Heat. Heat. call this meeting to order of the Apple Valley Economic Development Authority. Um the first item of this is the meeting of November 13, 2025. First order of business is the approval of tonight's agenda. Any changes from staff? >> Mr. President, commissioners? No changes to tonight's agenda >> from the authority. Move approval. >> Second. >> Moved and seconded. In favor? >> I. >> That passes unanimously. The consent agenda. Uh number three. Any items that uh staff needs pulled the authority motion. >> I'll make a motion to approve the consent agenda. >> And Bergman in favor >> I >> That also passes. Um our regular agenda is item number 4A, a resolution of support for allocation. Mr. Benetti. >> Thank you, Mr. President. Members of commission, we have before you tonight a resolution support, excuse me. Hopefully I got that. Yep. Thank you. We have a resolution of support for pool tiff funds for the Valley Station Apartments. I'm going to be very quickly, I'm sure most of you are aware of the site location, 15584 Gas Light Drive. uh legally described as lot one block two Carol Center fourth edition again at the southeast corner of of gas light and 155th right south of the transit station red robin and the uh uh flooring decor so quick background uh 3.1 acre site has been owned by the EDA since 1997 February 99 the EDA entered enter entered into a lease agreement with MVTA to operate a transit station at that site I didn't do anything. Uh, so they entered into a lease agreement for a parking right site. Uh, July 20, 2024. About a year ago, the Met Council MVTA quick claimed those lease sold interest and any ownership rights to the site. And around that time, we issued an RFP for the redevelopment of site. Real estate equity equities was chosen to be to be the preferred developer of a five-story 140 unit affordable workforce housing project and a PA was also executed between the EDA and RE September 3rd 2025 just a few months ago planning commission recommended approval and this board or excuse me the city council approved for the 144 unit revised project. So, just a quick site plan. Again, just shows the outline of the new facility on the site. Just an architectural rendering of what you're of what was approved. Right now, the project is estimated to be at 55 million. >> This is a memory test, Tim. >> I know. And I don't have my my notes in front of me. >> Pardon me. The developer has applied to Dakota County CDA for an allocation of 4% what they refer to as low-income housing tax credits. Developer states that due to prevailing wage requirements, unique design of the project, increased building and labor costs, higher interest rates, this is resulting about a $6 million plus financing gap. uh to help close this gap, the developer, actually the city of staff helped provide secure an $88,000 mech council livable communities demonstration account grant. Uh we actually asked for 1.1. We got 88, which we thought was remarkable. Uh the city is committing approximately 1.25 million of our local affordable housing, as we refer to them as LAA funds. So we're committing about 750 from 2025, another 500,000 projected from our 2026 funds. Under that our LAA agreement with uh the county, we can use those LAA funds to help with closing a gap or gap assistance in this case. Uh but despite this contributions from both the grant and the LAA funds, we're still short about four four million. So developer is going before the Dakota County CDA board to ask for an additional financial assistance which would be through the means of a tiff number 11 pan which some of you may have remembered this from years ago. This was created back in 2001 certified April 20 2002. It descertifies in a few years from from now in December of 2029. It consists of a number of properties in the city uh starting with the the the Timbers or the penock place senior housing, Remington Cove Apartments, Harlson Apartments, Legacy Square condos, and Hearthstone. Under this tiff 11 pan, it establishes uh a means to provide for support for affordable housing. Uh encourage more uh affordable housing throughout the community. Also provide for uh assistance as needed. Uh it's generated over 18 million of funding up to this point. Approximately 8 million of of that has been spent back into the city through either private or CDA sponsored development. The current balance is over $11 million, which is pretty healthy. The CDA has asked Northwind Finance to provide an independent financial analysis. Northland is also our own uh financial group, but they did an they're providing an independent financial analysis to determine what may be fair or reasonable tiff allocation in this case. This resolution tonight does not ask you to support a specific fund, but simply ask to convey your support, encouragement for the board to authorize an allocation of pool tiff funds from this number 11 pan uh tiff district. And again, that would be to be determined by the board. So before you tonight is just that resolution of support. Uh if you have any questions, I'd be happy to answer any of those. We also have Lisa Alfson and Maggie Dykes from the CDA here to answer any questions if you have any [clears throat] from them. >> Ruben, >> Mr. again. Okay. So, when we did the penock, the one on Penock and and uh Cedar Avenue coming into town, we at one point asked for a a set year number of years And for us to finalize that project, we had to add another 10 years to it for 25 years. Now, is this going to have is this going to have a running date on it when it stops or is it going to be a short term or is it going to drag it out for put that into a tiff district for for 25 years? >> No, >> it does not. >> It doesn't have the dollar amount is just there for the correct. >> Yes. So, it descertifies. Sorry. Hopefully I got the right date. December 20ou 2029. >> I wave Maggie up because it look like she might have an answer. >> Sorry. Hi, Maggie Dyes. Dakota County CDA. Nice to see you all. Thanks for having us here tonight. Um although I think we invited ourselves. Um so, uh as as Tim stated and as you may be aware, uh the TIFF district was created uh back in 2001. It ends in 2029. That's because it's 26 years from the time that the district is certified and starts starts generating increment. So we've used it this increment at several developments throughout uh Apple Valley. It does not get spent outside of Apple Valley. Um so it's only for projects inside of the city. And and to um uh Commissioner Bergman's uh question there, the timeline is 2029 period. End of story. That's when it's over. >> That's when it's over. Okay. Thank you, >> Mr. Rupaul. >> Generally, when we looked at this project way back when on your timeline, right, we all were [clears throat] this was the right project for the site. But the other thing that was with this is that uh this was the one developer who wasn't asking for additional assistance. And I just don't want that to go silent here because I don't know the answer to this. you is this have the requirements in the site changed thus that no matter which developer was working this project we would have a gap or is this unique to that to this developer um would be my one question and I don't know we need these answered today we can deal with a resolution saying we support using the tiff district but I think these are other answers we probably that I at least would like to have as we work our way through and as Northland does their analysis and that kind of thing. Um, so I'm not gonna put you on the spot with questions you don't know the answer to, but I think to maybe put it back to the developer to say we'd like to understand where the gap came from. Um, and maybe for for Maggie or Northland, if we're looking at more Well, let me ask the questions in this order. 2028 or nine hits, this district gets descertified. What happens to the $11 million that sits in the district? uh Commissioner Hoopa and um uh board um it the CDA retains those funds and those funds will be used for other affordable housing developments in Apple Valley. >> So they don't just magically go away somewhere, but we do we do dip into a resource that CDA exclusively controls. Is that correct? >> That's that's correct. And yes, we work with the city obviously to to provide financing. We also use it on our own developments to maintain the quality developments that you all come to expect from the CDA. So that's where the funds are going. >> Are there other part of this this project has some affordability to it? We all know there's a need for that if we're looking at additional assistance. Are there other reasonable requirements we can ask of a developer that would aid affordability if we're going to do that? And in doing so, do we make the gap bigger by doing Right. Is that >> right? that that weighs into that. Um there is there's the requirement from the tax credits that these all these units are at 60% AMI or below. There are some units there that are affordable for folks at 30% AMI. So you get some more affordability there. If you create more public purpose, obviously there's there's a little bit bigger gap, but it's a reasonable expectation to ask for more public purpose. And so that's that's the the conversation that we're continuing to have with the developer is what else comes out of this in addition to >> public purpose. I'm assuming the tax credits have a a period of time that affordability must remain. >> They do. They do have a period of affordability. >> Would it be if we're asking for more assistance, can that period be extended? Because right the we want affordability now, but we kind of also want it 30 years from now. Right. >> Right. Right. Right. And that will extend into 30 years. So >> there's it's a little bit >> it's Right. It's a little nuanced, but yes, it'll it'll extend to 30 years. >> So, I don't need to answer so I think just like as we get those things figured out. >> Yeah. >> Decision is different than the one we made a little bit before. And I want to understand why it's different. >> Yeah. The affordability does get tied though to so [clears throat] if we want to extend that term, you certainly can do that, but it's it's going to be a minimum of 30 years that we're going to require that affordability. >> Great. Those were my questions if they were questions. [laughter] >> Others I've I'm sorry, Mr. Johnson. >> First of all, the the 6 million is requested pretty ordinary stuff. It wasn't like we found [clears throat] sinkhole in the bottom of the of the lot that we're looking at, >> right? >> So, $6 million sounds like a project that's almost out of control. What What is it there? What is there that would prevent them from coming back three or six months and saying I need another five million? Commissioner Johnson, members of this uh board right now that's remains to be seen, but right now they're claiming uh with their current pro- fora to the county is that with the prevailing wages, the expectation that those are going to go up, the the high the high price of of building, housing costs, labor costs, and uh unique project designs, everything else just contributed more to their uh financial performance. that required that created this gap that they weren't expecting and they approached us with a number of options and suggested could we use this could we use that and uh you know using our WA funds for that was ideal because we can use that for this type of of gap financing using the pool tiff funds uh this becomes a policy decision that has to be uh granted by the Dakota County Board of Commissioners Uh, who made the $55 million estimate is that started this? >> I believe the developer did the the developers. >> So, he should be [clears throat] there shouldn't be these kinds of surprises coming up. This is ordinary stuff. It isn't like we added more rooms. >> Great. >> Anything. >> Um, hi Lisa Alison. I'm with the Dakota County CDA. I just can share a few things because it is a little, you know, it's a it's a big swing for all of us, but what I can share is this is the first year of tax credits and bonds that the state now requires prevailing wage. We haven't had that before. And so when our gap has been typically in that 1.72 million now, it's about 20 20% increase in costs. And there is a public purpose there. I I I would say because people are getting paid a higher wage, but that comes with a cost. with the project decreasing in the number of units that occurred. That's a decrease in the revenue that the developer was assuming that they would have in addition to another public purpose that I that happened with this project which is a good thing for the tenants is they're not paying parking and that was a tune of probably about a $1.2 million that they were thinking they would get in revenue each year and that's gone. So there's just those costs that start to add up a little bit and to get to that more of that $6 million gap >> who decided to change the parking >> that was at the planning commission. >> Mr. Chair, with the the unit reduction was also related to reducing building height. Yep. >> Right on the back side. So that took a couple units out as well. Took >> about four units. Four. >> [clears throat] >> Miss Gindle. >> So just a comment. So I mean obviously um legislators have um been encouraging more affordable housing, but on the other hand now in one year they put prevailing wages and they made the prices go up so crazy. Um I I just that doesn't make any sense to me. I've seen uh TIFF used successfully in in a number of instances with my other hat on and uh I'm thinking specifically of a track over in Burnsville that was a roly pololy topography and they needed most of that money to flatten it out. Um this appears to be a different animal where um as as Mr. you pointed out, we went into this cuz they said we don't need anymore and and now they need more and I would hate to think that's on purpose, but um it did factor into our decision to to go with them. So >> we have the benefit of the chair of our um planning commission. Can we discuss about what happened with the parking that >> do you want? >> Sure. Do you want to tell me what what the date on that one was for that? >> I'm I'm just curious if I was there at that one. >> Uh, Commissioner Curtis, I'm not sure if you were there, but >> I believe it was discussed at the original first public hearing. There was a concern about uh the site being able to park itself with the 1.7 spaces per unit. I'm I'm I'm spitballing here. In effect, we were talking about providing for parking offsite. And there was a a statement, I believe, made by the developer that if if parking was free or not charged, more people are probably likely to park instead of pay for it. So they would park on site. So a recommendation was made or suggested that you take away the the the parking fee for or to pay for the parking away. Make it free. You'll encourage more people to park in the garages and on the parking lot where they should be parking. We're trying to avoid any off- streetet parking or on street parking and uh trespass parking uh on the other sides of the site. So, the the benefit was take away the charged parking, make it free, have more people park, and developer initially uh kind of bristled at it, but they agreed to it as part of their conditions of approval. Yeah, I was not at attendance on that one, but I do know that when we did had our public hearing that there was a lot of residents that were very concerned >> it was >> about the parking, you know, extension around. There was an area where I think a lot of children played or something. >> Mr. Rupa. >> Uh, thank you. So, can we just talk about what the the requested action is here this evening so we're all clear on on what we're bringing forward and then my part two of that is timing, right? If there's discomfort here, we need to talk about this more. We want more information >> if this doesn't go tonight, what does that impact if we need to come back and do it later? >> So, at this point, you're being asked to just simply uh adopt a resolution of support back to the Dakota County CDA Board of Commissioners. It's simply saying that you're you're supporting the the applicant or the developer's efforts to ask for tiff funding to help close their gap. You're not specifying an amount. We the memo may indicated up to four million. It may be up to four million or it could be as low as $1. We don't know. It's we're going to leave that up to the uh discretion of the Dakota County Board. At this point, we'd like to present this resolution to the next meeting, which I believe is coming up in a week, Tuesday. >> Tuesday, next Tuesday, where I believe the executive director, Mr. Sherler, has said that at that meeting, they're going to bring it for another discussion topic to and have it set for a public or ask to set a public hearing at the December meeting for a public hearing date in January of 2026. So we kind of need to take action on this this evening is boiling that down. >> Sorry, just a sorry things changed, right? So just think just wanted to share that things have changed just a smidge is that um the executive director Tony Shler has decided that he would not like to bring that to the board next Tuesday. That would No, it's things change live life changed. But we um because our board is also a little bit concerned about the size of the gap, right? And we're all trying to get an understanding, not just you and your your position, but the board of commission, the CDA board of commissioners is also trying to get their arms around this this gap. And so what he is hoping to do is to meet with them and then in the earliest that that board will um take consideration would be December to set a public hearing in January of 2026. So that would still be the same time frame, but this is not when we had originally talked, we thought the timeline was going a little bit earlier. Um, but that this does not need to be considered at this time to that would not impact this. >> So, Mr. President, is it >> I'm just listening to comments here, right? And if Tony's going to have conversation with the developer to better understand the gap, is that information that could come back here so we could also better understand the gap before taking this action >> and how Of [clears throat] course, that means is we probably have to call another special EDA meeting prior to another council meeting to do that. >> But is that is that acceptable to Yes. Does that work for CDA and you all if we don't have comfort moving forward tonight here? >> I'm getting nods of approval. So, we we could call your next regular meeting would be December 23rd. >> And and I'd rather see it the tiff discussion than a cheapening of the the product. I don't want I don't want to see all the the nice things with the design go away. >> I would agree >> to meet a a budget. >> We would agree. >> We just [clears throat] and I just understanding where that that gap is and maybe so we all understand that this is an economic gap, not necessarily a project gap. And so there may be enough dollars to build it, but because of these other things, the long-term dollars don't work and that's the gap. Am I correct on that one? So we just might need to lay that out a little better. Y >> we didn't add $6 million of amenity to the project boosting the cost, but we did take long-term economic value from them by the other things we did and that's creating >> So it's a $6 million gap over 30 years, not necessarily a $6 million gap at inception. >> Sure. >> Can a number and I'm not sure if you said it. [clears throat] >> Can we get a number on um how much the prevailing wage has added to the project? Did we already talk about exactly that? It's kind of lumped in with other things, but I'd like to know that so we can tell legislators, you know, you're telling us you want more affordable housing, but then you do things like this. That's a negative to doing it. >> That's a good point. >> We could understand. >> We can get that information for you. >> So, no action required. Just we can move on from here. Is that correct? >> Yes. We can table this to another special meeting if if you're open to that. >> Sounds prudent. Yeah. >> Thank you. >> Do we need a motion for that? >> Let me turn the microphone on. I believe, Mr. Chair, that you can just continue the matter to a date to be determined. >> So, no motion needed. No. >> Correct. >> Okay. You're not acting on the resolution. >> Let's leave it at that then. >> Perfect. >> Thank you, Mr. President. >> Any staff updates? Anything come >> Mr. President? In the interest of time, we have none. >> Okay. Motion to second. Move Zupa and Grenle meeting. All in favor vote. >> I >> I >> we are ajourned. [music] [music] >> [music] [music] >> Daddy, Daddy. [music]