Based on the context provided, here is the transcribed townhall meeting of the Apple Valley Economic Development Authority with speaker names assigned. **[0:01] Hey,** **[0:09] hey,** **[0:21] hey.** **[0:40] Clint Hooppaw:** I call this meeting to order of the Apple Valley Economic Development Authority. Uh, this is the meeting of December 23rd, 2025. First order of business is the approval of the agenda. **[0:55] Tom Melander:** Mr. Chair, I'll move to approve the agenda before we get on to the consent agenda. **[1:05] Clint Hooppaw:** Ah— **[1:08] John Bergman:** I'll second it. **[1:09] Clint Hooppaw:** That's okay. Thank you. I'll do things in the right order then. Supposed to go in the order they're numbered. How about that? That's good. Three comes after two. Let's do approval of the agenda first. **[1:20] John Bergman:** Second. **[1:22] Clint Hooppaw:** Moved and seconded. Thank you. In favor? **[1:25] Councilmembers:** I. I. **[1:27] Clint Hooppaw:** Now we'll do the consent agenda. **[1:29] Lisa Hiebert:** I'll move approval of the consent. **[1:33] Clint Hooppaw:** Thank you. **[1:35] John Bergman:** Second. **[1:36] Clint Hooppaw:** Moved and seconded to approve. In favor? **[1:40] Councilmembers:** I. I. **[1:42] Clint Hooppaw:** That carries. Move on to the regular agenda which is item number 4A. Mr. Benetti. **[1:50] Tim Benetti:** Thank you, Mr. President, members of the commission. Uh, just a brief uh reminder of what we're asking for tonight is a consideration of an EDA resolution of support for allocation of pool TIF funds to Real Estate Equities. I'm going to go very quickly. I know you saw this last time, but this is our Gaslight site at 15584 Gaslight Drive. Uh, real quick, 3.1 acre site owned by the EDA since 1997. It was an old park and ride site that was uh relinquished by the Met Council MVTA through a quitclaim deed in mid-summer of 2024. Some of you may recall we requested an RFP. Real Estate Equities was chosen to provide for a five-story, 148-unit apartment project. Uh, on September 3rd that was approved by our planning commission and council approved uh a revised 148 unit down to 144 unit. And here again are the site plan and elevation plans for that project. Uh, right now as summarized in the report, the estimated project cost is $55 million. The developer has applied to Dakota County CDA for allocation of 4% low-income housing tax credits which are tax-exempt bonds. Uh, developer stated that due to prevailing wage requirements, unique design, increased building labor costs, higher interest rates resulting in estimated six-plus million dollar financing gap. Uh, per the EDA of November 13th, developer provided a detailed explanation of the gap and increased cost which is in the letter dated December 3rd, 2025. Developer is also here tonight to uh field any questions that you have on that letter or what contributed to that gap. So, right now, what we've provided for to help close that gap is an $88,000 Met Council grant. Uh, also 1.25 million in our local affordable housing aid from 750,000 from 2025 to estimated 500,000 from our projected 2026 funds which we feel we will make up. Uh, despite these contributions there still remains a $4 million gap and hence the developers requesting that additional assistance through the CDA through the allocation of those uh pool TIF funds which we went over very quickly. This is that TIF number 11 Pennock which is part of multiple properties scattered through our community that have generated uh these TIF dollars through the uh improvement of those projects. Right now it's generated over 18 million and approximately 8 million has been spent and uh right now the current balance is just over 11 million. Uh, CDA was asked to ask Northland Finance—which is a financial consulting group that we also use—to provide an independent financial analysis and they found that, concluded the proposed level of financial assistance as requested was reasonable. That's also included in your packet and now the EDA is just simply asking for city support or encouragement for the Board of Commissioners to authorize those funds. So again, you're asked to adopt the resolution in your packet tonight. Again, I'm here to answer any questions if you have. Otherwise, any specific questions on the gap financing, I will defer to the developer who's also here tonight as well. Also, representatives from our Dakota County CDA are here as well, Lisa Maggie. **[5:15] Tom Melander:** Mr. Hooppaw, just Tim, just I know you said it and then I didn't write it down fast enough. Number of units in this project is— **[5:29] Tim Benetti:** 144. **[5:33] Tom Melander:** Perfect. And my other quick question is uh, this resolution supports spending some pool TIF the county is in control of but is not asking for any additional city contribution beyond what you've already provided via the grants and those things. Correct? **[5:49] Tim Benetti:** That is correct, Mr. President and commissioners. So the pool TIF funds are already been collected. They're still kind of waiting in a holding pattern by the CDA or County Board. They can allocate those for these types of projects if they deem necessary or fit. **[6:06] Ruth Grendahl:** Thanks. Um, [clears throat] so what was the dollar amount for prevailing wage added to the project? **[6:22] Tim Benetti:** I'm going to defer that to the applicant or the developer, please. **[6:26] Ruth Grendahl:** Did I ask that at the last meeting? **[6:27] Blaine Barker (Developer):** 3 million. **[6:29] Ruth Grendahl:** What the Legislature was thinking about on that when we want affordable housing and then they add $3 million onto a project like this... I didn't know there was a problem. **[6:43] Clint Hooppaw:** Tim, why don't we have the developer come up? He's probably in a little better position to answer, right? Remaining questions on the gap and the like. **[6:52] Tim Benetti:** Sure. **[6:55] Clint Hooppaw:** Before you leave, Tim, I have a—when I was reading the uh report that you prepared, um a word jumped out at me in the one of the closing paragraphs. That Northland Public Finance conducted a "cursory" review. Now, somebody doesn't understand the right meaning of the word cursory, I'm hopeful. In my book, that means kind of surface, kiss it as you walk by. Uh, not a detailed review, not a thorough review. Cursory is not a word that I like to see when we're talking millions of bucks. **[7:29] Tim Benetti:** Sure. It was a direction of the CDA to ask Northland to just provide an initial assessment. Usually, uh, when you get into the detail analysis like a TIF review, there's a lot more work that goes into that. Again, this was just—again, hence the term cursory—was just a quick review made by Northland just to see, is this reasonable? And again, I believe they checked, went over the pro forma, the added cost, and determined that if pool TIF was allocated here, it would be considered a reasonable request or a reasonable allocation. **[8:14] Clint Hooppaw:** But at some point before the money got freed up, there'd be a thorough review, right? **[8:21] Tim Benetti:** Absolutely. **[8:26] Lisa Alfson (Dakota County CDA):** Hello. Um, my name is Lisa Alfson, Dakota County CDA. Thank you for having us here tonight. I can share, Mr. President, that we have staff, we have housing finance staff who underwrite all the deals that come towards us for these projects and they do a very thorough job of vetting this. What we had asked Northland was—typically when we come to you or into any of our cities, we ask them to do a review, a thorough review of creating a new TIF district. This is not a new TIF district. This is pool TIF. And so we wanted a third party to look at this and be able to say in your knowledge of all the projects they've seen, "Does this look out of line to you? It's a big number for us. What do you think?" And that's what we had asked Tammy and her staff to consider. And so that's where she wanted to say a "cursory review." She didn't get into all the details to all the numbers. We have staff who've gotten into all those numbers. All of those numbers look reasonable. And that's what Tammy is looking at as well. What I liked was that last paragraph of what they typically see when a project's like this for a gap. It's about a 10% in from the public, right? This is at 11%. That's not extraordinary for them. That 11% could be done if there are extraordinary things that you're obtaining as a part of that deal. She has cited it's near transit and other kind—this is city-owned desire from the city. So there's different things that can add to the benefit of doing that project. So I hope that helped answer the question. **[9:56] Clint Hooppaw:** [clears throat] So, any other questions for the developer? **[10:14] Councilmembers:** No. **[10:16] Clint Hooppaw:** Mr. Barker, go ahead. **[10:18] Blaine Barker (Developer):** I was just going to say good evening Chair and uh commissioners. I'm Blaine Barker with Real Estate Equities. Also here is Patrick Ostrom. **[10:35] Lisa Hiebert:** My question to you is bidding a job. So when you bid a job, um, do you not look out one year to two years and think about the cushioning of what the percent will be of the increase in that time frame? **[10:44] Blaine Barker:** Commissioner Hiebert, um, we do. Uh, we always reach out to a contractor to get an initial takeoff pricing um before we have full plans based on, you know, a site plan or schematic drawings. Um, so we get that early and then continue to fine-tune that as the drawings progress and eventually get full construction drawings and subsequently bids from all the subcontractors. Hear why we were so off on our estimate versus actual was um the legislature passed this prevailing wage bill um right around when the RFP was released by the city. And at that time, we hadn't fully realized and understood and quantified the impacts of that bill um prior to making the application um to the city uh in response to the RFP. **[11:40] Lisa Hiebert:** Okay. How about the additional um question about the unique design of the project? What changed in the time between that and the bid? **[11:51] Blaine Barker:** Uh, yeah, so our initial proposal showed um a C-shaped building um that you know was fully connected. Um, we envisioned uh a solution where we would be able to build over the existing sanitary sewer easement um by sleeving it so that if it ever needed access um it could. Uh, it was ultimately deemed by city staff that that was not um viable. Um, and we found that out after we had been awarded the RFP. So now the building is uh not fully connected. So there's a garage on the north side of the building and the south side of the building. Then also levels one and two don't connect either so that um that sanitary sewer easement that's running west to east is accessible. **[12:42] Lisa Hiebert:** And then lastly is the higher-than-expected interest rates. Um, my research shows that the interest rates have decreased, not increased. So explain that to me please. **[12:53] Blaine Barker:** Yeah, it's less about the interest rates on the um reduced first mortgage sizing as it is the change to affordability levels. Uh, so when we responded to the RFP, we were averaging to 60% AMI, which is the maximum allowed under the federal low-income housing tax credit program. Um, we have since added additional 50% AMI units and 30% AMI units so that we're not fully leveraging that first mortgage. Um, and we did that for two reasons. Um, one was we applied to LCDA Met Council for funding. Um, they want to see deeper affordability as a condition to their funding. Um, and then also in talking with uh Dakota County CDA staff who who are here, I don't want to speak for them, but they had um expressed an interest in this development uh including some additional affordability as well. **[13:47] Clint Hooppaw:** Thank you. No further questions. Do we have a—yeah, I don't have anybody any further questions. So, maybe ask Tim... Tim, what's the action we're asking for here again this evening? And just so everybody's clear. Thank you everyone. **[14:15] Tim Benetti:** Mr. President, uh members of commission, uh you are asked to adopt a—or consider a resolution. It's all right. Take your time. Say is you're asked to adopt an EDA resolution of support and again this is just a resolution of support for the allocation of available pool TIF increment funds by Dakota County to assist in this financing for Valley Station. **[14:44] Clint Hooppaw:** And that resolution goes ultimately to Dakota County CDA for them to make the final decision. Is that correct? **[14:52] Tim Benetti:** And they would uh use that as probably an addendum to a staff report that they're prepared for a public hearing that will be coming up I believe sometime in January. **[15:08] Lisa Alfson:** Thank you. Just a small clarification that public hearing has yet to be scheduled at this point in time. Um, so but if and when it is scheduled that would be this would be something that the Executive Director has asked to be added to with the support from the city. **[15:26] Clint Hooppaw:** Okay. **[15:47] Ruth Grendahl:** Mr. President, um, my concern is, you know, we had—we went out for an RFP and this—this one didn't need any government financial assistance. I mean, do we go back to the drawing board and see what the other people um what they what they bid and see and make it, I mean, apples to apples maybe? Because right now, I mean, what is it, a 20% subsidy now what we're looking at for the project? Well, maybe I would have looked at one of the other projects differently. Okay. **[16:14] Clint Hooppaw:** I would just—what Councilmember Grendahl said is true, right? We came in... it's a different assumption. My question would be, and it's hard to know without going back, is would everybody else kind of be in the same boat due to these same changes? I don't think anybody had fair notice of the prevailing wage, and that's probably the biggest hit in this one to me, but I can't say that with any clarity, right? Regardless of resolution or no, this still goes forward to the CDA board for action. It's just whether we want to support using the pool TIF in Apple Valley that was generated from other Apple Valley projects to support this project or we don't want to make that statement tonight. But either way, this still goes to the CDA board to decide. **[17:08] Tim Benetti:** That is correct as well. **[17:21] John Bergman:** Chair, to me, for [clears throat] the first time I've heard this from the time I've sat up here, um, "available pool tax," that's all new to me. So, um, I've kind of listened to what Mayor Hooppaw has to say and Ruth has had to say. So, it would still go back to the county to let them make a decision on this. Correct. **[17:39] Tim Benetti:** That is correct. **[17:42] Tom Melander:** Mr. President, I guess what I can support is making sure that pool TIF that was generated from projects in Apple Valley gets returned to Apple Valley projects. That part I can support. Um, whether it's right, this project and this developer versus another one. I do like that idea of making sure that those dollars that effectively were hitting our taxpayers are getting used back here in Apple Valley. And if you go back to the drawing board, I don't know that I can guarantee that by the time you get a new project brought forward either. And I guess yeah, for that reason and also watching the time, but for that reason and we can continue discussion, I'll make a motion to adopt the resolution of support and we'll leave it to the CDA and their math and authority to determine if this is warranted or not warranted. **[18:28] John Bergman:** Second it. **[18:31] Clint Hooppaw:** Second. Did I hear a second? Councilmember Bergman was your second. All right. In favor, I? **[18:40] Councilmembers:** I. I. **[18:42] Clint Hooppaw:** Opposed? **[18:43] Councilmembers:** Nay. Nay. **[18:44] Clint Hooppaw:** That's a uh five to two. Thank you. So that moves us forward to communications items. Any communications? **[19:04] Tom Lawell:** Mr. President, in the interest of time, we have none. **[19:07] Clint Hooppaw:** Okay. Motion to adjourn. **[19:10] Tom Melander:** So moved. **[19:11] Lisa Hiebert:** Second. **[19:13] Clint Hooppaw:** Seconded. In favor? **[19:15] Councilmembers:** I.