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n ~~ 1 City Council Minutes April 12, 1995 Page 5 1.9 Continuing on, Mr. Long stated that Mr. Wellington is paying much higher taxes than other commercial centers in the area. Any tax savings realized after 1997 would be passed along to tenants in the form of lower rents. Mr. Long admitted that Falcon Crossing is not going "under" but commented that when leases come due, some tenants may be leaving to cheaper rents unless the council takes action to lower the property taxes on this property. The goals of the council and applicant are the same - a healthy business community. Mayor Baldwin stated that the council expects any property owner to attempt to improve their financial situation and they expect that the city will be asked for help. The city, however, has several restrictions on helping in this situation, including a small staff, limited funding, and covenants made with the taxpayers of the city. This project was originally part of an agreement between the developer and the citizens of Falcon Heights that, in return for financial assistance, additional revenue would be generated for the project and development that the city could not otherwise finance. Baldwin noted that the policy issue is that a covenant was made with city taxpayers -the city took on the financing of this project with the promise of a payoff to the public. The council needs to deliver to the public on the $650,000 beyond the initial investment. Baldwin stressed that he does not want to cut off discussions with Mr. Wellington about how to improve his business situation but that in order to terminate the assessment agreement, the applicant will need to find funds not otherwise available to the city to replace the $650,000 lost to TIF revenue. Since the city's legal counsel has stated that the city is legally entitled to enforce the agreement, the city's obligation is to litigate if necessary to avoid termination of the assessment agreement. Councilmember Jacobs asked Mr. Wellington for the meaning of the term "negative economic impact", outside of increased property taxes on the project. The applicant, Mr. Wellington, made several comments in reply. These included that he was not part of the original agreement on the property and that the property taxes on this property are burdensome. Falcon Crossing is not about to "tip over" but some tenants are having problems with their rent levels. Mr. Wellington stated that he would like to see the special assessment approach to public improvements rather than the use of TIF funds and that the amount of proposed improvements might be extreme. Mr. Wellington also noted his dissatisfaction with being asked to pay for the city's consultants in order to continue discussions. Continuing on, Mr. Wellington asserted that the tenant base at Falcon Crossing needs to be solidified and that he would like to be able to compete effectively for quality tenants. The property will always have limitations in attracting new tenants, particularly limitation in parking and vehicular access. Finally, Mr.