[0:00] e [0:45] I'll get the button pushed here oh you new doorbell I think I've seen that one [0:51] before but I don't yeah I've seen this one a couple of [0:57] times I don't know [1:05] okay we got a green light we ready to go well good morning everybody uh it is [1:11] Thursday October 10th 2024 uh it is 7:35 a.m. and this is the [1:17] meeting of the adanta Housing and Redevelopment Authority uh for this particular date and um We are continuing [1:24] to do our meetings on a hybrid sort of fashion whether it's at the city council level or the H level level you can [1:31] participate today in community comment there is no public hearing matter today in which you can participate uh the call [1:37] numbers will come up on the screen here if you want to call in and let folks know that you'd like to speak to the uh [1:43] HRA on a matter of concern to you that's not on the agenda today or otherwise scheduled for a future public hearing [1:50] and uh so feel free to call in and we'll be taking up those Community comments uh right at the front end of the meeting so [1:56] make sure you get this information we'll put it back up on the screen but get it uh down a can uh having provided that [2:02] information might call the meeting to order and ask Jennifer benot to call the role good morning commissioner Jackson [2:09] here commissioner Pierce here commissioner agu here chair huband here [2:14] and commissioner Risser is not here at this time all right thank you and I'm looking at the agenda it says pledge of [2:21] and I think I know what that means uh Pledge of Allegiance like pledge of allegiance to the flag of the [2:28] United States of America and to the Republic for which it stands [2:33] one nation under God indivisible with liberty and justice for [2:42] all and we have a form of meeting agenda in front of us that's been published and um I think there's a a good [2:49] recommendation here from the staff that we we switch items 8.1 and 8.2 so 8.2 [2:55] would go first it makes more sense from a sequential standpoint I think based on what conversations we we've had in the [3:01] past both uh both sitting as the HRA and the city council uh so uh would someone [3:07] care to make a motion to approve the agenda with the uh switching of the recommended order in 8.1 and 8.2 so [3:13] moved second commissioner Jackson moves commissioner Pierce seconds the adoption of the meeting agenda switching items [3:19] 8.1 and 8.2 for in sequence any further discussion all those in favor of adoption of the meeting agenda stated [3:25] say I I I opposed carried uh now we are at Community comment let's have those [3:31] numbers go back up on the screen if possible and then is there anyone in the audience that wishes to address the H on [3:37] a matter of concern to them matter that's not otherwise on the agenda scheduled for a future public [3:43] hearing okay nobody coming forward we have anybody online I don't have anyone online yet but because there is a slight [3:51] delay in the broadcast I would recommend we wait one minute before moving on my clock shows that it's 7:35 so I'll come [3:58] back to you at 7:36 or when I have a caller whichever is first thank [4:28] you for [5:01] it is now 7:36 and I still don't have a caller so I think it's safe for you to move forward with the agenda all right [5:07] very good thank you director benot um following Community comment we usually have our executive director [5:13] respond to community comments that were made the week uh the prior meeting excuse me not the week before but the prior meeting and there were no [5:19] Community comments at the prior HRA meeting so we'll just move forward from there with the consent agenda items is [5:24] there anyone on the H any any commissioner who wishes to remove an item from the consent agenda [5:30] if not I'll entertain a motion to adopt the items on the consent agenda and a single motion so moved second [5:36] commissioner Jackson moves commissioner Pier second the adoption of the items on the consent agenda in a single motion [5:42] any further discussion all those in favor of adoption of the items on the consent agenda in a single motion say I [5:47] I I opposed carried uh all those items are adopted on the consent agenda that [5:53] are part of the consent agenda uh and now we're going to get to the heart of the meeting this morning and that is um [5:59] uh in the reports and recommendations portion of the agenda and the uh first matter we're going to hear about is the [6:06] um 8.2 reversed with 8.1 uh makes more sense sequentially I think to talk about [6:12] this too um uh first and that is uh we had a discussion uh in the past about um [6:20] our past city council meeting about uh what what could we do at that Macy's Home Store site we've got an approved [6:26] project there but what are the other possibilities uh at that site if we didn't use Tiff or just use Tiff to a [6:33] lesser degree so I think um I'm going to turn now to our economic development manager Bill nondorf and have him lead [6:40] out this discussion yes good morning Bill nondorf the city's economic development manager [6:45] uh this morning we wanted to um have further discussions about the use of tax increment financing uh on the Macy's [6:52] furniture site over at 7235 France Avenue um so we don't have any I don't [6:58] have any new information free this morning um but I just wanted to set the stage uh uh the developer Patrick Brahma [7:05] with Enclave companies is here with us this morning and here he's prepared to respond to several questions that have [7:11] been posed to him over the last couple weeks about his proposals so I'll just set the stage um uh the image on the [7:19] slide uh is the current site uh 8 acre parcel built in [7:24] 1977 currently used as the as the Macy's Furniture Store uh that a use that does [7:30] continue today and the intention is that they would sell the property relocate to [7:35] another location in in a Dina renovate that property and free up this site so [7:41] it's a multi-step phase just to get to groundbreaking for this new project we've got to move this business and and [7:47] these operations first so that is's there's some time involved in this one [7:54] uh the project itself is is led by Enclave companies um and one of their [8:00] Partners is lifestyle communities so as you'll recall the site is split into four different buildings and there's [8:07] three different Lots the Northwest building which which is the mixed use the two buildings on the East which are [8:14] predominantly residential with a little cafe on one of the um one of the corners [8:19] and then the southwestern building is is a more intensive mixed use highrise since the sight's being split [8:26] into these three different elements um as we prepare our our Redevelopment agreements our our contracts [8:33] essentially uh we started getting into it and realized that we didn't just need one contract we needed three because [8:40] each of these Parcels is very unique they'll have separate set SE separate [8:45] groups of investors in each one the financing structure for each one is different and so suddenly our workload [8:53] to prepare these agreements went from one single agreement to three different agreements so uh we had hoped to bring [9:00] the full projects to you this morning for your consideration and frankly we're not there yet we're still working [9:06] through a lot of that writing and drafting uh we want to make sure that when the uh projects are being delivered [9:13] that the city gets all the public benefits that we've been talking about from them um so right now we we're working diligently with the attorneys on [9:20] that one to get those contracts prepared uh and we do expect to bring them to you later in this month or in early [9:26] November but the project is the same so the the information in your packet this [9:31] morning actually dates back to July if you recall in Late July we put together a term sheet uh for your consideration [9:39] that outlined this the general parameters of how Tiff could be used to get this project off the ground and to [9:46] deliver these public benefits we continued that conversation in August made some revisions uh based [9:52] on your suggestions uh and now we're uh as we prepare these actual contracts [9:57] we're using uh that Rev term sheet as the basis for our contract negotiations [10:02] and preparations along the way there's been a lot of questions that have been posed [10:07] about um uh should Tiff be used is this the right amount uh and then some [10:13] hypothetical questions of well what would the site look like if we didn't use Tiff do we really need to use it on [10:19] this so that's a question that I think is best answered by the developer and that's why he's here this morning he has [10:25] a brief presentation to share and so uh the slides that I'm showing here are just quick reminders of what the project [10:32] uh is is entailing uh this is the Northwest parcel uh the mixed use with [10:37] office retail restaurant and residential uh the southwest corner is the high-rise with Condominiums uh a [10:45] good deal of Class A office space and some retail restaurant space and then on the east side of the property facing the [10:52] prominade are the two residential buildings with a cafe on the first floor uh of course I'm happy to any [10:59] questions that you have about the term sheet or where we are moving forward but I what we really wanted to do was set [11:05] this time aside for the developer to give some answers to your questions and then myself uh Patrick Brahma with [11:11] Enclave uh and also Nick an Hut from ERS and Associates are is here and we are all uh happy to answer any questions and [11:19] uh give you the information that you need to make a decision not today but in the future and with that I'll turn it [11:25] over to Mr Brahma unless there's any immediate questions all right good thank you Mr [11:30] commissioner Jackson has a question for you yes I think maybe I'm going to ask it now let's just sort of talk about the [11:36] size and scope of this potential note so [11:42] when we did so I've got it's a multi-part question I don't know where to start but when we did Maison green [11:48] there was Tiff associated with the development and then Tiff associated with the street reconstruction around it [11:55] um was that one note or two notes when we did that sure good good question so the mesan green project uh reuter Walton [12:03] was a developer there and we did use Tiff on that project a little bit simpler project one building one site [12:09] one developer um but in that project it's very similar to what we're striving [12:14] to do here is leverage this tax-based growth on this private property to fund [12:20] public improvements either in or adjacent to the property so on Mason green we did agree to one uh [12:29] approximately $5 million note to the developer um to help get their project [12:34] going and also to secure some land that they will be giving to us um and then on top of that there was sufficient cash [12:41] flow from that new project that's around a $90 million project um there's enough [12:47] cash flow to fund the public improvements that we just finished um so as we went through that entitlement [12:52] process some of the concerns we heard from the neighborhood were about um challenges and walking and bicycling and [13:00] uh turning in and out of their neighborhoods uh and there was no uh budget planned in in the capital uh [13:07] budget to make those kind of Road roadway or sidewalk improvements but with the Meson green project how we [13:13] leveraged it was um to issue the note to the developer get the project going get [13:18] the tax base uh enhanced and then uh capture that new tax base to fund these [13:23] new improvements so that was one note to the to the developer and then the city issued a separate cont contract for the [13:29] roads um that's how our engineering department prefers to do it for public infrastructure that we own and maintain [13:36] we would rather hold those contracts and have the contractor answer to us um and [13:43] so on the uh on on this proposed uh project we're looking at a similar type of outcome where the developer would be [13:50] responsible for the work on their private property they would hire the contractor they would get the debt they [13:55] would get the equity and then we would reimburse them through Tiff notes later um but also we think the the project [14:03] would generate enough revenue for the city if we chose and I know we're not there yet but if we chose to proceed [14:09] with some type of pedestrian Crossing in the future there should be a I don't know I don't know if there'll be exactly [14:15] enough funding at this point I think we're going to look at other sources as well but there's a large chunk of funding from this site that could start [14:22] that underpass project um so very similar arrangement to the mine green okay thank you and then on this this [14:29] project what is the approximate size of the note that we would be um working [14:34] with the developer on so it was 5 million for maon green what would it be for this one sure so this is a much larger project so this one the value is [14:42] just under $300 million of private investment the Tiff note or would be [14:47] sized at the financial gap that they're seeing which is around 23 million and for this uh project that [14:54] we're speaking about today we would actually break that into three separate notes so each phase of the project would [15:00] get a note commensurate with their with their size and with the benefit they deliver but they would all total about [15:07] 23 million okay so that's approximately 7 and a half% of the overall project would or a [15:13] little bit 7 point 7% that's correct um would be uh the size of the note [15:19] relative to the overall project that's correct okay thank you that's all I've got yeah I thought that was a good point [15:25] you raised there commissioner Jackson is that um we typically tried to stand to that 10% Mark in the circumstances where [15:31] we do use T tax increment financing correct yeah we're at 7 and a half% y [15:42] 7.7 all right other questions for manager nondorf at this point in time otherwi they could bring Mr Brahma up [15:48] here to talk about um i' would say that commissioner Pierce has been the one you know leading this conversation in terms [15:55] of um the level of curiosity I think of whether it's the council or the HRA but [16:02] he's been kind of the point man on person on this and um but we look [16:07] forward to your uh your thoughts I know that um you've been asked to think about [16:13] what kind of a project could you build here if uh you didn't have the tax and [16:18] government financing available like you have for the like you tentatively have for the approved project yeah we still [16:24] got a ways to go on that but nonetheless uh it's an important step in the process and I know you've got a [16:30] little sheet here that you provided to us so we're eager to hear what you have to say this morning Mr Brahma welcome [16:36] please give us your full name and address morning mayor members of the HRA uh Patrick Brahma uh [16:44] 166 South how 100 St Louis Park I'm with Enclave company as we're the developer [16:50] on this project glad to be here with you again and continue the conversation and what we think is a wonderful project I [16:56] appreciate the continuous feedback and um uh in collaboration on this project [17:01] so I'll go through this presentation uh admittedly I we've been working with you guys for it's been [17:06] about 18 months almost twoy year roughly process uh this is would be the least [17:12] visually exciting presentation I have provided to dat and I just want to give you that disclaimer so I apologize lots [17:18] of words and Patrick talking um and uh so I'll go through this it's a basically [17:25] it's a onepage document but I I kind of go through and highlight different sections of it that way as I'm talking [17:30] through it we can follow along with where I'm pointing to and what I'm talking about uh in general there's been [17:36] three questions that um that we've been discussing uh with [17:42] with the city council uh over the last couple weeks I'll go through those three questions they're the three questions [17:48] that are shown on your screen here um first is what would happen to this project uh the project that was approved [17:54] on 917 uh received final approvals if Tiff wasn't available or um for the sake [18:01] of clarity of some sort of financial assistance or investment people use different terms but if there wasn't some [18:06] sort of support to the project what would happen uh then kind of reversing that question backwards uh if if [18:14] assistance was taken away what what type of project could could occur here um and [18:19] so we'll go through through that in a little bit of detail and then um taking that question even a step further was [18:25] asked okay those changes to the project what would be taken away what's the dollar value roughly to those things so [18:31] we can understand the scope or the impact of those various items so I'll go through these three questions um before [18:38] I go into that I did make a note uh Mr new indor presentation was great and accurate I just want to make for anybody [18:45] that gets into the details or Geeks out on plans the way that I do the renderings that were included in that [18:51] are some of the original renderings on the project we did go through as you well know uh multiple rounds of land use [18:58] review We End updating those renderings based on public feedback received through a public process and so from our [19:04] perspective there's further enhancements to the articulation the site plan Green Space dog park connections to the [19:10] prominade that are not on those plans only for the sake of clarity for anybody that's watching from the public okay so [19:15] jumping into this uh presentation or or uh [19:21] um not sheet that we put together starting at the top the first question [19:26] uh what would happen to this project if Tiff was not available um the the direct answer is the this [19:34] project that was approved on 9917 wouldn't work there is there is a financial gap um Ellers obviously has [19:40] under done their underwriting uh to um to validate that financial gap uh so [19:46] just to be clear if anybody hasn't heard it this project wouldn't move forward uh we're not in a position financially to [19:52] make it work without Tiff as approved um I do want to mention for the [19:58] record that uh that we've attempted to be transparent that we knew a financial gap [20:05] existed on the project and that that this discussion would be needed and that [20:10] assistance would be needed at some level because of the questions that have occurred recently we went back and [20:15] checked records just to make sure that I'm not just verbally saying that so all of the applications that we've made [20:21] we've I dated them here and each of those applications also um included [20:26] multiple some in some cases two or three meetings with different Boards of commissions we attempted to at least [20:31] verbally state that we know we don't know if or how much excuse me how much Tiff would be needed or exactly what the [20:38] financial gap is but we knew there is there is a gap and until we get through [20:43] land use approvals and really understand the total project costs and understand the scope of the project we won't know that final Gap uh but we knew a gap [20:50] existed and we're obviously sophisticated enough and don't have projects to know upfront in general [20:55] where a project is headed and so we've tried to be transparent that that would be the case on this project from the [21:01] very beginning so what would need to change [21:08] with this project so the project that was approved on the 17th uh to make it work without Tiff um I'm going to do a [21:15] couple preambles just because from our core value perspective we just want to be transparent um we're going through [21:22] this question because we're being asked uh this is not we're not requesting changes these changes we're not opposing [21:28] these changes uh we are aware and we're made aware and are conscious of the city's policies that they have in place [21:35] sustainability policies affordability policies comprehensive plan small District plans we obviously went through [21:42] multiple steps of concept plan review with the community for us that's a huge part of the initial process with the [21:47] city to make sure that we're understanding the city's processes and and plans and vision um and so a core [21:54] value for Enclave is that we we don't want to be the developer that's going into the communities and to ask for exceptions to all the rules we want to [22:01] follow the city's Vision so that's what we tried doing here um on this particular project um so I'm going to [22:07] outline a handful of these uh different um items uh that are really the biggest impact on a project driving it uh [22:14] driving this particular project uh to need assistance or creating a fin Financial gaps [22:26] backwards affordable housing is and and the first two that I'm going to outline here are the two most impactful um [22:33] affordable housing is pretty straightforward I'm going to go through these these different items that are the move the big drivers and then uh on the [22:40] right side the next section I'll identify dollar values to that but it's it you know affordable housing there [22:45] isn't a ton to discuss there it's pretty straightforward policy uh and impact on the project there's 10% affordability [22:51] 50% Ami across this project 500 excuse me we're in the 570 something unit so [22:57] there's um uh quite a bit of affordable housing on this project that is a a big impact to a project uh land use strategy [23:05] um this project and and we we we've followed and bought into the city's [23:11] vision for the site we think the saltdale district guidelines are you know we we're aware of them and and [23:17] think ultimately what has been approved here is is a great project so we're not not throwing out these comments uh uh in [23:25] opposition to the city's Vision uh for this area however it is a reality of the financial [23:31] performance of a project it does it does weigh on a project and make it more expensive to construct a project um so [23:38] some of the things uh we were asked what what could we do to change to make the project work and really it comes down to [23:45] simplifying the project that's the short answer uh so I'll go through that in a little bit detail a little bit of detail [23:51] here but making the project um you know the net outcome would be a simplified [23:56] project that is more efficient which lowers the per unit cost of construction [24:02] while still in our perspective delivering a good project that still can generate the rents that we need and it [24:07] would just reduce the financial gap so if we can come in at a lower cost and still maintain good rents the financial [24:13] gap uh is reduced and so this is a big mover on the project uh what would it [24:18] look like right now this project includes four blocks we would need to swap it out to two blocks so you'd have [24:25] two larger buildings uh right now uh the parking is separated into four blocks obviously [24:30] because the buildings are all split apart the below ground parking we would we can we would connect it it would be [24:36] much more efficient perfectly rectangular parking that's what we do on most of our projects that's very [24:41] efficient um some of that parking would likely come out of ground and be at grade or above ground and the screening [24:48] of that parking uh there would be some screening we wouldn't want ugly parking we wouldn't propose that but it wouldn't [24:53] be as to the to the standard likely that the community would would prefer on this site uh there would be some more surface [25:01] parking it wouldn't be significant this site just doesn't have enough space for [25:07] significant uh surface parking to make a a a project work but we or the level of [25:13] density that we need to make a project work but there would be more surface parking than we have right now the [25:18] exterior design of the project would take a step back it'd be something closer to like a 71 [25:24] France um what else do we have on here uh right now the project has uh from our [25:31] perspective uh a lot of mix of use we have a decent amount of office and Retail the intensity of mixed use would [25:39] come down um office and Retail are high [25:44] risk drivers for a developer uh the higher the risks the higher returns that investors require so just from that [25:51] metrics alone pulling out big risk factors can drive down the minimum returns that deel that a investor is [25:57] going to require on a project and in addition to that the biggest cost driver [26:02] in these buildings is concrete uh so parking and office and [26:08] Retail Drive significant amount of parking so we can get far more efficient with our parking in these buildings if [26:15] we moved to a strategy and I'm not proposing this that eliminated the public parking on the first floors we [26:20] could really just have true apartment buildings that would be very efficient and cost effective and we pull out a lot [26:26] of concrete out of these buildings so again four buildings to two and those two buildings probably are very heavily [26:33] residential unit counts probably go up um office commercial space goes far [26:39] quite a bit down maybe down to a minimal amount um You probably looking at [26:44] structures or buildings are kind of like the Fred that you're familiar with they'd still be five over two seven [26:50] stories out of grounds five stories of wood frame construction the other component that would change on this site [26:56] is and we're proud to have worked with the city on on this but there's a lot of public realm there's a lot of public [27:01] space there's increased setbacks in certain areas um there's amenities in certain areas that you're well aware of [27:07] we would we would to make this work we would be pulling those things out and going to more of a a standard Suburban [27:15] type approach where you have a sidewalk system that wraps a building and meet the city's code requirements for [27:21] plantings and trees and so it's not you know we do this stuff all the time so we don't think it's a bad project we still [27:27] would be proud of that type project it just obviously isn't the same as the city's Vision in our discussions to date [27:32] Brahma hold that thought for a second commissioner Jackson has a question for you yes thank you um no oh you're [27:39] getting some water um so when we talk about merging the two buildings I [27:45] remember in the process of of changing the um land use plans along the way that [27:50] it was pretty difficult to accommodate having the potential of an underpass and [27:57] I thought you could so obviously if we merge the two buildings that underpass goes away um so tell me sort of if I've [28:05] got this correct so parking would be easier and cheaper if we didn't have the underpass we um wouldn't have a East [28:13] West Corridor through there so it'd be a big block but tell me a little bit about the difficulty of planning around the [28:19] potential underpass and I apologize I hadn't gotten to it is noted here and that's a [28:26] good point so I had I I didn't cover that so okay this project as you well know um a big part of the strategy of [28:33] the design and layout of this project and part of the public process we went through that that resulted in a pause [28:40] was uh learning about and receiving feedback on a potential underpass connection uh across France Avenue and [28:47] the outcome of that discussion was Landing that underpass in the middle basically the middle of our site and [28:53] that resulted in the need of us to adjust our site layout um and and the [28:58] design of our buildings uh if you look at our site plan today you'll notice that the Northwest building is a small [29:05] building it's a it's not one thing doesn't look like the other so it's a small unique building um that's because [29:12] uh in order to get a um a slow grading ramp down to the center of our site on [29:18] the west side of our site to make that connection across France we had to create an extra 50 foot Corridor across [29:24] the south side of our site to wrap up uh for that ramping down for a connection across France and then to your point [29:30] council member Jackson uh we there was a desire to make sure that there was an east to west connection from the [29:36] prominade directly to the landing point of whatever that connection would be in the future uh underpasses the current [29:42] assumption and so in Reverse if if we only have two buildings that east to [29:47] west connection is gone if we go back to a more traditional uh layouts that we're proposing and talking about that that [29:54] path that's available along the South Side we would request to have it reduced in in width so and then the last [30:01] component is the way that I were designing the structural Integrity of these buildings against France Avenue [30:07] they're being designed at extra cost to take structural load of excavation and [30:13] Pole away of dirt in the future for a potential underpass um so there's a few factors that we've included into this [30:19] project intentionally in our design that are that are cost drivers okay so and I'm just going to summarize for the [30:25] people listening there are two Regional connect that have influenced the design you have now and they would both I mean we [30:32] wouldn't get rid of the regional path obviously but the improvements to the regional bike trail would be gone and [30:38] then everything the complex things to do with the underpass would be gone well [30:43] yeah in this hyp difficult that yes that's correct is the short answer we're not asking for those would be things we [30:49] would have to give up if we hadn't asked for them you would not have included them that's correct okay terrific thank [30:54] you commissioner U thank you so I obviously have a lot of questions but I [31:00] have one short one then I I'll let you kind of wrap up but what is the [31:05] difference swag estimate that you would think of in the total number of US units [31:10] of housing between this potential F well this hypothetical situation and the [31:17] current proposal we have we so we have not um done a [31:24] redesign and actually done a a plan for the unit count of the the buildings [31:29] merged uh at rate the way that we've been looking at right now we've been assuming a slight increase uh but we we [31:36] haven't dug deep so I'd have to actually do a design to to figure that out my [31:41] guest guess off the top of my head you might be 5 to 10% more the reason why I pause on that is there you have to go [31:50] it's a big um uh I uh stress testing [31:55] analysis it's not a simple direct path and what I'm getting at is it may be more efficient on this project because [32:03] of the cost of concrete and the parking ratios that you can get with the physical square foot of the site to keep [32:10] the exact same parking exact unit count um but we're so much more cost effective [32:18] per unit that just staying at that unit count is the way to go versus trying to push Unit C up higher and now you have [32:24] to add another floor of concrete the concrete floors of Park are the most expensive part of these projects so we'd [32:30] have to get very deep into to be able to answer that question with uh more [32:35] certainty um so I would say no more probably no more than 10% increase uh [32:41] but it could end up being a similar number if if we did a redesign thank you that that is really helpful just [32:47] directional I think that that's fair um and then when you do mention the elimination of affordable housing um so [32:55] that is a a policy that we have as a city so would you in that situation then hypothetically be looking to do the Buy [33:04] in Buy in this analysis that we have here is [33:10] assuming just the policy doesn't exist not even the Buy in it would just be there's no affordability payment or [33:16] compliance is what this analysis is suggesting I'm not requesting that but [33:23] that's what this is suggesting okay thank you I do have more like broader conversation but I'm happy with to [33:29] complete thank you go ahead Mr brma the third item uh is in relation to [33:38] uh public spaces public streets public RightWay public realm um there isn't ever a [33:46] perfect way to describe this because it's a little bit variable um but in in [33:52] General on this particular project as you know Gallagher Drive comes in on the south side of our site that done that is [33:58] located on private property own maintain liability of private property owner this project requires the Reconstruction of [34:05] that road we also have the new North to South Road there's public easement over it so it's going to function like a [34:10] public road but it's privately owned operated maintain liability there's obviously public space [34:16] that's included on this project as well and uh you know the expansion of the prominade and a few other areas uh in [34:22] some communities those area those areas through the platting process get dedicated to the city and the City city [34:27] owns operates maintains and takes care of the liability of those things I know that's an intentional strategy for the city which again I'm not asking for a [34:34] change to but there is a cost to that and so that is a driver here and I'll outline that as [34:40] well and then the sustainability policy also has costs associated with that um [34:45] that I'll touch on here in a moment um and then just a couple caveats uh just [34:51] because we're throwing out so so much information I think the caveats are important um trying to compare and and [34:59] and this is something developers do not not even on this public stage trying to compare one real estate development to [35:05] another and making hypothetical comparisons without being able to bid [35:11] two like projects on the exact same site with two sets of plans at the exact same time there will always be minor [35:18] discrepancies because difference in Market in time and so I just want any [35:23] everybody to know this isn't a perfect science without what I just said two sets of full plans bid at the same time [35:29] on the exact same site it it so there's a little wiggle here for disclaimer for everybody the market conditions do [35:35] matter very much uh and then the last thing not asking but it got brought up [35:41] in the subsequent conversation I just do want to identify this project is paying and depending on how you someone would [35:48] Define development fees the answer slightly different but this project is paying about $6 to10 million of [35:54] development fees depending on your perspective there's a cost in impact there and again if someone was asking the question how could we make this work [36:01] without Tiff that's another bucket that someone may or may not be willing to [36:06] consider we're not requesting okay so I'm going to move on to making connections and dollar values to those [36:12] four uh buckets that we outlined um I've been talking a lot so I'm just I'm [36:18] looking at you one last time before I continue down this column uh is it okay if I continue on I please do okay uh so [36:26] I'll go through these four different buckets here uh first affordability uh we took the 30 uh the uh just to update [36:35] everybody originally we were at 20 years assumed affordability uh we understood the city's policy was updated recently [36:41] to 30 years or at least we when we originally came in thinking about this project we thought it was 20 to 25 years [36:48] and recently we were made aware that it's actually 30 and so I'm saying that in the context of what we're showing [36:54] here we're showing 30 years of rents loss on those affordable units and we're [36:59] doing a Net Present Value calculation of of that rent loss we're discounting at a 6.25% discount rate and we're including [37:07] 2 and a half% inflation what I'm getting at is if we just did a surface like hey $800,000 over 30 years that total is $26 [37:14] million that's not necessarily a fair way to represent that number we need to Discount that back to Net Present Value [37:20] so we're showing $6 million throw it another caveat different people do these calculations differently and someone [37:26] them might look at this different and have a different perspective but this is just one way of looking at it's how we look at it is that's the rent loss that [37:32] we have on the rental buildings on the condo side we're not dealing with long-term cash FL analysis or loss of [37:38] rents what we're talking about is a one-time upfront uh construction cost impact to the project so they're at $3.4 [37:45] million so when you combine them together we're looking at that roughly $16 million if you if you Net Present [37:52] Value back the the loss of rent on the land use side of [37:58] things um I had mentioned that caveat of trying to understand the difference in [38:03] pricing with construction costs is is very difficult short of what I said of [38:10] um but we're actually in a unique position uh or Enclave is right now uh [38:17] we have another seven story building seven story building under out of ground that's [38:23] under construction right now in a walk Environ walkable environment in downtown rochest [38:29] that that project and the style of building is very similar to what what [38:35] really what elimination of one through four there looks like um so we have a real life example with construction [38:42] costs that we can compare to this particular project and so that's what this section does it Compares a project [38:48] that includes one through four to one that doesn't and I guess I would even add a caveat with that Rochester project [38:53] that I'm comparing this to they we they did qualify for re development Tiff District we did investigate the [38:59] potential use of Tiff on that project they did have a sustainability policy affordability policy commercial [39:05] requirement mixed use requirement green space requirement that all kicked in if you use Tiff for a number of reasons we [39:11] ended up not going to the route of Tiff but it's actually set up well here to be able to make a comparison between [39:17] projects versus me just doing forecast and takeoffs and making assumptions so that project was [39:23] $230,000 per unit right now our pricing for per Department unit this particular [39:29] project for construction costs ranges between 260 and $275,000 per unit depending on the [39:35] building the Northwest building is the most expensive because all the Mi use an extra concrete inefficient [39:40] layout um and so then if you just if you and then further in this analysis if you [39:46] read through it uh for the sake of being conservative not in the favor of the developer we I I pulled back those [39:51] numbers pulled back the Gap I took $5,000 off per unit and so I included the range of what that could be at the [39:58] um at the top there so it could be 13 to20 million um the majority of apartment units we have on this project are not in [40:05] the Northwest building so um You' be looking at something that's closer to the you know 15ish 14ish Milling is my [40:13] assumption if if you did a very deep analysis um so that's roughly the [40:19] difference between you know if we if we did change our project today to [40:25] something that's closer to you know didn't include the four things on the left there in other words basic what we [40:30] have in Rochester right now that's about the savings that we assume would occur U [40:36] but without designing it and bidding it we won't I we're making [40:42] assumptions the third item uh operations and maintenance I talked through on the left there kind of the background on [40:48] that uh we did have our maintenance team uh work with a subcontractor to put [40:54] together some rough estimates of the ongoing maintenance for this project and the difference between a project that [41:00] has all of the extra setbacks the all of these public spaces that are privately maintained uh the way [41:07] that it's set up in this proposed project the approved project the way that we're proposing here versus a [41:12] traditional project where most of those spaces turned public the intensity of plantings is less as you well know we've [41:18] the the level of plantings and Landscaping on the site were enhanced to match the prominade to make it feel like [41:24] you're not leaving the prominade when you come through our site that it's the prominade is flowing through our site and so if we reduce everything down the [41:31] level's down to a more standard level and then aot a lot of the the public [41:37] space was was dedicated to the public including the roads we could save $500 to $100,000 per year on maintenance this [41:44] project also kicked in the city's requirement for us to do a park maintenance fee a special Park maintenance fee for the prominade [41:51] totaling $86,000 a year and so you can see the total impact over 25 years here [41:57] we we did not do a Net Present Value calculation on that so just know if someone did a Net Present Value calculation the total there would come [42:02] down but that's the face value of adding that up over 25 years the life of the Tiff [42:08] District yep no just go ahead and finish and then [42:14] I'll I'll follow up after is this I think this is your last bullet point [42:19] yeah for water break too thank you okay last item is [42:25] sustainability uh sustainability uh there's a range here and there's we don't show the top end of [42:31] the range I'll walk through what why that is um what we did on the short end end of the range there identified very [42:38] specific straightforward uh costs um the sustainability policy as you will know [42:44] requires um has certain design requirements uh uh um uh what's the word [42:52] I'm thinking of modeling requirements um and then commissioning requirements so there's a lot of soft [42:58] costs that are involved with complying with that policy on this project over the four buildings we're looking at about a half million dollars of soft [43:05] costs that are added so that's not construction costs it's not physically changing anything to the project it's just the soft costs and then in addition [43:12] to that and it's not a city requirement but encouraged we added solar to two of our buildings so those are very [43:19] straightforward costs that I can easily say these are extra costs um that we're showing that's at $1.2 million there are [43:26] other costs um um but one thing I want to do is make sure that I wasn't double counting um those other costs that might [43:31] be increased costs in mechanical or increased costs in the envelope or insulation of a building those types of [43:37] things to make the project more efficient from an energy perspective those are already picked up in number two so I'm showing the lower number and [43:43] sustainability to avoid I don't want to be disingenuous and in double count dollars so um realize that was [43:51] longwinded thanks for hanging in with me um I'll stand for questions [44:02] um thank you um Mr chair uh so uh thanks for [44:09] um going through the exercise and uh really embracing the question that was [44:16] asked and so I I just wanted to just frame this [44:21] um the reason I asked the question whenever that was a month [44:27] ago or a couple weeks ago whenever um I everything is [44:33] connected and so when I read through what you have here there's a couple of [44:38] things that stand out to me um the project that we have in front of us [44:43] right it's a it's a beautiful project right when you step back and you think about the vision in that space um I [44:52] think it's a beautiful project um but I do think our processes kind of [45:00] lead us toward an outcome fairly early on in the process [45:06] and so the the um just your first bullet point um this project would not occur [45:14] but for Tiff like we talk about Tiff Tiff Tiff Tiff and what we really should [45:20] be saying is right the city needs to make an investment in this project well [45:25] what are the options for that well tip is one of those right we also look at Grants right we could do bonds we [45:33] there's lots of things we could do um now they may not create the capacity of [45:39] $20 million to do the project um but I do think it's healthy for the city to be [45:45] thinking about if we want to do this and we need to make an investment um what's [45:51] the best way to do that okay so that was the first thing that was in my head is I [45:57] like to make sure as we look at things like this we're framing it that way um [46:04] and so that that's the first thing um I think it's healthy for us to be [46:11] able to have a conversation about choices but you can't have a [46:16] conversation about choices if you don't know what those choices cost you don't know what the impact is of those choices [46:24] and so I have done the I've done this just as all of us have we have a site [46:30] plan in front of us we're giving non-binding feedback um I will say well [46:37] what if I'd like for affordable housing to be um not revert back to Market well [46:43] that has a cost to it when I make that statement in a council meeting I don't know what it what the cost is of that [46:50] and so we kind of all have things that we add to the project um but Without [46:57] Really knowing what the impact is to the project other than it definitely is in [47:04] the benefit of the city for most of the things that uh we suggest but I don't know that that is [47:11] the a healthy way to do it and so by the time we've done that you've probably [47:17] spent almost $2 million to get to this point um and so I would like I [47:23] appreciate the right side of your spreadsheet because I think it healthy [47:31] for us to be able to have a conversation um which takes time right we can't have the conversation today but [47:39] have a conversation about choices um and I'm not hearing anybody say this but I'm just giving the I'm I'm just kind of [47:47] painting with broad Strokes You could argue with your land use strategy [47:53] points as a city we perhaps we can't really afford our comp [48:00] plan because there's a gap there all right well if that's true then what do [48:06] we need to do as a city um to make sure that the things that we have in there we [48:12] can achieve maybe we can achieve them in a longer period of time maybe we can [48:18] structure projects differently so that we can continue to progress towards what's in the comp plan um those kinds [48:25] of conversations um as um I'm I'm used to in business as [48:32] a leader having those kinds of conversations and so I'm simply trying to frame um from a process standpoint it [48:40] would be healthier for us to be able to do that um and so I know my comment about I don't know if we can afford our [48:47] comp plan that's a big broad stroke um but I say that for effect and I think [48:52] everybody can understand where I'm going when I say that um and so then I'll go back to everything is [48:59] connected we're also looking at a um a proposed tax lever increase of [49:07] 133% now we're doing some work on that so everybody hear me say that I'm going to say it three times we're doing some [49:14] work on that we're doing some work on that we are doing some work on that I mentioned that for the same [49:22] framing reason if we do this project or a [49:28] project and we use Tiff we definitely create more tax capacity but it sits in the district for [49:36] whatever the time frame we set for that that tax District [49:43] so if we're in a position where we need additional Revenue could it be better for us to [49:49] have a project that can be done in two years without Tiff maybe it's not 300 [49:57] 50 um million in tax capacity maybe it's [50:02] 150 but that 150 goes directly to the general fund once that project is [50:09] complete again everything's connected and so that's that is um is how I think [50:17] about a lot of this but I think our process has to enable us to be looking [50:23] at all of these pieces that layer on top of each other and not making a decision [50:29] um without U those factors being in [50:34] place and so a lot of what I'm teeing up um Mr rahma is not the developer right [50:42] this is not all on you some of this is for sure on uh City process um and I [50:49] think we can we can make a lot of progress in terms of looking at how we [50:54] do this um and so the the last thing I will will add is that and I think I said [51:01] this already I um we may look at this and have conversation as a councel and [51:09] say um again I'm hypothetically you have a list of things [51:15] on the right we may choose as a city you know what we don't have $22 million to [51:21] invest in this but we'd like to get it done so maybe we can make choices in [51:28] here that relax some of the standards or delay some of the value um so that we [51:34] can get the project done those kinds of conversations we would have to have and [51:39] I think you've already heard I my colleagues start to dive into that um [51:46] and I think that that is a healthy conversation for us so I just wanted to thank you for engaging in this and um [51:54] the due diligence that you've done you've answered the question of saying well here's what would impact If U there [52:01] were no Tiff and then I really appreciate the right side uh of where you Tred to [52:07] quantify uh what those changes might be U because I think that can help us uh [52:13] have a much deeper conversation um as we um move forward Beyond [52:20] today thank you commer commissioner U thank you uh thank you commissioner [52:26] Pierce for kind of framing that up uh because I think my my direct ask would be to the city that as we continue [52:32] looking at our process I would love for Tiff and what are these things going to [52:39] cost to be a part of that entire Evolution it feels like right now we say [52:46] we'll talk about that later and I think that that gets to your point of it makes it really hard to make some of these [52:51] trade-off decisions um because I know that there are like very tactical things that I've [52:56] asked for right of of having parking that could be converted into something else down the road which I know adds to [53:02] costs um having this underpass I think would be amazing and really drive to the [53:07] utilization and the connectivity that has a cost um additional car charging [53:13] right like there are all these little things that we've layered on and those were just ones I could think of for myself throughout these meetings and so [53:19] I want us to bring more of that visibility into the discussion earlier [53:24] on but I think that's also because what you've presented here today frankly [53:30] isn't a project that would be approved right and what I really understood of the ask of commissioner Pierce or was [53:36] council member Pierce I think at the time um what would you have presented as [53:42] a project that you thought would be approved and that I think would be different right [53:48] um right now affordable housing is a requirement that we have as a city um [53:54] there are different things in here as as I'm going through right um if you were to and I just did like back of the napkin math um but I think it would be [54:01] approxim I'll kind of describe my math that I did um I estimated based off of [54:07] the what I saw here is 524 rental apartments I did 10% um which was 53 [54:14] apartment units and then I forgot off the top of my head when I was doing this math I estimated like 150,000 for the [54:22] Buy in and so that's approximately $8 million and so that would be something [54:27] um that isn't a part of this calculation that would absolutely add to the cost and I think just compound that this [54:34] might not be a feasible project regardless and so I think this was a helpful exercise and I think helps bring [54:41] some of the dollar values to some of the things that we're asking for but I and I know you it took two years to get to [54:48] this project as is so I know I can't just put you on the spot to say like quick come up with what it would be but [54:54] I am genuinely asking you know if you were coming into this project and you had it in your mind that Tiff would [55:00] absolutely not be something that would be possible for this site um I don't think that this is what you would have [55:06] brought forward because this wouldn't have been approved either right so you would have some internal tradeoffs um [55:13] can you speak to that at all here on the spot of of what would it look like if you were trying to get something [55:19] approved and wanted to make the best of this site before you answer that I just wanted to clarify the question I asked [55:26] asked was if you got little or no Tiff [55:31] how would that impact your project so I I don't I wasn't actually thinking [55:37] project that could be approved right um we talked about that question uh but [55:44] that that wasn't the ask that I I had for today so I just wanted to be fair to [55:50] to you thank you for that clarification it's my ask great now on the spot hold [55:55] on add add on yeah I'd like to just kind of add on and hopefully you'll prove this [56:02] commissioner agu so you're talking about parking assume and this is going to be [56:07] stretch your engineering skills but assume all parking underground is connected so we have a big square of [56:13] parking or two rectangles of parking but then we have just you know bare bare [56:18] level streets breaking it into 200 blocks 200 foot blocks on the surface so [56:25] underneath that street it's all parking underground but we we maintain the um uh [56:31] surface level separation of the streets because um that would be required in our [56:37] um that's sort of the basis of the whole Southdale plan so this you've got them [56:43] merged but is is that a fair qualification commissioner agu okay [56:49] thanks glad to respond to the question and it's uh does it's I just have to side comment it's interesting because [56:54] we've tried diges in the question that we thought we heard we even dialogued with multiple people okay what how did [57:00] you hear the qu and there's different ways to answer this question so I just out of respect it's different ways to answer this question um I can answer [57:08] that on the spot and I say this with um humility and just respect so don't I'm [57:14] not attempting to be abrasive if if if assuming no assistance at all we [57:21] would have never worked on this project it's if we knew it wouldn't be a possibility for that discussion period that I we don't think a project [57:29] works here that meets because the only way for us to make it work would be for me for us to ask for a bunch of [57:35] variances that's that's the honest I mean that's we would have to ask for several variances and waivers to [57:40] policies now would it be exactly these four things maybe it's three of the four or a combination of of something but we [57:49] it just wouldn't work we would you know and we and it's kind of for I tried to [57:54] um for us for Enclave it it's important like it's a core value for us when we go [58:00] into communities to not be the developer that's asking for can I get an exception to this can I get S to that you know do [58:06] we we really try to frame up the way we work with communities to meet their Vision um so I realized the process [58:14] things you just mentioned and the odds that we're at now and the difficult position we're in because of that and I respect that um but to your question [58:21] council member reu I um probably not the answer you're looking for but that's that's the true [58:29] thank you and and I think where that brings my mind and just kind of speaking to my fellow Commissioners here [58:35] is you know we look at some of these sites across the city and this being one of them of kind of asking ourselves like [58:42] why hasn't this been redeveloped yet like why is it still sitting there um as the bunker as the Macy's Furniture Store [58:49] and and there are multiple sites right it isn't just this one and what I what I hear a lot from people in the community [58:55] is you know these are desirable sites we shouldn't be using Tiff to attract [59:01] developers to it um and I I just think it's a good data point to understand well they're still undeveloped today um [59:11] and what we have as standards as a city have changed from when the original [59:16] Macy's site was built and so I I do think that um commissioner pierce the way you framed it up of do we need to [59:24] change what it is that we're looking for our comprehensive plan like does our comprehensive plan need to change if we [59:32] want to set a specific threshold or cap or goal of what Tiff is for a city and I [59:41] I know we've all seen the graph um I think that U manager nindorf usually shows it at some points um throughout [59:47] the process of you know what percentage of our tax base is within a tiff District compared to other cities across [59:54] the board and I always use that kind of mentally as well and and maybe maybe we [59:59] do want to talk about a hard cap but maybe it is just thinking relatively where we at um and I if I recall I don't [1:00:06] know the exact percentage right now off the top of my head and I won't put anyone else on the spot but we're very very low on that graph and so if what we [1:00:16] want to take out of this is a higher level conversation about the [1:00:21] comprehensive plan and whether we can afford that and what are the mechanisms that we have as a city um maybe one of [1:00:28] those things is we say okay this is what we want out of a city this is our comprehensive plan but we want to [1:00:33] balance it with here's our Target or our goal for Tiff District percentages um I [1:00:41] think that might be a way to think about it as well um because we do have Tiff in [1:00:46] our disposal as something we can do to help encourage developments that we want to see and so I think that that's where [1:00:53] we just again need to have that macro level conversation to have an awareness of these tradeoffs of is this site in [1:01:01] this area where we can get this underpass and really allow connectivity to one of our other substantial [1:01:07] Investments within the Centennial Lakes Park area and connect that across under France um I think that that might be a [1:01:15] reasonable conversation for us to have at the top of the House of where do we strategically want to invest up to a [1:01:21] certain threshold that we think is reasonable um but again these are kind of broader conversations but I do think [1:01:27] it's worthwhile for us to talk about um as we consider this today so thank [1:01:35] you yeah thanks everybody um see Mr anut out there and Mr nondorf [1:01:42] too um but first let me ask Mr Brahma uh you know when I look at the I look at [1:01:47] the leftand side of the chart you put together which I I [1:01:53] appreciate you doing this work on actually short not no and I don't think manager nondorf has seen this until [1:01:59] today this may or may not be new information or partially new information to him I doubt it with his level of [1:02:05] knowledge that he probably knows all of these things from having got through these exercises with you over time uh [1:02:12] but we haven't really talked about what kind of pressur is that you're under as a as a developer in our community [1:02:17] sitting here with an approved project and some I would think some potential uh financing lined up what you [1:02:24] know what kind of a timeline are you on there with respect to uh potential [1:02:31] financing uh timing wise right now uh first thing that is the overarching [1:02:36] timeline we're need to comply with is our purchase agreement we our deadline [1:02:42] is January 10th um so we're trying to back into that and and U to be candid it's getting [1:02:50] very tight and so um we're closely monitoring that And discussing that with [1:02:55] Macy's um I don't want to speak on behalf of Macy's but uh it's been from their [1:03:00] perspective a long process as well and I don't know that I don't think this is the first project that's uh come to the city is my understanding and so I just [1:03:07] don't know where that conversation will go as all I can say publicly but we are under we're under a time crunch right [1:03:12] now um as far as uh debt and Equity uh the the Full Construction lending the [1:03:20] full final debt and Equity that's something that will come into play before construction starts if um don't [1:03:26] know if we've conveyed the detail or if it's been brought up but Macy's will be leasing back the property so we're going [1:03:32] to buy it then they're going to lease it back through August of 25 and during that uh lease back period [1:03:40] we would be obtaining our uh final Equity package and debt financing for constructions of the $300 million so in [1:03:47] the short term here what we need to accomplish is getting the dollars to close in the land which is a different [1:03:53] process and so we're we're feel good about that process but admittedly it is [1:03:58] it's getting very tight and with with unknowns you know candidly we're looking at 200 plus page Tiff agreements three [1:04:04] of them that's 600 something pages to get through that and accomplish all that before you know with enough time for [1:04:11] people to close on it's we're in a difficult spot right now um but I say [1:04:16] that just sharing information to be transparent we're going to get through it and any the any clear Direction you [1:04:21] can give helps us and Macy's all move forward forward so I know that's not a [1:04:28] perfect answer um yeah no I didn't expect a perfect answer but I do you know when we think about the information [1:04:34] that we've just seen for the first time this morning and uh we think about uh having [1:04:40] the ability to to think all of this through on our own in addition to sitting here for uh an hour roughly to [1:04:48] hear what you're talking about and and hearing things like well uh as member as commissioner Jackson brought up uh well [1:04:55] we couldn't improve the regional bike trail or we you know it this affects the passageway connection we that that's a work in progress that [1:05:02] we're thinking has value in terms of of uh drilling down on that idea to see if [1:05:08] it really makes sense and uh if if you came back with a two-part project instead of a four-part project and the [1:05:14] things you're talking about generally here uh you know I think for all of us having [1:05:22] a little bit of time to think this through would be would be good but I want to do that in the context of being sensitive to the time pressures that [1:05:30] you're under um and I also would like to see for example me personally it you know that [1:05:37] old addage of pictures worth of a thousand words you know if you had a if we had a new site plan or a potential [1:05:42] site plan that embraced some of the ideas that you'd have here that on a project that you think could be built uh [1:05:49] whether you know to commissioner 's point you know it may or may not be something that that we would approve [1:05:54] because we have certain standards are want to maintain but the idea that you would you'd come forward with something that from a site plan standpoint and [1:06:01] from an elevation just a like a sketch plan basis show us what's the difference [1:06:07] you know uh if you go to two buildings instead of four buildings and you go to two streets instead of four streets and [1:06:13] you go to above ground parking what what one of the things that uh is affecting me is one of the the potentially one of [1:06:20] the best pieces of property in our city uh you you might have to come back [1:06:25] with this idea of having exposed parking ramps above ground above grade I mean [1:06:30] right on a park you know we've seen that already happen uh over at where [1:06:36] Pinstripes is you know we put a screen on it but nonetheless there's a parking ramp on one of the best pieces of [1:06:42] property in town because of opposition from uh Years Gone by about what what [1:06:47] people wanted to see there so there are things for us to Think Through too and [1:06:53] um as part of that thinking process for me and I think for others as well and [1:06:59] maybe this is where manager unor and and Mr anut in particular come into play and that is what are the implications I'm [1:07:05] going to ask you guys that maybe come up here together Mr Brahma stand by what [1:07:10] are the implications for the general taxpaying public by advancing this project as [1:07:19] approved we've talked about this before but I think it's an important thing to be thinking about as we is as we maybe [1:07:26] even delayed this conversation for for two weeks or um you know but trying to be sensitive to what Mr brah is facing [1:07:33] from a pressure standpoint from a you know financing because as we gone through this project he said all along [1:07:40] this isn't going to be a finance this isn't going to be a funding issue you know and I don't want to put them in a spot where it is a funding issue or put [1:07:46] us in a spot where it is a funding issue because we've already got two projects that are approved sitting on France Avenue uh with market conditions that [1:07:53] aren't allowing them to go forward so Mr nondorf I don't know if you want to lead off on that question sure want me to [1:07:58] repeat it or do you could you repeat it sure yeah and maybe this wasn't very [1:08:04] artfully stated but I want to know what you think the implications are for the general taxpaying public in Idina by [1:08:09] advancing this project as it's been approved I'll start with the general and then Nick can jump into some details [1:08:17] um uh so that so the biggest impact is having a private [1:08:23] developer make the investment into our community and deliver the items that we [1:08:29] as a community said we wanted so as we went through the process to prepare the Southdale plan the comprehensive plan [1:08:37] the sustainability policy the affordable housing policy you know as you recall [1:08:42] those took years to develop with lots of input from the community and now we can make progress on each one of those [1:08:49] fronts um the developer is willing to take the risk and make that investment [1:08:55] can conditioned upon the city participating at the end and reimbursing them for a portion of it but to me the [1:09:01] biggest impact of the taxpayer is they get that result that they're looking for [1:09:06] um and if some without the risk of the city going out for debt and building it [1:09:12] ourselves uh without the risk of the city buying land Building plazas [1:09:18] building parking uh so we get the benefit with very little risk if or no risk right so [1:09:25] what about this notion that uh it spreads a it spreads a more General burden on the general taxpaying public [1:09:32] when these taxes are uh collected on a tax eement financing sort of basis and [1:09:39] uh but we still got you know there's more there's more people living here and there's more to maintain together [1:09:45] um and I know that some folks out there worry about that but my understanding is that let me just preface it by saying to [1:09:52] this maybe to Mr anut is that if if you're if the market rate increase of your property in your [1:09:58] town uh is less than uh annually less than the uh proposed Levy you can [1:10:06] capture that differential to help raise the standard on where the where the [1:10:12] level was frozen to help pay for some of those expenses that people worry about that year you're putting more on us by [1:10:18] virtue of building this project for 300 million uh until the tax inqu financing [1:10:24] district is over over 25 years from now how do you deal with that problem thank you for the question how [1:10:31] do you answer that question I guess uh Nick an Hut with Ellers and Associates were financial advisers to [1:10:37] the H um and how it uses its resources um so in part um to answer the question you [1:10:44] know we're talking about the use of tax increment financing which itself is designed to capture the new value that's [1:10:51] created after this private investment is made and potentially harnessing that [1:10:58] additional tax capacity to help pay for portions of the project that that we've [1:11:03] mentioned that are driving a gap in the financing of that project um we're also [1:11:09] talking about only using 75% of that tool to help fund this project [1:11:15] um that tool is designed to shift the burden or the risk to the developer it [1:11:23] it is incumbent that the developer actually builds that project generates the tax base and then continues to [1:11:30] operate that project at an amount that actually pays the taxes to create the [1:11:35] financing in the first place and um so we can think about other potential City [1:11:41] resources leveraging your own existing dollars to pay for those things but that would put your own money at risk you [1:11:48] essentially would be investing directly into this project and then expecting it to deliver later on uh to repay the [1:11:56] funding that you're providing so we're we're using a kind of a passive investment strategy in this we're [1:12:03] deferring the benefit that's created to the tax base in order to obtain all of [1:12:08] these amenities that we want in this project and at the end of the day it's going to come back onto the tax base [1:12:14] eventually and add to the pie of the ex existing taxpayers um but not for the [1:12:20] period while the Tiff district is established um but Tiff itself is also [1:12:26] designed intentionally to try to protect the uh potential that this [1:12:33] project might not help fund future increases in services that you find [1:12:39] necessary when you increase your Levy in the future to pay for all of the things [1:12:45] that the city does and provides its taxpayers if that rate increases in the [1:12:51] future the property actually helps offset a portion of that increase [1:12:56] because the tax rate that is put into effect when a tiff district is established is Frozen in time so at any [1:13:03] point if that rate rises above the Frozen level the taxes related to that [1:13:08] differential do flow to the local jurisdictions um so that is a [1:13:15] hypothetical that is incumbent on the fact that maybe tax rates would rise above the level that they are today um [1:13:22] that is a protection that's built into this mechanis mechanism so it is built into how Tiff operates that those taxes [1:13:28] are not captured for that entire period of time it's only the taxes related to [1:13:34] your existing tax rate right now which by the way for this project would be after you've adopted your 2025 levies so [1:13:43] the property that it sits there today is still going to contribute the same amount of [1:13:48] taxes um while this Tiff district is operational as it is for 2025 going [1:13:56] forward the P the portion of the increase after it's developed is going to be captured within a tiff District [1:14:02] only to the extent that that tax rate matches in the future if the county the [1:14:09] school the city need to increase that total rate in the future because of a new Demand on public [1:14:16] surfaces that additional part above the Frozen rate goes to your local General [1:14:21] levies to help offset that need does that answer your question question I think so yeah I mean it's I know it's [1:14:28] technical but uh what I hear you saying generally is that there's a mechanism [1:14:34] established through the law that allows us to to increase that Frozen base or [1:14:39] the increment above the Frozen base if uh we have a levy that increase that [1:14:45] helps defray any and pay for any uh increase in the demand for services I think I I would phrase it a [1:14:52] different way um but please do you don't have the [1:14:57] discretion necessar to choose to turn it on or off right what you have right now is we're going to establish a tiff [1:15:03] district and we're going to establish it based on the the tax rates that are in effect today if in the future it's not going to [1:15:10] limit your ability to raise your levies in the future if you need to or future bodies I'm not pointing at you all [1:15:15] directly but a future Council needs to raise its Levy and it causes an increase [1:15:21] in that tax rate then there's nothing in the Tiff District that's going to preclude that ability or restrict you in [1:15:27] any way but the way the the taxes are going to flow is up until the point of [1:15:33] the Frozen tax rate it's going to still be captured within the Tiff District but if there's an increase in that rate [1:15:38] Above This level the taxpayers are expected to pay in 2025 then that money directly to to that [1:15:46] I'm going to use increment I know increment on top of increment but that incremental difference is going to help [1:15:52] fund those Levy increases can I well yeah just one another segue [1:15:58] off that and I go to commissioner PE but it seems to me that one of the other uh potential advantages arguable advantages [1:16:04] of tax in and financing is that the project gets built the taxpayer gets the [1:16:09] advantage of all of the benefits that were created when the project is finished uh during the entire time that [1:16:15] taxing financing district is in existence um and it's getting you know [1:16:21] and then it's getting uh they're getting the developers getting repaid out of the increment that flows uh post to [1:16:29] completion of the project correct it's an Tiff is best [1:16:35] viewed from a long-term perspective I mean we're not making an investment today just to have a quick flip and a [1:16:42] big you know a big payday tomorrow um the city's been here for over hundred [1:16:47] years we're going to be here a 100 years in the future so as we make some of these long-term Investments and some of [1:16:53] these long-term investment strategies we're really looking not to tomorrow but [1:16:58] 10 years in the future 20 years in the future 30 years in the future and it's these types of massive Investments that [1:17:05] will help solidify and stabilize that future so I uh that's usually how I look [1:17:10] at it as in with a long-term lens yeah so just by way of example I think if you look at 50th in France where we tore [1:17:17] down a an exempt piece of tax property which was the middle ramp and Nolan [1:17:23] Mains now exists there and we had we used Tax incur financing down there and the things that we got out of it were uh [1:17:29] improvements on the ramp on the north side of the road we got a heated underground parking as free for people in our town free across the road uh we [1:17:37] got uh plazas and passageways and new businesses and all these public [1:17:43] amenities that people were take are able to take immediate advantage of when the [1:17:48] project is finished and what what I think it was about $10 million in Tiff [1:17:53] donut 50th in France right yeah the the Tiff uh at 50th was a $10 million Tiff [1:17:59] note and so every as I recall every 6 months now they're paying $600,000 worth [1:18:05] of taxes and based on them doing all the work now they're getting reimbursed 90% [1:18:10] of that probably goes back to the developer to reimburse them for the money they expended until the $10 million is satisfied plus interest that [1:18:20] that's exactly correct and that place um has really um uh you know turned into a [1:18:26] place that people love there's more it did everything that we had hoped it would do I mean as as you mentioned it [1:18:32] was um it was a a a tax exempt parking garage that was not Ada accessible and [1:18:39] it was a a back loading dock and we turned it into into a place where people love uh with events and programming and [1:18:47] the new the indoor parking uh with that use of Tiff you know we leveraged the developers investment we had them build [1:18:55] us the parking garage underneath the building at their expense in the past the city made those Investments um so [1:19:02] that we were able to limit the the debt risk to the city by leveraging the developer investment and that's we've [1:19:09] used that model for Tiff in a d sto projects and we put a piece of exempt property back on the tax rols after 40 [1:19:15] plus years cor right all right want want to go to commissioner Pierce he went commissioner Jackson yeah I um so I [1:19:22] agree with everything that was just said um starting from the answer that you [1:19:29] gave to the question um but for me like the [1:19:35] comparison is different and so that's that's one of the reasons this is is so [1:19:42] complicated if if I compare which is better in the long [1:19:49] run given our current circumstances is it better [1:19:55] that we get a reduced amount of task capacity in two years right to the general fund [1:20:05] versus 20 to 25 years from now and so I'm trying to compare that to [1:20:12] and you're comparing that to the community benefits right and I it's [1:20:18] there's nothing wrong with that but that's kind of when when I think about this I I uh um that's one of the things [1:20:26] that I wonder I think that's a key question really is is the weight worth it [1:20:33] yeah M Mr chair one thing I would say about about what uh commissioner Pierce [1:20:39] just said is it's important to remember that there's not a new Revenue stream that goes directly to the the general [1:20:47] fund it goes we increase our tax capacity which means that we have the [1:20:52] possibility of offsetting our ly our Levy would be slightly smaller around [1:20:58] everybody in the community but it wouldn't in and of itself create new [1:21:06] dollars Jackson um yes thank you so I I don't know if this will work uh but what [1:21:13] I'd like to see is one of the things that we we haven't talked a whole lot about is this park maintenance fee and [1:21:19] that's a big deal to me um Centennial AES needs repair we're going to be bringing more more you know every year [1:21:26] it needs maintenance and we're going to be bringing more people into the area and as a result uh one of the elements [1:21:32] of this Tiff potential Tiff deal is a park maintenance fee so I'd like to [1:21:37] request um from Mr Ellers if Poss or Mr an Hut at ERS you get that a lot I'm [1:21:43] sure um uh if let's assume the purchase price is [1:21:50] the that that we're talking about is the value of the land and let's assume instead of this project [1:21:58] it gets a complete renovation so let's double the purchase price as a new value [1:22:04] if you could run the existing tax numbers not right now but I I think this is would help me what the tax flow would [1:22:12] be this purchase price doubled and the taxes that would be generated from that [1:22:17] which is people talk about incremental change instead of transformational change so incremental is they put a [1:22:23] second story on here and repave the lot so we'll just say we're going to double the value of what it is now what taxes [1:22:29] that our current tax rate would flow from that and then compare contrast that with the um annual fee paid for this [1:22:37] park maintenance because I think that's kind of an Apples to Apples so the the taxes that would flow to the city would [1:22:43] obviously go to the general fund it wouldn't go straight to Centennial Lakes but I'm very concerned about making sure [1:22:49] that Centennial Ace continues to be maintained in a worldclass fashion the way we've been doing it and this is a [1:22:54] new Revenue stream for that so that's kind of Revenue stream to revenue stream I would I would really like to see that [1:23:00] um uh at some point we're happy to do that we've done those kind of comparisons before um and just you know [1:23:08] the starting point today is uh today the site pays zero in park fees um so any [1:23:15] dollar above zero is a is a win in that category but we can readily put that comparison together for Youk you [1:23:33] I think we can defer that it's just a conversation we can table for two weeks sure yeah the uh the second item was a [1:23:39] proposed resolution to take action on the Tiff District um that action would [1:23:45] be conditioned upon the city council's Final action it's this is just one of the many steps in the process but we can [1:23:51] readily defer that to the next meeting um we're right now we're aiming to based on where we are with the negotiations [1:23:58] the contract preparation we're aiming on uh early November to have final approvals on this project and so by [1:24:05] pushing this item off today that's not a problem okay Mr Brahma can you come up [1:24:10] is that you know we've got people that have other things they need to do after [1:24:16] 9:00 and you too I'm sure is that do that work okay for you too um if we if [1:24:21] we lay postpone this conversation for two weeks and then come back okay thank [1:24:27] you thank you uh do you need any kind of a motion on that Mr nondorf or just it doesn't [1:24:35] seem like we would because we haven't we haven't taken any action or asked to table anything so all right let's uh [1:24:42] anything else for the go to the order oh I just one thing I thought of is that the leue of amendment voters has a uh uh [1:24:49] a presentation by uh somebody from the state at the uh senior Center at 10:00 [1:24:55] this morning on tax increment financing how it works in Minnesota so uh if you're interested in hearing [1:25:02] from one of the people from the state uh uh I would assume a a statutorily based [1:25:09] presentation on what the Tiff is all about you can go over to the senior center at 10:00 at Grand View for that [1:25:16] presentation does anybody else have anything for the good of the order here Mr executive director nothing only [1:25:23] to let you know that you'll get a first look at your proposed HRA meeting schedule at next week's council meeting [1:25:30] yeah and you got I just want to say that having been in a meeting with you I think it was yesterday I like your beard [1:25:35] better today than yesterday thank you for that looks good looks good um all right uh so um is there a [1:25:45] motion to adjourn so moved second got a motion by commissioner uh Jackson second by commissioner AG to adjourned the [1:25:51] meeting of the H this Thursday October 10th 2024 four any further discussion those in favor of adjournment say I I I [1:25:58] opposed carried We Stand [1:26:23] adjourned e