EDC 12-01-2004 - Laserfiche WebLink

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- . ~ e ~~HILLS CITY OF ARDEN HILLS, MINNESOTA ECONOMIC DEVELOPMENT COMMISSION DECEMBER 1, 2004, 7:00 A.M. CITY HALL 2ND FLOOR CONFERENCE ROOM, 1245 WEST HIGHWAY 96 Vice-Chairman Kunkel called the meeting to order at 7:15 a.m. Those in attendance: Chair Aplikowski (arrived at 7:20 a.m. ), Vice Chair Bruce Kunkel, Commission members Kevin Kelly, Ray McGraw, Dale Beane, Chris Ashbach, Jim Paulet and Ed Werner. Staff: Scott Clark, Michele Wolfe, Peter Hellegers: Guest: Sid Inman, Ehlers and Associates: Council member Lois Rem. Mr. Clark gave a status report on the City/Army meeting of December 1,2004, Future TCAAP related meetings were noted including December 8, 2004 (Nuclear Regulatory Meeting) and January 13,2004 (Master Planning Advisory), Mr. Clark also discussed that the financial modeling process has begun with Ehlers and that the process will be completed by early January. Mr. Sid Inman, Ehlers and Associates made a presentation on how a third party financial consultant reviews the need for financial assistance on redevelopment projects, The highlights of his presentation (including observations by staff and questions by Commissioners) follows: - The dynamic conflict between a City and developer is that both operate with separate e models ( profit vs. policy implementation) - All analysis needs to meet a "but for" test which means that but for assistance the project would not be built. - The Office of the State Auditors will be issuing guides regarding "but for" tests The need to know the deal by the policy makers is key in helping answer questions and educating the general public on why assistance is being given and the ramifications Discussed the issue of look back and protecting the City from not providing assistance that is not needed - Policy considerations for the City include minimum time for assistance, minimum amount, risk tolerance, fiscal disparities election, etc, Restrictions can be place on the increment or assistance but needs to be measured back to the ability to do the deal. Caution against guaranteeing an income stream - Discussed the difference in general obligation bonds, revenue bonds and pay-as-you notes Need to relook at business subsidy policy of the City Develop a communication plan/public relations on financial decisions being made Discussed the overall concepts of internal rates ofretum vs. cash flow. Also illustrated different types of businesses and needs (e,g. townhouse devcloper needs an 8 to 10% return and a restaurant will need 25% .