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• EN HILLS MEMORANDUM DATE: June 8,2010 Item. 3.A TO: Financial Planning and Analysis Committee Sue Iverson,Acting City Administrator FROM: James Lehnhoff,Community Development Director SUBJECT: Communications Tower Discussion and Recommendation to the City Council Action Request Provide the City Council with a recommendation on whether or not to pursue a purchase of the Reiling Communications Tower located at 1296 County Road F from Sand Companies, Inc. Background • Earlier this year, Sand Companies Inc. (SCI)proposed to donate the Reiling Communications Tower to the City for$l. In return, SCI was requesting that the City provide $575,000 in public assistance for the 55 unit workforce housing project that is to be constructed at 1296 County Road F. The public assistance could be in the form of Tax Increment Financing(TIF), waived fees, and/or direct payment. The most recent preliminary TIF analysis has indicated that the project would generate$201,000 over 15 years. Assuming that TIF is awarded, that leaves a gap of$374,000 in SCI's request. That gap could be filled by waiving fees or providing cash to the project. While this gap may not directly represent the price of the communications tower it is essentially what the City would be paying for the communications tower. According to SCI, if the City does not purchase the communications tower,their request for assistance would decrease to $225,000. SCI is not saying that the communications tower should be valued at$350,000. However,the higher contribution from the City will increase their likelihood of receiving the housing tax credits. Without the tax credits, SCI does not consider the project to be viable. City of Arden Hills FPAC Meeting for June 8,2010 IlAhdocsllahlAHdatalPlanninglCommuniry Developmeml Wireless Communication TowersiReiling Tower 060810-FPAC Memo-Reding Tower • Purchase.doc Page 1 of 4