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All ready. Looks like it. Okay, here we go. Well, good morning everybody. It is June 11th, 2026 at 7:30 in the morning and this is the meeting of the Adana Housing Redevelopment Authority. Um we're

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continuing to hold both the H meetings and the city council meetings in a hybrid fashion. People can uh watch us online, call in uh during certain portions of the meeting. If they have a concern, they can call in. And under the committee comment portion, there's no hearing this morning. So the committee

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comment portion of the agenda will be the only participation. Then if it's an item on the agenda or an item scheduled for a future public hearing, those are offlimit topics. anything else. I would be willing to hear your concerns. Uh, having provided that information, I'm going to call the meeting to order and

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ask our executive director, I think, to call the role. >> Uh, thank you, Mr. Chair. Commissioner Jackson >> here. >> Commissioner Pierce >> here, >> Commissioner Agnu >> here. >> Chair Hubland >> here, >> and Commissioner Risser is absent. >> All right. Very good. Uh, next is the

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pledge of allegiance. I pledge allegiance to the flag of the United States of America and to the republic for which it stands. One nation under God, indivisible, with liberty and justice for all.

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>> You've got a form of meeting agenda that's been published to the commissioners and the general public. Is there anyone on the uh H that wishes to modify the agenda? Anyone from a staff standpoint? Is there a motion to approve the meeting agenda as published? >> So moved. I second. >> Commissioner Jackson moves Commissioner

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Agnu seconds the adoption of the meeting agenda uh for the meeting this morning. Any any further discussion? All those in favor of adopting the meeting agenda for the meeting this morning say I. >> Opposed? Carried. We have a meeting agenda. Uh now is community comment. I'm going to get that number up on the

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screen in case we have anybody that happens to call in and ask if there's anyone in the audience who wishes to address the HR in a matter of concern to them. Okay, hearing nothing and seeing no one coming forward. Uh, is is there anybody online?

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>> We currently do not have any callers, but due to the slight delay in the broadcast, I do recommend that we wait one minute here. >> Yeah, we just put the information up on the screen, so I think it's a good idea to wait a minute. Okay, it's been a minute and we do not have any callers this morning.

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>> All right, thank you. Uh, Mr. Executive Director, any comments that you wish to make regarding comments that might have been made at the prior H meeting? >> And no comments made at the prior H meeting. >> Okay, we've only got one item on the consent agenda this morning, and that's the uh minutes from the H meeting of May

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14th, 2026. Is there any uh modification of those minutes, changes, additions? If not, I'll accept a motion, entertain a motion to approve the minutes from May 14, 2026. >> So moved. >> Second. >> Commissioner Jackson moves. Commissioner Agnu seconds the adoption of the HA

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minutes from the May 14, 2026 Hing. Any further discussion? All those in favor of adoption of those minutes say I. >> I. >> I. Opposed. Carried. Those minutes from May 14, 2026 are adopted. Uh getting into the heart of our agenda this

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morning, we've got a couple of matters in the reports and recommendations portion of the agenda. Our economic de development director uh Bill Nuendorf has both of these matters. And then our executive director will be following that up with a couple of comments on a

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couple of other projects in town. But we'll turn first to Bill Newandorf who wants to visit with the HR about a potential grant agreement with uh uh a business, small business in our community called the Mad Hatter Bakery

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and Cafe at 7300 Metro Boulevard. Mr. Nuendorf, >> good morning. >> Yes, good morning. Thank you. Uh this first first item on your agenda is one of the small spark streamline grants uh that we've been uh making available for the last few years. Uh this morning we

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have the owner of the business with us if there's any questions. Uh Jules Hill. Um but the business is uh uh a small bakery and cafe located in the office industrial district just west of Highway 100, not too far from our public works

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uh facility in that office complex. Uh the Spark program, as you recall, was uh uh first established in 2021. Uh we we created this program based on statewide legislation that was made available to cities throughout the throughout

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Minnesota with the intention to attract business investment, create new jobs, and strengthen our local tax base. Uh this program we've had a lot of conversation about. It was extended last year and it expires at the end of this year in 2026.

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uh in order to fund this program, we did not have to increase our property tax levy, but instead we were able to use existing incremental taxes that that the city had in in three different commercial tiff districts. Um at this point in time, uh we have about a million dollars left in the fund. So,

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there's plenty of of uh money still available to fund uh grants and projects like this. Uh we've we've also looked at we've talked about the uh the process. I just want to run through that again. Um,

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this program um is intended, as the name implies, to be streamlined and simple and easy to use. We we've tried to make it uh uh uh responsive to the needs of small business. Oftentimes, I'm here talking about larger investments and reimbursements that that the city makes,

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but small businesses are really the lifeblood of our of our economy, both nationally and locally. So for for this process um we we initially in the first step uh myself or others in the city here uh work with prospective applicants as they uh go through their building permits and and trying to try to get

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things running. Uh we use this particular program as a problem solver when uh unbudgeted things happen when things break that weren't supposed to break when things are required that we didn't even know were required. Um, and uh, a few years ago, our our our city

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attorney prepared a template that we use so that we don't have to negotiate complex legal documents every single time. We just use the same standard template. Um, uh, and I'll always make sure if there's any questions, I run those through our city attorney, but we try to make it simple and predictable.

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Then we're at the second step where I present present the grant application or the grant uh, contract to you for your consideration and review. Um, from that point, uh, the rest of the program is really up to the up to the business owner. Hire the contractors, get the best prices, make sure that the job gets

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done appropriately. The city will come in and do our final inspections. At that point in time, the applicant uh, seeks to be reimbursed uh, per the terms of the grant agreement. When all is said and done, we'll issue a certificate of completion to note it to just to formally document that the work

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that we thought was going to happen did happen uh in the way that we all were expecting and then we issue the reimbursement. So again, we try to keep it really simple for this particular program. Uh here's uh two images of the project location. >> Just a moment here. >> Sure.

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>> Commissioner Jackson has a [clears throat] question for you. So with the time limits on this program that uh reimbursement that has to occur before the end of this year. Is that correct? >> That's correct. >> Okay. Thank you. >> Yep. The program will expire on December 31st. So everything needs to be buttoned

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up uh by the end of this year. >> There really is an element of awkwardness to this in the sense that they need the money. We've seen that in other circumstances, but we don't give them the money until after they do the work and pay somebody with money they we

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don't even know if they have. So, I mean, it's been kind of I I guess everybody's worked through that little uh temporary bridge problem, >> right? >> But, uh it is you hate to give money in advance because you don't know if they'll actually do the work with the money that you give them. So, it's a bit

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of leap of faith there on both sides. I guess >> Mr. It's also an important fraud control uh aspect of of most most uh governmental grant systems do work like that. >> Yeah. >> And I'm sure the contractors are

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probably understanding of that as well. They see an agreement. >> Correct. And in this particular program, we've had conversations with the business owner, with a landlord, with a contractor, with the inspectors. Um uh again trying to come up with a creative

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way to to solve a problem that we didn't know existed a few months ago. >> Okay. >> Um but the the fact that Adina reimbures after the fact has been a long-standing practice. >> Um Mr. Neil had alluded to that. Um I can't think of an instance where we've

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provide money upfront. It's always been reimbursement after a job well done. On a couple cases, the job wasn't done on time or or as we expected, and we delayed those payments until we knew what we were getting. So, the images on the on the screen show

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the location of the business. Uh the aerial photo in the on the right side of the screen shows the office property just west of Highway 100. It's the uh in the grouping of of five high-rise office buildings that were built in the 1970s and 1980s. Uh each one of these

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buildings also contains a cafe on the first floor. Um uh there's been an exception in our zoning code that allows that type of of uh mixed uses um for for many dec decades. Uh so the image on the left shows a particular office building

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at 7300 metro. Um and uh uh the business owner uh moved into the the space after the previous tenant vacated. Um, so had it had been vacant for not a not a long time, just enough for them to remodel um

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and open and then realize that there was a a glitch. Um, so I had mentioned that the owner is here with with us this morning, Julia Hill. Uh, and the type of business is a bakery cafe. Uh initially they specialized in um in uh catered

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desserts, high-end baked goods and found success in the marketplace there and expanded their offerings into savory uh food items. Working for over 10 years uh food uh uh farmers markets and those types of things. Eventually uh the owner realized that to really uh expand the

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business, she she needed a brickandmortar location and we're really happy that she chose a dinina for that location. So the uh the cafe here is able to provide breakfast and lunch um for folks that work in the building as well as anyone else that wants to visit.

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Um and uh I will tell that say when I was in there when they were first getting piloted um it smelled amazing. So we should all check it out. Um but what the biggest challenge is that small businesses like this in older buildings um you run into a a uh into the

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headwinds of modern codes versus older codes. And so for this particular one uh the old ventilation equipment is no longer up to code and it can be very expensive to replace that especi especially for a small business. Um, and

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it's that high cost of the ventilation system that we want to address here so that uh the owner can actually finish what she started and get fully open uh as she had intended. Um, I mentioned a lot of the remodels already complete. In fact, they're open for business. Uh so

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the bakery end of things is is running well um because the oven doesn't need that kind of ventilation, but it's the cooktop and the the actual cooking uh that is currently on pause until they can get the ventilation uh work through. So with this grant, they intend to hire

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a contractor, work with the landlord to get the work done, uh fully uh complete their uh remodel project, and then actually get their full their full staff up and running. So that's where the the jobs are. So far, the owners invested over $100,000 uh in the business this

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year. So it's for a small business, it's still a sizable investment. Um and with this grant, we would reimburse them for up to 24,000. That's the maximum of this grant. Um uh the business owner worked uh collaboratively

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with the landlord who worked with a contractor that has done a lot of business in the work and they were able to find a way to to meet in the middle. Uh I think everyone bended a little bit in order to to make this work and I'm excited to bring it uh this in front of you this morning to really solve this

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problem and have this business fully opened as they expect. So with that uh in your packet you'll find a copy of the grant agreement. Uh you'll find uh the presentation I just gave and it was I certainly recommend that the H authorize this grant agreement. Um I'm happy to

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answer any questions and the owner uh Miss Jules Hill is here with us if you have any questions for her. questions or [clears throat] questions by HR commissioners for Mr. Nuendorf. Anybody? Yes, Commissioner Jackson.

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>> Yes, thank you. So, I guess when I first read this, I thought it was for um the HVAC system, but this is the the ventilation, the hood for the kitchen part of it. >> That's correct. Um, do you know whether this adds any environmental um,

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sustainability, lower energy or uh, sort of that kind of benefit to this project? >> I don't know if it does. Um, I I'm not familiar with the specs of the actual piece of equipment. Um, uh, I don't have a >> Well, then I like I said, the HVAC or

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the, um, hood isn't as much as like heating and cooling. And so, yeah, I just was curious whether anything had jumped out at you that was would make it more energy efficient or better for the environment. >> Yeah. No, I'm I'm sorry. There there wasn't any kind of review like that. But this is strictly ventilation. So, it's

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not a new air conditioner. It's not a new furnace. Um that would be um hundreds of thousands of dollars. We're trying to keep this one simple. It's simply the ventilation so that the cooking greases and the cooking odors go outside rather than remaining inside the

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building. >> Okay. Thank you, >> Commissioner Pierce. >> I just had a a fun question, I guess. I do believe we had these at the Diana Um final ceremony, I think. Madhatter

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cupcakes. >> Oh, yes. >> Yeah. Didn't we? >> Yeah, I think they were Mad Hatter. Yeah, they were. >> [snorts] >> um my daughter liked them. So [laughter]

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um I am glad that um we are able to uh support small businesses in this way. So I told you nothing of substance just a fun one. [laughter] It's an observation. Yeah, a good one. >> Well, we've had some nice successes with these uh exped expedited grants up to

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24,000. And I can't help but think about the uh old crepe crepery >> on France Avenue that's just seems to have a thriving business and uh helped her with the front door, I think the front windows and the the back door and

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had a grant of a similar nature. And so it's nice to be able to help these small businesses prosper in our community and enhance our tax base in the process. So um is there a motion? Well, Miss Hill, do you want to come forward at all? tell

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us a little bit about your business and then the expansion of it. This is your chance to uh if you come off to the side, I think it'd be best >> um introduce yourself and and then folks that are watching the meeting online will be able to learn more about your business.

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>> Yeah. Hi. So, I'm Jules or well, Julia officially, but please call me Jules. Um so, yeah. So, basically, um I worked full-time for the last sort of 30 40 years. Gosh, show my age now. Um, but I took I I've always had an interest in

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baking. I think my grandmother sort of brought me up and she was a fantastic baker. Um, and basically I guess I learned from her. But the point is I really enjoyed doing it just more for personal sort of like reasons and it

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became sort of a passion project really. So would bake for friends and family, word of mouth and about 10 years ago I kind of set up the business but more in that vein. So, it wasn't like I was opening a storefront or even going to markets or anything like that at that

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point. Um, and then about 18 months ago, decided I'd had enough of working full-time, wanted to retire, but I'm not good at just sitting around doing nothing. So, consequently, um, my sons both said to me, "Well, why don't you expand your little baking business?" And

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so, that's how it kind of kicked off. from last year we were um on the the local farmers markets and other events and what have you like big events that go on through the summer but obviously not much happens during the winter time here being Minnesota so it was a case of

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well how are we going to continue to bring revenue in and get this business and people were saying to us at the time last year do you have a storefront do you have a bricks and mortar where could we come to buy your products other than at the markets so we were very lucky and

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very fortunate to find this particular location that the rent on it is not excessive to the point where it's like I'm never going to be able to afford something like that. And um anyway, this came up and people are just buzzing

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about it. We do it's quite a unique um food offering that we do although we do obviously cupcakes and regular cakes and I am absolutely really really busy with sort of at the moment weddings and stuff like that. So I'm very busy that it was a case of well let's offer something

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that isn't currently really there's not a lot of that offering in Minneapolis or Minnesota as a whole which is sort of like the British style foods um comfort food really that's the best way to describe it. So um my son is a chef and

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he said well I can do all the pastries and I can do like a cooked English cooked breakfast and we can do lunches hot lunches and things. Um and so that's really how it's gone on and it's really sort of taken off. Um you know our weekends particularly are very very

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busy. Um and you know we get people not just from the buildings themselves but from off the street because there is quite a large British expat community in Minneapolis. And of course we all crave our own and as as I'm sure you would if

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you were living in another country. It's I miss my own foods. So that's how it's happened. And and unfortunately the the the cafe space that we're in now does didn't have the hood and the ventilation system for us to be able to do the

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British breakfast. That was the main um crux of it. So, we needed to have this hood installed. By which time I basically exhausted all my own funds, which was a huge amount to invest, you know, just to to do the markets, let

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alone actually go into a space. Um and then I read about these this um grant system and I thought well hopefully maybe somebody can just help us to to expand and be able to you know use that as part of our business because that is

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quite a large portion of our business that comes through the door want the breakfast particularly sort of like Thursdays, Fridays and Saturdays is like a busy time for that but the people in the building itself they will come down and they want hot breakfast and this

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sort of things. So, it was a case of right or what can we do? We did look around the building, looked at replacing the ventilation system that they had currently, but you were talking of like hundreds of thousands to actually do it because it is, as Bill already said,

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it's a it's an old system. So, the only way to do it was to go outside from the main wall at the back of the cafe. So, it goes out to the outside and you get an a sort of built-in hood and ventilation system to be able to do that. And of course, for the health

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inspection part of it, we have to have that to comply to code and the fire regulations and things. So, at the moment, we can't do any of that. And so, it's kind of impeding a little bit on the income that we could the revenue

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that comes in to the business. So this is why I'm really hoping that you can uh approve what we need it for and you know it helps us as a look business to grow and something that I can eventually pass on to my son when I do eventually decide

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to Right. Okay, I've had enough now. So [laughter] yeah, so that's basically it. I hope that's enough. >> Yeah. [snorts] >> What what are your hours of operation? [clears throat] So right now through the summer months we because we still actually go to one of the markets

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because we missed it. So we we were at the market on Sunday. So we're open Wednesday through Saturday from 8:00 a.m. to 3:00 p.m. But once the winter comes back again, we were this has only just started this week. We were open Monday through Saturday. Um but we were

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finding that the business was a little bit slower on those first two days. Um, and so what we could take in on a Sunday at the market sort of balance that out. So it gave us a couple of days to just relax and rest a little bit. Um, but once the winter comes back, then we will

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be reopening. So the original hours, which was Monday through Saturday, so 8:00 a.m. to 3:00 p.m. every day. >> Okay. Good. All right. Well, thanks for being with us this morning. Thank you. It was good to learn more about your business. >> Thank you. And hopefully this will help

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other people find uh find find the Madhatter Mad Hatter Bakery and Cafe. >> I'm glad you enjoyed the cupcakes anyway. >> Yeah. [snorts] All right. Um is there a motion to uh approve the grant request? >> So move.

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>> Second. We got a motion by uh Commissioner Pierce, second by Commissioner Agno to approve the grant request recommended by our staff uh to support the remodeling of a restaurant located at 7300 Metro Boulevard, the Madhatter Bakery and Cafe. The amount up

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to $24,000. Uh any further discussion? All those in favor of approval of the grant as stated say I. >> I. >> I. Opposed. Carried. >> It's approved. >> Thank you very much. >> Good luck. >> Thank you. >> Thanks. We'll see you in the fall, I

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guess. >> Yeah, come by. >> Yeah, we'll do that. >> Probably never too early to eat a cupcake. >> Thank you. >> Yeah, thank you. All right. Um, manag manager Nundorf, you have one more

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matter, I think, for us. >> Yes. Uh this next one is an update and a introduction um regarding the old Macy's furniture site. So this is the property at 7235 France Avenue. Um and this morning I wanted to give you a brief

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update about the overall project. Uh but specifically I wanted to talk about the Northwest parcel. Um so uh this morning we're joined by uh representatives of the original developer Enclave Companies. Uh Ben Landhauser is here with us on behalf of

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Enclave. And then we have two representative representatives from the Doran Group. Uh Evan Doran and Jeremy Edwards are here from from uh from Doran. So um they are here because it's uh the Doran group's intention to uh

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acquire that Northwest parcel and be the developer on that one. Um so I wanted to bring them in front of you this morning and do the introduction. Um, but before I get into that, uh, uh, wanted to just, uh, give also an update on the overall project. And, and as background, uh,

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you'll recall back in 2023 and 2024, we had some long conversations about this overall property. Um uh and through through the city's procedures and processes, we ended up reszoning the site, converting it from a

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purely commercial site to a mixeduse site that would allow residential, office, and commercial. Um and then the H agreed to create a TIF district and at the time we issued uh three TIFF redevelopment agreements to reimburse

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the developers after they had finished the projects. We had these conversations due to the transformational nature of the changes that were proposed on the site. Um uh so uh in February of this year,

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Enclave did purchase the property from Macy's. So Macy's had vacated last over a year ago at this point. Um uh the initial intention was for Enclave to purchase the properties right away and start rolling. However, economic

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headwinds um had other thoughts. So, there has been a little bit of a delay in them actually moving forward. But that being said, um in February, they purchased the property. Uh they are working with our building department as we speak to get demolition permits in order. Um so, the the building that

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exists today would come down uh this summer and they intend to break ground on the two eastern buildings, the ones along the prominade later this year. So, they're working hard on that. Um uh for the northwest parcel uh

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Enclave is has opted to sell that parcel to a different developer since they've got two buildings that are already under construction. So in fact they are talking with different pro prospects to purchase both the northwest parcel and the southwest. Um again the the

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intention there is to is to split up the financial investment and bring in kind of different flavors and different groups to make the whole uh greater vision possible. Uh so this morning I have two simple goals. Uh one is simply to introduce the

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Dorne group uh to to the HA. Uh and then uh through many conversations we've had about tax incre increment financing, you had requested that uh you get first dibs, the first conversation about financing before we even submit anything for plan commission and city council

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review and all those things. Um so that that's why why we're here this morning. Uh I have met with the Doran group and I meet with Enclave regularly on this one. um uh they still anticipate the need for tax increment financing to go forward on

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all four of the buildings as they initially expected. Um uh but I wanted to again just to kind of get the conversation started here. So you'll recall that here's an image of the site. Uh this is taken a couple

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summers ago. Um it's an 8 acre site first built in 1977. uh originally was the Dayton's Home and Furniture Gallery. Eventually Macy's purchased purchased it from the Dayton Group. Um and the site has been vacant

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for about a year. Uh the city did have the property inspected a couple years ago back in 2023 uh with an eye towards the criteria to even use tiff. member in Minnesota state statute gives a specific set of criteria

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that must be achieved to even have uh tax increment financing be an option. So we did have the building inspected and it was confirmed to satisfy those state requirements. Um and at that time the city council and the HA agreed to establish a tax

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increment district. Um we chose just to include this one parcel. Um there's other strategies that would um include potentially parcels to the north or the south. Um we decided just to focus on what's in front of us. We try to use tax

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increment on a sparingly basis here in Adina. Use it when needed where needed. Um as opposed to just a broader approach and hope for the best. We don't find that broader approach to be in in the city's interest. Um, so that district was approved in 2024, but remember just

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because it was approved doesn't mean it actually does anything. So the tax increment collection will begin in 2028 and then last for 26 years. That's the typical TIFF law. So um so that step is

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in is in motion. Uh here's an image of the approved project from 2024. They took the 8 acre site with the large surface parking lot, subdivided it essentially into four building pads uh northeast, southeast, northwest, and

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southwest. Uh expanded and formalized uh an access road. Right now, a lot of people shortcut through the parking lot, but this would actually create a real road with real sidewalks and a place for people and a place for cars and trucks. Uh and then the site would be bisected

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with green space. um uh playing off of the Adina prominade that primarily goes north south in this area. Um so there'd be new green space in the center and then on the southern edge of the property there's the existing bicycle trail for

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the uh 9mi creek trail that of course would continue. Uh they do have to shift it and do some realignment so there will be some construction. Um but that that piece is actually one of the first that would get um uh removed and then replaced quickly uh for the duration of

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the project. Um so this image image shows the two buildings on the east. They're the larger footprints. Um and those are the ones where Enclave Companies intends to break ground on those this fall. Um, so,

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uh, before they can get to the to those new buildings, they've got to get rid of that existing building. And then a lot of site work. Uh, remember before this was a furniture store, this was a gravel pit. And what we found is when they filled in the gravel pit, they just

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filled in the hole with whatever they could find. So, there is a lot of excavation that has to happen on this site. um from the soil studies that have been completed, we don't expect a lot of contamination, but our practice has been there tends to

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be something and you know it when you find it. So that's again what another one of the reasons why the city decided to use tax increment just because there's a lot of uncertainty what actually is in there. Um a few years back when the city constructed uh the

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ponds in the prominade uh we found a bunch of railroad ties that were covered with asphalt and oil. So it wasn't just cleaning it up and putting somewhere putting it somewhere else. It was you bring in the environmental people and they do all their stuff. So so we're expecting a lot of uh commotion on the

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site. standard stuff. We It's not a super fun site, nothing like that, but there is a lot of work that has to happen just to make the first of these even possible. Um I want to shift gears now to the Doran

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group. So um uh over the last several years, Enclave has been um investigating several different strategies to realize this vision. One of their strategies was to find one single financer, one single

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equity and go all in and go big and do it all at once. Um that uh that strategy was not successful, right? It's hard to find someone to build four buildings all at once right on top of each other. And so instead they switch to the strategy that they're pursuing

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uh ultimately here of enclave building some of the some of the project and then selling the other pieces to other developers where they can diversify the financial investment. The Dorne group is not new to Adina, not new to the Twin Cities. They've been around for for several generations at

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this point. Uh initially founded by by the late Kelly Dorne. Um uh and currently led by Kelly's son Evan. Um the Doran group is responsible for um uh a lot of projects throughout the Twin Cities and elsewhere in the country. In

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Adina, they're most recently uh responsible for the Arya um the the apartment building at the corner of 66th and York. Uh the one that has kind of the curved or the scalloped edge uh on the eastern side of the street that was

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finished maybe seven or eight years ago at this point. Uh, one of the interesting things about the Doran Group is that they are a fully integrated real estate company. So, internally they have their own developers and finance people, but they

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also have their own architects. So, they keep a lot of that in-house. They have their own general contracting uh folks that work with them as well as their own property management team. So, rather than subbing out all these various tasks to different people, most of that they

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can do in house. Of course, they still hire subs. They have to, you know, there's a lot of other work involved here, but having control of all those primary groups really brings cost efficiencies to the conversation. So, for for the Northwest site, the

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Doran group wants to shift focus a little bit from all ages apartment to 55 plus senior housing. The concern being that um on the eastern side of the property, we're already going to see about 450ome

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new all age apartments. Um the 55 plus category is a little bit different and that's right now that's uh uh it's not overlapping onto what's already happening next door. Um but the the folks that rent senior housing tend to

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like even larger units than than others. Um, and in in Adina, we've always seen the units skewing larger for the last 20 years or so. Um, that's just what the market is. So, at this point in time, we're still very early in in this whole project. Um,

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but we're uh estimating that the total development cost is just over $71 million. So, it's a a pretty pretty substantial in investment here. uh working through the numbers, we still find that the cost of construction, the

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cost of meeting some of the city's policies like affordable housing and sustainability increase the price and reduce the profit. Um so they still do expect to need a tax increment note to fill in that financial gap. Um it's I mentioned it's very early in the process. So, uh,

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at this point, we have not seen a full financial analysis or site plans or architecture or anything of that sort. But again, I wanted to bring this concept to the HR early because I know that once they go through the planning commission process and the site review

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process, we're still going to be in the same situation that we were in in 2023 that there's a financial gap and we'll need tax increment increment financing to reimburse them to help fill that gap. So, here's images of the um of the

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concept. On the left is the original concept from 2024. Um the the blue shade is retail. There'll still be retail. The gray is the indoor parking and then the green was anticipated to be the lobby for the

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apartment building. Um and then on the southern edge of the site is the prominade. Remember for this proper for this project the city required a 60 foot wide east west pedestrian area. Uh it it serves two purpose, three purposes. Um

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just light and air for the residents. Um it also serves as public access for the citizens and people that are that are at Centennial Lakes in the Prominade. Uh and then also fire department for safety access in case you have to get an ambulance or a fire truck. It serves

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that function. So the image on the right shows the general layout that Doran will be proposing. Again, this is still subject to full staff review and planning commission and council review, but you notice the footprint is a little bit larger. Um uh

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and that's due to the fact that um for senior housing, they the renters there expect a little bit larger apartments and that kind of just moves the footprint. So on the west, north and east sides of the building, those walls will stay about the same, but that

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southern uh wall will be shifted about 50 ft or so to the south, which means that the prominade will get shifted about 50 ft to the south. Um so when all is said and done, the components that we expected will still be there. They'll be slightly rearranged. Um

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uh but that that's the basic concept that they'll be pursuing through the planning commission. With this project though, the financial needs and the public benefits are the same. In the future, we'll run through a full financial analysis and confirm what

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that actual dollar amount is. It's way too early to even begin that conversation. But if you recall with this particular project, we negotiated a full package of public benefit in order for tax increment to be used. While the Dorne group will be the new developer

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that delivers the project, at this point I'm still expecting the public benefits to be the same. Um, so, uh, in no particular order, those benefits will include affordably affordably priced units in addition to the market rate, new new outdoor public realm space on

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all four sides of the building, internal shared public parking, uh, if we need if Metro Transit needs it in the future, they would allow for a featured transit easement. um if if it's desirable to do a special service district for the commercial

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businesses in this area in the future, they would be agreeable to that. They're willing to set hiring and contracting goals so that construction workers and small businesses of all types have a fair share shake at getting a

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construction job or getting a contract. From a fiscal perspective, this again represents a massive increase in our tax base. Those are the projects where where we use tax increment. Um, right now the property pays about $348,000

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each year in taxes. That's a lot. When these four buildings are finished, this site will generate about 3.6 million a year in property taxes. So, um, again, that that's that's where we where we really focus with these kind of larger

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scale projects. This project would also generate a lot of fees for the city. Now, these are mandatory fees that we apply to everyone. We're not just picking on this developer. Um, but for these big projects, those fees are in the

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millions. So, park dedication fees, sewer fees, water fees, those are uh each one of those fees for a project like this um can be a couple million. So, those go into the city's sewer fund

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or the water fund to help fix leaky pipes or improve pipes and whatnot throughout the city. Um, we would also expect to uh have a park maintenance agreement in place here. This is something the city has done for decades. when there's residential users or fact

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frankly any user along the the park areas um we assess a park maintenance fee to help offset the costs to maintain Centennial Lakes Park in the prominade uh it's a heavily programmed park it's well-loved well visited and visitors

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unfortunately break things wear out and generate trash and so these park fees will help offset the city's other costs I'm sure there's other benefits that I forgot not to list here. So there I put a catch all that there's probably other things that we'll identify. Um but this

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is the the set of public benefits we initially negotiated. I expect I would expect them to stay the same on this site. And then just a little bit about TIFF and some of this is is old hat. We we have the conversation a lot. Um but I

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still want to reiterate that uh in Minnesota the use of tax increment financing is guided by state law. a city council or an HA just can't make up their own rules. It's all has to go through the state. But we do have a a tiff policy here in Adina that frankly

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is more restrictive than what state law would allow. And we like it that way because it gives us more focus on where we want to invest um tax dollars and where we don't want to invest that. Um so we the H created the TIFF district for the size and duration that we think

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we'll need. Uh we don't try to oversize them. Um, and as we discussed earlier this morning, we tend to issue pay as you pay as you go tiff notes after the project is finished. So that's a a a key point is rather than providing financing

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upfront and and you know crossing your fingers and hoping for the best, we provide a tax increment note after they finish the project. And then that note is basically a pledge or an IOU that says, "Thank you. You did what you said you were going to do. when you pay your

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taxes for the next several years, we will rebate some of them back to you to reimburse you for the for some of these eligible costs that you incurred. Uh when the city issues a tax note, it is not an obligation that falls into the

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general tax levy. Um the repayment of that note only comes from the taxes created from this property. So if they overperform, great. That helps everybody. If they underperform, that's their risk. The city is not damaged by

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that at all. And also recall with tax increment financing, those base taxes that are not the incremental are always distributed to the city, the county, the schools, the state. Just like always, we follow the state law for that.

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Um, and then also with tax increment financing, the city or the HA does get to keep uh and retain a portion of that, usually up to 10% for administrative expenses to make sure that the cost of of the legal fees and just all the

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administration expenses are borne by the project, not by the general taxpayer. So those are those are policies we always apply. And the fundamental uh message here is that when when the city of Adina applies tax increment, the financial

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risk is always structured to rest with the developer, not with the city taxpayer. And that's something I can't repeat enough. Um when the city does create a a tiff agreement, we work with uh our legal uh

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adviserss at Dorsey and Whitney and our financial adviserss at Ellers Associates. I would expect that to continue for this project as well. And when we actually when the process or when the proposal gets further down the road, like when they actually submit something that has detail on it, uh

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which should be just a few weeks away, um we will scrutinize that budget, review their financials in depth, in detail. Um and we will uh estimate the value of that tiff note. Um we don't uh

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we we we don't guess. we actually look and and figure it out. The goal is is to make this project competitive with with all the peers in the marketplace. Investors can invest anywhere and while they love Adina, if they can make more money in Nashville, they will invest in

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Nashville. So, we want to make sure that we can be competitive um uh in the marketplace and achieve typical market returns. Um uh we are not striving to to make a home run for the investors, but they need a solid

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base hit. Um so we want to make a typical return. Um we also do uh according to our TIFF policy, we limit that TIFF note based on the value of public benefit they actually deliver. And that's something that's unique to Adina and something that that uh is not

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addressed in the state laws. But we found that works better for us as a community to make sure that from a from a fis fiscal perspective um the city and the city residents and taxpayers and visitors do receive public benefit

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value. And then we also do scrutinize the project at both the front end and the back end. So if they if things come in under budget, which I think is pretty rare, but in case they do, we will reduce the size of that note. Um so so

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there's a lot of scrutiny that that is still to come. Uh we also will negotiate the interest rate to make sure that the interest that is paid um on the note does not exceed the interest that they're paying to the bank. We don't want interest to be a profit source, but we do want to make sure that the project

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can stand on its own. Um and then finally look backs and clawbacks in every one of our TIFF agreements. Again, not unique to to to the Dorne group or to Enclave, but every one of Adina's TIFF agreements includes look backs,

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which is a chance to look at the books at various points in the future to make sure that TIFF is not being overused. We want them to to to reach a a typical market return, not the home run. So, um if they hit the home run, they don't

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need TIFF, and we will shut it off early. Uh and that's what a clawback is. the the legal ability where if they their profit exceeds a certain threshold, our tiff obligation is over. So, uh that's where working with uh legal and

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financial adviserss is really in our community interest to make sure that we can support the project but not overly subsidize it. So, this is just the beginning. There's many next steps and I I I don't want to lose sight of that fact. Um uh I

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mentioned representatives from Enclave and the Doran Group are here with us today. Um we have very limited information at this point, but we wanted to give you the first sneak peek here and alert you that uh that the Doran Group is expected to purchase it. We would then write a new redevelopment

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agreement with them and based on everything we've seen, we still expect uh a financial g gap to be there. TIFF can be used to solve that gap. Um in the weeks ahead uh they're expected to submit a full site plan to

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the um planning commission. It's for staff review, public review, planning commission review, city council review. So there's that whole entitlement process because they haven't approved site plan and now by changing the footprint to meet the market for the

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seniors, they've got to amend that. So there'll be a whole round of public discussion there. Once they finish with that, we expect to come back to the HR with a uh a TIFF redevelopment agreement. So, these are

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those 300page contracts that I bring to you every every couple years that really has the full scrutiny, the full detail. So, we'd be looking uh and we could expect to see that if all goes well in the fall. Um uh late summer is probably

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unlikely, but probably the fall of this year. Um, at that point, the city and the H can take a step back and then it's all in the developer court. Once they they know that they've got an approved site plan once they know that the city

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uh has a TIFF contract in place, then they go and they lock in their equity to build the project. They lock in their construction debt. They actually take title to that land. um work with this with the architects to get the whole thing designed, get it get the proper

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permits, go to groundbreaking, take 18 months or so to build the project, then this then the H um gets involved again. Once they've finished everything, we go through the books a final time and issue that TIFF note. So, we're here on

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step one. Um so there's a long way to go on the on this disc discussion but again we wanted to bring this to you first um for your discussion. So with that in mind um I provided a lot of information about the transformational nature of this project.

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It's a massive increase in our tax base both residential and and commercial really adds vitality as we had hoped to achieve in that greater Southdale plan. rather than large surface parking lots. We'd rather have happy people living and working and shopping. Um we've also

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again reiterated that the cost of construction is not going down. Uh it's stable but still going up. Um and that tiff is necessary to fill that gap. Uh we've used tiff for these instances before. This is another one where again

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I haven't gone through the full numbers but tiff will be necessary to enable that private equity and to enable that that um that construction debt. Uh the Dorne group has proven to be a capable partner. Um they brought a couple slides and again to share with you this morning

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and and again they're here to answer any questions. So with that I'll turn it over to the uh Mr. Chair if if you don't mind I'll turn it to the Dorne group. um they can run through their information unless there's any questions that you have of me first. >> Hey, Commissioner Agnum may have a question for you. >> Sure.

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>> I did. Thank you. Um and I I think it was helpful for you to walk through and kind of just remind us of the overall process um of TIFF as we're considering these projects. I think what for me is unique with this one is we had the

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discussion of TIFF previously when we were first going through all of the site plan review. Um and I I know that we approved it to a certain point then. Can you kind of help me understand then like what the distinction is of these

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subsequent approvals compared to what has already been approved. >> Sure. Sure. So um the city and the HA uh along with Enclave executed three redevelopment agreements. the one that

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uh exists on the east is underway and moving along as they go through their demolition. Uh the southwest uh is kind of on pause right now. That'll we'll probably come back and talk about that later this year or next year. But the Northwest agreement is with Enclave. It

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is not transferable. They can't just pick someone and assign it to them. You, the HA, the city has control over who can can possess that agreement. Um, and also that that agreement calls for uh mixed use uh that is not senior housing

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that has a whole level of office space that is no longer really in the market. Um, so we need to update that as at as a minimum. That old agreement also anticipates an investment of about 50 million where this whereas this Doran

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proposal is an is an investment of over 70. Um, so we need to I mean at this point I'm expecting just to scrap that old agreement and replace it with something that's custom written for the Doran group for the project that eventually would work through those

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approval procedures. So that's um how I would see it working out. >> Okay, that that's really helpful. Thank you. And so when we think now to this tiff district, it remind me does it include both the

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east and the west of France that we kind of collectively did and then we have agreements with each of kind of as you just described it each of the um I don't know parcel holders or however I want to say it. Is that how I'm supposed to understand it? Is we did the district

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and now this is carving it out for each parcel. >> Essentially, um, with one clarification, the city created two separate tiff districts, one for the west side of the street. Um, when that was moving forward and then a separate one for the east

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side of the street. While the while the conversation started at at the at a similar time, um they were on a both developers are on a different time frame. We don't want to co-mingle. So there's two separate tiff districts. And so this particular agreement is only

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applicable to what we call 72nd in France number three, which is the east side of the street, the Macy's side, the former Macy's side of the street. >> Okay. Thank you. And so when we did um the district then on

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the east side um so the one that we're talking about tonight um we had like a full amount that now is kind of being divided in to the three. Correct. What was that full amount? >> Sure. The um that's a good trivia quiz. Uh I don't recall off the top of my

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head. Um it was so on the east side with the two eastern buildings the north or northwest and the southwest I think the total tiff pledge would be about 20 million in that range 21ish

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I I I don't recall this specifically but in that range I mean it's a big number the overall investment is in the range of um uh like 300

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plus million 350 maybe. Um, so it's it's a it's a big tiff number for a humongous project size. >> Okay. Because what I'm trying to understand is, you know, do we already have that that certain dollar amount earmarked and I know you said that you

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hadn't quite gotten to the financials yet, but is it going to be more? And it sounds like you think that it is because the project cost is about 40% more. Is that accurate? >> Um, correct. Yeah, the initial project

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cost was about 56. This one's about 71 million. So, yeah, uh, significantly more. We haven't even started the discussion on the gap. So, for the previous proposal, the TIFF note was sized at about 4.5 million.

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Um, that was part of the 22 total that I was that I was uh mentioning. Um, for this gap, we haven't even started that conversation. Could be less, could be more. I'm not going to say it's going to be more with the developers in the room. >> Okay.

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>> Um, the other question that I had is more, and maybe it's too far down on like the site plan perspective, but we had already broken this larger parcel up and had new lines drawn. So, would that

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need to be redone? >> Probably not. So, the parcel size they they did secure the plat which establishes the boundaries of each of the parcels. Um that was approved a few months ago um maybe last year. Uh we

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think we can still live within those lines but the footprint of the building changes but we think the parcel lines would probably stay the same. >> Okay, that's all my questions for now. I'll probably have more later. Thank you, >> Mr. Pierce. Um thank you. Um, so you've

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answered probably half my questions. Um, the way I think about this, and I appreciate all the detail, but essentially the first project is

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scrapped and we're essentially starting over with that parcel. >> That's that's yeah, >> that's a fair way of looking at it. And because we're starting over with that parcel, we'll get a new project, right? Got to do a new site plan. Based on all

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of that, you would come back uh with an anticipated gap that we think we would uh use TIFF to help cover. >> Correct. Um and so then my only other question [clears throat] the um

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the original project which we've already done all that work for if we said well we don't want to do this project we want to stick with the first project then what happens there?

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>> Sure. So with the reszoning of like this the city council has sole discretion. you could say no to that. Um, it's uh it's beyond our controls to force a developer to build something that they can't finance. So, we wouldn't, you

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know, if it's not financable or marketable, you know, we can't force that upon them unless we're willing to fund it, which we're not. >> No, no, I'm assuming the current project is good to go. We've closed the gap.

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We've pledged uh tip, it's in your second slide or so to enclave and so if we say hey thanks for this idea however enclave we want you to build the first project. Do you have any insight from

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the developer as to uh why they're seeking to do this other than what you stated before? >> Sure. Yeah, I had mentioned um uh the initial plan well initially enclave had was working a couple different

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strategies. One strategy was to find one investor to fund the whole thing and they were moving far down that path. That that did not pan out. Then they started looking at at the other strategy they were pursuing of individual

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investors for each building. Um and then that led to the third strategy of individ individual investors for some and then bringing in others to build other parts. So they've been looking at a whole lot of of different ways to build this. Um uh when we approved the

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contract in 2024, the TIFF contract and the site plan, they were on a path that ground, they were hoping ground was going to be broken in early 25. the economy had other thoughts and that did not happen in spring of 2025. So right

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now this is um you know there's no right way or wrong way to do it. Um but right now they're finding that the marketplace is not investing in that initial concept plan. >> Okay. Okay. Thank you >> Mr. Jackson.

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>> Yes. Thank you Mr. Chair. Um so thank you for the uh extensive discussion of TIFF. I think that we just need to keep telling the public what we're doing. Um, I have two questions regarding just our process in TIFF. The first of all is the

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TIFF collection would start in 2028. Does that mean the project needs to be completed by then or they just have to start paying regardless of whether it's complete or not? >> Yeah. Yeah. Great question. So, so the start and end dates are dictated by

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state law. So 2028 is the first year that uh tax increment would be collected and and identified by the tax assessors as tax increment. Um the developer has five years in order to complete the

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project and the city or the HR has five years to issue a financial pledge. So that five years started in 2026. So we we things never go perfectly, right? Especially when you've got mega projects like this, there's always uncertainties.

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And so we try to push that f the start date when the clock start when that 5year clock starts running. We try to push that back as long as we can. So um so the city has uh until about 2031 to issue financial obligations. Um, but at

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this point, the way the state law is written, the way the TIFF district was established, TIFF collections start in 2028, whether they're fully completed or partially completed. Um, for any TIFF note that the city issues,

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um, what's the right way to describe this? uh they they will be required to pay their taxes every year. Whether it's a nominal amount or a huge amount, that's their obligation. The city has no obligation to issue a

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TIFF note, let alone make payments on that TIFF note until they finish the project that we agreed to. >> So, it um you know, it's in their interest and there's been a lot of stress on their side of the conversation. they need to get this thing moving

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because those once the tiff district is established that clock starts running and um it actually hurts them like delays not only they hurt them in many ways but it also hurts their tiff collection. >> Thank you. And then this is a more generalized question. It's my

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understanding that because currently it's 100% commercial that when it becomes at least partially residential that that residential tax will increase the amount of money that goes to the schools regardless of any you know even

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though the base of what gets paid out to the county, the city and the schools does not change that the mix of that uh because of the shift from commercial to residential means the schools will automatically get more tax revenue. venue from this property by the change of use. Is that correct?

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>> That that is correct. Yeah. It's it's called um fiscal disparities. And so I had mentioned that currently the site pays about $348,000 a year in property taxes. [clears throat] Half of that leaves Adina and either goes to the

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state or to the fiscal disparities pool. That was a decision that the state legislators made back in the early 1970s. Um, so that fiscal disparity law only applies to commercial. So when you change something from commercial to

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mixed use or commercial to residential, that 40% that that was leaving Adina is now staying in Adina to help the cities, the school, and the county. Um, so there's um there's a huge huge benefit there. >> Okay. Thank you.

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So, it's an interesting conversation where we and my colleagues have touched on this and we originally approved uh I'll call it a master plan for the whole site. Then we went from four parcels to three parcels and and

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now Enclave says they want to start building apartments along the prominade on the back side on I think that that's that's one of the parcels and then we got northwest southwest the other two parcels. So because the existing tiff agreement

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that we approved in November of 24 involved the master plan that our colleagues have discussed. What right does Enclave have to move forward on those apartments along the prominade when it's a subset of the

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master plan that was originally approved from a tiff standpoint? Uh well, they the right that they possess is they do have an approved site plan that would um you know, they're waiting for the permit to demo it, but they they're able to

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demo the site, regrade the site and start construction on any of the buildings that according to this plan. So, the two easterly buildings will move forward according to this plan, but as the site, it's the pads on the west that will probably change. Um, so I don't

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think the city can revoke that site agreement, but the city council certainly could reject a change to the western site plan. Um, but right now there's no changes proposed to the east. So they still have the uh zoning

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entitlements to construct the eastern portion. >> Okay. All right. And then uh the tiff eligible expenses we've talked about extensively in the past. Uh and Dina, we limit them. We limit them to public benefit being delivered and we had this master plan

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that had all these public benefits attached to it including underground parking I think and the prominade and then I think one thing you forgot to mention was the tiff eligible expenses site improvement. So to the extent you discover things there

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that were unanticipated or even the even the regular dirt work I think can be covered by tiff >> correct >> important I think to be thinking about here. Um, what I'm starting to get concerned about a little bit is

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we do the east side under the existing plan and now we moved up to the primary commercial corridor and now we've got one proposal for one parcel and no proposal for the other parcel. We've just you're proposing

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shifting the the to accommodate this use of the northwest parcel. you're you're suggesting we shift the prominad 50 ft to the south which shrinks up that pad >> and so what goes on that pad you know and then now we've got and I guess we

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had this before with the master plan uh and and maybe Dorne can help us with this when they get up to speak but now along the commercial corridor that has become a real vibrant retail corridor we're going to have the side of an

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apartment building along France Avenue, not the front, the side with the amenity deck pointing towards the prominade, which makes some sense. Uh, so I I want to hear a little bit more about how this retail is going to work and how that how that building would interface with

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France Avenue. Uh, and I guess you guys can talk a little bit about that because it's probably something you've thought about as well. Uh because we want to make sure that that that the buildings that go along that corridor maximize the potential of the corridor.

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We we hear all kinds of folks saying you want to be on France Avenue. Well, it's mostly commercial people. And I know that Commissioner Jackson made a great point that that's that's the property gets or the property tax gets peeled off for fiscal disparities and you're probably better off with residential.

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But there's something about the having the side of a apartment building 50 feet from France Avenue that at least conceptually for me is is hard to grasp right now. >> So, Commissioner Jackson. >> Uh, yes. Thank you, Mr. Chair. I don't

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want it to be I I'm really upset about about this. I'm not in favor of this, honestly. Um, so I don't want to my question to be imbued with that. I just wanted to make I always like to make the point that when we do shift to residential that the schools help because people have questions about the

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schools but I I don't like this at all. >> Yeah, Commissioner. Thanks, Mr. Chair. I I um this is to me very complicated and um I know we could we have complete

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control over process but personally I don't really want to hear from a developer today. This feels like to me it it should flow from the planning commission back to us. And so all the questions we've been

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asking you today are more related to HA financing construct. Um we haven't even had a uh preliminary view of site plan any of that. Um and so I guess I'm fine

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with hearing from a developer cuz they're here but it seems out of sequence to me a little bit. I'd prefer to have it go to the planning commission first and then I could get their report out, ask questions that way. Um cuz this

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seems very complicated to me and I need to spend a little bit more time um understanding it. >> Okay. >> If I if I could inter interject just to clarify, the developer is proposing mixed uses. Um there would

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still be retail on the first floor. >> Yeah. and then apartments stacked on top. >> That's what I want to hear about that. >> Okay. >> I think why they're here. Let's hear about that because that might help alleviate some of the concerns along France Avenue. Hey, going back to Commissioner Agnu >> and respectfully, um, Commissioner

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Pierce, I'm just looking for some clarification because I thought that we as a body had asked staff to come with come to us with like a heads up more early in the process about TIFF. And so based off of your

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feedback, I'm confused because I thought we had asked for them to come to us before everything went through the process. So can you clarify your expectations? >> Yeah, I start with don't be confused at all. I I think the conversation we've been having is about TIF financing. I'm

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saying I would rather have planning commissions report to say this is the project. this is the recommended site plan. And so what I feel like now we're going to do is we've had this

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conversation about TIFF financing and the developer is going to come up and start talking about a project and we're going to have kind of this discussion about a project that our planning commission hasn't even

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responded to. has they haven't even had a presentation of the um site plan review. And so that's and we can certainly do it right. They're here. We've got some questions, but it just seems a little out of sequence to me. >> It's a little bit like a modified sketch

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plan review. >> Yeah, >> which is fine. >> And Commissioner Jackson, do you have another point you want to make at this point in time? >> If I could chime in again. So, we should use caution. Um, site plan reviews are not the purview of the HR. So, you have

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many questions about the site plan. That's great. So do I. So does the rest of staff because we haven't seen anything. Um, but the purpose of today's conversation, two things. Introduce the Dorne group, who is a completely different body than the Enclave company,

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experienced, capable, and ready. um uh and then to just lay the groundwork that while they want to keep moving on this site, there's still a financial gap. So, there's plenty of time to have conversations with the planning

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commission at a city council meeting about site plan and layout and mixed uses and landscaping and sidewalks, but we should not let this financing conversation devolve into a site review. That would not be in order. Fair point.

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>> Thank you. >> Fair point. Um, who's Ben Landhalger? Which one is Who's Ben? There you go. Okay. We've seen you in the past. I think you're the you're the new Patrick Brahma. Okay. All right.

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Thanks for that. And Evan, I know. And we're gonna have We got Jeremy Edwards and is here as well. So, um, yeah, I think let's let's hear what Doran's ideas are. Um, what you want to do from what you

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want from us is what I understood, Mr. Nundorf, was, you know, are we still comfortable using TIFF as a the tool to accomplish some public benefits relative to this Northwest site?

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use awareness, >> I think. Can you all hear me if I just talk? >> You need the microphone for the um the recording. >> Yeah. Okay. Uh good morning, commissioners. Uh thank you for having us. Uh my name is Evan Doran. I'm the president and CEO of the Doran Group. Um I'll give you a little bit of background

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about the firm and then I hope to address some of the questions we've heard today. Uh and then we'll happily ask or answer others. Um but just as a quick kind of overview of who we are for those of you I think probably most of you were not around when we first did our project Arya um in Edina I think

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Mayor Hland you were still here I I don't recall others >> um we delivered that project in uh 2019 um but a couple things to note about us uh that are I would say slightly unique um for our company is that we are generally long-term owners. So we bring owner strategic mentality and and lots

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of deep operational experience to our our projects. We also generally uh uh invest significant amount of equity in our projects. So we are not what would be considered sort of a quasi merchant um builder. We we generally are investing 50 to 100% of the uh equity in the project similar to what we did in

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Adina or at Arya. Um, and that allows us to both retain a lot of control around decision-m in terms of quality, construction, long-term management, asset management. Um, but it also, I think, creates a lot of alignment with with the long-term approach from a city's perspective. Uh, we maintain

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strategic approach to asset management. Um, have been around through multiple different market cycles. Um, and then we also leverage our in-house services as, uh, Bill mentioned. We have our development team. We also have in-house uh construction and design groups as well as property management. So, we kind

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of can do all of those things uh and provide some best-in-class product while getting competitive pricing. Um the company started nearly 20 years ago. Uh Kelly was the founder. Um he had a long career in retail uh development uh beginning in the 1990s and early

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2000s. Um, we came up in the marketplace uh uh doing uh commercial retail and ultimately also student housing uh around the University of Minnesota which was where Kelly went to to school. Um and uh after kind of a number of of projects at the University of Minnesota

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totaling well over a thousand beds uh we uh pivoted and he pivoted into luxury multif family rentals. Um and we've continued that that product uh cycle ever since. um with the beginning of a mill and Maine downtown Minneapolis right across the river St. Anthony Bridge um and now uh own and operate

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around 200 units here in the metro have about 150 employees that are based across the metro at various projects and communities as well as our uh headquarters over at Eden Prairie. Um finally just talking a little bit about our team again the vertical integration.

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So, as again I've said, president, CEO, we have our full staff, Ian Prairie, uh, including our CFO, vice president, marketing, uh, general counsel, and then Jeremy Edwards, who's here, as well as our intern Aiden, who's with us for the summer, uh, uh, work on our development team as kind of the first of our series

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of, uh, vertically integrated companies. And then we have our design, construction, and property management groups as well. Um, I want to talk a little bit about the project. We didn't prepare slides because again, this was an HA sort of finance focused meeting. We we uh we are waiting to present aside slides related to the site and site

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plan, but I want to address just a couple pieces that I think got brought up in that respect as well. So, what we're proposing is not dramatically different from what was previously approved and proposed on the northwest parcel. The northwest parcel site as it was approved in the PUD was a uh

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generally speaking, I think five or six stories um over a parking garage. Uh it had commercial on the first floor along France Avenue. It had residential across uh and and on France Avenue on all sides uh and also had a mix of commercial rent

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uh retail as well as office and 124 units of multif family. So the building we're proposing or will be proposing today that dovtales into this discussion about tiff and uh the h is that we're proposing no commercial office but we are maintaining France

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fronted commercial retail. It's actually grown. So the original project was around 5600 square feet of retail along France. We're providing or or going to propose roughly 7,200 feet. Um and 13 roughly 138 uh age restricted

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apartments. So it's a net ad of about 14 or so units that'll get finessed and finalized as we go through the site plan process. Um two reasons to just touch on again for the expansion of the site. um we are more or less uh flipping the sort

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of orientation and size of the northwest and southwest building paths uh more or less and I think you'll probably hear from that from Ben either now or in the future as we talk about sort of what's happening on the west side but um it's important to note that the prominade remains the same in terms of its size,

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length, width, spacing, all of that essentially remains all the same. Um our building footprint grows for two primary reasons. uh the affordable uh not the affordable the uh active adult uh population which is again folks restricted to ages 55 and older. The

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reality is most of those demographics suggest that the average movein age of those of that population is around 70 years old. You probably could get that same data from Avidor which is up on uh Vernon 100 another age restricted uh project. Uh there's also an Amir project

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in Bloomington just down in Normanddale Lakes. Again, both of those are successful age restricted projects uh with average ages in the low 70s. So that would be the expectation for us is that the average movein population age would be around 70 years old. Those that

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population generally prefers because they've either been downsizing from a home or maybe a condo. They're likely living in the community already, but they generally want larger units. Um, typically two bedrooms as a the ironic twist with market rate is that in market rate units or market rate buildings

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oftentimes, um, the smaller units go first. They lease first because they're slightly lower rent, uh, maybe more population that can afford that on their own or as a couple. Um, it's actually the reverse in active adult. Typically, it's usually the larger units, the two-bedroom units that go first, um, and

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rent first because that's where the sort of population is downsizing from. Um, they also want a little bit more space. The dining table is like a critical element in unit design for these this population because most of the groups if you can picture your grandmother or your aunt or whoever is coming with that sort

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of uh furniture from their home. So they want that extra space to entertain to have their same lifestyle. And so we have decided to and and with intention built our units to be slightly larger. Um we have two projects that are active

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adult restricted age projects already under construction in Maple Grove and in Hudson, Wisconsin. Um and we are seeing the results of that demographic preference already. So that pushes the unit size to be a little bit bigger. Um and therefore to get sort of the similar

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unit mix that was generally in place for the original Northwest project. Um that is one of the reasons that that building footprint gets a bit bigger. The other side is the commercial use. Uh the retail square footage on France is important as as chair Havlin noted. Um

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but the original uh Northwest project uh that was approved had around 19 stalls on the ground floor public sort of public parking. We're proposing 40. So there's a distinct difference in sort of the spacing and what we're providing in the retail uh portion of this. And both

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of the facts of the expanded retail or expanded parking and then the inclusion of the affordable uh units in the building are really the two primary drivers of why tiff we believe tiff is going to be required to make this project work. So, um, at the end of the day, I think it's important to note that

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those those two primary drivers, plus some of the other public benefits that are still on the table, including potential earthwork, uh, public art, other things that are likely going to be all part of the required, um, TIFF agreement, are all still on the table, as uh, Bill noted, uh, will be essentially kind of recreating a TIFF,

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uh, redevelopment agreement should we, uh, be successful in in getting your approval. Um but the the affordable units and the parking are the primary drivers of that um tiff gap uh which again existed on the previous building. The previous building was just smaller.

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So as the building grows, as the value of the building grows, as the tax value of the building grows, the tiff gap will will change with that. Um I am happy to answer some additional questions. I know I got a little bit into the site planning process, which again we'll get into sort of more in full down the road.

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Um, but I'm happy to uh address questions you might have. >> Would you talk a little bit more about that retail and how how that would interface with France Avenue? So, if we're driving down France Avenue, you know, what's the exposure to retail versus the site of the residential building?

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>> Yeah, it's I mean, um, Bill, I don't know if it'd be possible to get Could you go back to the other presentation? >> And and I I would just comment fair point you made right at the beginning that this isn't marketkedly different from what was approved before, but we approved a

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master plan that that everything seemed to fit well together. [snorts] And so that's one of the concerns I think we all have is that does it still fit the, you know, the the the general notion that we all had as to >> how we would blend the public uses with

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the with the private investment >> to be partners in that. So go ahead. >> So I think two questions I think are in there. Um, one just thinking again about the retail specifically. So again, the plan on the left is the existing um previously approved PUB project. The

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commercial in blue is around 5,900 ft². We're essentially saying we're going to stretch that further south. As our building grows, so does the retail here. So just like it's now facing France, essentially all oriented towards France, you'd see it coming southbound on France Avenue, you know, to your left. You'd see that kind of uh corner, the the top

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corner there. Um similarly, you'd see it, you know, coming north um kind of as you looked across the prominade. Uh you'd see that same retail. So, we're essentially maintaining that same retail frontage on that ground floor. Um, it just grows. Um, and then I think the other question is sort of more of a how

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do these things blend together? I mean, I don't want to I won't speak for Enclave. Obviously, Ben's here, so I can't speak to their experience trying to kind of find the right mix of partners and financing and all those pieces across the whole parcel. What I can just tell you is that, you know, I think we've come to an agreement with

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them that that this is a complimentary use for them. um provides housing which was already again approved here. Um it just provides a slightly different type of housing as opposed to more market rate sort of more general market rate uh housing and is now an age restricted product. Um but generally approximately

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the same unit count 124 to around 138. Um so I think it still maintains that sort of complimentary use concept. Um, and I think uh allows uh Enclave to also really focus on some of the remaining parcels and kind of get their work going

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um as opposed to trying to take a huge bite of the apple um which in today's environment is candidly just extremely hard. I can I can at least speak to that from our own experience. So, just to be clear for me, uh, when I look at that original concept plan on the left, that

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was the Enclave plan, that commercial runs parallel to France Avenue from the north end of the building to the south end of the building in that blue area. Mhm. >> You don't have it set up that way from a coloration standpoint, but your notion

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is is the same that fronting France Avenue from the north end of the building to the south end of the building would be that strip of retail. >> Yep, that's correct. I mean, at the end of the day, yeah, the as you said, folks who are providing retail want to be on France. They want to face France. It'd

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be silly of us to try to tuck them in the back corner. We believe in the retail being a complimentary use here. We've um begun early stage con sort of conceptual. We haven't engaged with the outside community, but sort of thinking about what would be the right mix of uses here. And we certainly believe there could be some great uses in that

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space, but yes, uh Chair Huffland, it is correct that our current plan would essentially mimic this blue and just grow it further south by around another 1,200 ft or so. >> Okay. and and uh is there a possibility with the the design work that you've done preliminarily that you could create

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a distinction between the retail and the building itself by using employing podium height strategies so you have a little bit of a setback to clearly more clearly define the retail >> um we haven't gotten that far into the design yet um but the the intent would be that we would have parking below

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grade this ground floor level which would include the retail would also be structural in nature so we'll have likely pre-cast cast uh ability to sort of push and pull and sort of work with architecture to make sure that that is a highlighted component uh to to the building. I think Arya is a good example

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of what you did to try to accommodate a site where you you have the curvature on the on the intersection there on the southeast corner of uh York where Xerxes becomes York and 66 is there >> and then on the east side where it

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becomes single family residential you you had the uh the uh the separate entrances really almost looks like a townhouse sort of effect. And so you were you were good about responding to what you kind of needed to do to react to what the site was giving you in terms

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of the its surrounding circumstances, if that's a way a decent way to put it. >> Yeah, I think that's right. And again, not to get so far into the site planning side of things, but I think we we also recognize that, you know, we've changed the shape of the building here a little bit. Partially that's being driven by um

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unit types, just kind of what unit types fit in the in the corners um to kind of have those bigger units. But that's also one of the things driving the prominade facing amenity deck. We just think that the prominade is a really great feature of this whole this whole place. Um it's kind of the placem part of this and so

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to us having that be somewhat of a shared space um in the future operations of the building made a lot of sense. And is all your all your parking underground parking or is there some surface parking involved? >> There is surface there's publicly available surface parking in the parking

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like in the podium structure again around 40 stalls or so. Um and then the the building or the residential portion of the parking will be below grade under underground. >> Okay, that's helpful for me. Commissioner Jackson. >> Yes, thank you Mr. Chair. So I'm a

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little incredulous about this. You can't promise the prominade when you don't control this piece of property. And looking at this picture, um this plan eviscerates the public purpose that's perceived by the public. So site, you

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know, we we say we will give money for site prep. We give money for affordable housing. Those are invisible to the public. this prominade pushing down and which will then change the building to the south which is condominiums which people are screaming for condominiums in

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our town. So we're going to have fewer condominiums a ch we're going to gamble that enclave will produce the um uh prominade on their piece of property instead of on yours. So when we get rid of the prominade on this parcel, you are taking

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away the publicly uh perceivable public benefit. And um so I just you know when we issue tiff it's very controversial and we have to say look this is making our city a better place. We understand the business behind it

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that we're asking for affordable housing that the site plan is filled with junk that they put in to make the parking lot, right? And we have to clean that up. But the public doesn't see that. And so I just I want to say that this takes away all the public benefit except for

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along France Avenue. Um, and the the whole I'm not going to get into any other site plan stuff, but but as far as we're talking about TIFF, this really reduces the public benefit in my eyes. >> Commissioner Agnu, and I've got a comment, Jill.

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>> Thank you. I I echo everything that Commissioner Jackson said. Um I I I'm particularly concerned about the the fact that we were intentionally focusing on this prominade. Um and

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seeing that and I I understand like it still probably will exist. Again, can't fully control that now that it's outside of this site. Um, but shifting it any further south than what we have and seeing a larger masked building that to

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me it feels a little like even seeing this picture on the side, it looks like it's a big H, but those gray pieces would be perceived as walls to people that would be walking on the prominade as well. Um, so yeah, I'm just I'm

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disappointed to see this. I would say >> I think can I if I can interject I know you have a comment. I think what's important to also just recognize here is the central prominade remains an obligation of Enclave one way or the other. So whether it's on the northwest parcel and they retain that parcel

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because we our project is denied or we just don't move forward, it is still an obligation of Enclave to provide that public benefit one way or the other. So the movement of this prominade to the south is still part of the contractual obligations of Enclave to provide as part of their PUD approvals and site plan approvals. So, I I recognize that

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the shifting of it is a is a is a question and uh point taken. Um but I think it's just important to note that it's I don't necessarily think it's as a gamble um or view it that way because again it's still an obligation um to the master developer >> and we're and we're and we're

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[clears throat] contributing to that. >> I'm assuming that you wouldn't even be thinking about this project if it wasn't but for the prominade. >> Yeah, I mean the prominade is is the benefit. I mean that is um that's how we're orienting. >> The the challenge is that when you move

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the prominade 50 feet to the south, it shrinks up the southwest parcel >> and then we're left to wonder well what that's a future use. We don't we can't even define which was different than what we had on the master plan. There won't be any condominiums there. >> No. Which is the

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>> but it could be retail. It could be retail. >> It could be retail. >> Yeah. Um, >> so I get it. Commissioner uh >> Pierce has some Yeah, Commissioner Pierce has some questions. >> Um, just just a statement and this is

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this is just me talking. I don't think you should be trying to answer these questions. I think what this is very complicated. the conversation for us, the question was financing and we've kind of already

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answered that we're okay with TIFF for this uh original project. Um, I would venture to say that that is still the case, but it's very complicated and I I think you

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need to get in a conference room or at a Starbucks someplace with Enclave and figure out um what project you're going to go through the planning commission with because there's lots of moving

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pieces to it. Um, and so I don't want this feedback to discourage you from doing that next piece of work. Uh, but you're getting some I don't even want to say lukewarm from us today. Um, but blinders on answering

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the original question. We wanted to have the heads up if things were changing from a tiff perspective. We've gotten that. Um there's a lot more work to do to come back with a project that we would uh u be excited about. I won't say

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supportive of I say more excited about >> take it. >> Yeah. For for me I think the u tiff eligible expenses are still there. I thought commissioner Pierce said it well. Um certainly when to take a look at it. Um

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I think we all understand that those tiff eligible expenses that relate to uh public benefit being delivered are critically important. Some are some are visible, some are always invisible. You know, people don't people don't appreciate the underground parking I

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don't think are the site improvements you have to make. And the affordable housing too is something that we've come to realize over time that we have to be a partner in. um where we might have put that burden on you in the past and and you've had that happen. Uh it doesn't work anymore.

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So if you want it, you got to partner up some way somehow. So um I don't know. You've gotten some interesting feedback this morning and so is Mr. Nuendorf. Um but for me, what I what I worry about is we're gonna have a pad to the south

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that's shrinking >> and what's what are we going to do with it? And if we do this peace meal like is being suggested here, we might have to compromise ourel into something in into a position that we didn't want to be in.

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Can't help but be left with the thought about the backside of all that retail by um pinstripes facing France Avenue. You know, that was that was a mistake that got made and I was on the council then.

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shouldn't have look it shouldn't look that way back side of something facing France Avenue. So um and for Enclave, you know, I would say

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I'm pretty disappointed that um you couldn't hold this whole thing together. Um, we were we were an earnest, willing partner with you on a plan that you came that you said you could deliver and you're not delivering what you said

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you'd deliver. And I don't care about market conditions. You should have had your financing lined up to do what you said you were going to do. And so now we're left in a position to kind of help you pick up the pieces and try to figure it out.

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and and and fortunately for you, you got a you got a company that's willing to look at that Northwest parcel that's got a great reputation for doing good work and uh fully integrated company that can that can do the job, but we've got to

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think about it in a different way. So, all right. Thank you. >> Thank you all. Mr. Chair, the final the final two items under under my report uh Mr. Newondorf was going to give anyway, they're just

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meant to be uh updates on a couple of projects that we've had at the H and you've had some involvement in. >> Right. Yes. Simplyformational. So, thank you for your input and and comments and suggestions for the for the Enclave and Doran proposal. Um, but just two quick

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updates here. Um, Coders Clubhouse was another small business that we supported with a streamline grant. Uh, happy to announce that they had their ribbon cutting a month ago uh and their grand opening just a couple weekends ago. So they are up and running uh providing uh

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the the educational services for our for our uh school age uh kids to learn all about computer coding and maker spaces. So uh uh we will issue them the the reimbursement grant for up to $24,000. Uh that uh helped defay the cost of ADA

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improvements and ventilation improvements to that building. Uh and then the the last report is just an update on the bigger project across the street from this one. um 7200 and 7250 France. Uh that's the Craftsman office

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and the setting apartments. We've kind of dabbled with this one with updates, but I wanted to get something more complete in the record. Um if you've driven by there lately, that's where they are, right? The the the Craftsman office is is looking good. The walls and windows are going in. They're doing

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interior finishes. Uh they are going to start moving in tenants in October. So, um uh I've already started [clears throat] a conversation with them about um uh getting a tiff note issued in a timely fashion. Uh right now the ball's still in the developer court.

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They've got a project to finish. They're they're on track, looking good. Um but they've got a long way to go as far as the paperwork and the reporting that I'll that I'll look at. Um but I do expect to issue a tiff note on that one in in early 2027. Uh we want to be

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responsive to them when they when they get finished earlier than we thought we thought they'd be. Uh we didn't think they'd be done in October. They they're moving fast. And then next to that is the setting apartment. Um uh also looking good as they continue to stack those those panels uh on the upper

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levels. Um this project we uh we use a bigger amount of spark instead of tax increment uh and [snorts] issued a forgivable loan. So that project is on pace um to be delivered in the spring of next year. and after they deliver it and

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after they get all their paperwork in place, then we would actually forgive the loan. So, um, just wanted to prov to provide an interim update on these projects. Uh, if you drive by, they're looking good. I oftentimes get questions. I thought you might have questions, too, about where they are. So, uh, wanted to give get that one for

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you. But that's what I have this morning. No action necessary. Just wanted to update you. >> Yeah, thanks for that, Commissioner Jackson. >> So, Mr. Afternoon, Dorf. How does the um timeline with Spark affect the forgivable loan that involved with that 7200 France building?

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>> Sure. Sure. So, when we issued Spark on this one, um they had to they had to achieve certain milestones and prove up that they expended the monies by a certain time frame. So, uh, uh, we issued the spark, most of it in 2025,

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um, to meet those milestones. Um, but in case [clears throat] they don't finish, in case something goes horribly off the off the rails, we didn't just give them a grant. We structured as a forgivable loan. So, in case that something goes wrong and they goof up, they owe us the

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money back. um if that were to happen, which is pretty unlikely at this point since they're moving, um they would somehow get the money back to us and then it would be uh you know redistributed to to the places that already started. So uh uh the the

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forgivable loan we are still not willing to forgive it till they finish it and uh that should close it out. So the deadlines that we set for that are are so the difference between a grant has to the comp has to be completed by the end

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of this year. We set deadlines for the levels of construction to be done on this and that's in compliance with state law. >> Correct. >> Okay. So okay we had two different programs two different ways of measuring the timeline and that's all kosher. >> Correct. >> Okay. Thank you.

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>> Yeah. So the Yeah, it's a great question. Um, so the forgivable loan, the the use of spark funds on a forgivable loan basis doesn't require that all of the work involved in the loan be completed by December 31.

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>> Sure. State law does not require that, but it's been Adina's best practice that we only issue the funds or forgive the obligation when they actually finish it. That's been a safeguard that Adina has added uh since I've been around. So, we've got close to a million dollars

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left in the Spark account. Is it possible we could use some of that money or all of that money on the Macy's site as a as a forgivable loan? >> You know, possibly. The way we structured the original agreement provided that as an option. Um, what

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they'll need to do though is uh actually break ground and start digging. And so uh uh uh once they actually get their demolition permits, I would enter entertain the conversation with them about whether or not that makes sense

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and then bring it back to you. Um but the it's already June and uh end of the year is coming quickly. So I don't know if that's realistic, but it's still an option that we've not eliminated. >> Possible option that also reduces the need for tiff. >> It does, right? And that that's the

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that's the biggest benefit is that we could reduce that tiff note and then close the tiff early at some point. Um so try to keep as many options available for us but too early to make a final determination. >> I'll tell you the way you get the best view of the craftsman is to go sit in

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the parking lot at Barley Lens Barley's because it's elevated there. It's just it just looks terrific. >> Right. And then I can also tell you that I had a meeting yesterday with one of the Opus folks and they're 70% leased up on the new building already.

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>> So they've got some good tenants coming in there, >> right? Yeah. The these class A office buildings, it's that flight to quality. We've talked about it for many many years, but once you actually start delivering the building, you see it happen. So, um I think both of the the

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buildings, uh the Arcadia by Opus and then the Craftsman, I think they're going to be very wellreceived in the market. We'll have a lot of good businesses there. >> Did they decide to do anything relative to a restaurant and the Craftsman? >> They haven't. Oh, in the Craftsman. >> Craftsman or Opus? I mean, at one time I

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recall there was a conversation about having a restaurant and the Craftsman and and at the Opus project. >> Sure. In the Craftsman, they have there's a coffee bar type type business on the first level in the lobby. Um, it's not of the caliber of like a

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fullblown Starbucks or Caribou, something like that. It's a smaller scale coffee operation, but it'll be available for for employees, clients, and the general public. Um, but that's more of a small operation. at the Arcadia across the highway from us here

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at city hall. They have that uh the southwesterly corner of that building is designed and they they just started pouring concrete about a week ago. Uh that's designed as a standalone operational restaurant. So no announcements have been made as far as

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users of that one. Uh as I recall the zoning says that it's commercial on that site. So, while it's been designed for restaurant, um, uh, it just full disclosure, it could also be a bank, it could be a dentist office, it could be lots of other commercial uses. Um, but

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right now, Opus is still focused on landing a restaurant there. They've got plenty of parking for it. They've got great visibility. They're building an outdoor terrace with outdoor seating. So, they're putting all those fundamentals that a restaurant would need. U, but no announcement yet on who that tenant might be. >> Yeah, that begs a question about what's

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going on across the street with Hemple. Sure. The >> Oh, it works right. >> Sure. The city uh owns the property at uh at Eden and Arcadia. They uh Hemple and the Monarch Group and the Jester group are working together on that site

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plan. Uh we should have that here at city hall in the next few weeks and we are targeting mid July to go into planning commission and city council for sketch plan. So you should be seeing that right after the holiday. >> Okay. and all the materials and

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equipment that you see kind of stationed in that area right now. I talked to the city engineer yesterday. He thinks that'll be cleared out by the by the end of summer. >> And then we've got a bridge dedication on the 25th. >> 25th. >> Okay.

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Anybody have anything else? All right. Is there a motion to adjurnn? >> So moved. Second. Yeah, we got a lot of enthusiasm around that motion by member Agnu who beat member Pierce to the or commissioner Pierce to the

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to the motion itself and Commissioner Pierce seconds. And any further discussion? All those in favor of adjourning the move uh the meeting of the D hous Housing Redevelopment Authority this Thursday, June 11th, 2026, say I. I. I. Opposed, carried. We

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stand adjourned.