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<br />ARDEN HILLS CITY COUNCIL WORK SESSION - JULY 21, 2008 <br /> <br />3 <br /> <br />Ms. Kvilvang stated the theory was Ryan Companies would prepare the land for <br />sale and should not need assistance in the vertical portion of the development. <br /> <br />Councilmember Holden questioned if the TIF funding could be negotiated as the <br />project proceeds, due to the fact the developer was limited in how these funds <br />could be used. <br /> <br />Mayor Harpstead noted this was not included in the finances at this time. <br /> <br />Mayor Harpstead asked if the TCAAP project could be completed without TIF. <br /> <br />Ms. Kvilvang stated the development would not be completed without TIF. She <br />indicated the Council could be strategic in the use of TIF allowing it to be used <br />only for housing and cleanup expenses. She added that the current internal rate of <br />return was calculated at 8.30/0. <br /> <br />Councilmember Holmes stated with the TIF dollars at $54 million the developer <br />is receiving an 8.30/0 rate ofretum and questioned if the TIF funding would have to <br />double in order to provide the requested 15% rate of return. <br /> <br />Ms. Kvilvang noted this isn't a dollar for dollar equation~ but would depend on all <br />the funding that comes in for this project. She explained that through the <br />negotiation process, costs will be refined to reduce the amount of TIF needed. <br /> <br />Mayor Harpstead questioned why $54 million was plugged into the proforma by <br />Ryan Companies when this did not meet their 150/0 rate of return. <br /> <br />Mr. Bubul responded that the long term goals of Ryan Companies were to achieve <br />a 150/0 rate of return, but they need assistance from the City. He noted the TIF <br />funding would be the last source of financing plugged into the equation. Mr. <br />Bubul noted the 150/0 would be a benchmark. <br /> <br />Councilmember Holmes indicated a guaranteed 150/0 rate of return on the land <br />seemed unwise when the vertical profit on this project was uncertain. She felt these <br />should go hand and hand. <br /> <br />Councilmember Grant requested that the Council review the first few paragraphs <br />of the developer agreement regarding the pay schedule. <br />