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ARDEN HILLS CITY COUNCIL WORK SESSION—DECEMBER 13, 2010 7 <br /> 2.A Presbyterian Homes Tax Increment Financing Contract(continued) <br /> Ms. Kvilvang, Ehlers and Associates, reviewed the financial TIF information with the Council in <br /> detail. She noted the fees charged by other cities were all over the board. There was no clear <br /> answer on how to charge issuance fees. <br /> Mayor Harpstead questioned what the present value of the financing would be if the time length <br /> would change from 14 years to 16 years. <br /> Ms. Kvilvang stated she would have to review this further before providing an answer. After <br /> calculating this amount, the total would be approximately$500,000. <br /> Councilmember Holmes reviewed a section. in Packet 2A, Attachment E and asked for <br /> clarification from Staff. <br /> Steve Bubul stated the only part that was unclear was the future value of the 118 of 1% being paid _ <br /> all up front at closing. The lump sum was intentionally ambiguous. There were various ways to <br /> calculate the amount and no developer would choose this option. He noted he has seen other <br /> City's with similar policies for small bond issues. However, this was unusually large and may <br /> need to be readjusted. <br /> Councilmember Holden questioned why the policy was developed in 2008. <br /> Steve Bubul indicated no policies were perfect, but the new project proposed by Presbyterian <br /> Homes was larger than the one completed in 2008. <br /> Councilmember Holden stated neighboring cities use a differing policy. She questioned how the <br /> Council should proceed. <br /> Ms. Kvilvang explained the bond rates provided by the City would greatly benefit Presbyterian <br /> Homes as the conduit financing was tax exempt. <br /> Councilmember Holmes questioned what amount Presbyterian Homes would be financing for <br /> this project. <br /> Ms. Kvilvang indicated $38.6 million would be financed for this project. The total project cost <br /> was approximately$50 million. <br /> Councilmember Holmes stated she was disappointed that the current policy wasn't working for <br /> the City. She indicated there were no guidelines on how to negotiate lump sum policies. <br /> Councilmember McClung explained that no one policy would be able to address all unforeseen <br /> issues. <br /> Councilmember Holmes questioned if staff was aware that Presbyterian Homes was expecting a <br /> $100,000 lump sum. <br />