[0:15] Speaker Unknown: Heat. Heat. [0:42] Clint Hooppaw: I call this meeting to order of the Apple Valley Economic Development Authority. Um, the first item of this is the meeting of November 13, 2025. First order of business is the approval of tonight's agenda. Any changes from staff? [1:00] Tom Lawell: Mr. President, commissioners? No changes to tonight's agenda from the authority. [1:07] John Bergman: Move approval. [1:09] Ruth Grendahl: Second. [1:10] Clint Hooppaw: Moved and seconded. In favor? [1:15] Multiple Speakers: Aye. [1:16] Clint Hooppaw: That passes unanimously. The consent agenda. Uh, number three. Any items that uh staff needs pulled? The authority? Motion. [1:32] John Bergman: I'll make a motion to approve the consent agenda. [1:38] Clint Hooppaw: And Bergman. In favor? [1:42] Multiple Speakers: Aye. [1:43] Clint Hooppaw: That also passes. Um, our regular agenda is item number 4A, a resolution of support for allocation. Mr. Benetti. [1:52] Tim Benetti: Thank you, Mr. President. Members of commission, we have before you tonight a resolution of support—excuse me. Hopefully I got that. Yep. Thank you. We have a resolution of support for pooled TIFF funds for the Valley Station Apartments. I'm going to be very quickly, I'm sure most of you are aware of the site location, 15584 Gas Light Drive, legally described as Lot 1, Block 2, Carroll Center Fourth Edition. Again, at the southeast corner of Gas Light and 155th, right south of the transit station, Red Robin, and the Floor & Decor. So, quick background: 3.1-acre site has been owned by the EDA since 1997. February 1999, the EDA entered into a lease agreement with MVTA to operate a transit station at that site. [2:50] Tim Benetti: I didn't do anything. Uh, so they entered into a lease agreement for a park-and-ride site. July 20, 2024—about a year ago—the Met Council MVTA quitclaimed those leased-hold interests and any ownership rights to the site. And around that time, we issued an RFP for the redevelopment of the site. Real Estate Equities was chosen to be the preferred developer of a five-story, 140-unit affordable workforce housing project, and a PA was also executed between the EDA and RE. September 3rd, 2025, just a few months ago, Planning Commission recommended approval and this board—or excuse me, the City Council—approved for the 144-unit revised project. So, just a quick site plan. Again, just shows the outline of the new facility on the site. Just an architectural rendering of what was approved. Right now, the project is estimated to be at 55 million. [3:50] Clint Hooppaw: This is a memory test, Tim. [3:53] Tim Benetti: I know. And I don't have my notes in front of me. Pardon me. The developer has applied to Dakota County CDA for an allocation of 4% what they refer to as low-income housing tax credits. Developer states that due to prevailing wage requirements, unique design of the project, increased building and labor costs, higher interest rates, this is resulting in about a $6 million plus financing gap. To help close this gap, the developer—actually, the city staff helped provide—secured an $88,000 Met Council Livable Communities Demonstration Account grant. Uh, we actually asked for 1.1. We got 88, which we thought was remarkable. Uh, the city is committing approximately 1.25 million of our local affordable housing, as we refer to them as LAA funds. So we're committing about 750,000 from 2025, another 500,000 projected from our 2026 funds. Under that LAA agreement with the county, we can use those LAA funds to help with closing a gap or gap assistance in this case. [5:00] Tim Benetti: Uh, but despite these contributions from both the grant and the LAA funds, we're still short about four million. So developer is going before the Dakota County CDA board to ask for additional financial assistance which would be through the means of a TIFF Number 11 plan, which some of you may have remembered this from years ago. This was created back in 2001, certified April 20, 2002. It decertifies in a few years from now in December of 2029. It consists of a number of properties in the city, starting with Pennock Place senior housing, Remington Cove Apartments, Harlson Apartments, Legacy Square condos, and Hearthstone. [5:45] Tim Benetti: Under this TIFF 11 plan, it establishes a means to provide for support for affordable housing, encourage more affordable housing throughout the community, and also provide for assistance as needed. It's generated over 18 million of funding up to this point. Approximately 8 million of that has been spent back into the city through either private or CDA sponsored development. The current balance is over $11 million, which is pretty healthy. The CDA has asked Northland Finance to provide an independent financial analysis. Northland is also our own financial group, but they are providing an independent financial analysis to determine what may be a fair or reasonable TIFF allocation in this case. This resolution tonight does not ask you to support a specific fund, but simply asks to convey your support and encouragement for the board to authorize an allocation of pooled TIFF funds from this Number 11 plan TIFF district. And again, that would be to be determined by the board. So before you tonight is just that resolution of support. If you have any questions, I'd be happy to answer any of those. We also have Lisa Alfson and Maggie Dykes from the CDA here to answer any questions if you have any from them. [7:07] John Bergman: Mr. President? Okay. So, when we did the Pennock—the one on Pennock and Cedar Avenue coming into town—we at one point asked for a set number of years. And for us to finalize that project, we had to add another 10 years to it for 25 years. Now, is this going to have a running date on it when it stops, or is it going to be a short term, or is it going to drag it out for—put that into a TIFF district for 25 years? [7:51] Tim Benetti: No, it does not. [7:53] John Bergman: It doesn't. The dollar amount is just there for the... correct. [7:56] Tim Benetti: Yes. So, it decertifies—sorry, hopefully I got the right date—December 2029. [8:03] Tim Benetti: I wave Maggie up because it looks like she might have an answer. [8:04] Maggie Dykes: Sorry. Hi, Maggie Dykes, Dakota County CDA. Nice to see you all. Thanks for having us here tonight. Um, although I think we invited ourselves. Um, so, as Tim stated and as you may be aware, the TIFF district was created back in 2001. It ends in 2029. That's because it's 26 years from the time that the district is certified and starts generating increment. So we've used this increment at several developments throughout Apple Valley. It does not get spent outside of Apple Valley. Um, so it's only for projects inside of the city. And to Commissioner Bergman's question there, the timeline is 2029, period. End of story. That's when it's over. [8:53] John Bergman: That's when it's over. Okay. Thank you. [8:55] Clint Hooppaw: Generally, when we looked at this project way back when on your timeline, right, we all were—this was the right project for the site. But the other thing that was with this is that this was the one developer who wasn't asking for additional assistance. And I just don't want that to go silent here because I don't know the answer to this: Is it that the requirements in the site changed thus that no matter which developer was working this project we would have a gap, or is this unique to this developer? That would be my one question. I don't know that we need these answered today; we can deal with a resolution saying we support using the TIFF district, but I think these are other answers I at least would like to have as we work our way through and as Northland does their analysis and that kind of thing. Um, so I'm not gonna put you on the spot with questions you don't know the answer to, but I think we maybe put it back to the developer to say we'd like to understand where the gap came from. Um, and maybe for Maggie or Northland, if we're looking at more... Well, let me ask the questions in this order. 2029 hits, this district gets decertified. What happens to the $11 million that sits in the district? [10:14] Maggie Dykes: Commissioner Hooppaw and board, the CDA retains those funds and those funds will be used for other affordable housing developments in Apple Valley. [10:19] Clint Hooppaw: So they don't just magically go away somewhere, but we do dip into a resource that CDA exclusively controls. Is that correct? [10:31] Maggie Dykes: That's correct. And yes, we work with the city obviously to provide financing. We also use it on our own developments to maintain the quality developments that you all come to expect from the CDA. So that's where the funds are going. [10:41] Clint Hooppaw: Part of this project has some affordability to it. We all know there's a need for that if we're looking at additional assistance. Are there other reasonable requirements we can ask of a developer that would aid affordability if we're going to do that? And in doing so, do we make the gap bigger? That weighs into that. [11:15] Maggie Dykes: There is the requirement from the tax credits that all these units are at 60% AMI or below. There are some units there that are affordable for folks at 30% AMI. So you get some more affordability there. If you create more public purpose, obviously there's a little bit bigger gap, but it's a reasonable expectation to ask for more public purpose. And so that's the conversation that we're continuing to have with the developer is: what else comes out of this in addition to the tax credits? [11:32] Clint Hooppaw: Public purpose. I'm assuming the tax credits have a period of time that affordability must remain? [11:38] Maggie Dykes: They do. They do have a period of affordability. [11:41] Clint Hooppaw: Would it be—if we're asking for more assistance, can that period be extended? Because we want affordability now, but we kind of also want it 30 years from now. [11:46] Maggie Dykes: Right. And that will extend into 30 years. It's a little nuanced, but yes, it'll extend to 30 years. [12:04] Maggie Dykes: Yeah. The affordability does get tied though to—if we want to extend that term, you certainly can do that, but it's going to be a minimum of 30 years that we're going to require that affordability. [12:15] Clint Hooppaw: Great. Those were my questions, if they were questions. [laughter] Others? I'm sorry, Commissioner Johnson. [12:30] Commissioner Johnson: First of all, the 6 million that is requested is pretty ordinary stuff. It wasn't like we found a sinkhole in the bottom of the lot that we're looking at, right? So, $6 million sounds like a project that's almost out of control. What is it there? What is there that would prevent them from coming back in three or six months and saying, "I need another five million?" [13:14] Tim Benetti: Commissioner Johnson, members of this board, right now that remains to be seen. But right now they're claiming with their current pro forma to the county is that with the prevailing wages, the expectation that those are going to go up, the high price of building housing costs, labor costs, and unique project designs—everything else just contributed more to their financial performance that created this gap that they weren't expecting. They approached us with a number of options and suggested, "Could we use this? Could we use that?" And you know, using our LAA funds for that was ideal because we can use that for this type of gap financing. Using the pooled TIFF funds, this becomes a policy decision that has to be granted by the Dakota County Board of Commissioners. [14:05] Commissioner Johnson: Who made the $55 million estimate that started this? [14:11] Tim Benetti: I believe the developer did. [14:15] Commissioner Johnson: So, he should be... there shouldn't be these kinds of surprises coming up. This is ordinary stuff. It isn't like we added more rooms. [14:31] Lisa Alfson: Hi, Lisa Alfson. I'm with the Dakota County CDA. I can share a few things because it is a big swing for all of us, but what I can share is this is the first year of tax credits and bonds that the state now requires prevailing wage. We haven't had that before. And so when our gap has been typically in that 1.7 to 2 million, now it's about a 20% increase in costs. And there is a public purpose there, I would say, because people are getting paid a higher wage, but that comes with a cost. With the project decreasing in the number of units that occurred, that's a decrease in the revenue that the developer was assuming that they would have. In addition to another public purpose that happened with this project—which is a good thing for the tenants—is they're not paying for parking. That was to the tune of probably about $1.2 million that they were thinking they would get in revenue each year, and that's gone. So there's just those costs that start to add up a little bit and lead to that more of that $6 million gap. [15:41] Commissioner Johnson: Who decided to change the parking? [15:43] Tim Benetti: That was at the Planning Commission. [15:45] Tom Lawell: Mr. Chair, the unit reduction was also related to reducing building height. [15:52] Tim Benetti: Right, on the backside. So that took a couple units out as well. Took about four units. [16:00] Clint Hooppaw: Miss Grendahl. [16:01] Ruth Grendahl: So just a comment. Obviously legislators have been encouraging more affordable housing, but on the other hand, now in one year they put prevailing wages and they made the prices go up so crazy. Um, I just—that doesn't make any sense to me. I've seen TIFF used successfully in a number of instances with my other hat on, and I'm thinking specifically of a tract over in Burnsville that was a roly-poly topography and they needed most of that money to flatten it out. This appears to be a different animal where, as Mr. Hooppaw pointed out, we went into this because they said we don't need any more assistance, and now they need more. I would hate to think that's on purpose, but it did factor into our decision to go with them. So. [17:21] Clint Hooppaw: We have the benefit of the chair of our Planning Commission. Can we discuss about what happened with the parking? [17:31] Commissioner Curtis: Sure. Do you want to tell me what the date on that one was? I'm just curious if I was there at that one. [17:38] Tim Benetti: Uh, Commissioner Curtis, I'm not sure if you were there, but I believe it was discussed at the original first public hearing. There was a concern about the site being able to park itself with the 1.7 spaces per unit. I'm spitballing here. In effect, we were talking about providing for parking offsite. And there was a statement, I believe, made by the developer that if parking was free or not charged, more people are probably likely to park on site instead of paying for it. So a recommendation was made or suggested that you take away the parking fee. Make it free. You'll encourage more people to park in the garages and on the parking lot where they should be parking. We're trying to avoid any off-street parking or on-street parking and trespass parking on the other sides of the site. So, the benefit was take away the charged parking, make it free, have more people park. The developer initially kind of bristled at it, but they agreed to it as part of their conditions of approval. [18:59] Commissioner Curtis: Yeah, I was not in attendance on that one, but I do know that when we had our public hearing that there was a lot of residents that were very concerned about the parking extension around. There was an area where I think a lot of children played or something. [19:16] Clint Hooppaw: Thank you. So, can we just talk about what the requested action is here this evening so we're all clear on what we're bringing forward? And then my part two of that is timing, right? If there's discomfort here, we need to talk about this more. We want more information. If this doesn't go tonight, what does that impact if we need to come back and do it later? [19:39] Tim Benetti: So, at this point, you're being asked to just simply adopt a resolution of support back to the Dakota County CDA Board of Commissioners. It's simply saying that you're supporting the applicant or the developer's efforts to ask for TIFF funding to help close their gap. You're not specifying an amount. The memo may have indicated up to four million. It may be up to four million or it could be as low as $1. We don't know. We're going to leave that up to the discretion of the Dakota County Board. At this point, we'd like to present this resolution to the next meeting, which I believe is coming up in a week, Tuesday. [20:21] Lisa Alfson: Tuesday. Next Tuesday, where I believe the Executive Director, Mr. Schertler, has said that at that meeting, they're going to bring it for another discussion topic and have it set for a public—or ask to set a public hearing at the December meeting for a public hearing date in January of 2026. So we kind of need to take action on this this evening, boiling that down. [20:45] Lisa Alfson: Sorry, things changed, right? So I just wanted to share that things have changed just a smidge. The Executive Director, Tony Schertler, has decided that he would not like to bring that to the board next Tuesday. No, things change, life changed. But because our board is also a little bit concerned about the size of the gap, right? And we're all trying to get an understanding—not just you in your position, but the CDA Board of Commissioners is also trying to get their arms around this gap. And so what he is hoping to do is to meet with them, and then the earliest that that board will take consideration would be December to set a public hearing in January of 2026. So that would still be the same time frame, but this is not when we had originally talked. We thought the timeline was going a little bit earlier. Um, but this does not need to be considered at this time. That would not impact this. [21:55] Clint Hooppaw: So, I'm just listening to comments here, right? And if Tony's going to have a conversation with the developer to better understand the gap, is that information that could come back here so we could also better understand the gap before taking this action? [22:09] Tom Lawell: Of course. That means we probably have to call another special EDA meeting prior to another council meeting to do that. But is that acceptable? Does that work for CDA and you all if we don't have comfort moving forward tonight here? [22:20] Tom Lawell: I'm getting nods of approval. So, we could call—your next regular meeting would be December 23rd. [22:25] John Bergman: And I'd rather see the TIFF discussion than a cheapening of the product. I don't want to see all the nice things with the design go away to meet a budget. [22:33] Ruth Grendahl: I would agree. [22:38] Clint Hooppaw: We just want to understand where that gap is. Maybe so we all understand that this is an economic gap, not necessarily a project gap. There may be enough dollars to build it, but because of these other things, the long-term dollars don't work and that's the gap. Am I correct on that one? So we just might need to lay that out a little better. We didn't add $6 million of amenity to the project boosting the cost, but we did take long-term economic value from them by the other things we did. So it's a $6 million gap over 30 years, not necessarily a $6 million gap at inception. [23:11] Ruth Grendahl: Can we get a number on how much the prevailing wage has added to the project? Did we already talk about exactly that? It's kind of lumped in with other things, but I'd like to know that so we can tell legislators, you know, you're telling us you want more affordable housing, but then you do things like this. That's a negative to doing it. [23:34] Tim Benetti: We can get that information for you. [23:44] Clint Hooppaw: So, no action required. Just we can move on from here. Is that correct? [23:49] Tim Benetti: Yes. We can table this to another special meeting if you're open to that. [23:54] John Bergman: Sounds prudent. Yeah. [23:59] Tim Benetti: Thank you. Do we need a motion for that? [24:08] Sharon Hills: Let me turn the microphone on. I believe, Mr. Chair, that you can just continue the matter to a date to be determined. [24:19] Clint Hooppaw: So, no motion needed. [24:20] Sharon Hills: No, correct. You're not acting on the resolution. [24:21] Clint Hooppaw: Okay. Let's leave it at that then. Perfect. [24:23] Tim Benetti: Thank you, Mr. President. [24:31] Clint Hooppaw: Any staff updates? Anything come up? [24:35] Tom Lawell: Mr. President? In the interest of time, we have none. [24:41] Clint Hooppaw: Okay. Motion to adjourn? [24:42] John Bergman: Move approval. [24:44] Ruth Grendahl: Second. [24:47] Clint Hooppaw: All in favor? [24:49] Multiple Speakers: Aye. [24:50] Clint Hooppaw: We are adjourned. [24:52] [Music]