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FALCON HEIGHTS CITY COUNCIL MINUTES June 11, 2003 Request to Allow Permit Parking on Garden Avenue (continued) -6- Council member Kuettel said that she knows of one community that switches limited parking from one side of a street to the other every six months. Talbot moved denial of the petition application for a permit parking area on Garden Avenue. The motion was unanimously approved. Consideration of the Development Agreements for the SE Corner Redevelopment Project: * FALCON HEIGHTS TOWN SQUARE LIMITED PARTNERSHIP * TOWN SQUARE SENIOR APARTMENTS LLC * TOWNHOMES AT TOWN SQUARE LLC Administrator Worthington said the Council is being asked to review and approve the development agreements for the SE Corner project. There are three agreements-one for each component of the redevelopment: Multi-family, senior housing, and townhomes. These agreements set forth the conditions of the development, including the financial stipulations • for the redevelopment. Mr. James Prosser, Ehlers and Associates, said that this has been carefully and meticulously planned, beginning in 2002. The developer has been working with the attorneys, property owners and the City. The agreements address the basic issues related to the assistance the City is providing. A development agreement is a type of risk. management agreement. It specifies the type of development that will occur, the appropriate amount of assistance that will be provided, and helps controls the financial risk to the City. How do we know the developer is getting the appropriate amount of assistance? The developer has to provide a pro forma and that information is reviewed by Ehlers, who establishes the "but for". Ehlers has reviewed a number of different updates of information and has determined that the level of assistance being provided is appropriate. What is the financial risk to the City? The City is not at risk if the development does not generate the additional increment that is projected. The development freezes up taxes on that property at its current level. The property will carry a much higher level of the tax capacity for the community and have a positive impact. The agreements are right on target and incorporate the appropriate risk management topics. Council member Lamb asked how the City would generate the funds to make the payments to the developer. Mr. Prosser said that what happens. is that there is a captured tax value for the property, and the City, School District and County receive that value for the term of the TIF District. As tax rates increase, the additional tax increment is captured by the City and is given to the developer. This is a very difficult project because of the cost to buy the buildings • and relocate the businesses. The taxing jurisdictions will continue to receive the same as they have been getting.