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� <br /> ; c_ c} �-iM1r �irli r iE ; � <br /> �_'ti 1<t•Ili�t;�, tioulcvarcl G4�. <br /> City Of OrOno � Paul, :�tN `i71i)J-l9OC) <br /> 2750 Kellcy Parkway �_<<,1-�i�i) f�hr�n� <br /> Caystal Bay, MN 55323 , ,c��_ti��,-� �.�,, <br /> 1-: <br /> ,. . _ �,r,. <br /> May 4, 2010 <br /> Dear Mayor, Council Members and City Staff, <br /> CommonBond Communities(CommonBond) h1s been working with the City of Orono to develop much <br /> necded quality affocdable housing for residents of Orono and adjacent municipalities. CommonBond, in <br /> partnership with its service partner- Interfaith Outreach Community Pa��tuers- is proposing the <br /> development of a 38 unit townhome community oii the City's Willo�v Drive parcel. <br /> The development will provide lwo, three, and four bedroom to��mhomes for residents earning between <br /> 30%and 60%of tfie area median income. The }�roposed housing community will support the area's�ieed <br /> for workforce housing and will provide att opportunity for families to live in quality affordable housing in <br /> the amenity-rich City of Orono. <br /> Afte�•discussions �vith City Staff; CommonBond has been directed ro provide options for land disposition. <br /> The two options that CommonBond is proposing are a land leasc or a note. <br /> Land Lease: <br /> CouimonBond would propose a 99 year lease for the land. For the Willow Commons development,the <br /> City would maintain ownecshi�of thc land. As the owner of the land,the City would have the ability to <br /> place specific criterion on the land, sucl� as required affordability and design aesthetics. <br /> ConunonBond would pay $1.00 for the land lease. As the lease holder, CommonBond Commwiities <br /> would be responsible for paying the taxes on the land. <br /> At the end of 99 years,the City would have the ability to choose to either continue the current lease terms <br /> or transfer ownership to CommonBond Co�nnn�nities for$1. <br /> 30 year Note <br /> As a tax credit deal,CommonBond would need to be sensitive to what invcstors will accept for notes. In <br /> the current syndication marl:ct, investors are requiring tliat all notcs, otttsidc of the pei-manent mortga�e, <br /> be soft debt and bc cepaici from available cash flow. <br /> If we were to movc forward with a note, valued at thc lppraised price, CommonBond wou(d requcst that <br /> thc City provide a note for the land with a 30 ycar term and a I% interest rate. CommonBond�vould <br /> makc payments on the note from availablc cash flow. The note would be repaid when ConimonBond <br /> refinances the development. <br /> CommonBond would prcfer a Iznd lease from the City, as opposed to Yhe 30 year note, due to thc <br /> requirements of tax credit inveslors and syndicators. <br /> li <br /> I <br />