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<br />ARDEN HILLS CITY COUNCIL WORK SESSION - JULY 21,2008 <br /> <br />2 <br /> <br />of return needed to be set as the basis for moving to the next step in determining <br />the amount of public assistance to be provided and used as a benchmark. <br /> <br />City Administrator Moorse stated it was important that the land value not be <br />bought down below market value so as to provide the developer with a windfall in <br />land sales. <br /> <br />Councilmember Holmes noted she would be in favor of setting a limit on TIF and <br />was not in favor of setting a rate of return for the developer. She felt the assistance <br />provided by the City should be for infrastructure. Councilmember Holmes <br />indicated she was not in favor of providing two phases of TIF, one being for the <br />land sale and the other for affordable housing. <br /> <br />Councilmember Grant questioned how much TIP would be provided to the <br />developer without further going through the financials and provided analysis. <br /> <br />Councilmember McClung asked if there was a way for the City to assist Ryan <br />Companies in managing their risk by providing a "number" to make this project <br />viable. He stated the City is removing a portion of the risk by providing TIF; and if <br />this happens he wants to see the City benefit. <br /> <br />Mayor Harpstead agreed with this statement that the City was easing the risk. He <br />indicated however, that he would rather have Ryan Companies assume the majority <br />of this risk and not the City of Arden Hills. <br /> <br />Councilmember McClung stated if Ryan Companies were to assume the majority <br />of the risk he can see how they should receive a return for their investment. <br /> <br />Ms. Kvilvang noted the only way to reduce the developer's risk would be to find <br />other funding sources other than RRLD's equity or invest City dollars. She <br />recommended the City not invest their dollars, but rather to provide public <br />assistance on a pay-as-you-go basis. Ms. Kvilvang indicated the market right now <br />is providing rates of return in the high teens to low twenties for comparable <br />projects. She added that the TCAAP site was 585 acres that would need to be <br />prepared for development, which was extremely large in comparison to any other <br />project and that it has environmental issues to address as well. <br /> <br />Councilmember Holmes questioned why public assistance was requested for the <br />land sale but not for the vertical. <br />