Paul. As a result of an extensive neighborho review process confirmed by a market study conducted by M�eid Reseazch Group, the believes there is a mazket for tental housing for the elderly of the type being proposed for the Dis ct. B. � To redevelop The Property was of Interstate 35 and the r no longer a viable con deteriorated. Currently, to the public welfaze, as operations of private en�,@ C. It is increase by ; viousl,�"operated as a nursery and greenhouse. Due to� the extension ting�`oss of access to a commercial frontage road, the Property was rc�a1 property, and the buildings located on the Property had �ropezty is vacant. The construction of the Project will contribute Property has not reached its development potential by the ordinary the tax base of the City of Saint Paul. that the t�able mazket value of parcels an the taY increment district will ely $1,141,700 once the new housing facility is placed in service. 2 � D. Remove blight within Saint Paul. The Superior Street Cottages site is located in the West Seventh azea of Saint Paui e substandard buildings previously located on the property have been removed, and will be eplaced with a new 23-unit low income rental housing facility for the elderly, substantially ' oving the West Seventh area of St. Paul. III, Classification of the District The HRA and the City, in determining the need to create a tas incre ' t financing disUict in accordance with Section 469.1'J4, fmd that the District is a housing distri pursuant to Minnesota Statutes, Section 469.174, Subd. 11 because (1) the project which comp,- es the District is intended for occupancy, in part, by persons or families of low and moderate in me, as defined in Minnesota Statutes, Chapter 462A, Title II of the National Housing Act of 19 , the National Housing Act of 1959, the United States Housing Act of 1937, as amended, Title of the Housing Act of 1949, as amended, other similaz federal, state, or municipal legislation, the regulations promulgated under any of those acts; and (2) the fair mazket value of the impro� ments which shall be constructed for commercial uses or for uses other than low and moderate i me housing consists of not more than 20 percent of the total fair mazket value of the planned provement in the development plan or agreement. The fair mazket value of the impmvements �mprising the Project was determined using the cost of construction method of esumating maz 't value. At least 40% of the units wi11 be occupied by individuals whose income is 60°/a or s of the azea median gross income, adjusted for family size. f Tn addition, the District meets the r uirements of a housing district pursuant to Minnesota Statutes, Seetion 469.176, Subd. 4d, becau 100% of the zevenues derived from taY increments from . the District will be used to finance the t, of a housing project as defined in Section 4b9.174, Subd. I 1, including the cost of public improy�ments directly related to the housing project and the allocated administrative expenses of the , Finally, the District m, ' ts the requirements of a housing district pursuant to Minnesota Statutes, Section 469.1761, S d. 1 and Subd. 3 because, for the duration of the District, either (a) the project which comprises District will satisfy the income requirements for a qualified residential rental project as defined � Section 142(d) of the Intemal Revenue Code (the "Code or (b) at least 50 percent of the resi ntial units in the project which comprises the District will be occupied by individuals whose i me is 80 percent or less of azea median gross income. In this case, as mentioned above, least 40% of the units will be occupied by individuals whose incame is 60% or less of the aze median gross income, ad}usted for family size, which satisfies the income requirements f a residenual rental project as defined in Section 142(d) of the Code. 3 ��- �. Descripfion oF the develonment �rogram for the Superior Street Cottages Proieet The development program consists of the development of a 23-unit low and moderate in e rental housing facility for the elderiy (the "Projec�') in the District and the fmancing of the P}ect The Project will be owned by Superior Street Cottages, LLC, a Miunesota limited liability mpany (the "Develope�"). This will require acquiring land, installing infrastruchue, co acting for professional services essential to redevelopment activities, incuning financing rela �penses and funding administrative functions, ali as described in more detail below. All of th�sts listed below aze re�ected in the project budget, and there are no additional public improvement costs. A. Acquire property. The land has been purchased by the Developer for agproxint2tely $215,000. In addition, project costs will include approximately $9,200 of property taxes ayable in 1998 on the acquired property. B. Reimbursement for Demolition of Structur '. Demolition of the structures which w e previously located within the District cost appro�mately $12,500. �" C. Undertake and install site and utilities. Site improvements will include sewer ccess at a cost of approximately $16,500. D. . Contracts for profession ' services essenfial to the redevelopment activifies. Professional services will testing, legal, civil engineering, a� design. The total cost for pro " $215,000. E. of Project ; land surveys and tide work, real estate, environmental , accounting, developer's fee, consultants and azchitectural services, other than bond issuance costs, is estimated at The actual co truction of the Project, and the funding of operating reserves, replacement reserves and debt s ice reserves therefore, and the cost of furnishings and equipment for the Project, is expect to total approximately $2,230,000. F. cur costs and expenses connected with financing activities. Th shall issue ta�c exempt ta�c lri�rement revenue obligations to finance approximately $1,400,00 of total project costs. Bond issuance costs plus other financing related costs (including 4 c�g� - y y' ' costs incurred in connection with other sources of funds set forth in Section VII.C.), construction period interest and insurance, legal expenses, printing and undenvriter's di anticipated to total approzcimately $102,000. V. � The following, as required by Section 469.175, Subd. 1(3), is a list of de lopment activities that are proposed to take piace within tbe District for which contracts have b n entered into at the time of the preparation of this plan, inciuding the names of the parties to e contract, the activity govemed by the contract, the cost stated in the conuact, and the expect .date of completion of that activity. � a. Glendening Architectural Services, Inc. Architect Fstimated Cost: $82,115 Fstimated completion date: February, 1 b. Gabler Housing Solutions Corporation �' Consultant J Estimated Cost: $34, 0 Estimated completion date: Fe ary, 1999 1�l� Development activities in the wiil consist of activities necessary anc in Section II above. � � Increment District. which may require the �penditure of ta�c increments, � to promoting and maximizing the objectives set forth The following, as�i by Secrion 469.175, Subd. 1(5), are esrimates of the (i) cost of the Project, including adm� "istrauon expenses; (ii) amount of bonded indebtedness to be incuired; (iii) sources of revenue t,f nance or othenvise pay the costs of the Project; (iv) the most recent net taY capacity of taa�able real property within the tax increment financing district; (v) the estimated captured net tax capacity of�the tax increment financing district at completion; and (vi) the duration of the ta�� increment finan�in� district's existence. 5 c,� � - 4 ��- A. Cost of the Projeet, induding administrative expenses. The total cost of the Project is estimated at $2,898,554, which igcludes $25,000 of blic improvement costs (see C.vi. below). In addition, the HItA may use an amount up to 10% tbe taY increment expenditures to pay for its costs in administering the Dist[ict. B. Amount of bonded indebtedness to be incurred. The HRA shall be the issuer of one or more series of t� exempt housi g revenue obligations by the end of the year 1998 in an aggregate amount not to exceed $1,400�00. The taac increments will be pledged to the payment of the bonded indebtedness. The HRA y, after the initiai issuance of bonds, issue refunding bonds for purposes of refinancing such bonde indebtedness. C. Sources of revenue to finance or otherwise pay �roject costs. The following aze the likely sources for funding the to�Project: Tax Increments Tax increments, net of up to 10% for�'dministrative expenses, are anticipated to equal approximately $26,178 annually. All taY �crements will be first pledged to the payment of debt service on the bonds described in B�bove. t ii. Inveshnent income ` � � Certain interest eamings�f'fom bond proceeds, if any, will be a source of revenue to gay project costs. A cwrent estiinate of such earnings is not auailable. iii. Aeveloper �apital The Developer�ill contribute $1OQ000 for construction of the housing faeility. � r. iv. Federal HO� Loan a On Nov¢mber 26, 1997, the HRA Board approved a loan to the Developer of federal HOME funds�n the amount of $752,625. v. 'On August 6, 1996, by Resolution No. 96-891, the City Council approved a$40Q000 the Developer from STAR funds. �y'y vi. PED Public Improvement Funds PED public improvement funds in the aznount of $25,000 will be contributed,�Po the Project. vu. Federal Home Loan Bank Affordable Housin� Grant A Federal Home Loan Bank Affordable Housing Grant has beefi� awazded to the Proj ect in the amount of $100,000. � viii. UDAG Re�yment Funds The City Council has passed a resolution authorizing ,�"loan of $245,929 of LTDAG repayment funds to the West Seventh/Fort Road Federation f,�{�r the purposes of making a loan to the Developer. ,� i/ D. The most recent net tax capacity of taai ble real property within the tax increment financing district �' As of January 31, 1998 the total tax capacity o��iroperry pazcels to be included in the District was $fi,726, a11 of which is attributable to vacant 1"�d. However, two parcels in the District were exempt from taY because they were owned by the or the HRA. The market value attributable to the land is assumed to remain constant. The o gmal ta�c capacity and Tax Rate are calculated in accordance withMinnesota Statutes, Sectiori 4, .174, Subd. 7 and Section 469.177, Subd. 1. E. The estimated captured�iiet ta�c capacity of the tax increment financing district at completion. F� r� The Project will consist of �'23-unit low and moderate income rental housing facility for the elderly with an aggregate assume "mazket value of $1,380,000, including land value. The increase in market value is estimated at $1 41,700. Applying a 1.0% taY capacity rate to the low income units and 2.5°/u ta�c capacity rate ,�� the mazket rate units results in an estimated captured taY capacity of approximately $19,970 as�sed in the year 1999 and payable in the year 200Q the year following expected compietion of,;fionstruction of the project. This captured tax capacity is calculated in accordance with Minqesota Statutes, Section 469.174, Subd. 4 and 469.177, Subd. 2. F. 'I'h¢ duration of the tax increment financing district's egistence. The Dlstrict will be certified in 1998. The first taY increments are anticipated to be generated fa taYes payable in the year 2000. Pursuant to Section 469.176, Subd. lb(a)(5), the duration of��the District will run 25 yeazs from the first receipt by the HRA of taz� increments, 7 q�-��Y which will be through calendar yeaz 2025. The HRA does, however, reserve the decertify the District prior to the legally required date. ►� 11 . canaciiies of all taging jurisdictions. The taxing jurisdictions in which the District is located in whole or in pa�re as follows: a. Independent Schooi District #625, whose boundaries��cgifemunous with those of the City of Saint Paul. j b. The County of Ramsey, wherein the City of Saint �� is located. c. The Housing and Redevelopment Authority,�'pf the City of Saint Paul, whose boundaries aze cotemunous with those of the City of 5aint P� d. The Port Authority of the City of Saint�'ul, whose boundazies are coteiminous with those of the City of Saint Paul and whose powers to le,c� and use property tases are limited. e. Metropolitan authorities, such as,?the Metropolitan Council, Metropolitau Aiiports Commission, Metropolitan Waste Control Coirimission, and the Metropolitan Mosquito Control District Of these, only the Metropolitau C�rtncil and the Metropolitan Mosquito Control District currently levy taa�es on real estate. �f The HRA is required by Minnesota �S�`tutes Section 469.175, Subd. 1(a)(6) to make statements relative to the alternate 'estimates of the impact of the tax increment fmancing on the net taz� capacities of all taxing jurisdicCiq` s in which the tax increment fmancing district is locaYed in whole or in part. ° Impact on Taxing Jurisdictions Under the the taxing jurisdic these taxing jurisi Table 1 below. tion that the estimated captured net tax capacity would be available to ithout creation of the District, creation of the District will sezve to deny the taxes from the captured net tax capacity in the amount estimated in E o��-yza— Table 1 Taxine huisdiction �� X. City of St Paut Raznsey County School Dishict #625 Other flntentionaily Omitted.l 36.910 42.008 60203 6.532 145.653 F-�r at�t Annval Loss rD ia,�;�o Pe�cent Caphtted Increment Iurisdictions 2534 28.84 4133 4.49 100 $ 6,634 $165,8 7,550 18 , 50 10,819 Q475 1,175 29375 $26.178 $654.450 Attached hereto in Attachment A is a list of the Pr , erty Identification Numbers for all properties to be included in the Disirict, a map showing the -'oject azea and the District, and a legal description identifying the boundaries of the District. XI. District administration and annual disciosur�e. � Administration of the District will be the, esponsibility of the HRA. Tax increments will be deposited into interest beazing accounts separ e and distinct from other funds of the Hittl. Tas increments will be used only for activities d nbed in this tax increment plan. The HRA will report annuall to the State Auditor, county boazd, school board and Department of Revenue regazding tivities in the District as required by Section 469.175, subdivision 5 and subdivision 6 an ill include information with regard to the District in the data necessary to comply with subdivis' n 6a. XII. In accordance w,�h Minnesota Statutes, Section 469.175, Subd. 4, any refluction or enlargement of the ge '� azea of the Project or tax increment financing district; increase in amount of bonded in tedness to be incurred, including a determination to capitalize interest on debt if that determinati was not a part of the original plan, or to increase or decrease the amount of interest on the de ` to be capitalized; inerease in the portion of the captured taY capacity to be retained by the City; i rease in total estimated taY increment expenditures; or designation of additional property to b acquired by the City sha11 be approved upon the notice and after the discussion, public hearing an findings required for approval of the original plan. The geographic area of a ta�c incremen'financing district may be reduced, but shall not be enlarged after five years following the date of rtification of the original tax capacity by the county auditor. Ciment T.C. Rario E �,r ya XIII. Administrative Ex�enses In accordance with Ivfinnesota Statutes, Sections 469.174, Subd. 14 and 469 6, Subd. 3, administrative e�penses means all expenditures of an authority other than amo ts paid for the purchase of land or aznounts paid to contractors or others providing materials an ervices, including azchitecharal and engineering services, directly connected with the physical elopment of the real properiy in the District, relocation benefits paid to or services provid or persons residing or businesses located in the District or amounts used to pay interest on, a reserve for, or sell at a discount bonds issued pursuant to Section 469.178. Administrative penses also include amounts paid for seroices provided by bond counsel, fiscai consul , and planning or economic development consultants. Administrative expenses of the Distri � 1 be paid from tas increments; provided that no taat increment shall be used to pay any admi �` ative expenses for the Proj ect which exceed ten percent of the total taY increment expenditures a orized hy the t� increment financing p1an or the tatal taac increment expenditures for the Pro}e _ hichever is less. Pursuant w Minnesota Statutes Section pay for the county's actual administrative expe: county may require payment of those expenses expenses were incurred. ,�,a XIV. � 6, Subd. 4h, tas increments may be used to mcurred in connection wath the District. The February 15 of the year following the yeaz the No taa� increment shall be paid�5 the HRA after three years from the date of certification of the original net tax capaciry by the Co,,�nty Auditor unless within the tt�ree-year period: (1) bonds have been ' sued in aid of the Project pursuant to Section 469.178 of the TiF Act or any o law, except revenue bonds issued pursuant to Minnesota SYatutes, Section G69, to 469.165; (2) the (3) the acquired property within the District; or has constructed or caused to be constructed public improvements within the The bo�ds must be issued, or the HRA must acquire property or construct or cause public °ment,�to be constructed by approximately May, 2001. to Minnesota 5tatutes, Section 469.176, Subd-. fi, if, after four years from the date of certifzcation of the original tca capacity of the taz increment fznancing district pursuant to �nnesota Stafutes Section 469.17� no demolifran, rehabilitation or renovation of property or other site prepcaation, including qual�ed 10 iszszzs.oz �B'-ti�s-- improvement of a sireet adjacent to a pa7cel but not ins7alZution of utility service including sewer or water syslems, has been commenced on a parcel loarted within a tar increment financing district by the authority or by the owner of the pcvicel in accordance with the tctt increment fznrnzcing plan, no additioncrl tax increment may be faken from that p el and the original tar capacity of thcrt parcel shall be excluded from the original tca c city of the tar inct financing disirict. If the authorify or the owner of the p el subsequently commences demolifron, rehabilitation or renovation or other site prep tion on that parcel including improvement of a street adjacent to that parcel, in ac ordance with the tmc increment fznancing plan, the authority shall cerlify to the cou '�auditor in the anrnral disclosure report that the activity has commencecl The county, " ditor shall certify ihe fax capacity thereof as most recenily certified by the commissio �of revertue and add it to the original tar capacity of the tctt increment financing district. -7'lee caunty auditor must enforce the provisions of this subdivision.. For purposes of this ibdivision, qual�ed improvements are limited to (I) corrslrucfion or opening of a new et, (2) relocafron of a street, and (3) substantial recon.slnsction or rebuilding of crn existin�street. The F3RA or a property owner must begin by approximately May, 2002. Pursuant to Minnesota Statutes, increments are considered to have been foliowing occurs: improvements to pazcels within the District 469.1763, Subd. 3, revenues derived from taY an activity within the District only if one of the 1. Before or within fzve ye after certiftcation of the District, the revemres are actually paid to a third party with respect to t� activity; 2. Bonds, the, to a third pariy, before or v repay the BontLr, and the eayected to be spent befo; temporary period within,� Reverrue Code, or depo�e� rocee of which must be used to finance the activity, are issued cmd sold [hi�ff'ive years ttf[er certi: fication of the Disirict, the reverrues are spent to � ceedr of the Bonds either.are, on the date of issuance, reasonably the end of ihe latter o, f(i) the fzve year perioc� or (ii) a reasonable meaning of ihe use of that term under Section 148(c)(1) of the Internal in a rea.sonably required reserve or replacement fund,' 3. Bi 'ng conii-acts with a third party are entered into for performcmce of the activity before or within ve yerns after certification of the District and the revemres are spent under the contractual ob ation; or r / 4. ,� Costs with respect to the acfrvity are paid before or wifhin ftve years after certification of fhe D', trici and the reve�rues are spenf to reimburse a party for payment of the costs, including interes 'n unreimbursed costs. Therefore, one of tke above four events mustoccur by ap�xoximately May, 2003. il qs�-wa�-- XV. Use of Tax Increment All revenues derived from taY increment shall be used in accordance with fmancing plan, and pursuant to Minnesota Statutes, Section 469.176, Subdivisions � XVI. Notificaiion of Prior Planned Improvements aY mcrement 4d. Pursuant to Minnesota Statutes Section 469.177, Subd. 4, the C' has reviewed the area to be included in the District and has not found properties for which buil, ng pennits haue been issued during the 18 months immediately preceding approval of ihe Plan by, e City. XVII. Eacess Taa 7ncrements Pursuant to Minnesota Statutes Section 469.176�ubd. 2, in any year in which the taac increment exceeds the amount necessary to pay the � authorized by the tax increment plan, including the amount necessary to cancel any tas le �as provided in Minnesota Statutes, Section 475.61, Subd. 3, the City shall use the excess amount� o do any of the following: 1. prepay the outstanding bonds; � 2. discharge the pledge of taac in ement therefor; 3. pay into an escrow account �dicated to the payment of such bonds; or 4. retum the excess to the C nty Auditor for redistribution to the respective taxing jurisdictions in proportion of their tax `pacity rate. 11 Since the District is a Section 273.1399, Subd. 1, th without making a local contcil XIX. The City and in accordance with � XX. 3 housing district" within the meaning of Minnesota Statutes, i5 therefore exempt from the LGA/fIACA state aid reduction, EIRA have elected to compute Fiscal Disparities conhibution for the District m 469.177, subdivision 3, paragraph a. Purs t to Minnesota Statutes Section 469.176, subd. 5, no more than 1�%, by acreage, of the pro rty to be acquired in the District as set forth in this Tax Increment Financing Plan shall at time be owned by the IIRA or the City as a result of acquisition with the proceeds of bonds i ued pursuant to Section 4b9.178, without the HRA or City having, prior to acquisiUon 12 �$' y�'�-- in excess of 10% of the acreage, concluded an agreement for the development or redevelopment of the property acquired and which provides recourse for the HRA or City should the development not be completed. XXI. Assessment A�reement. Pursuant to Minnesota Statutes Sections 469.175, Subd. 1(b) and 46��17, subd. 8, the HRA or City may enter into an agreement in recordable form with the Developer of property within the Disuict which establishes a minimum market value of th�land and completed improvements for the duration of the District. The assessment agree�ent shall be presented to the assessor who shall review the plans and specifications for thenmprovements constructed, review the market value previously assigned to the land upon whie�the unprovements aze to be constructed and, so long as the minunum mazket value conta�d in the assessment agreement appeazs, in the judgment of the assessor, to be a reasonable�tamate, the assessor may certify the minnnum mazket value agreement. 13 ��-4a� A'I°TACHMENT A [list of parcels, legal description and map o£ district and project area� The land referred to is situated in the State of Minnesota, County of Ramsey, and is de�ibed as follows: ,� Parcel 1: ID-01-28-23-33-0097 All that part of the following described tract: All of Blocks 1 and 2 of Norwood Addition to the City of Ss��Paul, excepting therefrom the following: A certain tract of real estate situated in th�Northwest comer of Block 1 of Norwood Addition to the City of St. Paul, which is agcurately and correctly described as follows, namely: Commencing at an iron monume at the North line of said Block 1, 136.25 feet Southwest from the Northeast corner o said Block aforesaid, and from said starting point running South in a line parallel w' h the Easterly line of said Block 1 a distance of 40 feet to a hub or iron monument; ence Southwest 93 feet to a point on the West line of said Block 1 and on the Easte y line of Erie Street, distant 15 feet South from the Northwest corner of said Bl 1; thence running North 15 feet to the Northwest comer of said Block 1; then�running Northeast along the I3ortherly line of said Block 1, 108.77 feet to the point,6f beginning; also all that portion of said Norwood Addition to the City of St. Paul e�'�raced within the original limits of Croodhue Street lying between Duke $treet andiErie. Street and which was vacated by the Commou Council of the City of St. Paul� Resolution approved April 25, 1905; which lies Southerly of therfollowing described line: Beginning at a point n the West Line of the above mentioned tract, distant 335 feet North of the South st corner of said Block 2; thence run Northeasterly to a point on the East Iine of said ove described tract; distant 450 feet North of the Southeast corner of said Block 2 an there terminating. Except all right of access, being the right of ingzess to and egress om Trunk Highway 1Vo. 35E. (Torrens �roperty-Certificate No. 341566) ID-01-28-23-33-0022 i D�a[iict and Project azea are coterminous. ' � 14 q�r_Wz� Q Lots 5, 6 and 7, Block 3, Norwood Addition to St. Paul, according to the piat thereof on file and of record in the office of the County Recorder in and for Ramsey County, Minnesota. (AbstractProperty) ID-01-28-23-33-0001 That part of Lot 4, Block 4, Norwood Addition to St. Paul beginning at,�''starting point on the Southerly line of Lot 4 51.11 feet West of the SE comet ,'�f Lot 4; thence Northeasterly along a line to the NE corner of Lot 4; thence Southe y along the Eastern line of Lot 4 to the SE comer of said Lot 4; thence along the S�uthern line of Lot 4 to the starting point. � (Vacated Erie Street) That part of Erie Street lying North of the Addition to St. Paul and South of the right o line of Lot 7, Block 3, Norwood of Trunk Highway 35E. IS RFR-08-1993 15:52 PED 14TH FLOOR 612 223 32c9 P.05 �l , . . , _ � . , . •� .. .. �� • r . . � a � .. y " _ '` � Y, � :`?. .�' . ' ' `� ?' .. , ( ' ' ' �� : �° - ' ' • . T � AC E `' � ` . = �' l R � . .�' •—' k— � � - `-. _ P J6` : ( � ,� ' '� , ,I _ _'�� ' q ° ` .A ,_., .:, ,> .. -- • _ ; P N . '`' . •� ; ,u l_ .... '•' ._ M1 � Y' _,�. " � L:� . � ^' 3 f -_ ... (} ' _ ' e_ ' . _ ' _ - ' ¢ 'v .. 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This housing finance program (the "Program") under Minnesota Statutes, Chapter 462C (the "Act") describes the proposed issuance by the Housing and Redevelopment Authority of the City of Saint Paul, Minnesota (the "HRA") of up to $1,400,000 of revenue bonds (the `Bonds") to finance, in part, the acquisition and construction of a senior rental housing development for the elderly (the "ProjecP') by Superior Street Cottages, LLC (the `Borrower"). The Bonds will be revenue obligations, secured by the repayment obligation of the Borrower, mortgages and other security interests in property owned by the Borrower, and a first lien on tax increments (the "Tax Increments") to be derived from the Superior Street Cottages Housing TaY Increment Financing District (the "District"), as described below. The Bonds will not be a general obligation of the City of Saint Paul, Minnesota (the "City") or the HRA, nor will any assets or revenues of the Ciry or HRA be piedged to the payment of the Bonds other than as described above. Issuer. The issuer of the Bonds will be the HRA. Under Chapter 72 of the Saint Paul Legislative Code, the HRA is authorized to exercise the powers of the City under the Act upon approval by the City of the Program and delegation by the City to the HRA of those powers for the purposes of the Program. Tax Increment District and Housing Development Project. In connection with the Project, the HRA will establish the District. The HRA has prepazed a tas increment financang plan for the District, pursuant to Minnesota Statutes, Sections 469.174 through 469.179, as amended (the "TIF Act"). The TIF Act requires that a tax increment district be established within a"project azea". Therefore, the HRA will also create a"housing development project" within the meaning of Minnesota Statutes, Sections 469.001 to 469.047, as amended (the "T�ItA Act"), and this Program constitutes the program required by Section 469.0171 of the H12A Act. The boundaries of the housing development project area, for purposes of the TIF Act, are coterminous with the boundaries of the District, and are set forth on the map attached hereto as E�ibit A. Housing Plan and Program. This Program will be undertaken pursuant to the Act and the Housing Plan of the City required by the Act. The Housing Plan, as amended, was adopted by the City 3n March of 1990. This Program will be adopted after review by the Metropolitan Council, and a public hearing on the Program, held after notice is given, all as required by Section 462C.04 of the Act. The Program is consistent with both the Housing Plan (and other housing plans of the City developed under other laws), and is consistent with development guides applicable within the City and developed by the Metropolitan Council. q � _y a2- Borrower. The bonower is Superior Street Cottages, LLC, a Minnesota limited liability company, whose members aze initially Lyngblomsten Services, Inc. and the West 7th/Ford Road Federation. During the term of the Bonds the sole member of the Borrower will be Lyngblomsten Services, Inc., or another �liated entity. Project. Superior Street Cottages will be a 23-unit rental housing project for the elderly. The Project will be newly constructed, with construction to begin shortly after the Bonds are issued. The Project is a multifamily housing development within the meaning of Section 462C.05 of the Act. The Project will be a rental housing development, and will be designed and intended to be occupied primarily by the elderly. The Project will be located on the northwest comer of Duke and Superior Streets in the City. The amount of Bonds attributable to the Project is expected to be approximately $1,400,000. The Project complies or will comply with all applicable building code, zoning and land use planning requirements. Need for the Project; Income and Rent Limitations. The development of the Project will provide needed additional rental housing opportunities within the City for the elderly. Under the Act, and under Section 145 of the Internal Revenue Code of 1986, as amended, which will govern the Bonds, no income limits apply to residents of the Project. However, the TIF Act imposes certain requirements in connection with the creation of a housing tas increment district, and in order to comply with such requirements, at least 40% of the units in the Project will be occupied by individuals whose income is 60% or less of the area median gross income, adjusted for family size. The statutory authority for various sources of subordinated financing also impose income or rent limits, or both, which may be more restrictive than the TIF Act. The Project will comply with the most restrictive limitations. The Borrower, and any subsequent owner of the Project, will not arbitrarily reject an application from a proposed resident because of race, color, creed, religion or national origin, sex, affectional preference, mazital status, or status with regazd to public assistance or disability. Bonds. The HRA will issue the Bonds, in one or more series, in an aggregate original principal amount of up to $1,400,000. Substantially all of the proceeds of the Bonds attributable to the Project will be applied to pay or reimburse for the costs of constructing, installing and equipping the Project. "Substantially all" means all of the proceeds of such Bonds, less amounts deposited in a debt service reserve fund or used to pay the costs of issuance of the Bonds. It is expected that the Bonds will have a term of not more than 25 years, and will mature serially or be subject to sinking fund payments. The Bonds will bear interest excludable from gross income for federal income tax purposes, and, to the same extent, excludable from the gross and taxable net income of individuals, estates and trusts for Minnesota tax purposes. The Bonds will be special, limited obligations of the HRA, payable solely from (a) tax increment and (b) revenues provided by the Borrower under one or more revenue agreements ��l "�� with the IIRA. The Bonds will be further secured by mortgages and other security interests in the property owned by the Borrower. The Bonds will not be a general obligation of the City or the HRA, nor will any revenues or assets of the City or HRA (other than those of the Borrower and the Tax Increments) be pledged to the payment of the Bonds. The City or HRA may require the Borrower to provide evidence satisfactory to the City or IIRA of the ability and intention of the Borrower to complete the construction of the Project, and evidence satisfactory to the City or HRA of compliance with the standazds and requirements for the making of the financing established by the HRA, as set forth herein and in connection therewith, the City, the F3RA or its representatives may inspect the relevant books and record of the Bonower in order to confirm such ability, intention and compliance. In addition, the City or HRA may periodically require certification from the Bonower or such other person deemed necessary concerning compliance with various aspects of this Program. The provisions of this Program are severable and if any of its provisions, sentences, clauses or paragraphs shall be held unconstitutional, contrary to statute, exceeding the authority of the City or the I-IRA or otherwise illegal or inoperative by an court of competent jurisdiction, the decision of such court shall not affect or impair any of the remaining provisions. The City shall not amend this Program, while the Bonds authorized hereby are outstanding, to the detriment of the holders of such Bonds. Adopted: May 13, 1998 Q� -'� �-ti EXHIBIT A jMap of District and Project Area] RFR-02-i�3�3 2.:52 ==� i�PH P�nOP. 612 2c� 323� P.�5 � a�-�2-2- � . .. � � . - . y ° ' � �.�' ,. :� . `{ -. _ T �'��,4c � � ]l in ., . ' • , � � . ' " "` � • ,--� t �_ o \ 1 . ... .' '` -' . - -ue' - ` 6- T ..,y �F :�\ �� T ` y . _ aR O' i<. '\`� 1 ( .. ,1� > j ' ��"o '," ,:."=' . 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' . . -•�N�.,i \ ^ ' •�si� � C � � 3rrY . 1 ; • \ i%/�/�,4:.K,t�tf:: n„ O � 1 j "� . },y _Q� ' .�y . �� t0 � !��a•� .1' � r'.% '.��.. �ii.7nH4,'i✓illi�ra� .d,1�w�c%�✓�d'.+l� I'wTy�,�.�,Xt -�s��j� Q •c—^_. .i �i �saS � , � °� LJ. 1:' ' ' . � �--•',�`i._'- �4, � � : ;?�+, 8 t I � � ��\ ( � :, . �' 3 � �Y �V � ��' ��L_:.�Y, .�i�' S? +C�� ,�'!� /� Lv . ..'al� e.r�. �~ iL_/ t' O.f _ "'"�_..tt?�tA_�� V �"-'� '� - . ��!��r. � �b...u•r-,..9:Or..�o. v� LE '�� ;� P�QY �� aPR S�9° 15:_a 62z 2?8 3c<c Fr�,E.fw75 �l8 -y� �- A. Cost of the Project, including administrafive egpenses. The totai cost of the Project is estimated at ^— $2,837,578 which includes $25,000 of public improvement oosts (see C.vi, below). In additioq the HRA may use an amount up to 10% of the tas increment expenditures to pay for its costs in administering the Distdck. B. Amount of bonded indebtedness to be incurred. The �IRE1 shall be the issuer of one or more series of ta7c exempt housing revenue obligations by the end of the year 1998 in an aggregate amount not to exceed $1,400,000. The taY increments will be pledged to the payment of the bonded indebtedness. The HRA may, after the initial issuance of bonds, issue refunding bonds for purposes of refinancing such bonded indebtedness. C. Sources of revenue to finance or otherwise pay project costs. The following are the likely sources for funding the total Project: T� Increments TaY increments, net of up to 10% for administrative expenses, are anticipated to equal approximately $26,178 annually. All taY increments will be first pledged to the payment of debt service on the bonds described in B above and anv excess shall be pledged to the repayment of the STAR Loan referred to in C.v. below ii. Investment income Certain interest earnings from bond proceeds, if any, will be a source of revenue to pay pzoject costs. A cuaent estimate of such eamings is not available. iii, Developer Ca�ital The Developer will contribute $100,000 for construction of the housing £acility. iv. FederaI HOME Loan On November 26, I997, the HRA 33oard approved a loan to the Developer of federal HOME funds in the amount of $752,625. b 1525225 ORIGlNAL Council Eile # a 4 aa Green Sheet # �'7'�-S(p si Presented By Re£erred To Committee: Date RESOLUTION OF THE C'ITY COUNCII. OF Tf� CITY OF SAINT PAUL APPROVING (A) A MULTIFAMII,Y RENTAL HOUSING DEVELOPMENT PROJECT FOR THE ELDERLY AND A HOUSING PROGRAM T`HEREFORE, AND AU7'HORIZING THE HOUSING AND REDEVELOPMENT AUTHORITY TO EXERCISE THE POWERS GRANTED IN NIINNESOTA STATIJ'i'ES, SECTION 462C.01 TO 462C.08 IN CONNECT'ION THEREWIIT3; AND (B) T'I� CREATION OF THE SUPERIOR STREET COTTAGES HOUSING TAX INCREMENT FINANCING DISTRICT AND TFTE TAX INCREMENT FINANCING PLAN RELATING THERETO BE IT RESOLVED by the Council of the City of Saint Paul, Minnesota (the "Council'�,as follows: 2 Secfion 1. Recitals 3 1.01. On August 6, 1996, the Council adopted its Resolufion C.F. No. 96-891 approving a loan of 4 STAR funds in the amount of $400,000 to Superior Street Cottages, LLC, (the "Developer'�, for the 5 purposes of fuiancing the acquisition, construction and equipping of a 23-unit multifamily rental 6 housing facility for the elderly (the "FrojecP') in the City of Saint Paul (the "City"). 7 1.02. The Housing and Redevelopment Authority of the City of Saint Paul (the "HRA") has also 8 passed a resolution authorizing a loan of $245,929 of UDAG repayment funds to the West 7th/Fort 9 Road Federation for the purposes of making a loan to the Developer, and a$753,000 HOME loan to 10 the Developer. 11 1.03. Minnesota Statutes, Chapter 462C (the "Housing AcP') confers upon ciries, or housing and 12 redevelopment authorities authorized by ordinauce to exercise on behalf of the City the powers 13 conferred by the Housing Act, the power to issue revenue bonds to finuice a progrun for the putposes 14 of planniug, aduiinistering, making or purchasing loans with respect to one or more mulrifamily 15 housing developments within the boundaries of the City. 16 1.04. The I�ZA has received from the Developer, a Muuiesota limited liability company, a proposal 17 thax the HRA undertake a progr�n (the "Program") to finance the Project, through the issuance of 18 revenue bonds or obligarions in one or more series (the "Bonds") pmsuant to the Housing Act and the 19 TIF Act, as defined below. 20 1.05. The City desires to encourage the development of housing facilities desi�ed for occupancy �� v � 1 � 21 primarily by elderly persons within the City and enwurage the development of under-utilized land 22 within the boundazies of the City; and the Project will assist the City in achieving these objectives. 23 1.06. A public hearing on the Progaui and the issvance of Bonds for the Project was held by the City 24 Council on May 13,1998, followivg duly published notice, at which time all persons that desired to 25 speak were heard. 26 1.07. In connection with the Project, it has also been proposed tha# the HRA establish the Superior 27 Street Cottages Housing Tax Increment Financing District (the "District") and, in connection 28 therewith that the City approve the creation of the IJistdct and the Tax Increment Financing Plan (the 29 "TIF Plau � relating thereto, all pursuant to and in accordance with Miunesota Statutes, Section 30 469174 tbrough 469.179, inclusive (the "TIF' AcP�; and that the HRA create a housing development 31 project pursuant to and in accordance with Minuesota Statutes, Sections 469.001 through 469.047, 32 inclusive (the "HI2A AcP�. 33 1.08. The I3RA has investigated the facts and has caused to be prepazed the proposed TIF Plan. 34 1.09. The HItA and/or the City, as applicable, have performed all acfions required by law to be 35 performed prior to the adoption of the Progrun, the establishment of the District and the adoption of 36 the TIF Plan, including, but not limited to delivering a copy of the Progr�uil to the Metropolitan 37 Council for their review and notification of Rauisey County and School District No. 625 ha�ing 38 taxing jurisdiction over the properiy to be included in the Dishict, and the holding of public hearings 39 after published notice as required by the TIF Act and the Housing Act. 40 1.10. Certain written reports (the "Reports") relating to the TIF Plan and to the activities 41 contemplated therein have heretofore been prepared by HRA and City staff and submitted to the 42 Council, the Board of Commissioners of the I�2A and/or made a part of the City or HRA files and 43 proceedings in connecrion with the Project. The Reports include data, information and/or 44 substantiation constituting or relating to the basis for the findings and determinations made in this 45 resolution. The Council hereby confulns, ratifies and adopts the Reports, which aze hereby 46 incorporated into and made as fully part of this resolution to the same extent as if set forth in fiill 47 herein. 48 Section 2. Approval of Housiu�Proarani and Authorization for I3RA to enter into Memorandum of 49 Understanding and to Exercise Powers. 50 2.01. The City hereby approves the Progcain for the fuiancnig of the Project and, pursuant to Section 51 72 of the Saint Paul Admiiustrative Code, authorizes the F3IZA to (i) exercise the powers granted in 52 Minnesota Statutes, Sections 462C.01 to 462C.08 for the purpose of financing the Program and (ii) 53 enter into a Memorandum of Understanding with the Developer in connection with the Project. 54 2.02. Neither the HRA nor the City shall be liable on the Bonds issued pursuant to the Program, and 55 the Bonds shall not be a debt of the HRA or the City within the meannig of any state constitutional 56 provision or statutory lnnitation, and will not constitute or give rise to a charge against the general 57 credit or taxuig power of the City or the I II2A or a pecuniary liability of the City or the III2A, nor 58 shall the Bonds be payable out of any funds or properiy other than those provided as security 59 therefore. 60 2.04. The issuance of the Bonds shall be subject to final detenuination by the HRA of the terms and �� 61 conditions of the Bonds, and neither this resolution nor any new resolution of the HRA shzll 62 constitute an urevocable commitment on the part of the City or the I3I2A to issue the Bonds. 63 Section 3. Findings bv the City far the A�proval of the Tas Increment Financin� Plan for the Su�erior 64 Street Cotta�es Housin� Tax Increment Financin� District. 65 3.01. The Council hereby finds that the District is a housing district pursuant to Muuiesota 66 Sfahrtes, Section 469174, Subd. 11. 67 3.02. The Council hereby finds that the District, and the approval of the TIF Plan relating 68 thereto, aze intended and, in the judgment of this Council, the effect of such acrions will be, to 69 provide an unpetus for housing development in the District and to further the public purposes and 70 accomplish certain objectives as specified in the TIF Plan. 71 3.03. The Ciiy does not elect to compute the t� increments in accordance with Muuiesota 72 Statutes, Section 469.177, Subd. 3, ciause (b), meaning that tas increments wiil be detern 73 before the application of the fiscal disparities provisions of Mivnesota Statutes, Chapter 473F. 74 3.04. As a qualified housing district within the meaning of Minnesota Statutes, Section 75 273.1399, subd. 1, the District is not subject w the state aid losses set forth in Section 273.1399. 76 3.05. The Council further fmds, declares and detemunes that the City made the above 77 findings stated in pazagraphs 3.01 flu�ough 3.03 above and has set forth the reasons and supporting 78 facts for each det�+ination in writing, attached hereto as Attackunent A. 79 Section 4. A�proval of the TIF Plan and Further pocumentation. 80 4.01. The TIF Plan, as presented to the Council on this date, is hereby approved and 81 adopted, and shall be placed on file in the office of ttte Executive Director of the FII2A. 82 4.02. The staff of the City, the City's advisors and legal counsel aze authorized and directed 83 to cooperate as necessary with the I�2A in the unplementation of the Plan and for tlus purpose to 84 negotiate, draft, prepare and present to this Council for its consideration a11 fiu�ther plans, resolutions, 85 documents and contracts which may be deemed necessary for this purpose. 86 4.03. The auditor of Ramsey County is requested to certify the original net tax capacity of 87 the Disirict, as described in the TIF Plan, and to certify in each year thereafter the amount by which 88 the original net tax capacity has increased or decreased; and the I is authorized and directed to 89 forthwith transmit this request to the counry auditor in such form and content as the auditor may 90 specify, together with a list of all properties within the District for which building permits have been 91 issued diuin� the 18 months immediately preceding the adoption of trus resolution. 92 Section 5. Desia�afion of Bond CounseL Leonard, Street and Deinard is hereby retained as 93 Bond Counsei for the issuance of the Bonds, and Norwest Investment Services, Inc. is selected as the 94 investment banker for the Bonds. Leonard, Street and Deinard and Norwest Inveshnent Services, Inc. 95 aze hereby authorized to assist in the preparation and review of necessary documents relating to the 96 Project and the Prograui therefore, and the creation of the TIF' District, to consult with the City 97 Attorney, Developer and Purchasers of the Bonds as to the maturities, interest rates and other temvs �.�,y 98 and provisions of the Bond and as to the covenants and other provisions of the necessary document�n � � 99 and submit such documents to the FIRA for final approval. �� 100 Section 6. Ratification of Prior Actions. All activities previously undertaken by I IRA and 101 City staff in preparing and finaliziug the TIF' Plan and the Program, in forwazding the TIF Plan to the 102 appropriate ta�cing jurisdiction including Rawsey County and Independent School Dislrict No. 625, 103 and forwazding the Program to the Metropolitan Council, are hereby ratified and aff.umed. i o4 Arrac�IIv�.rrT a d�� t��`� 105 RESOLUTTON # � 106 The reasons and facts supporting the findings for the adoption of the Tas Increment 107 Financing Plan (the "Plan") for the Superior Slreet Cottages Housing TaY Increment Pinancing 108 Dishict (the "District") as required pursuant to Minnesota Statutes, Section 469.175, Subdivision 3 109 aze as follows: 110 111 112 113 114 115 116 117 118 119 120 121 122 123 124 125 126 127 1. Finding that the District is a housing district as defined in Minnesota Stc�tutes, Section 469.174, Subc1 11. The City finds that the District is a housing district pursuant to Minuesota Statutes, Section 469.174, subd. l l because (i) the Project is intended for occupancy, in part, by persons or families of low and moderate income, as defined in Mivuesota Statutes, Chapter 462A, Tifle II of the National Housing Act of 1934, the National Housing Act of 1959, the Unitecl States Housing Act of 1937, as amended, Tide V of the Housing Act of 1949, as amended, other similar federal, state, or municipal legislafion, and the regulations promulgated under any of those Acts; and (ii) fair market value of the improvements which shall be conshucted for commercial uses or for uses other than low and moderate income housing consists of not more than 20°/a of the total fair mazket value of the planned improvement in the development plan or agreement. Specifically, at least 40% of the units in the Project will be occupied by individuais whose income is 60% or less ofthe area median gross income, adjusted for family size. In addition, the City finds that the District meets the requirements of the housing dishict pursuant to Miimesota Statutes, Secrion 469.176, subd. 4(d) because 100% of the revenues derived from the tas increments from the Dishict will be used to finance the cost of the housing project as defined in Section 469.174, subd. 1 i, including the cost of public improvements directly related to the housing project and the allocated administrative ea�aenses of the HRA or the City. 128 In addition, the City finds that the District meets the requirements of a housing district pursuant to 129 Mirnzesota Statutes, Secfion 469.1761, subd. 1 and subd. 3 because, for the duration of the Distaict, 130 either (i) the Project will satisfy the income requirements for a qualified residential rental project as 131 defined in Section 142{d) of the Internal Revenue Code, or (ii) at least 50% of the residential units 132 in the Project will be occupied by individuals whose income is 80% ar less of area median gross 133 income. 134 2. Finding that the Tax Increment Financing Ptan conforms to the general plan for the 135 development or redevelopment of the municipality as a whole. 136 The proposed Project has been reviewed by the Metropolitan Council and the Metropolitan Council 137 has determined that the Program fixrthers local and regional housing policies and is consistent with 138 the Metropolitan Development Guide, and that the Prograui is comparible with the housing portion 139 of the comprehensive plan of the City. 140 3. Finding that the Taz Increment Firaavtcing Plan for the District will afford maximum 141 opportunity, consistent with the sound needs of the City as a whole, for the development of the 142 District by private enterprise. 143 The establishxnent of the District will result in the facilitation of the development of affordable �' �� 144 multifamily housing for the elderly in Saint Paul. 145 146 4. Finding that the City does not elect to compute the tcrc increment in accordance with Minnesota Statutes, Section 469.177, subdivision 3, clause (b). 147 The failure to elect to calculate increments in accordance with the above referenced statute 148 results in a greater amount of increment to be captured from the District, which will facilitate 149 the financing of the Project. ORCG1NAl. Nays Requested b�ep�rtment oi: Plannin Economic De elo� ent By ('� '1 Adopted by Council: Date (V��\V93' Adoption Certified by Council Secretasy By: Approved Z By: cil Form Ap� r e by Cit ttorney By: qr-ya�� Allen Carlson 266-6616 May 13, 1998 TOTAL # OF SIGNATURE PAGES 1 No 64256 u oerµ�rortwtoR �_ � a.rcw.c� _ 0 � ��.�❑ arv.r.owtY rnvamc _ ❑warsuu.amur.ESOUt ❑wuur��mninctrc G 4❑ Wn,R�ae,worr,p 1❑ Kimberlv / (CLIP ALL L TIONS SIGNATURE) ��SNUU'CT""A PIIBLIC HEARING to coxisider adoption of the attached resolution which: 1. Establishes the Superior Street Cottages Aousing Tax Increment District and Ta�c Incremen Financing Plan 2. Authorizes the HRA Board to issue up to $1,400,000 of tax exempt 501(C)(3) revenue bonds to finance the construction of a 23 unit senior rental development 3. Authorizes staff enter into a memorandum of understanding with developer which states te and conditions towards final approval and issuance of bonds. (see attached memo for details PL4NNING CAMMISSION CIB COMMITTEE CIVIL SERVICE COMMISSION Has this person/firtn everMOrlced untler a conhact for Mis deparGneM� YES NO Has fhis persoNfi�m eexr been a city empbyeeT YES NO Does this persanlfirm possess e sitill rwt npmallyposse&sed by any curtent city employee? VES NO is Mis D�soMrtn atargetetl vsndoR YES NO %ain ail ves answers on seoa2te sheet and attach to areen sheet West ?th/Fort Road Federation and Lyngblomsten Services, Inc, propose to construct a 23 unit senior reatal development at Duke and Superior Streets. City Council has approved a$400,00 STAR loan zad HRA has approved a$753,000 loan using HOME funds and loan of UDAG Repayment funds in the zmount of $245,929 to the project. The $1,400,000 of bond proceeds will complete the financing of the project. However, in order to have sufficient revenues to rep y the debt on the bonds a housin tax increment district mu t -- - -- --- 4NTAGESIFAPPROVED increments generated from the district wi11 go towards repayment of the bonds. The City will add to its sock of afffrodable senior rental housing. �'" �� ' i .°€- IFAPPROVED The City will possibly fore-go increased property ta�ces should the progerty be developed The proposed project is not financially feasible without tax increment financing. AMOUNT OF TRANSACTION f_ _ N�A �.# INFORMATION (IXPWM �{A� 41998 COSNREVENUEBUOGETED(CIRCLEON� YES NO ACTNITY NUMBEft �� '�� ; � ,,. r �, � DEPAR"1'MENT OF PLANNING & ECONOMIC DEVELOPMENT Pamela Wheefock Oirector CTTY OF SAINT PAUL Norm Coleman, Mayor T�: FROM: Council President Bostrom Councilmember Blakey Councilmember Harris Councilmember Benanau Councilmember Lantry Councilmember Reiter Councilmember Coleman Allen Carlson � 25 Wes[ Fourth Saeet Saint Paul, MTI SS102 q�-y}� TeZephone: 612•266-6700 Facsimile: 6T 2 228-3220 SUBJECT: May 13,1998 City Council Public Hearing regarding Establishment of the Superior Street Cottages Housing Tax Increment Financing District, Approvai of Tas Increment Financing Plan, Approval of Housing Plan and Preliminary Approval to Issue 501(c)(3) Multifamily Revenue Bonds DATE: April 28, 1998 Purpose The purpose of this report is to request the City Council to approve the attached resolution related to the development of the Superior Street Cottages elderly housing development to be located at the Northwest corner of Superior and Duke Streets in District 9: The resolution approves: A Housing Program pursuant to MN Statutes, chapter 462C which describes issuance of up to $1,400,000 of 501(c)(3) tas exempt revenue bonds (the `Bonds") to finance the acquisition and construction of a 23-unit senior rental housing development at the Northwest corner of Superior and Duke Streets (the "Project") by Superior Street Cottages LLC (the `Borrower"). 2. Preliminary issuance of up to $1,400,000 of 501(c)(3) tax exempt revenue bonds to finance the Proj ect and gives the Housing and Redevelopment Authority of the City of Saint Paul, Minnesota (fIRA) final authority to issue the Bonds. 3. Establishment of the 25 year Superior Street Cottages Housing Tax Increment Financing District (the "TTF District'� and Tax Increment Financing Plan (the "TIF Plan'�, in which the tax increments generated will be pledged to partially repay the Bonds. q8'-y��.- 4. Staff to enter into a memorandum of understanding with the Borrower which stipulates terms and conditians towazds the final issuance of the Bonds. 5. Leonard, Street and Deinard Professional Association as bond counsel and Norwest Investment Services, Inc. as investment banker for the Bonds. Before the above resolution may be approved, the City Council must open the meeting to the public for discussion regarding the approval of the Housing Program, establishment of the housing tax increment district and preliminary approval of the issuance of tax esempt revenue bonds. A notice of public hearing was published in the Saint Paul Pioneer Press on Apri128,1998 pursuant to NIN Statute requirements. It is also at this time that the County and School District may comment on establishment of the TIF District and TIF Plan. Background The West 7th/Fort Road Federation and Lynblomsten Services, Inc. formed the Superior Slreet Cottages LLC to construct the 23-unit Superior Street Cottages senior rental housing development at the Northwest corner of Superior and Duke Streets in District 9(the "ProjecP'). This is the site of the former Holm & Olsen nursery. The Project is comprised of 4 restricted- income one bedroom units, 3 market rate one bedroom units, 5 restricted-income two bedroom units and 11 market rate two bedroom units. The proposed gross monthly rents for the one and two bedroom restricted-income units is $504 and $644, respectively. The proposed gross monthly rents for the one and two bedroom market rate units is $675 and $795, respectively. The affordable units aze required due to federal funding provided to the project. The total estimated cost of the project is $2,898,554. The City Council adopted resolution No. 96-891 which authorized a loan of STAR funds in the amount of $400,000 to the Borrower. On November 26, 1997, the Housing and Redevelopment Authority (I�2A) adopted resolution No. 97-11/26-4 authorizing a loan of federal HOME funds in the amount of $753,000 and a loan of UDAG Repayment funds in the amount of $245,929 to the Borrower. The Borrower is investing $100,000 into the Project. As approved by the HRA Boazd, part of the STAR funds were disbursed in March to the Borrower in order to purchase the Project site. In order to complete the financing of the Project, the Borrower is requesting the HRA to issue up to $1,400,000 of 501(c)(3) ta�c exempt revenue bonds. The Bonds will be retired over a 25 year period and have an annual debt service requirement of appro�mately $102,000-$105,000 per year assuming an interest rate of biis%-63is% The Bonds will be primarily repaid from revenue from the Project. However, Project revenues wili only cover about 80%-85% of the annual debt service requirement. Therefore, the Borrower is also requesting the City Council to establish a housing ta�c increment financing district and approve a tax increment fivancing plan which will create tax increments that can be pledged to repay the Bonds. The boundary of the TIF District will be contenninous with the Project boundary. Housing tax increment districts aze not subject to state- aid penalties. The project will generate approxnnately $38,883 per year in real estate t�es of wl�ich approximately $26,17830,000 as captured increments may be used to repay the Bonds. Current real estate tases are appro�mately $6,700 per yeaz. The TIF district will be in effect for 98-yz�- 25 years or until the Bonds aze repaid, whichever is shorter. Attached is a copy of the TIF Plan which details the unpact upon the taxing jurisdicfions and addresses the statutory requirements showing that but for the establishment of the tas increment financing district and tax increment financing plan, the Project would not be financialiy feasible. Pursuant to Minnesota Statutes copies of the proposed TTF Plan were sent to the School District and County for comment April 13, 1998, thirty days prior to the CiTy Council's public hearing of the TIF Plan. Pursuant to Minnesota Statutes copies of the proposed TTF Plan were sent to the School District and County for comment April 13, 1998, thirry days prior to the City Council's public hearing of the TIF' Plan. In regazds to the issuance of the Bonds, neither the HRA or City shall be liable on the Bonds and the Bonds shall not be a debt of the HRA or City withiu the meaning of any state constitutional provision or statutory limitation, and will not constitute or give rise to a charge against the general credit or taxing power of the City or the HRA or a pecuniary liability of the City or the HR, nor shall the Bonds be payable out of any funds or properry other than those provided as security therefore. Recommendafion Staff recommends adoption of the attached resolution which: 1. Approves a Housing Program as required prior to issuance of Bonds. 2. Establishes the TIF District coterminous with the Project boundary and the TIF Plan to partially fmance acquisifion and construction of the Project from taY increments generated by the TIF District. 3. Authorizes the HRA to issue 501(c)(3) revenue bonds in an amount up to $1,400,000 to finance the Project. 4. Authorizes staff to enter into a memorandum of understanding with the Borrower which stipulates terms and conditions towards the final issuance of the Bonds. Authorizes Leonard, Street and Deinard Professional Associafion as bond counsel and Norwest Investment Services, Inc. as investment banker for the Bonds. Attachments 1. City Council Resolution 2. Housing Program Tax Increment Financing Plan for Superior Street Cottages Tax Increment Financing District The attached resolution is sponsored by Councilmember Coleman cc: Pamela Wheelock, 5usan Kimberly \�PED\SYS2\SHARED\CARLSOAP\WEST7FED\CC513.MQ�4 °I�- yz� CITY OF SAINT' PAUL, MINNESOTA PROGRAM FOR A MULTTFAMII,Y SENiOR HOUSING DEVELOPMENT (SUPERIOR STREET COTTAGES) Introductiou. This housing finance program (the "Program") under Minnesota Statutes, Chapter 462C (the "Ac�') describes the proposed issuance by the Housing and Redevelopment Authority of the City of Saint Paul, Minnesota (the "FIItA") of up to $1,400,000 of revenue bonds (the `Bonds") to fmance, in part, the acquisition and construction of a senior rental housing development for the eiderly (the "Project") by Superior Street Cottages, LLC (the "Borrower"). The Bonds will be revenue obligations, secured by the repayment obligation of the Borrower, mortgages and other security interests in property owned by the Borrower, and a first lien on tax increments (the "TaY Increments") to be derived from the Superior Street Cottages Housing TaY Increment Financing District (the "DistricP'), as described below. The Bonds will not be a general obligation of the City of Saint Paul, Minnesota (the "City") or the HRA, nor will any assets or revenues of the City or HRA be pledged to the payment of the Bonds other than as described above. Issuer. The issuer of the Bonds will be the HRA. Under Chapter 72 of the Saint Paul Legislative Code, the HRA is authorized to exercise the powers of the City under the Act upon approval by the City of the Program and delegation by the City to the HRA of those powers for the purposes of the Program. T� Increment District and Housing Development Project. In wnnection with the Project, the HRA will establish the District. The HRA has prepared a tax increment financing plan for the District, pursuant to Minnesota Statutes, Sections 469.174 through 469.179, as amended (the "TIF Ac�'). The TIF Act requires that a tax increment district be established within a"project azea". Therefore, the HRA will aiso create a"housing development projecP' within the meaning of Minnesota Statutes, Sections 469.001 to 469.047, as amended (the "I�2A Act"), and this Program constitutes the program required by Section 469.0171 of the IIRA Act. The boundaries of the housing development project azea, for purposes of the TIF Act, aze coterminous with the boundaries of the District, and are set forth on the map attached hereto as E�ibit A. Housing Plan and Program. This Program will be undertaken pursuant to the Act and the Aousing Pian of the City required by the Act. The Housing Plan, as amended, was adopted by the City in March of 1990. This Program will be adopted after review by the Metropolitan CouncIl, and a public hearing on the Program, held after notice is given, all as required by Section 462C.04 of the Act. The Program is consistent with both the Housing Plan (and other housing plans of the City developed under other laws), and is consistent with development guides applicable within the City and developed by the Metropolitan Council. Borrower. The bonower is Superior Street Cottages, LLC, a Mivnesota limited liability company, whose members aze initially Lyngblomsten Services, Inc. and the West 7th/Ford Road 1649786.01 HousrtigArogam qY -ya'' Federation. During the term of the Bonds the sole member of the Bonower will be Lyngblomsten Services, Inc. Project Superior Street Cottages will be a 23-unit rental housing project for the elderly. The Project will be newly constructed, with consttuction to begin shortly after the Bonds aze issued. The Project is a multifamily housing development within the meaning of Section 462C.05 of the Act. The Project will be a rental housing development, and will be designed and intended to be occupied primarily by the eiderly. The Project will be located on the northwest comer of Duke and Superior Streets in the City. The amount of Bonds attributable to the Project is expected to be appro�mately $1,400,000. The Project complies or will comply with all applicable building code, zoning and land use planning requirements. Need for the Project; Income and Rent Limitations. The development of the Project will provide needed additional rental housing opportuniries within the City for the elderly. Under the Act, and under Section 145 of the Internal Revenue Code of 1986, as amended, which will govem the Bonds, no income limits apply to residents of the Project. However, the TIF Act imposes certain requirements in connection with the creation of a housing taJ{ increment district, and in order to comply with such requirements, at least 40% of the units in the Project will be occupied by individuals whose income is 60% or less of the area median gross income, adjusted for family size. The statutory authority for various sources of subordinated financing also impose income or rent limits, or both, wluch may be more restrictive than the TIF' Act. The Project will comply with the most restrictive limitations. The Boirower, and any subsequent owner of the Project, will not azbitrarily reject an application from a proposed resident because of race, color, creed, religion or national origin, sex, afFectional preference, marital status, or status with regazd to public assistance or disability. Bonds. The FIItA will issue the Bonds, in one or more series, in an aggregate original principal amount of up to $1,400,000. Substantially all of the proceeds of the Bonds attributable to the Project will be applied to pay or reimburse for the costs of constructing, installing and equipping the Project. "Substantially all" means all of the proceeds of such Bonds, less amounts deposited in a debt service reserve fund or used to pay the costs of issuance of the Bonds. It is �pected that the Bonds will have a term of not more than 25 yeazs, and will mature serially or be subject to sinking fund payments, The Bonds will beaz interest �cludable from gross income for federal income tax purposes, and, to the same extent, �cludable from the gross and taxable net income of individuaLs, estates and husts for Minnesota ta�c purposes. The Bonds will be special, limited obligations of the fIRA, payable solely from (a) tas increment and (b) revenues provided by the Borrower under one or more revenue agreements with the HRA. The Bonds will be further secured by mortgages and other security interests in the property owned by the Botrower. The Bonds will not be a general obligation of the City ar the T3RA, nor will 1649786.01 . Housmg Rogam qK-yZS any revenues or assets of the City or HRA (other than those of the Borrower and the T� Increments) be pledged to the payment of the Bonds. The City or HItA may require the Borrower to provide evidence satisfactory to the City or HRA of the ability and inteution of the Borrower to complete the construction of the Project, and evidence satisfactory to the City or HRA of compliance with the standards and requirements for the making of the financing established by the I3RA, as set forth herein and in connection tkierewith, the City, the HRA or its representatives may inspect the relevant books and record of the Bonower in order to confum such ability, intenrion and compliance. In addition, the City or HRA may periodically require certification from the Borrower or such other person deemed necessary conceming compliance with various aspects of this Program. The provisions of this Program aze severable and if any of its provisions, sentences, clauses or pazagraphs shall be held unconstitutional, contrary to statute, exceeding the authority of the City or the HRA or othenvise illegal or inoperative by an court of competent jurisdiction, the decision of such court shall not afFect or impair any of the remaining provisions. The City shall not amend ihis Program, while the Bonds authorized hereby aze outstanding to the detriment of the holders of such Bonds. Adopted: May 13, 1998 1649786.01 3 Housv�g Pro�am qd' - y?'' . �: [Map of District and Project Area] 1644/86.01 A-1 xousmg Progmn ° � -y��- HOUSING AND REDEVELOPMENT AUT7 OF T'HE CTI'Y OF SAINT PAUL,IVIINNE TAX INCREMENT FINANCING PLAN SUPERIOR STREET COTTAGES HOU TAX INCREMENT FINANCING DLSTJ l�l Introduction A. Background The Superior Street Cottages Housing Tas Inc ment Financing Aistrict (the "District") shall consist of an approximately 86,900 squaze fo parcel located at the northwest corner of Duke and Superior Streets and formerly occu ed by the Holm & Olson Nursery (the "Property"), in the City of Saint Paul, County of Ramsey, State of Minnesota and legally described in Attachment A attached hereto and ' corporated in this plan. The Housing and Redevelopment Au rity of the City of Saint Paul, Minnesota (the "I-IKA") proposes a plan for the development of the strict consisting of the acquisition of land, demolition of struchu'es, and the consiruction of a 23- t low income rental housing facility for the elderly (the "Project") on the Properiy to be own by Superior Street Cottages, LLC, a Minnesota limited liability company. B. Creafion of This taY increment Subd. 11 of the Superior Sta C. Need and Street Cottages H�ousing Tas Increment District to the creation, under Minnesota Staiutes Section 469.174, Housing Taac Increment District (the."District"). " Purpose i. To incre the supply of adequate housing within the community for elderly persons of a11 in me levels including rental housing for seniors of low and moderate income. ii. To p vide such housing on land or in azeas which qualify as redevelopment projects wi emphasis upon lands potentially usefizl for contributing to the public welfare, but w ch by reason of special probiems or wnditions, haue not reached full development tential by the ordinary operations of private entetprise. iii./ carry out the provision of housing and development of underdeveloped lands within the City consistent with the general land use pian and other components of the City's Comprehensive Plan. Ta assist in the provision of rental housing to elderly persons of low and moderate income at prices or rents within their means and to make advance commitments to q�-y��- such rental assistance in low and moderate inwme units in order to assist in securing financing for housing improvements. v. To finance a portion of the development costs of the Project by m of ta3� increment generated by Project improvements and development. vi. To finance housing development by a combination of private an public financing under authority and subject to the requirements of federal, sta and local law and ordinance for the provision of revenue bond financing for hous" g purposes. It is necessary ihat the HRA exercise its powers under state law develop, impiement, and finance a program designed to encourage, ensure and facilitate the deve pment of affordable housing for its low- and moderate-income elderiy residents. The Project ' further accomplish the public purposes specified in this paragraph. I� area. A. Provide afforda6le housing for low- d moderate-income elderly residents of Saint Paul. As a result of an extensive neighborho review process confirmed by a market study conducted by M�eid Reseazch Group, the believes there is a mazket for tental housing for the elderly of the type being proposed for the Dis ct. B. � To redevelop The Property was of Interstate 35 and the r no longer a viable con deteriorated. Currently, to the public welfaze, as operations of private en�,@ C. It is increase by ; viousl,�"operated as a nursery and greenhouse. Due to� the extension ting�`oss of access to a commercial frontage road, the Property was rc�a1 property, and the buildings located on the Property had �ropezty is vacant. The construction of the Project will contribute Property has not reached its development potential by the ordinary the tax base of the City of Saint Paul. that the t�able mazket value of parcels an the taY increment district will ely $1,141,700 once the new housing facility is placed in service. 2 � D. Remove blight within Saint Paul. The Superior Street Cottages site is located in the West Seventh azea of Saint Paui e substandard buildings previously located on the property have been removed, and will be eplaced with a new 23-unit low income rental housing facility for the elderly, substantially ' oving the West Seventh area of St. Paul. III, Classification of the District The HRA and the City, in determining the need to create a tas incre ' t financing disUict in accordance with Section 469.1'J4, fmd that the District is a housing distri pursuant to Minnesota Statutes, Section 469.174, Subd. 11 because (1) the project which comp,- es the District is intended for occupancy, in part, by persons or families of low and moderate in me, as defined in Minnesota Statutes, Chapter 462A, Title II of the National Housing Act of 19 , the National Housing Act of 1959, the United States Housing Act of 1937, as amended, Title of the Housing Act of 1949, as amended, other similaz federal, state, or municipal legislation, the regulations promulgated under any of those acts; and (2) the fair mazket value of the impro� ments which shall be constructed for commercial uses or for uses other than low and moderate i me housing consists of not more than 20 percent of the total fair mazket value of the planned provement in the development plan or agreement. The fair mazket value of the impmvements �mprising the Project was determined using the cost of construction method of esumating maz 't value. At least 40% of the units wi11 be occupied by individuals whose income is 60°/a or s of the azea median gross income, adjusted for family size. f Tn addition, the District meets the r uirements of a housing district pursuant to Minnesota Statutes, Seetion 469.176, Subd. 4d, becau 100% of the zevenues derived from taY increments from . the District will be used to finance the t, of a housing project as defined in Section 4b9.174, Subd. I 1, including the cost of public improy�ments directly related to the housing project and the allocated administrative expenses of the , Finally, the District m, ' ts the requirements of a housing district pursuant to Minnesota Statutes, Section 469.1761, S d. 1 and Subd. 3 because, for the duration of the District, either (a) the project which comprises District will satisfy the income requirements for a qualified residential rental project as defined � Section 142(d) of the Intemal Revenue Code (the "Code or (b) at least 50 percent of the resi ntial units in the project which comprises the District will be occupied by individuals whose i me is 80 percent or less of azea median gross income. In this case, as mentioned above, least 40% of the units will be occupied by individuals whose incame is 60% or less of the aze median gross income, ad}usted for family size, which satisfies the income requirements f a residenual rental project as defined in Section 142(d) of the Code. 3 ��- �. Descripfion oF the develonment �rogram for the Superior Street Cottages Proieet The development program consists of the development of a 23-unit low and moderate in e rental housing facility for the elderiy (the "Projec�') in the District and the fmancing of the P}ect The Project will be owned by Superior Street Cottages, LLC, a Miunesota limited liability mpany (the "Develope�"). This will require acquiring land, installing infrastruchue, co acting for professional services essential to redevelopment activities, incuning financing rela �penses and funding administrative functions, ali as described in more detail below. All of th�sts listed below aze re�ected in the project budget, and there are no additional public improvement costs. A. Acquire property. The land has been purchased by the Developer for agproxint2tely $215,000. In addition, project costs will include approximately $9,200 of property taxes ayable in 1998 on the acquired property. B. Reimbursement for Demolition of Structur '. Demolition of the structures which w e previously located within the District cost appro�mately $12,500. �" C. Undertake and install site and utilities. Site improvements will include sewer ccess at a cost of approximately $16,500. D. . Contracts for profession ' services essenfial to the redevelopment activifies. Professional services will testing, legal, civil engineering, a� design. The total cost for pro " $215,000. E. of Project ; land surveys and tide work, real estate, environmental , accounting, developer's fee, consultants and azchitectural services, other than bond issuance costs, is estimated at The actual co truction of the Project, and the funding of operating reserves, replacement reserves and debt s ice reserves therefore, and the cost of furnishings and equipment for the Project, is expect to total approximately $2,230,000. F. cur costs and expenses connected with financing activities. Th shall issue ta�c exempt ta�c lri�rement revenue obligations to finance approximately $1,400,00 of total project costs. Bond issuance costs plus other financing related costs (including 4 c�g� - y y' ' costs incurred in connection with other sources of funds set forth in Section VII.C.), construction period interest and insurance, legal expenses, printing and undenvriter's di anticipated to total approzcimately $102,000. V. � The following, as required by Section 469.175, Subd. 1(3), is a list of de lopment activities that are proposed to take piace within tbe District for which contracts have b n entered into at the time of the preparation of this plan, inciuding the names of the parties to e contract, the activity govemed by the contract, the cost stated in the conuact, and the expect .date of completion of that activity. � a. Glendening Architectural Services, Inc. Architect Fstimated Cost: $82,115 Fstimated completion date: February, 1 b. Gabler Housing Solutions Corporation �' Consultant J Estimated Cost: $34, 0 Estimated completion date: Fe ary, 1999 1�l� Development activities in the wiil consist of activities necessary anc in Section II above. � � Increment District. which may require the �penditure of ta�c increments, � to promoting and maximizing the objectives set forth The following, as�i by Secrion 469.175, Subd. 1(5), are esrimates of the (i) cost of the Project, including adm� "istrauon expenses; (ii) amount of bonded indebtedness to be incuired; (iii) sources of revenue t,f nance or othenvise pay the costs of the Project; (iv) the most recent net taY capacity of taa�able real property within the tax increment financing district; (v) the estimated captured net tax capacity of�the tax increment financing district at completion; and (vi) the duration of the ta�� increment finan�in� district's existence. 5 c,� � - 4 ��- A. Cost of the Projeet, induding administrative expenses. The total cost of the Project is estimated at $2,898,554, which igcludes $25,000 of blic improvement costs (see C.vi. below). In addition, the HItA may use an amount up to 10% tbe taY increment expenditures to pay for its costs in administering the Dist[ict. B. Amount of bonded indebtedness to be incurred. The HRA shall be the issuer of one or more series of t� exempt housi g revenue obligations by the end of the year 1998 in an aggregate amount not to exceed $1,400�00. The taac increments will be pledged to the payment of the bonded indebtedness. The HRA y, after the initiai issuance of bonds, issue refunding bonds for purposes of refinancing such bonde indebtedness. C. Sources of revenue to finance or otherwise pay �roject costs. The following aze the likely sources for funding the to�Project: Tax Increments Tax increments, net of up to 10% for�'dministrative expenses, are anticipated to equal approximately $26,178 annually. All taY �crements will be first pledged to the payment of debt service on the bonds described in B�bove. t ii. Inveshnent income ` � � Certain interest eamings�f'fom bond proceeds, if any, will be a source of revenue to gay project costs. A cwrent estiinate of such earnings is not auailable. iii. Aeveloper �apital The Developer�ill contribute $1OQ000 for construction of the housing faeility. � r. iv. Federal HO� Loan a On Nov¢mber 26, 1997, the HRA Board approved a loan to the Developer of federal HOME funds�n the amount of $752,625. v. 'On August 6, 1996, by Resolution No. 96-891, the City Council approved a$40Q000 the Developer from STAR funds. �y'y vi. PED Public Improvement Funds PED public improvement funds in the aznount of $25,000 will be contributed,�Po the Project. vu. Federal Home Loan Bank Affordable Housin� Grant A Federal Home Loan Bank Affordable Housing Grant has beefi� awazded to the Proj ect in the amount of $100,000. � viii. UDAG Re�yment Funds The City Council has passed a resolution authorizing ,�"loan of $245,929 of LTDAG repayment funds to the West Seventh/Fort Road Federation f,�{�r the purposes of making a loan to the Developer. ,� i/ D. The most recent net tax capacity of taai ble real property within the tax increment financing district �' As of January 31, 1998 the total tax capacity o��iroperry pazcels to be included in the District was $fi,726, a11 of which is attributable to vacant 1"�d. However, two parcels in the District were exempt from taY because they were owned by the or the HRA. The market value attributable to the land is assumed to remain constant. The o gmal ta�c capacity and Tax Rate are calculated in accordance withMinnesota Statutes, Sectiori 4, .174, Subd. 7 and Section 469.177, Subd. 1. E. The estimated captured�iiet ta�c capacity of the tax increment financing district at completion. F� r� The Project will consist of �'23-unit low and moderate income rental housing facility for the elderly with an aggregate assume "mazket value of $1,380,000, including land value. The increase in market value is estimated at $1 41,700. Applying a 1.0% taY capacity rate to the low income units and 2.5°/u ta�c capacity rate ,�� the mazket rate units results in an estimated captured taY capacity of approximately $19,970 as�sed in the year 1999 and payable in the year 200Q the year following expected compietion of,;fionstruction of the project. This captured tax capacity is calculated in accordance with Minqesota Statutes, Section 469.174, Subd. 4 and 469.177, Subd. 2. F. 'I'h¢ duration of the tax increment financing district's egistence. The Dlstrict will be certified in 1998. The first taY increments are anticipated to be generated fa taYes payable in the year 2000. Pursuant to Section 469.176, Subd. lb(a)(5), the duration of��the District will run 25 yeazs from the first receipt by the HRA of taz� increments, 7 q�-��Y which will be through calendar yeaz 2025. The HRA does, however, reserve the decertify the District prior to the legally required date. ►� 11 . canaciiies of all taging jurisdictions. The taxing jurisdictions in which the District is located in whole or in pa�re as follows: a. Independent Schooi District #625, whose boundaries��cgifemunous with those of the City of Saint Paul. j b. The County of Ramsey, wherein the City of Saint �� is located. c. The Housing and Redevelopment Authority,�'pf the City of Saint Paul, whose boundaries aze cotemunous with those of the City of 5aint P� d. The Port Authority of the City of Saint�'ul, whose boundazies are coteiminous with those of the City of Saint Paul and whose powers to le,c� and use property tases are limited. e. Metropolitan authorities, such as,?the Metropolitan Council, Metropolitau Aiiports Commission, Metropolitan Waste Control Coirimission, and the Metropolitan Mosquito Control District Of these, only the Metropolitau C�rtncil and the Metropolitan Mosquito Control District currently levy taa�es on real estate. �f The HRA is required by Minnesota �S�`tutes Section 469.175, Subd. 1(a)(6) to make statements relative to the alternate 'estimates of the impact of the tax increment fmancing on the net taz� capacities of all taxing jurisdicCiq` s in which the tax increment fmancing district is locaYed in whole or in part. ° Impact on Taxing Jurisdictions Under the the taxing jurisdic these taxing jurisi Table 1 below. tion that the estimated captured net tax capacity would be available to ithout creation of the District, creation of the District will sezve to deny the taxes from the captured net tax capacity in the amount estimated in E o��-yza— Table 1 Taxine huisdiction �� X. City of St Paut Raznsey County School Dishict #625 Other flntentionaily Omitted.l 36.910 42.008 60203 6.532 145.653 F-�r at�t Annval Loss rD ia,�;�o Pe�cent Caphtted Increment Iurisdictions 2534 28.84 4133 4.49 100 $ 6,634 $165,8 7,550 18 , 50 10,819 Q475 1,175 29375 $26.178 $654.450 Attached hereto in Attachment A is a list of the Pr , erty Identification Numbers for all properties to be included in the Disirict, a map showing the -'oject azea and the District, and a legal description identifying the boundaries of the District. XI. District administration and annual disciosur�e. � Administration of the District will be the, esponsibility of the HRA. Tax increments will be deposited into interest beazing accounts separ e and distinct from other funds of the Hittl. Tas increments will be used only for activities d nbed in this tax increment plan. The HRA will report annuall to the State Auditor, county boazd, school board and Department of Revenue regazding tivities in the District as required by Section 469.175, subdivision 5 and subdivision 6 an ill include information with regard to the District in the data necessary to comply with subdivis' n 6a. XII. In accordance w,�h Minnesota Statutes, Section 469.175, Subd. 4, any refluction or enlargement of the ge '� azea of the Project or tax increment financing district; increase in amount of bonded in tedness to be incurred, including a determination to capitalize interest on debt if that determinati was not a part of the original plan, or to increase or decrease the amount of interest on the de ` to be capitalized; inerease in the portion of the captured taY capacity to be retained by the City; i rease in total estimated taY increment expenditures; or designation of additional property to b acquired by the City sha11 be approved upon the notice and after the discussion, public hearing an findings required for approval of the original plan. The geographic area of a ta�c incremen'financing district may be reduced, but shall not be enlarged after five years following the date of rtification of the original tax capacity by the county auditor. Ciment T.C. Rario E �,r ya XIII. Administrative Ex�enses In accordance with Ivfinnesota Statutes, Sections 469.174, Subd. 14 and 469 6, Subd. 3, administrative e�penses means all expenditures of an authority other than amo ts paid for the purchase of land or aznounts paid to contractors or others providing materials an ervices, including azchitecharal and engineering services, directly connected with the physical elopment of the real properiy in the District, relocation benefits paid to or services provid or persons residing or businesses located in the District or amounts used to pay interest on, a reserve for, or sell at a discount bonds issued pursuant to Section 469.178. Administrative penses also include amounts paid for seroices provided by bond counsel, fiscai consul , and planning or economic development consultants. Administrative expenses of the Distri � 1 be paid from tas increments; provided that no taat increment shall be used to pay any admi �` ative expenses for the Proj ect which exceed ten percent of the total taY increment expenditures a orized hy the t� increment financing p1an or the tatal taac increment expenditures for the Pro}e _ hichever is less. Pursuant w Minnesota Statutes Section pay for the county's actual administrative expe: county may require payment of those expenses expenses were incurred. ,�,a XIV. � 6, Subd. 4h, tas increments may be used to mcurred in connection wath the District. The February 15 of the year following the yeaz the No taa� increment shall be paid�5 the HRA after three years from the date of certification of the original net tax capaciry by the Co,,�nty Auditor unless within the tt�ree-year period: (1) bonds have been ' sued in aid of the Project pursuant to Section 469.178 of the TiF Act or any o law, except revenue bonds issued pursuant to Minnesota SYatutes, Section G69, to 469.165; (2) the (3) the acquired property within the District; or has constructed or caused to be constructed public improvements within the The bo�ds must be issued, or the HRA must acquire property or construct or cause public °ment,�to be constructed by approximately May, 2001. to Minnesota 5tatutes, Section 469.176, Subd-. fi, if, after four years from the date of certifzcation of the original tca capacity of the taz increment fznancing district pursuant to �nnesota Stafutes Section 469.17� no demolifran, rehabilitation or renovation of property or other site prepcaation, including qual�ed 10 iszszzs.oz �B'-ti�s-- improvement of a sireet adjacent to a pa7cel but not ins7alZution of utility service including sewer or water syslems, has been commenced on a parcel loarted within a tar increment financing district by the authority or by the owner of the pcvicel in accordance with the tctt increment fznrnzcing plan, no additioncrl tax increment may be faken from that p el and the original tar capacity of thcrt parcel shall be excluded from the original tca c city of the tar inct financing disirict. If the authorify or the owner of the p el subsequently commences demolifron, rehabilitation or renovation or other site prep tion on that parcel including improvement of a street adjacent to that parcel, in ac ordance with the tmc increment fznancing plan, the authority shall cerlify to the cou '�auditor in the anrnral disclosure report that the activity has commencecl The county, " ditor shall certify ihe fax capacity thereof as most recenily certified by the commissio �of revertue and add it to the original tar capacity of the tctt increment financing district. -7'lee caunty auditor must enforce the provisions of this subdivision.. For purposes of this ibdivision, qual�ed improvements are limited to (I) corrslrucfion or opening of a new et, (2) relocafron of a street, and (3) substantial recon.slnsction or rebuilding of crn existin�street. The F3RA or a property owner must begin by approximately May, 2002. Pursuant to Minnesota Statutes, increments are considered to have been foliowing occurs: improvements to pazcels within the District 469.1763, Subd. 3, revenues derived from taY an activity within the District only if one of the 1. Before or within fzve ye after certiftcation of the District, the revemres are actually paid to a third party with respect to t� activity; 2. Bonds, the, to a third pariy, before or v repay the BontLr, and the eayected to be spent befo; temporary period within,� Reverrue Code, or depo�e� rocee of which must be used to finance the activity, are issued cmd sold [hi�ff'ive years ttf[er certi: fication of the Disirict, the reverrues are spent to � ceedr of the Bonds either.are, on the date of issuance, reasonably the end of ihe latter o, f(i) the fzve year perioc� or (ii) a reasonable meaning of ihe use of that term under Section 148(c)(1) of the Internal in a rea.sonably required reserve or replacement fund,' 3. Bi 'ng conii-acts with a third party are entered into for performcmce of the activity before or within ve yerns after certification of the District and the revemres are spent under the contractual ob ation; or r / 4. ,� Costs with respect to the acfrvity are paid before or wifhin ftve years after certification of fhe D', trici and the reve�rues are spenf to reimburse a party for payment of the costs, including interes 'n unreimbursed costs. Therefore, one of tke above four events mustoccur by ap�xoximately May, 2003. il qs�-wa�-- XV. Use of Tax Increment All revenues derived from taY increment shall be used in accordance with fmancing plan, and pursuant to Minnesota Statutes, Section 469.176, Subdivisions � XVI. Notificaiion of Prior Planned Improvements aY mcrement 4d. Pursuant to Minnesota Statutes Section 469.177, Subd. 4, the C' has reviewed the area to be included in the District and has not found properties for which buil, ng pennits haue been issued during the 18 months immediately preceding approval of ihe Plan by, e City. XVII. Eacess Taa 7ncrements Pursuant to Minnesota Statutes Section 469.176�ubd. 2, in any year in which the taac increment exceeds the amount necessary to pay the � authorized by the tax increment plan, including the amount necessary to cancel any tas le �as provided in Minnesota Statutes, Section 475.61, Subd. 3, the City shall use the excess amount� o do any of the following: 1. prepay the outstanding bonds; � 2. discharge the pledge of taac in ement therefor; 3. pay into an escrow account �dicated to the payment of such bonds; or 4. retum the excess to the C nty Auditor for redistribution to the respective taxing jurisdictions in proportion of their tax `pacity rate. 11 Since the District is a Section 273.1399, Subd. 1, th without making a local contcil XIX. The City and in accordance with � XX. 3 housing district" within the meaning of Minnesota Statutes, i5 therefore exempt from the LGA/fIACA state aid reduction, EIRA have elected to compute Fiscal Disparities conhibution for the District m 469.177, subdivision 3, paragraph a. Purs t to Minnesota Statutes Section 469.176, subd. 5, no more than 1�%, by acreage, of the pro rty to be acquired in the District as set forth in this Tax Increment Financing Plan shall at time be owned by the IIRA or the City as a result of acquisition with the proceeds of bonds i ued pursuant to Section 4b9.178, without the HRA or City having, prior to acquisiUon 12 �$' y�'�-- in excess of 10% of the acreage, concluded an agreement for the development or redevelopment of the property acquired and which provides recourse for the HRA or City should the development not be completed. XXI. Assessment A�reement. Pursuant to Minnesota Statutes Sections 469.175, Subd. 1(b) and 46��17, subd. 8, the HRA or City may enter into an agreement in recordable form with the Developer of property within the Disuict which establishes a minimum market value of th�land and completed improvements for the duration of the District. The assessment agree�ent shall be presented to the assessor who shall review the plans and specifications for thenmprovements constructed, review the market value previously assigned to the land upon whie�the unprovements aze to be constructed and, so long as the minunum mazket value conta�d in the assessment agreement appeazs, in the judgment of the assessor, to be a reasonable�tamate, the assessor may certify the minnnum mazket value agreement. 13 ��-4a� A'I°TACHMENT A [list of parcels, legal description and map o£ district and project area� The land referred to is situated in the State of Minnesota, County of Ramsey, and is de�ibed as follows: ,� Parcel 1: ID-01-28-23-33-0097 All that part of the following described tract: All of Blocks 1 and 2 of Norwood Addition to the City of Ss��Paul, excepting therefrom the following: A certain tract of real estate situated in th�Northwest comer of Block 1 of Norwood Addition to the City of St. Paul, which is agcurately and correctly described as follows, namely: Commencing at an iron monume at the North line of said Block 1, 136.25 feet Southwest from the Northeast corner o said Block aforesaid, and from said starting point running South in a line parallel w' h the Easterly line of said Block 1 a distance of 40 feet to a hub or iron monument; ence Southwest 93 feet to a point on the West line of said Block 1 and on the Easte y line of Erie Street, distant 15 feet South from the Northwest corner of said Bl 1; thence running North 15 feet to the Northwest comer of said Block 1; then�running Northeast along the I3ortherly line of said Block 1, 108.77 feet to the point,6f beginning; also all that portion of said Norwood Addition to the City of St. Paul e�'�raced within the original limits of Croodhue Street lying between Duke $treet andiErie. Street and which was vacated by the Commou Council of the City of St. Paul� Resolution approved April 25, 1905; which lies Southerly of therfollowing described line: Beginning at a point n the West Line of the above mentioned tract, distant 335 feet North of the South st corner of said Block 2; thence run Northeasterly to a point on the East Iine of said ove described tract; distant 450 feet North of the Southeast corner of said Block 2 an there terminating. Except all right of access, being the right of ingzess to and egress om Trunk Highway 1Vo. 35E. (Torrens �roperty-Certificate No. 341566) ID-01-28-23-33-0022 i D�a[iict and Project azea are coterminous. ' � 14 q�r_Wz� Q Lots 5, 6 and 7, Block 3, Norwood Addition to St. Paul, according to the piat thereof on file and of record in the office of the County Recorder in and for Ramsey County, Minnesota. (AbstractProperty) ID-01-28-23-33-0001 That part of Lot 4, Block 4, Norwood Addition to St. Paul beginning at,�''starting point on the Southerly line of Lot 4 51.11 feet West of the SE comet ,'�f Lot 4; thence Northeasterly along a line to the NE corner of Lot 4; thence Southe y along the Eastern line of Lot 4 to the SE comer of said Lot 4; thence along the S�uthern line of Lot 4 to the starting point. � (Vacated Erie Street) That part of Erie Street lying North of the Addition to St. Paul and South of the right o line of Lot 7, Block 3, Norwood of Trunk Highway 35E. IS RFR-08-1993 15:52 PED 14TH FLOOR 612 223 32c9 P.05 �l , . . , _ � . , . •� .. .. �� • r . . � a � .. y " _ '` � Y, � :`?. .�' . ' ' `� ?' .. , ( ' ' ' �� : �° - ' ' • . T � AC E `' � ` . = �' l R � . .�' •—' k— � � - `-. _ P J6` : ( � ,� ' '� , ,I _ _'�� ' q ° ` .A ,_., .:, ,> .. -- • _ ; P N . '`' . •� ; ,u l_ .... '•' ._ M1 � Y' _,�. " � L:� . � ^' 3 f -_ ... (} ' _ ' e_ ' . _ ' _ - ' ¢ 'v .. 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This housing finance program (the "Program") under Minnesota Statutes, Chapter 462C (the "Act") describes the proposed issuance by the Housing and Redevelopment Authority of the City of Saint Paul, Minnesota (the "HRA") of up to $1,400,000 of revenue bonds (the `Bonds") to finance, in part, the acquisition and construction of a senior rental housing development for the elderly (the "ProjecP') by Superior Street Cottages, LLC (the `Borrower"). The Bonds will be revenue obligations, secured by the repayment obligation of the Borrower, mortgages and other security interests in property owned by the Borrower, and a first lien on tax increments (the "Tax Increments") to be derived from the Superior Street Cottages Housing TaY Increment Financing District (the "District"), as described below. The Bonds will not be a general obligation of the City of Saint Paul, Minnesota (the "City") or the HRA, nor will any assets or revenues of the Ciry or HRA be piedged to the payment of the Bonds other than as described above. Issuer. The issuer of the Bonds will be the HRA. Under Chapter 72 of the Saint Paul Legislative Code, the HRA is authorized to exercise the powers of the City under the Act upon approval by the City of the Program and delegation by the City to the HRA of those powers for the purposes of the Program. Tax Increment District and Housing Development Project. In connection with the Project, the HRA will establish the District. The HRA has prepazed a tas increment financang plan for the District, pursuant to Minnesota Statutes, Sections 469.174 through 469.179, as amended (the "TIF Act"). The TIF Act requires that a tax increment district be established within a"project azea". Therefore, the HRA will also create a"housing development project" within the meaning of Minnesota Statutes, Sections 469.001 to 469.047, as amended (the "T�ItA Act"), and this Program constitutes the program required by Section 469.0171 of the H12A Act. The boundaries of the housing development project area, for purposes of the TIF Act, are coterminous with the boundaries of the District, and are set forth on the map attached hereto as E�ibit A. Housing Plan and Program. This Program will be undertaken pursuant to the Act and the Housing Plan of the City required by the Act. The Housing Plan, as amended, was adopted by the City 3n March of 1990. This Program will be adopted after review by the Metropolitan Council, and a public hearing on the Program, held after notice is given, all as required by Section 462C.04 of the Act. The Program is consistent with both the Housing Plan (and other housing plans of the City developed under other laws), and is consistent with development guides applicable within the City and developed by the Metropolitan Council. q � _y a2- Borrower. The bonower is Superior Street Cottages, LLC, a Minnesota limited liability company, whose members aze initially Lyngblomsten Services, Inc. and the West 7th/Ford Road Federation. During the term of the Bonds the sole member of the Borrower will be Lyngblomsten Services, Inc., or another �liated entity. Project. Superior Street Cottages will be a 23-unit rental housing project for the elderly. The Project will be newly constructed, with construction to begin shortly after the Bonds are issued. The Project is a multifamily housing development within the meaning of Section 462C.05 of the Act. The Project will be a rental housing development, and will be designed and intended to be occupied primarily by the elderly. The Project will be located on the northwest comer of Duke and Superior Streets in the City. The amount of Bonds attributable to the Project is expected to be approximately $1,400,000. The Project complies or will comply with all applicable building code, zoning and land use planning requirements. Need for the Project; Income and Rent Limitations. The development of the Project will provide needed additional rental housing opportunities within the City for the elderly. Under the Act, and under Section 145 of the Internal Revenue Code of 1986, as amended, which will govern the Bonds, no income limits apply to residents of the Project. However, the TIF Act imposes certain requirements in connection with the creation of a housing tas increment district, and in order to comply with such requirements, at least 40% of the units in the Project will be occupied by individuals whose income is 60% or less of the area median gross income, adjusted for family size. The statutory authority for various sources of subordinated financing also impose income or rent limits, or both, which may be more restrictive than the TIF Act. The Project will comply with the most restrictive limitations. The Borrower, and any subsequent owner of the Project, will not arbitrarily reject an application from a proposed resident because of race, color, creed, religion or national origin, sex, affectional preference, mazital status, or status with regazd to public assistance or disability. Bonds. The HRA will issue the Bonds, in one or more series, in an aggregate original principal amount of up to $1,400,000. Substantially all of the proceeds of the Bonds attributable to the Project will be applied to pay or reimburse for the costs of constructing, installing and equipping the Project. "Substantially all" means all of the proceeds of such Bonds, less amounts deposited in a debt service reserve fund or used to pay the costs of issuance of the Bonds. It is expected that the Bonds will have a term of not more than 25 years, and will mature serially or be subject to sinking fund payments. The Bonds will bear interest excludable from gross income for federal income tax purposes, and, to the same extent, excludable from the gross and taxable net income of individuals, estates and trusts for Minnesota tax purposes. The Bonds will be special, limited obligations of the HRA, payable solely from (a) tax increment and (b) revenues provided by the Borrower under one or more revenue agreements ��l "�� with the IIRA. The Bonds will be further secured by mortgages and other security interests in the property owned by the Borrower. The Bonds will not be a general obligation of the City or the HRA, nor will any revenues or assets of the City or HRA (other than those of the Borrower and the Tax Increments) be pledged to the payment of the Bonds. The City or HRA may require the Borrower to provide evidence satisfactory to the City or IIRA of the ability and intention of the Borrower to complete the construction of the Project, and evidence satisfactory to the City or HRA of compliance with the standazds and requirements for the making of the financing established by the HRA, as set forth herein and in connection therewith, the City, the F3RA or its representatives may inspect the relevant books and record of the Bonower in order to confirm such ability, intention and compliance. In addition, the City or HRA may periodically require certification from the Bonower or such other person deemed necessary concerning compliance with various aspects of this Program. The provisions of this Program are severable and if any of its provisions, sentences, clauses or paragraphs shall be held unconstitutional, contrary to statute, exceeding the authority of the City or the I-IRA or otherwise illegal or inoperative by an court of competent jurisdiction, the decision of such court shall not affect or impair any of the remaining provisions. The City shall not amend this Program, while the Bonds authorized hereby are outstanding, to the detriment of the holders of such Bonds. Adopted: May 13, 1998 Q� -'� �-ti EXHIBIT A jMap of District and Project Area] RFR-02-i�3�3 2.:52 ==� i�PH P�nOP. 612 2c� 323� P.�5 � a�-�2-2- � . .. � � . - . y ° ' � �.�' ,. :� . `{ -. _ T �'��,4c � � ]l in ., . ' • , � � . ' " "` � • ,--� t �_ o \ 1 . ... .' '` -' . - -ue' - ` 6- T ..,y �F :�\ �� T ` y . _ aR O' i<. '\`� 1 ( .. ,1� > j ' ��"o '," ,:."=' . 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' . . -•�N�.,i \ ^ ' •�si� � C � � 3rrY . 1 ; • \ i%/�/�,4:.K,t�tf:: n„ O � 1 j "� . },y _Q� ' .�y . �� t0 � !��a•� .1' � r'.% '.��.. �ii.7nH4,'i✓illi�ra� .d,1�w�c%�✓�d'.+l� I'wTy�,�.�,Xt -�s��j� Q •c—^_. .i �i �saS � , � °� LJ. 1:' ' ' . � �--•',�`i._'- �4, � � : ;?�+, 8 t I � � ��\ ( � :, . �' 3 � �Y �V � ��' ��L_:.�Y, .�i�' S? +C�� ,�'!� /� Lv . ..'al� e.r�. �~ iL_/ t' O.f _ "'"�_..tt?�tA_�� V �"-'� '� - . ��!��r. � �b...u•r-,..9:Or..�o. v� LE '�� ;� P�QY �� aPR S�9° 15:_a 62z 2?8 3c<c Fr�,E.fw75 �l8 -y� �- A. Cost of the Project, including administrafive egpenses. The totai cost of the Project is estimated at ^— $2,837,578 which includes $25,000 of public improvement oosts (see C.vi, below). In additioq the HRA may use an amount up to 10% of the tas increment expenditures to pay for its costs in administering the Distdck. B. Amount of bonded indebtedness to be incurred. The �IRE1 shall be the issuer of one or more series of ta7c exempt housing revenue obligations by the end of the year 1998 in an aggregate amount not to exceed $1,400,000. The taY increments will be pledged to the payment of the bonded indebtedness. The HRA may, after the initial issuance of bonds, issue refunding bonds for purposes of refinancing such bonded indebtedness. C. Sources of revenue to finance or otherwise pay project costs. The following are the likely sources for funding the total Project: T� Increments TaY increments, net of up to 10% for administrative expenses, are anticipated to equal approximately $26,178 annually. All taY increments will be first pledged to the payment of debt service on the bonds described in B above and anv excess shall be pledged to the repayment of the STAR Loan referred to in C.v. below ii. Investment income Certain interest earnings from bond proceeds, if any, will be a source of revenue to pay pzoject costs. A cuaent estimate of such eamings is not available. iii, Developer Ca�ital The Developer will contribute $100,000 for construction of the housing £acility. iv. FederaI HOME Loan On November 26, I997, the HRA 33oard approved a loan to the Developer of federal HOME funds in the amount of $752,625. b 1525225