01-09-2002 Council Minutes - Laserfiche WebLink

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MINUTT;S CITY COUNCIL JANUARY 9, 2002 deadlines, and suggested three options. The first would be for the City to put out an RFP for the site. However, there are no guarantees that the City would receive satisfactory development proposals. The second would be for the City to provide short-term financing to 12. A. Morton Company until they have the project leased. Once leased, they will be able to secure bank financing. This option puts the City at risk for bond payments should R. A Morton not be successful in obtaining long-term financing. The third option would be to extend the deadline. The extension could be 45 days rather than the 90 days they have requested. The Administrator pointed out that R. A. Morton Company is proposing a good project, will have a reasonable amount of equity into the project, a low return on investment, and are looking to be long-term owners. Anderson asked the number of banks that have denied financing. The Administrator reported that R A. Morton Company has approached four banks. While they have not been denied, the banks are imposing some rigid requirements that are making financing more difficult. He also noted that the events of September 11`x' have impacted the office market. LaValle stated that it is his understanding that R. A. Morton is looking for investors in the project to increase their equity position. If that is done, they will be able to obtain financing. LaValle suggested that the City provide an additional $200,000 in equity in the project to get the deal done. It was noted that the project value is estimated at over $4 million. The Administrator pointed out that the City would have a preferred equity status. Fahey suggested that the City agreed to extend the option agreement for an additional 90 days provided that R A. Morton Company absorb development costs. He also agreed that the City should offer a $200,000 equity position in the project. The City Administrator suggested that the Council call for a workshop meeting for next week so that they can meet the principals involved and discuss the matter. Montour asked R. A. Morton's equity in the project. The City Administrator estimated it to be at $850,000 to $900,000 if they achieve the higher level. Mr. LaValle introduced the following resolution and moved its adoption: RESOLUTIONNO. 2002-1-7-CALLING FORA WORKSHOPMEETING FOR WEDNESDAY, .IANUARY 16, 2001, AT Q:3/I P. M. TO DLSCUSS THE