HomeMy WebLinkAbout03 13 2017 Ron Clark Housing Report
Phone 952.447.9800 / Fax 952.447.4245 / www.cityofpriorlake.com
4646 Dakota Street SE
Prior Lake, MN 55372
CITY COUNCIL WORK SESSION REPORT
MEETING DATE: MARCH 13, 2017
AGENDA #: A
PREPARED BY: DAN ROGNESS, COMMUNITY & ECONOMIC DEVELOPMENT DIRECTOR
PRESENTED BY: DAN ROGNESS & CASEY MCCABE
AGENDA ITEM: RON CLARK PROJECT
INTRODUCTION: The “new” city council has asked for a more complete picture of the history and
various elements of the Ron Clark, “Pike Lake Marsh” Project. City staff will
provide the Council a presentation about the Pike Lake Marsh multi-family
housing development proposed for the NW corner of the Pike Lake Trail / CH42
intersection (Attachment 1). This 68-unit “workforce” housing project by Ron
Clark is nearly identical to one they recently constructed in Savage behind the
old Rainbow Foods building north of CH42.
TOPICS: Discussion topics will include a description of the proposed multi-family housing
development, a summary of the Tax Increment Financing (TIF) request,
information related to the Housing Tax Credit (HTC) award, a project cost
overview, wetland replacement and a transportation question that will need to
be addressed together with this project.
CONCLUSION:
In 2016, the City Council approved Resolution 15-083 in support of this proposed
workforce housing project (Attachment 2). While the resolution was not binding
on the city, it was used in part to help support Ron Clark’s application for Housing
Tax Credits from MN Housing during a competitive HTC allocation round in
2016. This was the second time that the credits had been applied for. Resolution
15-083 recognized that a future TIF application would need to be made by Ron
Clark if HTC’s were awarded to this project. The combination of credits,
increments and other public resources are used to bring the rent levels down to
an affordable level for 15 years, which otherwise would be at much higher market
rent rates.
While the two requests are not legally related, the City Council is expected to act
on the applicant’s request for final plat approval and tax increment financing
during the March 27, 2017 meeting, which includes a public hearing on the TIF
request. If the TIF request is not approved, the project would not move forward
unless the developer can identify a new source of funding.
In 2015, the City Council approved Resolution 15-095 regarding the Preliminary
Plat for the proposed development project. The developer will be improving Pike
Lake Trail from CH42 north to a new east-west public street (urban design
section). The developer will also improve a new east-west public street from
Pike Lake Trail to their access drive with a temporary cul-de-sac at the end.
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ATTACHMENTS:
Prior Lake City Code does require developers to extend roadways and utilities
to the end of their property, due in part to phasing of development; therefore, the
next development cannot necessarily connect. Because of a significant wetland
on the north and west portion of this property this extension was challenging in
terms of wetland impacts and construction costs to the developer. This means
that if and when the property to the west develops, other developers will likely
have to undertake this extension unless for some reason the transportation plan
were to be modified.
The use of TIF in this project or others previously approved could help facilitate
a contribution from this project toward this utility and roadway extension. The
staff will outline this option at a high level at the meeting.
The final point of information is wetland replacement. The state legislature
adopted a law some years ago, to protect wetlands and the critical function they
perform in protecting our ground water. Like many projects in Prior Lake, wetland
replacement is necessary as part of this project and we will provide an overview
on those topics to the city council.
This work session topic is intended to get the Council familiar with the project
and TIF request prior to the public hearing. The Council will receive further
detailed information in the March 27 meeting packet, including a conclusion on
the TIF “but for” findings from the city’s financial consultant Northland Securities.
1. PowerPoint Slides
2. Resolution 15-083 (TIF support)
3. Resolution 15-095 (Preliminary Plat approval)
City Council Work Session
March 13, 2017
Project Description
68-unit, 3-story apartment building
15 one-bedroom units
33 two-bedroom units
20 three-bedroom units
Underground Parking (83) + Surface Parking (44)
29,824 SF building footprint; total area of 119,557 SF
including underground parking.
Zoned R-3, High Density Residential
No rezoning is required
Approved
Preliminary Plat By
City Council in 2015
History –Pike Lake Marsh
May 4, 2015 -PC approved CUP for this project in R-3 and
recommended approval of the Preliminary Plat.
May 11, 2015 –CC approved its consent to the process for
the creation of a Housing TIF District in support of the
proposed Ron Clark multifamily housing project for
$600,000 and a maximum 15-year term (Res. 15-083)
May 26, 2015 –CC approved Pike Lake Preliminary Plat.
December 15, 2016 –Final Plat application submitted.
January 11, 2017 –TIF application submitted.
Anticipated CC action on 3/27 related to Final Plat and TIF
Housing Tax Credits
The Housing Tax Credit (HTC) Program is a financing
program for qualified residential rental properties; it is the
single largest financing program for affordable housing.
The HTC program offers investors a 10-year reduction in
tax liability in exchange for capital to build or rehab
eligible affordable rental housing units.
Of the 23 applications seeking over $21 million of HTC in
the first round of 2017, Pike Lake Marsh was one of the
12 approved projects and received $1,045,000 of the
$8.75 million in HTC awarded through MN Housing.
Rent Analysis
100% of units will be affordable to households at/below 50% of the Area Median
Income (AMI) for Scott County for the first 10 years. Rents may adjust up to 60%
AMI in years 11 –30.
1-Bedroom Unit: Market Rate* =$1,375/month
HTC Limit = $805/month (50% level)
Monthly Rent Difference = $570
2-Bedroom Unit: Market Rate* =$1,775/month
HTC Limit = $966/month (50% level)
Monthly Rent Difference = $809
3-Bedroom Unit: Market Rate* =$1,950/month
HTC Limit = $1,115/month (50% level)
Monthly Rent Difference = $835
*Based on rental rates for a proposed market rate apartment building in PL
Rent Analysis
2016 Qualifying Income Limits for Scott County (60% AMI):
1-person household = $36,060
2-person household = $41,220
3-person household = $46,380
4-person household = $51,480
5-person household = $55,620
Project Cost and Public Financing
Total Development Cost (TDC)$15.2 million ($223,530/unit)
Total County Est. Market Value $7.48 million ($110,000/unit)
Current Market Value (land only) $241,600
TIF Request $600,000 (15-year TIF term)
Scott County CDA Financing $175,000 (grant)
Total Public Financing $775,000 ($11,400/unit, or
5% of TDC)
Developer Fees & Street Cost
Developer pays these estimated development fees to the City:
Developer will also be paying an estimated $525,000 for improvements to
Pike Lake Trail and approx. 300’ of the proposed E/W public street
Parkland Dedication $255,000
Sanitary Sewer $21,516
Water $39,148
Stormwater $32,561
Street Oversize $34,825
Building Permit $48,000
Utility Connection Charge $18,000
SAC/WAC (City only) $219,028
$668,078
Future Street Support Network
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4646 Dakota Street SE
41INNES Prior Lake MN 55372
RESOLUTION 15 083
A RESOLUTION CONSENTING TO THE PROCESS FOR THE CREATION OF A HOUSING TAX
INCREMENT FINANCING DISTRICT IN SUPPORT OF THE PROPOSED RON CLARK MULTIFAMILY
HOUSING PROJECT
Motion By McGuire Second By Morton
WHEREAS The City of Prior Lake the City is a municipal corporation and political subdivision duly
organized and existing under the Constitution and laws of the State of Minnesota and
WHEREAS Pursuant to the Constitution and laws of the State of Minnesota particularly Minnesota
Statutes Sections 469 174 469 1799 et seq as amended the City is authorized to use tax
increment financing to carry out the public purposes described therein and contemplated
thereby and
WHEREAS A proposal has been made by R E C Inc d b a Ron Clark Construction and Design the
Developer to construct sixty eight 68 units of multifamily rental housing at or near the
northwest corner of County Highway 42 and Pike Lake Trail in Prior Lake and 100 of the
units will be affordable to households with incomes at below 60 of the area median income
the Project and
WHEREAS The Developer has submitted plans and applications for approval by the City for a Conditional
Use Permit and a Preliminary Plat related to the Project
WHEREAS The City wishes to support the Project and work with the Developer to secure Tax Increment
Financing TIF assistance from the City by creating a Housing TIF District upon the
Developer s securing an allocation of Housing Tax Credits HTC from the Minnesota
Housing Finance Agency MHFA for the Project and
WHEREAS The City cannot create a Housing TIF District in support of the Project until all statutory
requirements have been fully satisfied including the consideration of comments from the
public and affected governmental jurisdictions following a public hearing s
NOW THEREFORE BE IT HEREBY RESOLVED BY THE CITY COUNCIL OF PRIOR LAKE
MINNESOTA as follows
1 The recitals set forth above are incorporated herein
2 The City Council supports the Project subject to final determination of project eligibility required
reviews public input notices and hearings and without surrendering its legislative discretion
3 This City Council upon MHFA s approval of Housing Tax Credits for the Project authorizes City staff to
continue to work on Tax Increment Financing for the Project upon receipt of a TIF application and
corresponding fee from the Developer
PASSED AND ADOPTED THIS 11th DAY OF MAY 2015
VOTE Hedberg Keeney McGuire Morton Thompson
Aye a a a
Nay E
Abstain E
Absent
if
Frank Boyley Manager
M City CouncikResolutions12015115 083 Ron Clark Housing TIF docx 2
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4646 Dakota Street SE
411A11vsso1 Prior Lake MN 55372
RESOLUTION 15 095
A RESOLUTION TO APPROVE THE PIKE LAKE PRELIMINARY PLAT
Motion By McGuire Second By Morton
WHEREAS Ron Clark Construction the Developer has submitted an application for a Preliminary
Plat known as Pike Lake and
WHEREAS The Prior Lake Planning Commission conducted a public hearing on April 20 2015 and
continued discussion to May 4 2015 to consider the proposed Preliminary Plat and
WHEREAS Notice of the public hearing on said Preliminary Plat has been duly published and posted
in accordance with the applicable Minnesota Statutes and Prior Lake Ordinance and
WHEREAS All persons interested in the proposed Preliminary Plat were afforded the opportunity to
present their views and objections related to Pike Lake for the record at the public hearing
conducted by the Planning Commission and
WHEREAS The Prior Lake City Council considered the application for the proposed Preliminary Plat
on May 26 2015 and
WHEREAS The Planning Commission and City Council have reviewed the Preliminary Plat according
to the applicable provisions of the Prior Lake Zoning and Subdivision Ordinances and
found said Preliminary Plat to be consistent with the provisions of said Ordinances and
WHEREAS The City Council has the authority to impose reasonable conditions on a Preliminary Plat
NOW THEREFORE BE IT HEREBY RESOLVED BY THE CITY COUNCIL OF PRIOR LAKE
MINNESOTA as follows
1 The recitals set forth above are incorporated herein
2 The Pike Lake Preliminary Plat is hereby approved subject to the following conditions
a The Developer shall obtain the required permits from other state or local agencies prior to any work
on the site
b The Developer shall revise the plans in accordance with the requirements contained in the
memorandum from the Engineering Public Works Department dated April 28 2015 prior to approval
of a grading permit for the site
c The Developer shall revise the plans in accordance with the requirements contained in the
memorandum from the Community Development Department dated May 1 2015
d The Developer shall revise the preliminary plat to indicate Lots 1 Block 2 and Lots 1 and 2 Block 3
as outlots Per the City Subdivision Ordinance 1102 700 these properties along the southern
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lakeshore of Pike Lake shall not be deemed buildable for development until public sanitary sewer
and water services are available to these areas
PASSED AND ADOPTED THIS 26TH DAY OF MAY 2015
VOTE Hedberg Keeney McGuire Morton Thompson
Aye
Nay
Abstain
Absent
9 4J
Frank Boy s City Manager
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