A public hearing was held at a recent Shoreview City Council meeting regarding the approval and authorization of an amended and restated tax abatement agreement with KJPL Shoreview Two LLC (Phase II) – for the Edison at Rice Creek Project, currently under construction.
Assistant City Manager and Community Development Director Tim Simonson gave a brief presentation before the public hearing.
“The final phase that was approved is for an additional 33 rental townhomes and carriage homes,” Simonson said. “The city and developer have agreed to the final phase to include four additional affordable units among the 33 that are being built.”
According to Simonson, the developer and city have agreed on another tax abatement for this final phase to include an additional four affordable housing units. The proposed tax abatement to support this change is $340,000 payable over 20 years beginning in 2024.
Here is a summary of the revisions made to the amended Phase II:
• A total of 189 multifamily units will be built (150 apartment units, 30 townhomes, and nine carriage houses).
• There will be 10 units available to Shoreview residents whose income meets 80% of area median income.
• Of the 10 units, eight will be supported by tax abatements from the city and the remainder will be provided at the developer’s expense.
• Of the 10 units, the developer is required to reserve two apartments, two townhomes and one carriage home for residents with 80% area median income. The remaining five must meet the income requirement, but the type of unit rented is at the developer’s discretion, which provides more flexibility to meet demand.
• The 10 units must remain affordable for the term of the tax abatement, which is 20 years.
• Beginning in 2024, the developer will receive a tax abatement of $39,000 paid semiannually for 20 years. No interest or inflation is attached to the tax abatement note. The total tax abatement totals $780,000.
Tom Gaffy, of Shoreview, was the only resident present during the public hearing at the Sept. 20 council meeting. He said he didn't understand the tax abatement process and asked how it worked. He also questioned who would cover the taxes for the project.
Simonson explained tax abatements. “I think sometimes that we assume (because we work for the city) that everyone knows what that means. In this case, the developer is paying the full taxes over the years of this agreement,” Simonson said. “The city would actually collect over $6 billion over this 20-year period, but we reimburse them a certain amount — in this case, $340,000 over that 20-year period — to basically cover the difference between market-rate housing for those units that we've identified for affordable housing.”
Following the public hearing, the council voted unanimously to approve the resolution to amend the tax abatement agreement.
The next Shoreview City Council meeting is at 7 p.m. Monday, Oct. 4, in council chambers at City Hall, 4600 Victoria St. N., in Shoreview.