DEPARTMENT: Physical Development Administration
FILE TYPE: Consent Action
TITLE
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Schedule Public Hearing To Receive Comments On Proposed Establishment Of Dakota County CDA Tax Increment Financing District No. 4-17, A Housing District, And Adopt Tax Increment Financing Plan
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PURPOSE/ACTION REQUESTED
Schedule a public hearing to receive comments on the Tax Increment Financing Plan for the establishment of Dakota County Community Development Agency (CDA) Tax Increment Financing (TIF) District No. 4-17 (Amber Fields Housing Project), a housing TIF district, in the City of Rosemount (the City).
SUMMARY
Real Estate Equities, LLC, (the developer) has submitted a request to the CDA to establish a housing TIF district for a 160-unit general occupancy apartment building, to be named Amber Fields Apartments, on an approximately 4.5-acre site generally located southwest of County Road 42 (145th Street W.) and Akron Avenue. The project’s 160 units will be income and rent-restricted to households earning 50, 60, and 70 percent Area Median Income (AMI) or below. For a one-person household in Dakota County in 2022, 60 percent AMI is $49,320. Per Minnesota Statutes, the housing development must remain affordable for the life of the TIF district.
The developer states the total development cost for the project is approximately $49 million. In addition to housing revenue bonds and an automatic allocation of four percent housing tax credits, the developer is requesting the following financial assistance from the CDA and County.
• $750,000 in CDA HOPE funds; this is a deferred loan.
• A housing TIF district generating approximately $760,000 (present value) for the developer.
The CDA’s Housing Finance policy states TIF assistance, if approved, is to be provided in the following manner:
• A maximum of 15 years of increment payments to the developer. A housing district may extend up to 25 years per state statute.
• Assistance to the developer not to exceed 70 percent of the available increment generated in the first 15 years. The remaining 30 percent is retained by the CDA. Of this amount, 10 percent is used to cover administrative costs, and 20 percent is used to assist other affordable housing developments in Rosemount. If the housing district runs the full 25 years, the entirety of increment collected after the first 15 years is used by the CDA to support affordable housing developments.
The City has provided a resolution of support for the TIF district. The establishment of a TIF district requires a public hearing. The recommended public hearing date is May 9, 2023. A TIF plan is currently being drafted by Northland Securities, Inc. (Northland), acting as the CDA’s TIF consultant for this project. Northland drafted an analysis regarding the use of TIF for the Amber Fields apartment project in a memo dated January 22, 2023. Dakota County policy accepts the use of TIF for affordable housing developments.
RECOMMENDATION
recommendation
CDA and County Staff recommend a public hearing be scheduled for 9:00 a.m. on May 9, 2023, in the Boardroom, Administration Center, 1590 Highway 55, Hastings, MN, to receive comments on the TIF plan establishing CDA TIF District No. 4-17 (Amber Fields Housing Project) to finance an affordable housing development in the City of Rosemount.
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EXPLANATION OF FISCAL/FTE IMPACTS
According to Northland, CDA TIF District No. 4-17 (Amber Fields) is expected to generate approximately $1.65 million in tax increment revenue (present value) over the 26-year term of the district. The developer would receive approximately $760,000 of increment (present value) over 15 years, and the CDA would receive $891,000 (present value). The CDA would use the funds for the creation or preservation of affordable housing in Rosemount.
☐ None ☐ Current budget ☒ Other
☐ Amendment Requested ☐ New FTE(s) requested
RESOLUTION
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WHEREAS, the Dakota County Community Development Agency (CDA) has requested that Dakota County schedule a public hearing to consider the approval of the Tax Increment Financing (TIF) Plan for its TIF District No. 4-17 (Amber Fields Housing Project) pursuant to and in conformity with Minn. Stat. § 469.174 through 469.1794; and
WHEREAS, the scheduling of the public hearing and publication notice thereof is consistent with the legal authority and public purposes of Dakota County.
NOW, THEREFORE, BE IT RESOLVED, That the Dakota County Board of Commissioners hereby schedules a public hearing for May 9, 2023, at 9:00 a.m. in the Boardroom, Dakota County Administration Center, Hastings, Minnesota for the purpose of receiving comments on the proposed establishment of Tax Increment Financing District No. 4-17 (a housing district) and the proposed adoption of a Tax Increment Financing Plan therefore, pursuant to and in accordance with all applicable Minnesota Statutes, in an effort to provide affordable housing in Dakota County; and
BE IT FURTHER RESOLVED, That Dakota County staff are hereby authorized and directed to work with Community Development Agency staff, Northland Securities, Inc., and any other consultants approved by the Dakota County Manager and Community Development Agency Executive Director to prepare the Tax Increment Financing Plan for Tax Increment Financing District No. 4-17 and to forward documents to the appropriate taxing jurisdictions, including Dakota County and Independent School District No. 196; and
BE IT FURTHER RESOLVED, That Dakota County staff are hereby authorized and directed to publish notice of said hearing, including a map of the area of Tax Increment Financing District No. 4-17 from which tax increment will be collected in a newspaper of general circulation in the County at least once not less than ten days nor more than 30 days prior to the date of the hearing and to place a copy of Plan on file in the Community Development Agency office at 1228 Town Centre Drive, Eagan, Minnesota, and to make such copy available for inspection by the public.
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PREVIOUS BOARD ACTION
None.
ATTACHMENTS
Attachment: Location Map of Proposed CDA TIF District No. 4-17 (Amber Fields)
Attachment: City of Rosemount Resolution of Support
Attachment: Northland TIF Memo - January 22, 2023
BOARD GOALS
☒ A Great Place to Live ☐ A Healthy Environment
☐ A Successful Place for Business and Jobs ☐ Excellence in Public Service
PUBLIC ENGAGEMENT LEVEL
☐ Inform and Listen ☐ Discuss ☒ Involve ☐ N/A
CONTACT
Department Head: Erin Stwora
Author: Maggie Dykes