The Rise on 7 affordable housing project that would replace a vacant church in St. Louis Park is poised to receive up to $1.2 million in local financial assistance.
The St. Louis Park Economic Development Authority, made up of St. Louis Park council members, approved a resolution in support of tax increment financing for the project. Rise on 7 would replace the former Prince of Peace Lutheran Church with 120 units and a daycare center.
While the nonprofit developer of Rise on 7, CommonBond Communities, is seeking financing from Minnesota Housing and other public agencies outside the city, St. Louis Park Economic Development Coordinator Greg Hunt said the project “will likely exhibit a funding gap” and therefore applied for the local assistance.
With TIF, new taxes generated by a development return to the developer for a period to pay for such costs as site acquisition, demolition and infrastructure improvements.
The consulting firm Ehlers and city staff “tentatively determined that approximately $1.2 million in TIF assistance is warranted to enable the affordable multifamily housing development to become financially feasible and proceed,” according to a city staff report.
The exact amount is not yet known, the report noted, and will depend on other financing sources and the total cost of development.
CommonBond Communities sought a resolution to help support its application for low-income housing tax credits.
“Such a commitment of TIF assistance would help make the department’s application more competitive, and applications with the highest scores are most likely to be funded,” Hunt said.
Ehlers and city staff still would need to verify financial need after CommonBond receives commitments from other funders, Hunt said. He added that staff would present a more specific assistance recommendation in the future.
In response to a question from Councilmember Lynette Dumalag, Hunt said the assistance would go toward the housing in the development but not the daycare facility.
Councilmember Margaret Rog noted she has expressed concern about how much TIF assistance St. Louis Park has supported and whether city leaders should review its public benefit requirements for projects.
Council members approved a $2.9 million TIF request for Texa-Tonka Apartments, a project which includes 20 affordable units, and will consider an $8.7 million TIF request for a project at Beltline Station with an estimated 82 affordable units, Rog added.
“Given how high a priority affordable housing is for us right now, I think we’re getting a great deal with a potential $1.2 million TIF request that will yield 120 affordable units – some for people at the lowest income levels – as well as a daycare,” Rog said. “To my mind this really showcases the value of working with nonprofit partners whenever possible to create and preserve housing as we get a lot more bang for our buck in that area.”
Councilmember Larry Kraft observed that the request amounts to $10,000 in assistance for each of the 120 affordable units.
“This seems like a great use of funding,” he said.
Councilmember Tim Brausen pointed out that the resolution does not commit the city to the assistance for the project.
He said, “We’re just showing our support that we’re willing to go that high depending on the analysis done by our staff.”
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