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r '~ City Council Minutes April 12, 1995 Page 4 j,. ~ v termination of the assessment agreement is a reasonable request since it will not affect the city's ability to repay the bonds that were issued. Mr. Jans's analysis found that without termination of the assessment agreement, the projected TIF fund balance in 2005 would be 5950,284. If the agreement was terminated in 1999, the fund balance in 2005 would be 5135,952. Using a present value basis, the tax savings to the applicant would be 5414,068 while the city would lose 5646,953 in anticipated TIF revenue and interest to use for planned TIF projects. Rich Martin, the city's legal counsel, made two comments. First, the city is permitted to grant the applicant's request, but it is not required to do so. Secondly, the assessment agreement is enforceable. The applicant has already filed an assessment appeal with the tax courts. The applicant argues that the development agreement and assessment agreements state that TIF funds generated from Falcon Crossing should be used only to fund improvements on the Falcon Crossing site. Mr. Martin stated that the city is legally permitted to use the TIF funds generated at Falcon Crossing for any project within the TIF district. To conclude the consultant's and staff's analysis, Administrator Hoyt noted the following findings: 1) the city and Mr. Wellington have the same goal to maintain and enhance a healthy business community; 2) the city frequently provides business owners with non-financial assistance on solving land-use issues; 3) Falcon Heights is a fully developed city with no opportunities to generate additional tax base and 66% of its land is tax-exempt. Therefore, the city must rely on its tax increment revenue to maintain the tax base for all tax-paying jurisdictions; and 4) past requests for assessment adjustments by individual property owners have been denied because of the possible detrimental effect granting them might have on all city taxpayers. From these findings, staff recommends denial of the request. Alternative proposals would be considered with the applicable escrow fees to cover the city's financial and legal costs. Mr. Bob Long, attorney for the applicant, explained that his client purchased his property on the belief that the assessment agreement and development agreement only guarantee repayment of the bonds, not financing for public improvements within the commercial district. Furthermore, Mr. Long argued that "minimum improvements" are specified only to those to be performed to the Falcon Crossing (Bullseye) site itself, not to other public and private properties. Mr. Long also stated that the city currently has no specific, formally approved plans for the projects described in the TIF plan. He suggested that the city may be able to find other funds for projects planned for TIF revenue. For example, the Larpentuer Avenue improvements and improvement of the southeast corner of the business district could be funded through other programs, including county/state aid money, Community Development Block Grant funds, Housing Redevelopment Authority funds, and special assessments.