HomeMy WebLinkAbout2008-037
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~HlLLS
CITY OF ARDEN HILLS
COUNTY OF RAMSEY
STATE OF MINNESOTA
RESOLUTION NO. 2008-037
A RESOLUTION DESIGNATING THE RATE OF RETURN
FOR PURPOSES OF NEGOTIATION BETWEEN THE CITY AND RRLD
WHEREAS, the City of Arden Hills (the "'City") and RRLD, LLC ("Developer")
have entered into a Preliminary Development Agreement dated March 30, 2007, as
amended (the "PDA"), during the term of which the parties determined to negotiate a
Master Development Agreement ("MDA") regarding the redevelopment of the Twin
Cities Army Ammunition Plant site (defined as the Development Property in the PDA);
and
WHEREAS, pursua11t to the PDA, the City agrees to evaluate and continues to
evaluate the financial and market feasibility of the redevelopment of the Development
Property proposed by Developer, and to analyze whether Developer can demonstrate a
need for public financial assistance in that effort; and
WHEREAS, to provide a guide for conducting those evaluations, the City has
determined to specify a maximum internal rate of return ("IRR") that is commercially
reasonable for Developer to seek in its role as developer of the Development Property,
taking into consideration the timing, nature and scope of the redevelopment effort.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of
Arden Hills, Minnesota as follows:
1. The City directs staff and consultants to evaluate Developer's pro formas
for development of the Development Property using a 150/0 IRR as the maximum
benchmark for (a) determining whether the Developer is projected to receive a
commercially reasonable rate of return, and accordingly whether the redevelopment is
financially feasible; (b) determining the amount of tax increment or other public financial
assistance (if any) that may be required in order to reach market feasibility; and ( c)
determining a rate of return in excess of which the parties will negotiate terms to adjust
financial assistance based on future performance (referred to as "look back").
2. The IRR analysis described in this resolution relates only to the
Developer's role as developer of the land, and not as developer of specific improvements
on the land. The City intends to develop a separate standard for IRR (or other measure)
for the developers of individual improvements, which will also be incorporated in the
MDA.
3. Staff and consultants are authorized and directed to continue negotiating
the MDA in accordance with the djrections in this resolution and with the principle that
any financial assistance for the proposed redevelopment will not create risk to the City.
Approved by the City Council of the Ci
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ATTEST:
Ronald J. M ~ orse, City Administrator
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