CCP 10-27-1997 - Laserfiche WebLink

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DRAFT . ARDEN HILLS EDA MEETING - OCTOBER 14. 1997 4 Mr. Fritsinger stated a lot of these items were worked on late into last week and up to the . meeting tonight. He explained the heart of the issue with Staff up to this time was to use TIF to pay for public improvements to get the project going and, secondly, the GBD was set up within specific framework as to design of the buildings and expectations. Up to this point, the City Council and staff did not consider using TIF for other purposes. However, as staff talked to Mr. Zehring about the request they felt it was appropriate to consider it from the viev.point of what the City wants to see in the GBD and what would help carry this to the vision of the Gateway standards. He noted that the additional funding being requested is trying to address that issue from that standpoint. Mr. Fritsinger stated the developer has provided copies of their proforma budgets for the project. The documents themselves do not provide a lot of information as to what is taking place on lease arrangements which have not yet been determined with Building III. He advised the developer did provide copies to the City Attorneys of the agreements with Apache and agreements being working on with AmberJack which confirms the nwnbers Mr. Zehring has been presenting. Mr. Fritsinger stated the biggest issue, should the EDA decide to pursue this project, is in the area of a tax exempt nature of the bond. He advised that bond counsel indicated the City is limited to 10% of the bond proceeds for "private development activities" in order to maintain the City's bond issuance tax exempt status. Up to this point, the City asswned the portion of the bond proceeds used would be related to acquisition with some property left to be sold on the open market. That piece of property would qualify for that 10%. Mr. Fritsinger explained that the proceeds the developer is requesting are the same private development funds. He stated Staff . worked on revisions to the assessment agreements which secure the level of TIF that will be generated and that approach makes sense since the City wants to guarantee the generation of TIF but it does not address the 10% issue. Mr. Fritsinger asked how the City wishes to reimburse the developer. The first option, from staffs perspective, would be a pay-as-you-go project which Mr. Zehring had stated this evening that Welsh Companies does not want. The second option is to look at a reduction in the sale price of the Kern Milling parcel. He explained that the City's bond counsel has indicated a reduction in the sale price does not go against the 10% statute if the City does not reimburse itself through the bond proceeds for the change in sale price. Mr. Fritsinger stated the third option is to look at an internal finance option and the fourth option is to use the bond proceeds to make a change in the assessment agreements. He advised that Staff spent no time in analyzing the request as it stands at this point from TIF being generated on the project. However, it looks like enough excess TIF would be generated but Staff needs to rcview this in greater detail before finalizing any activity related to this. Mr. Ringwald stated the 10% relates to the initial acquisition estimate, not what is paid for the property or it is sold for. .