Item 3: MUPTE Application for Alder Park Apartments and attachments

Home Browse Search

Public Benefits After reviewing the Paradigm on Pearl application against the public benefit scoring criteria in the Standards and Guidelines, staff determined that the proposed development earned 110 points. (A minimum of 100 points is required for the City Manager to recommend that council approve an application.) Points were awarded for the project through the following benefits: Density: 50 points (10 points per unit in excess of the minimum code requirement; 50 point max) o Green Building Features and Quality of Building Materials: 50 points for Earth Advantage-gold o certification Parking: 10 points (10 points per code space in excess of the minimum code requirement) o The project is contiguous to a historic structure. The applicant has a mitigation plan but it was not accepted by Planning and Development Department staff to receive public benefit points because the plan lacked sufficient information. Impact and Need for Tax Exemptions to Encourage Housing The City and other local taxing districts forgo revenue when property is exempted from taxes. Alder Park Apartments will continue to generate property tax revenue on the land. The submitted application indicates that the 2010 property tax was $5,762. After ten years, the entire development will be taxable, generating an estimated $24,850 on the housing portion in year 11. The applicant also indicates that MUPTE is vital to the development and, if it is denied, the property will be developed without the green building features and with features not preferred by the neighborhood association (more bedrooms per unit and reconfigured parking/garbage). Financial Analysis The applicant has demonstrated that the project as proposed could not be built but for the benefit of the tax exemption. Staff and the Loan Advisory Committee reviewed the pro-forma and confirmed this conclusion. (See Attachment F for more information.) Timing This application was submitted on May 20, 2011. The City Manager has 90 days (until August 18) to make a recommendation to the council; if the council has not acted in 180 days, the application is deemed approved. Additionally, the existing MUPTE ordinance expires for all projects unable to be constructed by January 1, 2012. In order to qualify for the exemption, the applicant is required to complete construction prior to January 1, 2012. If the project fails to be completed by the deadline due to circumstances beyond the applicant’s control (such as a natural disaster, bankruptcy of key vendors, or dissolution of the related financial institution), the council has the option to grant a one-year extension. The applicant provided a construction timeline showing that construction is expected to be complete on or before January 1, 2012. However, some question remains about the ability to meet this timeline. In light of this possibility, should the council decide to grant the exemption, the resolution approving the exemption states explicitly that if the applicant is unable to complete the project and obtain a temporary or final certificate of occupancy for the residential portion of the project prior to the deadline, that the applicant will not receive the tax exemption and will have no expectation of being granted an extension. The applicant is aware of the deadline and implications of not meeting it. \\Cesrv500\cc support\CMO\2011 Council Agendas\M110725\S1107253.doc