minhous 01-04-21 - Laserfiche WebLink

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Director Leininger gave a slideshow presentation on the terms of the development agreement and other aspects of the project, including a location overview. He noted that these projects are the first new mid-size, multi-unit buildings in quite some time and that 20% of the units will be affordable via the city's CRA,which provides tax abatement for specific property improvements. Renderings of The View West&The View East were displayed, noting that each would be 160 units and 120 units respectively, and that the View East is a bit further behind in the approval process with the Planning Commission. Director Leininger presented an overview of the basics of tax increment financing, displaying a graphic that showed the differences between a non-school and school TIF. Chairman Shachner questioned whether schools would be the sole beneficiary of a property valuation increase, or if the city could benefit as well. Director Leininger replied that the school portion of any valuation increase could only go to benefit the schools. Director Leininger noted that there are multiple pieces of legislation regarding the TIF for the properties, related to their transfer, TIF approval, etc. There will be 6 different pieces of legislation related to the incentive request and their sequence is important. Director Leininger summarized the key agreement terms, adding that the dates of timing between the West and East projects are staggered by 6 months. The development dates are there as a safeguard.Any default on the CRA affordability component is a default on the TIF. Mr. Leininger stated that the TIF doesn't really go into effect until year 16 of the 30- year TIF. He noted the importance of tying affordable housing to the TIF, along with required construction meetings with the neighborhood.There is also a 10% participation of minority and women involved in the project. In a discussion regarding the project's pro forma, it was noted that the project would result in a $23 million improvement to the property. In year 16, $300,000 goes back to the developer through year 30 of the TIF.The TIF will generate $9 million for the schools and approximately$5.5 million in income tax.After year 30,the Barry Buick site will generate $1.1 million annually and the Spitzer site stands to generate almost$1 million annually. Councilmember Rader asked whether the development would be possible without the incentive and inquired about the city's motive in granting the TIF. Director Leiniger stated that with larger projects like these ones,there is significant cost involved in acquiring the site. During the debt years there is operational cost and revenue generated is likely used to create savings for building maintenance. The revenues are simply not enough to offset the costs and construction debt that go into a project of this scale. Some of those costs have increased due to our COVID environment- material costs have doubled, market uncertainty, etc. Councilmember Rader asked the price of the affordable units would be. Mr. Leininger stated that typically housing expenses cannot most more than 30% of one's income in order to be affordable and that there will be a cap on what units can be leased at so people earning at a certain level could be eligible. Chairman Shachner asked what ways these projects could increase affordability of housing in Lakewood.Alex Solove spoke to his personal experience having difficulty looking for a