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<br /> MENDOTA HEIGHTS
<br /> CITY OFFICES EVA LUATI ON
<br /> Ov,NERSHI P LEASE COST C:Or--1PAF: I Sm'.lS .
<br />The 01,.\10 or 1 e2.se ques.t i on for 2,' mun i c i p3.1 90'.) e r nme n t opE'rcttiDrl i "::;.
<br />reason.~bl y ~.traight forvJard II.} i i: h re~.pect to d i r. e c t quo?=-tion'=,~ bu t
<br />exceedingly complex CoJ i th respect to indir-e,:t i :;."::.Ij 12-;.. J n geno?r'd.l
<br />terms, a government,3,l en tit)' should be able to provide o-f-f-ice
<br />space 1 e=.s E')<pens i ve 1 ;.' than a pr.jl)3.te en ter-pr' i =.e oper-atic'o,
<br />r--llJ n i c i p a.1 C0S. t S..9.V i n 9s include:
<br /> 0 in ter'es t CCrS.ts
<br /> 0 profit-=:-
<br /> 0 i n~,lJr~.nce
<br /> 0 property t .='.x e s
<br /> 0 income t a)~ e 5
<br /> 0 -:;.ome s~.l e"=- tax e s
<br />Th e se ~.2.1.) i n gs can amount to ;1;4-1.8 per' s.q IJ 2.r e f ,:,Q t r' e n t ct 1
<br />equ j ,.1ft] en t=..
<br />A first cut financj2.1 qUE-s.t i on for the mu n i c i pal it>, i =. \"Ihe ther. or
<br />not debt financing of sufficient quant i ty can be ':s~clJr>?d to
<br />permit the project to proceed. Sufficiency fa 11 -;::. 1..\1 i t:h i n the
<br />bonding a.lJthorit>' 1 i m it=:. a,s v,le 1 1 2-:;. the pCllitical 2ccep t.?b i J i t/
<br />1 i m i 1:-:=. since bonding genera11 y requires a publ i c r'e-ferendurTI .
<br />Since no e qui t ::/ is i nIJo1')ed ~ the d.moU n t c.f debt i.;:. :. ion j fie 2n f: 1 >'
<br />higher than ~}.) i t h a project \J.J i t h e q IJ i t ~,' P ~.r tic i pat i on i n'Jol')ed.
<br />Pr i vB.te de')elopment genera.l1 y must p.~y .s. higher r. ate of in t >? r e ,::. t
<br />on borr OiJJE> d mone/~ make o.n d.cc~pt:abl e t-. e t ur. n for eqlJ i t y .
<br />i nvestor's~ pay propertl' and i nce,me t2,>~e-::, ~ and meet i n-::-urance
<br />requ i remen t'3. Offse t tin,;) fac tor"s include income t 2.>: i ncerl t i 1,_' e.;:
<br />throlJgh depree i .=,-t i on I t 3.X cr.ed i ts ~ .=-.nd c a.p ita. I 1~.3. in-:;. tax r'.3, t e s ('n
<br />appreei-3tion. C3ener'3.11 y ~ a 1 ea=.ed gOI.)ernmen t2.1 ':If fie e f e,r e ';Ioe =.
<br />mlJch of the publ i c sp ~.c e ~ omrnon 1 )-' a<;:.soci.=<.ted with 2. spec i 3.11 )'
<br />designed gOIJernmen ta.1 structure. Lea<;:,ed <;:.pace also permi t<;:
<br />i ncremen 1:3.1 ' expansion a.s need;;. grCdJ,1 rather' than ec.rr'ying
<br />unoccupied e>~~ra capac i ty in adl) Co.n c e of needs.
<br />Fin c.1 1 )-' ~ a v,}hol e group of C ommu nit y i 5~.ues are i n~)Crl ved. [,)h a, t
<br />ar~ E' th e City" s de'Jelopme-nt obj E'C t i I) e';;? Can a nel..'J mun i c i p.;, J
<br />bu i I din g 1 €,IJeragE c, the r priv.ate development? Alon9 1..\1 i th the
<br />communi ty de~}e 1 opmen t issues ctre the que--:;.t ion::. of the rol e a.n d
<br />flJnc t i on of rnun i C i pal ';Iove-rnme-nt In t"lendota He i gh t ';:. . l.,lh a, t r'o 1 e
<br />does a, Ci L..' Ha.ll have in .;:.st.;,bl i <;:.h i og commun i ty 2.nd gO!.) e r nrne n t
<br />identi ty? A rTlunicip3.1 bu j 1 d j ng- i:re-quen t 1 y pro'.) ide-=:. 'space- 1:0
<br />se r ,.) e- .?,.::. a. cc,mrnuni ty bu i I din g fos.t.?r' i n,~ ac t i 'v' i tie-:;. and p r. OI;J r' 2.rn'~. .
<br />Commun i ty sp.3.ces require ~,pec i 2.1 fea. tures. not cl.J"S.tom.3.r' i 1 >'
<br />pr'o'Jide-d in pro i ')3. te off i ce bu i 1 .j i n g'::. -3.r!d ,~ t time--=:. elf the da>' .;:..nd
<br />VJe e k t hat :. tra in n '~rm2.1 building c'per'a t i nl~ pr..;,ct i CE'-=:-.
<br />The accomp~.n)'i ng 2.02.1 y,::. is. pr,:.l.} ides ,;=;.orne dirnen~.i on tel the- cCo';:.t
<br />questions. J t must be r'e-cogn i zed th 3. t the bu i 1 d i nl~ p r' ogr c.m j';;
<br />only in i t-= be,~inning sta.ges .3.nd th a t the .3.rnOlJn t and c C'=:' t of
<br />office space h.9.s ~/e t to be de ter'fTI i ned. Th r. e e di fferen t building .
<br />CO';=;. t 3.1 ter'n.;-.t i '.)e5 ar'e pre-;::.en ted to pre,l.} i de << r 2.n '~e r e- ';:.IJ 1 t '=. .
<br /> D-2
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