2021.06.01 EDA Meeting PacketAGENDA
ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF CRYSTAL
REGULAR MEETING
TUESDAY, JUNE 1, 2021
IMMEDIATELY FOLLOWING THE 7:00 P.M. CITY COUNCIL MEETING
CRYSTAL CITY HALL
COUNCIL CHAMBERS
1. Call to order *
2. Roll call *
3. Approval of minutes from May 18, 2021 Regular Meeting
4. Public hearing and consideration of a resolution authorizing the sale of an EDA lot at
4741 Welcome Ave. N. for construction of a 4-unit residential building
5. Resolution authorizing an application to the Hennepin County Corridor Planning
program for Douglas Drive and West Broadway
6. Potential Tax Increment Financing request for Sand Companies development at 5240
West Broadway
7. Other business *
8. Adjournment *
*Items for which no materials are included in the packet
Page 1 of 2
Minutes of the
Economic Development Authority of the City of Crystal
Regular Meeting
Council Chambers
May 18, 2021
1. Call to Order
President Parsons called the meeting of the Economic Development Authority of the City
of Crystal (EDA) to order at 7:55 p.m.
2. Roll Call
Upon call of the roll, the following members were present: Jim Adams, Brendan Banks,
John Budziszewski, David Cummings, Therese Kiser, Nancy LaRoche and Olga Parsons.
The following staff were present: Executive Director Anne Norris, Deputy Executive
Director John Sutter, City Planner Dan Olson and City Attorney Troy Gilchrist.
3. Approval of Minutes
Moved by Commissioner Banks (Budziszewski) to approve the minutes from the March
2, 2021 regular meeting. Motion carried with Commissioners Adams, Banks,
Budziszewski, Cummings, Kiser, LaRoche, and Parsons voting aye.
4. Consider tentative acceptance of proposal for construction of a new single-family home
at 3556 Major Avenue North
Staff presented the proposal received from Great Buy Homes and requested an EDA
motion tentatively accepting the proposal. Glenn Hammer of Great Buy Homes addressed
the board and answered questions about the proposed home.
Moved by Commissioner (LaRoche) to tentatively accept the proposal from Great Buy
Homes. Motion carried with Commissioners Adams, Banks, Budziszewski, Cummings,
Kiser, LaRoche and Parsons voting aye.
5. Other Business
There was no other business.
6. Adjournment
Moved by Commissioner Banks (Budziszewski) to adjourn the meeting. Motion carried
with Commissioners Adams, Banks, Budziszewski, Cummings, Kiser, LaRoche, and
Parsons voting aye.
The meeting adjourned at 8:08 p.m.
Page 2 of 2
These minutes of the May 18, 2021 meeting of the Crystal Economic Development Authority
were approved by the Authority on ________________ ____, 20___.
______________________________
Olga Parsons, President
ATTEST:
______________________________
Therese Kiser, Secretary
EDA STAFF REPORT
Lot Sale Public Hearing
4741 Welcome Avenue North
FROM: Dan Olson, City Planner
TO: Anne Norris, Executive Director (for June 1 EDA Meeting)
DATE: May 26, 2021
RE: PUBLIC HEARING: Continue public hearing approving the sale of
4741 Welcome Avenue North for construction of a new four unit
residential building
Gernco Construction submitted a proposal to purchase the lot at 4741 Welcome
Avenue North for a new four unit residential building, and the EDA gave tentative
approval of the sale on May 4, 2021. Notice of the June 1 public hearing was published
in the Sun Post on May 20.
Gernco has not provided a detailed site plan and floor plans necessary for the EDA to
complete the public hearing and take action on the property sale. Therefore staff
requests that the public hearing be opened, any public comment be taken, and the
hearing be continued until the June 15 EDA meeting.
REQUESTED EDA ACTION: After opening the hearing and taking any public
comment, approve a motion to continue the public hearing to June 15, 2021 for the
sale of the lot at 4741 Welcome Avenue North.
___________________________________________________________________________
FROM: John Sutter, Community Development Director
___________________________________________________________________________
DATE: May 26, 2021
TO: Anne Norris, Executive Director (for June 1 EDA meeting)
SUBJECT: Consider a resolution authorizing an application to the Hennepin County
Corridor Planning program for Douglas Drive and West Broadway
The 2021 EDA Work Program included exploring the reconstruction and relocation of West
Broadway’s southerly intersection with Douglas Drive so that it lines up with the northerly
Hanson Court intersection. The proposed project would realign the existing skewed
intersection of Douglas Drive and West Broadway to a four-legged, right angle intersection.
Added benefits of the realignment include improved access to the Hanson Court business
area, upgraded existing pedestrian facilities that would meet current ADA standards and a
multi-use trail connection from Becker Park to the Canadian Pacific Railway, where a proposed
Three Rivers Park District trail would follow the CP spur south and connect to other regional
trails in Golden Valley, St. Louis Park and Edina.
This project would likely include not only the intersection realignment but also undergrounding
the existing overhead utilities, new street lighting, new sidewalk and other streetscape
improvements along West Broadway and Douglas Drive from 55th Avenue to the Canadian
Pacific Railway. The main objectives would be to improve the community’s connections to
Becker Park and the regional trail system, enhance the southern gateway into Crystal’s main
commercial area, and to facilitate and encourage private investment in the city’s Town Center
mixed-use redevelopment area.
The first step is to develop a conceptual layout and preliminary cost estimate for this project.
To that end, staff would like to apply for $45,000 from Hennepin County’s Corridor Planning
grant program, to be matched with $15,000 from the EDA professional services budget line
item in 2021 and 2022. A resolution of support from the EDA would help ensure the most
competitive application possible.
The anticipated award would occur by midsummer. If awarded, the grant would be used to hire
a design engineering firm by Sep. 30, 2021 with a goal of completing the preliminary layout
and cost estimate by spring 2022.
EDA adoption of the attached resolution is requested.
EDA STAFF REPORT
Hennepin County Corridor Planning
Application - West Broadway and Douglas Dr
Location Map
▲
NORTH
Aerial Photo
▲
NORTH
Proposed Resolution
ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF CRYSTAL
HENNEPIN COUNTY
STATE OF MINNESOTA
RESOLUTION NO. 2021-03
RESOLUTION SUPPORTING AND ENDORSING AN APPLICATION TO THE
HENNEPIN COUNTY CORRIDOR PLANNING PROGRAM
WHEREAS, the city’s Comprehensive Plan, Unified Development Code and Official Zoning Map designate the
200-acre Town Center area as a mixed-use redevelopment area which would be within a 10-minute walk from the
proposed METRO Blue Line Extension station at Bass Lake Road; and
WHEREAS, the condition and configuration of existing public improvements in the south part of the Town Center
area, in particular along Douglas Drive and West Broadway from 55th Avenue to the Canadian Pacific Railway,
limits the redevelopment potential of the area; and
WHEREAS, specific public realm elements to be considered for improvement include undergrounding utilities,
street lighting, landscaping, sidewalks, a regional trail link from Becker Park to the Canadian Pacific Railway
corridor, and realignment of the southerly Douglas Drive intersection with West Broadway and Hanson Court; and
WHEREAS, a conceptual, preliminary design and cost estimate is necessary to determine feasibility, phasing,
and necessary partnerships with other agencies; and
WHEREAS, the city’s Economic Development Authority budget does not include sufficient funding to develop the
conceptual, preliminary design and cost estimate for this work.
NOW THEREFORE, BE IT RESOLVED BY THE ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF
CRYSTAL, MINNESOTA, that the application to the Hennepin County Corridor Planning program is hereby
supported and endorsed.
Adopted this 1st day of June, 2021.
_______________________________
Olga Parsons, President
_______________________________
Anne Norris, Executive Director
Page 1 of 3
__________________________________________________________________________
FROM: John Sutter, Community Development Director
__________________________________________________________________________
DATE: May 26, 2021
TO: Anne Norris, Executive Director (for June 1 EDA meeting)
SUBJECT: Potential Tax Increment Financing request for Sand Companies
development at 5240 West Broadway
Sand Companies is proposing to build an apartment building at 5240 West Broadway on a
1.75-acre site comprised of four vacant lots (5232-5256 West Broadway):
EDA STAFF REPORT
Sand Companies - 5240 West Broadway
Potential TIF Request
Page 2 of 3
Preliminary building information (subject to change as the project is refined):
58 units in a 4-story building with a basement parking garage
The units would have 1-4 bedrooms (but 70% of the units would have 2-3 bedrooms)
46 units would be affordable at 60% of area median income; 12 would be affordable at 30%
The largest source of funds would be equity from federal Low Income Housing Tax Credits
(LIHTC) which are awarded by the Minnesota Housing Finance Agency (MHFA). To be
considered for 2022 construction, Sand Companies must submit their LIHTC application to
MHFA by July 15 and the tax credit awards would be announced in late 2021.
Sand Companies estimates that the preliminary sources, uses and financing gap for this
development are as follows:
$16,456,785 Sources, including LIHTC equity but no TIF or other local assistance
$17,503,846 Uses, including $195,000 for public realm improvements along West Broadway
$ 1,047,061 Financing Gap
While preparing their application, Sand also noted that MHFA has revised its scoring to award
points for projects with local financial assistance:
Page 3 of 3
To help close the anticipated financing gap and maximize the project’s LIHTC score at MHFA,
on May 20 Sand Companies asked staff to consider a Tax Increment Financing (TIF) district,
specifically an affordable housing district. Staff asked our TIF consultant, Ehlers and
Associates, to prepare a very preliminary TIF analysis, which is attached.
TIF SCENARIOS
The maximum duration of a housing TIF district is 26 years. Based on other projects, Ehlers
suggests that a 15-year duration might be appropriate for this project. For comparison, staff
also looked at a 10-year duration:
Summary of 15-year TIF scenario:
$795,000 TIF paygo note (present value)
4.54% of the total project cost of $17,503,846, or just enough to get 8 MHFA points
There would still be a $252,000 gap the developer would need to fill
Summary of 10-year TIF scenario:
$550,000 TIF paygo note (present value)
3.14% of the total project cost of $17,503,846, or just enough to get 6 MHFA points
There would still be a $497,000 gap the developer would need to fill
Please note that the developer has not submitted a detailed proforma, but this would be
required when they submit a formal TIF application for staff, Ehlers and EDA review prior to
any city action to create a TIF district.
In the meantime, the developer needs to know whether they can include any sort of proposed
TIF in their LIHTC application to MHFA. This would need to be a resolution similar to the
attached example from the City of Plymouth in 2018. Because the LIHTC application deadline
is July 15, the June 15 meeting will be the only opportunity for the EDA to consider such a
resolution. Please note that the resolution would state a TIF amount, subject to completion of
the required steps to create a TIF district, conditioned upon the project receiving LIHTC, and
not binding upon the city even if LIHTC are awarded.
QUESTIONS FOR EDA DISCUSSION ON JUNE 1:
What are your thoughts in general about creating a TIF district to assist this project?
What general level of assistance would you support? (Please see two scenarios above.)
Are you comfortable considering a resolution on June 15? (Please see Plymouth example.)
Representatives from Sand Companies will be attending the June 1 EDA meeting virtually or
in-person to answer questions.
5/25/2021
DistrictType:Housing
District Name/Number:
County District #:Exempt Class Rate (Exempt)0.00%
First Year Construction or Inflation on Value 2022 Commercial Industrial Preferred Class Rate (C/I Pref.)
Existing District - Specify No. Years Remaining First $150,000 1.50%
Inflation Rate - Every Year:0.00%Over $150,000 2.00%
Interest Rate:4.375%Commercial Industrial Class Rate (C/I)2.00%
Present Value Date:1-Aug-23 Rental Housing Class Rate (Rental)1.25%
First Period Ending 1-Feb-24 Affordable Rental Housing Class Rate (Aff. Rental)
Tax Year District was Certified:Pay 2021 First $174,000 0.75%
Cashflow Assumes First Tax Increment For Development:2024 Over $174,000 0.25%
Years of Tax Increment 26 Non-Homestead Residential (Non-H Res. 1 Unit)
Assumes Last Year of Tax Increment 2049 First $500,000 1.00%
Fiscal Disparities Election [Outside (A), Inside (B), or NA]Inside(B)Over $500,000 1.25%
Incremental or Total Fiscal Disparities Incremental Homestead Residential Class Rate (Hmstd. Res.)
Fiscal Disparities Contribution Ratio 31.7658%Pay 2021 First $500,000 1.00%
Fiscal Disparities Metro-Wide Tax Rate 139.5040%Pay 2021 Over $500,000 1.25%
Maximum/Frozen Local Tax Rate: 121.902%Pay 2021 Agricultural Non-Homestead 1.00%
Current Local Tax Rate: (Use lesser of Current or Max.)121.902%Pay 2021
State-wide Tax Rate (Comm./Ind. only used for total taxes)35.9780%Pay 2021
Market Value Tax Rate (Used for total taxes)0.24121%Pay 2021
Building Total Percentage Tax Year Property Current Class After
Land Market Market Of Value Used Original Original Tax Original After Conversion
Map ID PID Owner Address Market Value Value Value for District Market Value Market Value Class Tax Capacity Conversion Orig. Tax Cap.
1 09-118-21-22-0030 W. Broadway Inv.5232 W. Broadway 135,000 135,000 100%135,000 Pay 2021 C/I Pref.2,025 Aff. Rental 1,013 1
2 09-118-21-22-0031 W. Broadway Inv.5240 W. Broadway 122,000 122,000 100%122,000 Pay 2021 C/I 2,440 Aff. Rental 915 1
3 09-118-21-22-0032 Zephyr Land LLC 5248 W/ Broadway 122,000 122,000 100%122,000 Pay 2021 C/I Pref.1,830 Aff. Rental 915 1
4 09-118-21-22-0033 Zephyr Land LLC 5256 W. Broadway 116,000 116,000 100%116,000 Pay 2021 C/I 2,320 Aff. Rental 870 1
495,000 0 495,000 495,000 8,615 3,713
Area/
Phase
Tax Rates
5/25/2021
Estimated Taxable Total Taxable Property Percentage Percentage Percentage Percentage First Year
Market Value Market Value Total Market Tax Project Project Tax Completed Completed Completed Completed Full Taxes
Area/Phase New Use Per Sq. Ft./Unit Per Sq. Ft./Unit Sq. Ft./Units Value Class Tax Capacity Capacity/Unit 2022 2023 2024 2025 Payable
1 Aff Apt 195,000 195,000 58 11,310,000 Aff. Rental 78,735 1,358 25%75%100%100%2026
TOTAL 11,310,000 78,735
Subtotal Residential 58 11,310,000 78,735
Subtotal Commercial/Ind.0 0 0
Total Fiscal Local Local Fiscal State-wide Market
Tax Disparities Tax Property Disparities Property Value Total Taxes Per
New Use Capacity Tax Capacity Capacity Taxes Taxes Taxes Taxes Taxes Sq. Ft./Unit
Aff Apt 78,735 0 78,735 95,980 0 0 18,992 114,971 1,982.26
TOTAL 78,735 0 78,735 95,980 0 0 18,992 114,971
Total Property Taxes 114,971
less State-wide Taxes 0
less Fiscal Disp. Adj.0
less Market Value Taxes (18,992)
less Base Value Taxes (4,526)
Annual Gross TIF 91,454
5/25/2021 Tax Increment Cashflow - Page 3
Project Original Fiscal Captured Local Annual Semi-Annual State Admin.Semi-Annual Semi-Annual PERIOD
% of Tax Tax Disparities Tax Tax Gross Tax Gross Tax Auditor at Net Tax Present ENDING Tax Payment
OTC Capacity Capacity Incremental Capacity Rate Increment Increment 0.36%10%Increment Value Yrs.Year Date
- - - - 02/01/24
100%19,684 (3,713) - 15,971 121.902%19,469 9,735 (35) (970) 8,730 8,360 0.5 2024 08/01/24
100%19,684 (3,713) - 15,971 121.902%19,469 9,735 (35) (970) 8,730 16,541 1 2024 02/01/25
100%59,051 (3,713) - 55,339 121.902%67,459 33,730 (121) (3,361) 30,247 44,280 1.5 2025 08/01/25
100%59,051 (3,713) - 55,339 121.902%67,459 33,730 (121) (3,361) 30,247 71,426 2 2025 02/01/26
100%78,735 (3,713) - 75,023 121.902%91,454 45,727 (165) (4,556) 41,006 107,439 2.5 2026 08/01/26
100%78,735 (3,713) - 75,023 121.902%91,454 45,727 (165) (4,556) 41,006 142,681 3 2026 02/01/27
100%78,735 (3,713) - 75,023 121.902%91,454 45,727 (165) (4,556) 41,006 177,169 3.5 2027 08/01/27
100%78,735 (3,713) - 75,023 121.902%91,454 45,727 (165) (4,556) 41,006 210,919 4 2027 02/01/28
100%78,735 (3,713) - 75,023 121.902%91,454 45,727 (165) (4,556) 41,006 243,946 4.5 2028 08/01/28
100%78,735 (3,713) - 75,023 121.902%91,454 45,727 (165) (4,556) 41,006 276,266 5 2028 02/01/29
100%78,735 (3,713) - 75,023 121.902%91,454 45,727 (165) (4,556) 41,006 307,894 5.5 2029 08/01/29
100%78,735 (3,713) - 75,023 121.902%91,454 45,727 (165) (4,556) 41,006 338,845 6 2029 02/01/30
100%78,735 (3,713) - 75,023 121.902%91,454 45,727 (165) (4,556) 41,006 369,134 6.5 2030 08/01/30
100%78,735 (3,713) - 75,023 121.902%91,454 45,727 (165) (4,556) 41,006 398,774 7 2030 02/01/31
100%78,735 (3,713) - 75,023 121.902%91,454 45,727 (165) (4,556) 41,006 427,780 7.5 2031 08/01/31
100%78,735 (3,713) - 75,023 121.902%91,454 45,727 (165) (4,556) 41,006 456,165 8 2031 02/01/32
100%78,735 (3,713) - 75,023 121.902%91,454 45,727 (165) (4,556) 41,006 483,942 8.5 2032 08/01/32
100%78,735 (3,713) - 75,023 121.902%91,454 45,727 (165) (4,556) 41,006 511,125 9 2032 02/01/33
100%78,735 (3,713) - 75,023 121.902%91,454 45,727 (165) (4,556) 41,006 537,725 9.5 2033 08/01/33
100%78,735 (3,713) - 75,023 121.902%91,454 45,727 (165) (4,556) 41,006 563,757 10 2033 02/01/34
100%78,735 (3,713) - 75,023 121.902%91,454 45,727 (165) (4,556) 41,006 589,231 10.5 2034 08/01/34
100%78,735 (3,713) - 75,023 121.902%91,454 45,727 (165) (4,556) 41,006 614,159 11 2034 02/01/35
100%78,735 (3,713) - 75,023 121.902%91,454 45,727 (165) (4,556) 41,006 638,554 11.5 2035 08/01/35
100%78,735 (3,713) - 75,023 121.902%91,454 45,727 (165) (4,556) 41,006 662,427 12 2035 02/01/36
100%78,735 (3,713) - 75,023 121.902%91,454 45,727 (165) (4,556) 41,006 685,789 12.5 2036 08/01/36
100%78,735 (3,713) - 75,023 121.902%91,454 45,727 (165) (4,556) 41,006 708,651 13 2036 02/01/37
100%78,735 (3,713) - 75,023 121.902%91,454 45,727 (165) (4,556) 41,006 731,023 13.5 2037 08/01/37
100%78,735 (3,713) - 75,023 121.902%91,454 45,727 (165) (4,556) 41,006 752,916 14 2037 02/01/38
100%78,735 (3,713) - 75,023 121.902%91,454 45,727 (165) (4,556) 41,006 774,341 14.5 2038 08/01/38
100%78,735 (3,713) - 75,023 121.902%91,454 45,727 (165) (4,556) 41,006 795,307 15 2038 02/01/39
100%78,735 (3,713) - 75,023 121.902%91,454 45,727 (165) (4,556) 41,006 815,825 15.5 2039 08/01/39
100%78,735 (3,713) - 75,023 121.902%91,454 45,727 (165) (4,556) 41,006 835,903 16 2039 02/01/40
100%78,735 (3,713) - 75,023 121.902%91,454 45,727 (165) (4,556) 41,006 855,551 16.5 2040 08/01/40
100%78,735 (3,713) - 75,023 121.902%91,454 45,727 (165) (4,556) 41,006 874,779 17 2040 02/01/41
100%78,735 (3,713) - 75,023 121.902%91,454 45,727 (165) (4,556) 41,006 893,595 17.5 2041 08/01/41
100%78,735 (3,713) - 75,023 121.902%91,454 45,727 (165) (4,556) 41,006 912,008 18 2041 02/01/42
100%78,735 (3,713) - 75,023 121.902%91,454 45,727 (165) (4,556) 41,006 930,027 18.5 2042 08/01/42
100%78,735 (3,713) - 75,023 121.902%91,454 45,727 (165) (4,556) 41,006 947,660 19 2042 02/01/43
100%78,735 (3,713) - 75,023 121.902%91,454 45,727 (165) (4,556) 41,006 964,916 19.5 2043 08/01/43
100%78,735 (3,713) - 75,023 121.902%91,454 45,727 (165) (4,556) 41,006 981,803 20 2043 02/01/44
100%78,735 (3,713) - 75,023 121.902%91,454 45,727 (165) (4,556) 41,006 998,328 20.5 2044 08/01/44
100%78,735 (3,713) - 75,023 121.902%91,454 45,727 (165) (4,556) 41,006 1,014,499 21 2044 02/01/45
100%78,735 (3,713) - 75,023 121.902%91,454 45,727 (165) (4,556) 41,006 1,030,324 21.5 2045 08/01/45
100%78,735 (3,713) - 75,023 121.902%91,454 45,727 (165) (4,556) 41,006 1,045,811 22 2045 02/01/46
100%78,735 (3,713) - 75,023 121.902%91,454 45,727 (165) (4,556) 41,006 1,060,965 22.5 2046 08/01/46
100%78,735 (3,713) - 75,023 121.902%91,454 45,727 (165) (4,556) 41,006 1,075,796 23 2046 02/01/47
100%78,735 (3,713) - 75,023 121.902%91,454 45,727 (165) (4,556) 41,006 1,090,309 23.5 2047 08/01/47
100%78,735 (3,713) - 75,023 121.902%91,454 45,727 (165) (4,556) 41,006 1,104,511 24 2047 02/01/48
100%78,735 (3,713) - 75,023 121.902%91,454 45,727 (165) (4,556) 41,006 1,118,409 24.5 2048 08/01/48
100%78,735 (3,713) - 75,023 121.902%91,454 45,727 (165) (4,556) 41,006 1,132,010 25 2048 02/01/49
100%78,735 (3,713) - 75,023 121.902%91,454 45,727 (165) (4,556) 41,006 1,145,320 25.5 2049 08/01/49
100%78,735 (3,713) - 75,023 121.902%91,454 45,727 (165) (4,556) 41,006 1,158,344 26 2049 02/01/50
Total 2,281,823 (8,215) (227,361) 2,046,247
Present Value From 08/01/2023 Present Value Rate 4.38%1,291,699 (4,650) (128,705) 1,158,344
Prepared by Ehlers & Associates, Inc. - Estimates Only N:\Minnsota\Crystal\Housing - Economic - Redevelopment\Pending Projects\Sands Company 2021\TIF Run 5-25-21