CCP 10-14-1997 - Laserfiche WebLink

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.Ji;I..-.:."'.' W -~ ~~ !:~,,{.;.;iII'-. i ' ,"'''.d\~ 1*"" l' , ,",_.._- CITY OF ARDEN HILLS ~ &.. t\-....-D-e..& . MEMORANDUM lojl'-j[47 DATE: October 15, 1997 TO: Economic Development Authority (EDA) FROM: Brian Fritsinger, City Administrator ~ SUBJECT: Tax Increment Financing Request Update - Welsh Update Staff has held additional conversations with Welsh Company on the request for additional tax increment financing (TIF) assistance. As the EDA is awarc, the devcloper had initially requested an additional $250,000 in assistance for its project within the Gateway Business District (GBD). The developer has since revised this request which is detailed in Mr. Zchring's October 14,1997 memorandum. Wclsh is sceking an additional $250,000, or a total of$500,000. What Would the Funds be Used For? The developer is proposing to use these funds to offsct thc cxtraordinary soils corrcction costs . and for exterior upgradcs to the buildings. The Council reccived a memorandum dated October 7,1997, which highlights the rationale behind the request for soil correction assistancc. How do These Additional Costs Affect the Developer's Rate of Return? Thc dcveloper has providcd thc City and it's financial advisor, Ehlers & Associates, with copies of its Sources and Uscs of Funds/Proforma Budgets. In revicwing these documents, thc additional funds do not appear to be related to significantly increasing the dcveloper's rate of rcturn. The financials and othcr documcnts revicwcd by the City's attorneys appear to be consistent with the dcveloper's rcpresentations. What other Related Options have been Addressed by the Developer? As Mr. Ringwald indicated in his October 14, ] 997 mcmorandum, staff has been guidcd by two gcneral principals in the use ofTTF for the development of the GBD. The first is the use ofTIF exclusively for infrastructure and somc propcrty acquisition. The second is thc use of brick, stone or glass on buildings. The revised requcst for funding is based upon the concept that if the City were to provide additional funding, what would it want to receivc in rcturn. In this case, the elevations have bcen amended to includc additional brick on all thrce buildings. How Can the City Financially Provide the Additional TIF Request? Mr. Ringwald previously outlined the problem related to thc use of bond proceeds for private development, and the impact ofspcnding morc than ten pcrccnt (10%) of the proceeds on thc tax exempt status of the bond. Bond Counsel has providcd additional clarification on this topic.