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MINUTES REGULAR CITY COUNCIL MEETING OCTOBER 10, 1984 PAGE 4 Mayor Eggert moved, seconded by Councilmember Chestovich, that a public hearing on tax increment financing for-the Lido Italian Restaurante be scheduled for November 14, 1984 at 8:00 P.M., and that the Clerk Administrator be authorized to publish the same. Motion carried unanimously. Attorney Mary Ippel, Briggs and Morgan, presented proposed Resolution 84-36 providing for public sale of $600,000 general obligation tax incre- ment bonds of 1984, Series B, and proposed Final Dote Resolution 84-37. She explained that the closing scheduled on the Industrial Revenue Bonds and the sale of the filling station, plus payment of the mortgage on the eight lots (scheduled for October ll) had been delayed due to some financing changes. Robert Collins, Attorney for Bullseye Golf, explained that costs are much higher now than anticipated due to the City's request for exterior enhancement, winter construction, and phase construction because the Flameburger lease does not expire until April 30, 1985, an increase of $100,000. For that reason, Mr. Collins stated that Bullseye plans to defer starting construction until spring after the Flameburger-lease has expired. Council expressed concern that the project would not be completed by the deadline stipulated in the development agreement (December 31, 1985), but Mr. Collins assured that there would be no problen, they anticipate con- struction being completed in 4 to 5 months. He also stated that Bullseye will make some changes to reduce costs, but National City Bank does not want the value of construction reduced. Mayor Eggert stated he had a problem with changing the dollar amount as it will change the amount of funds generated by the tax increment financing. Mr. Collins said the value of the building for tax purposes would not change. Attorney Ippel recommended that both items be approved at this time, and if the Industrial Revenue Bonds are not closed by November 5, 1984 and the filling station has not been purchased, the TIF bond sale could be cancelled. She recommended it be stipulated that if the market-value change is below what is necessary to amortize the funds, the sale must be cancelled. Councilmember Ciernia asked what the City's liability is with signing the IDB Note Resolution. Attorney Ippel stated that the City is used only as a conduit, the note will be purchased by National City Bank, and payments will be made by Bullseye under the loan agreement. The note does not con- stitute a debt to the City. PUBLIC HEARING ON TIF FINANCING FOR LIDO CAFE SCHEDULED BULLSEYE GOLF, INC. PROPOSED RESOLUTION ON TIF BONDS & IDB NOTE Councilmembers Baldwin and Ciernia inquired what equity Bullseye has in the project and Mr. Collins replied that it is approximately $40,000 after paying off the mortgage on the eight lots (mortgage held by Midway National). Other items regarding the Bullseye finances were discussed. Councilmember Baldwin then questioned why Bullseye was allowed to deposit a $20,000 cashiers check rather than a letter of credit as stipulated in the development agreement. Attorney Ippel stated that the cashier's check is better than a letter of credit, and that Miller Schroder has done a very thorough financial in- vestigation. Mr. Baldwin expressed concern that since the development agreement stipulates there must be a letter of credit, and no letter of credit was provided, they would be in violation of the agreement, and that he would not have voted in favor of the agreement if that stipulation had not been included. Attorney Van de North stated he and Attorney Gasteazoro made the decision to accept the cashier's check and that they were remiss in not polling Council. The Banking Attorney at Briggs and Morgan also felt is was proper and not a material change in the agreement. Following the discussion, Mayor Eggert moved, seconded by Councilmember Chestovich, that the $20,000 cashier's check be accepted in lieu of the letter of credit.