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HomeMy WebLinkAbout2023.06.26 EDAM REGULAR SESSION6/26/23 -1- MINUTES OF THE PROCEEDINGS OF THE ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF BROOKLYN CENTER IN THE COUNTY OF HENNEPIN AND THE STATE OF MINNESOTA REGULAR SESSION JUNE 26, 2023 CITY HALL – COUNCIL CHAMBERS 1. CALL TO ORDER The Brooklyn Center Economic Development Authority (EDA) met in Regular Session called to order by President April Graves at 7:11 p.m. 2. ROLL CALL President April Graves and Commissioners Marquita Butler, Kris Lawrence-Anderson, Dan Jerzak, and Teneshia Kragness. Also present were Executive Director Reggie Edwards, Assistant City Manager/City Clerk Barb Suciu, and City Attorney Jason Hill. 3. APPROVAL OF AGENDA AND CONSENT AGENDA Commissioner Lawrence-Anderson moved and Commissioner Jerzak seconded to approve the Agenda and Consent Agenda, and the following item was approved: 3a. APPROVAL OF MINUTES 1. May 8, 2023 – Regular Session Motion passed unanimously. 4. COMMISSION CONSIDERATION ITEMS 4a. RESOLUTION APPROVING CERTAIN OPTION AGREEMENTS WITH PROJECT FOR PRIDE IN LIVING, LLC AND RESOLUTION SUPPORTING THE USE OF TAX INCREMENT FINANCING FOR A RENTAL HOUSING DEVELOPMENT PROJECT Executive Director Reggie Edwards introduced the item and invited Ehlers representative Jason Aarsvold to continue the presentation. Mr. Aarsvold explained the action is the same as one approved by the Council last year with minor changes. First, the Council is asked to consider a resolution of support for tax increment financing 6/26/23 -2- (TIF) for the Project for Pride in Living’s (PPL) application for Low-Income Housing Tax Credits (LIHTC). This is required for PPL to claim points in its tax credit application. Mr. Aarsvold stated the Council is also asked to consider option agreements for the sale of EDA- owned land. The current option agreement would expire too soon for this round of funding. Evidence of site control is necessary for a tax credit award. The option agreement includes an option for a second EDA-owned lot for a planned future phase. He pointed out the action is not for final approval of TIF for the project. Mr. Aarsvold showed an overview of the site in question. PPL proposed a 60-unit LIHTC project as the first phase. There are 44 units at 50 percent area median income (AMI) rent limitation and 16 units at 30 percent AMI. The second phase would be up to 70 units located just south of the first phase. The details have not been determined. Mr. Aarsvold noted the current Ehlers project underwriting for Phase 1 shows a need for the requested assistance due to the high project cost, serving deeper levels of affordability, and meeting the TIF “but for” test. If tax credits are awarded for Phase 1, the project will go through another underwriting process to confirm need prior to final EDA approval. Phase 2 will require a similar process, likely in the next year’s funding cycle. Mr. Aarsvold explained the option agreement gives the developer exclusive rights to purchase the properties during the option period, which is until January 1, 2026 at the latest. This is required to apply for tax credits. Land price is proposed to be written‐down to $1, helping with points in LIHTC scoring system. Overall, standard option agreement terms would be implemented. Mr. Aarsvold stated the resolution of support for TIF indicates preliminary support for TIF related to Phase 1 only. Staff anticipates a TIF Note of up to $340,000 payable from 90% of increment in TIF #7 over a period of 19 years. Passing a resolution allows PPL to claim points in its application to MN Housing and the item must still come back through the full TIF process prior to final approval. Commissioner Kragness asked if PPL received the required points from the City’s resolutions previously. Mr. Aarsvold confirmed those points were received in the previous round, but they have created a stronger application for this second round. Commissioner Kragness asked if PPL received feedback on why they weren’t granted the funding. Mr. Aarsvold stated the project scored well, well enough to be funded. However, other projects had slightly higher scores and, therefore, received priority for funding. Commissioner Jerzak noted Wangstad received 139 points while PPL receive 131 points in the last round. By allowing the option agreement to run through 2026, it precludes other developers from considering the site. He asked how many buildings are in the master plan. Mr. Aarsvold stated there are four buildings in the primary site plan. However, the item at hand is only for the first two buildings. 6/26/23 -3- Commissioner Jerzak stated the developer had a similar project in St. Louis Park where they returned to the Council to ask for an additional $450,000. Brooklyn Center has received a lot of asks in recent years, and the City only has so much bandwidth. The City stewards the money of the residents, and the Council needs to allot the money thoughtfully. President Graves asked which components of the project have been approved by the Council. Mr. Aarsvold stated the only thing the Council has approved is a term sheet. Commissioner Butler moved and President Graves seconded to adopt a resolution approving certain Option Agreements with Project for Pride in Living, LLC. Commissioners Lawrence- Anderson and Jerzak voted against the same. Motion passed. Commissioner Butler moved and President Graves seconded to adopt a resolution supporting the use of tax increment financing for a rental housing development project. Commissioners Lawrence-Anderson and Jerzak voted against the same. Motion passed. 5. ADJOURNMENT Commissioner Jerzak moved and Commissioner Kragness seconded adjournment of the Economic Development Authority meeting at 7:27 p.m. Motion passed unanimously.