04-25-2018 Council Packet - Laserfiche WebLink

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STAFF REPORT TO: Mayor Keis and Members of the City Council FROM: Joel Hanson, City Administrator DATE: April 20, 2018 RE: Suite Living Development Agreement Documents Staff has been attempting to finalize the development program for the Suite Living project at 2736 and 2744 Rice Street. Per the Conditional Assignment of Rights (copy attached) executed with the Suite Living developers, we are providing a $600,000 loan for a three year term that earns 4% interest per annum. This loan was to be secured by a 2nd mortgage (subordinate to the primary financing for the project). Recently, the Developers asked us to consider accepting a personal guarantee versus the 2nd mortgage due to concerns they have related to the impact to the primary mortgage holder. We are attempting to clarify the exact nature of that issue. A personal guarantee may be an acceptable alternative in terms of securing our loan, but the City Attorney and I want to ensure we have done our due diligence. We are also trying to meet the deadline of a May 1st closing on the purchase agreement so our goal is to have all of this resolved by Wednesday’s meeting. If that isn’t possible, it is likely we would need to call a special meeting to ensure the closing date requirements are achieved. The actions we will be taking are as follows: • Approval of a PUD/Development Agreement that addresses the conditions of zoning approval as well as other terms of this project (the loan issue impacts our ability to finalize this). • Approval of the Loan Agreement • Approval of the attached Resolution authorizing an Interfund Loan from the Water & Sewer Capital Replacement Fund (#604) to finance the loan associated with TIF District 7-1. The amount of the interfund loan is $600,000. The 604 Fund is readily able to handle this advance given its existing fund balance and the fact that another interfund loan will be paid off upon the sale of the Owasso property to Q3. • Approval of another Interfund Loan in the amount of $30,000 to cover the costs associated with the creation of the TIF District that will be recovered from future tax increments. We need to approve this resolution within 60 days of the costs being incurred to ensure they are reimbursable from TIF.