CCP 09-22-1997 - Laserfiche WebLink

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----- . . Memorandum, Development Agreement with Welsh Development Company Page Two . September 19, 1997 What Security will the Citv have for the City's Bonds? The City's bonds will be payable out of tax increment generated by the project or, if tax increment is insufficient, from general tax levies. To secure the redeveloper's obligations, special assessments in the amount of63,5% of the cost of the Highway 96 and Fourteenth Street improvement projects will be assessed against the redeveloper's property. The other 36.5% of the cost of the projects will be paid from the anticipated tax increment from the project being constructed on the property owned by AmberJack, Ltd. (MSL). The assessments on the redeveloper's property will be released, in whole or in part, as the phases of the development are completed and assessment agreements are executed establishing minimum market values for tax purposes for the phases. So long as any assessments are outstanding on a phase, the payment of the assessments is a personal obligation of the redeveloper that allows the EDA to sue to collect the assessments, as well as foreclosing the assessment lien. What Happens if Excess Tax Increment is Generated? If the AmberJack property actually generates tax increment that is greater than the tax increment generated based on the minimum market value established in the assessment agreement, the EDA agrees that the excess tax increment will be available to reimburse the redeveloper for its payment of special assessments. Tax increment is only excess if it is not needed to pay the costs . of the City's public improvement projects. Also, tax increment that is in excess of the amount needed to pay the City's bonds or any costs of the West Round Lake Road improvements that are not assessed against private property will be used by the EDA to reimburse the redeveloper and AmberJack for any payments of assessments for the West Round Lake Road improvements, to the extent that the EDA can legally do so. The agreement does not include language which would allow the City to use excess proceeds towards the acquisition of the ATS property before reimbursement to the redeveloper. The EDA should carefully consider whether or not it wishes to have ATS included in the City's initial public improvement costs, Does the Al!reement Include State Mandated ,Job and Wage Goals? Recent actions by the State of Minnesota require that any project receiving financial assistance from a local government include job and wage goals. These goals will need to be reported to the State in subsequent years, The EDA should find that its activities in this project are being undertaken for redevelopment, and not for economic development or job growth purposes. Therefore, the EDA fmds that the provisions of Minnesota Statues, Section 1161.991, which requires the establishment of wage and job goals in projects assisted for economic development or job growth purposes, does not apply, However, ifit is later determined that the Statute applies, the wage and job goal established is one new job at minimum wage, . -..-....------