07-11-01 Council Minutes - Laserfiche WebLink

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MINUTES CITY COUNCIL JULY 11, 2001 City staff have been working to try to resolve the situation. At times, solutions have been close, but the matter has not yet been resolved. The Administrator also noted the impact that the changes in class rates and Tax Increment Financing legislation are having on this project. The Administrator indicated that the methodology that Mr. Biagini is using to help finance the second phase of the project imposes significant risks for the City related to Mr. Biagini's ability to make good on TIF guarantees. The Administrator estimated the risk to the City at $40,000 to $50,000 per year in TIF shortfall The Administrator also pointed out that Mr. Biagini has no tenants for Phase II The Administrator repotted that staff, the City Attorney, Mr. Biagini, and his attorney met yesterday to try to come up with some ideas to resolve the situation. Some possible concepts were developed, but a final resolution has not yet been worked out. Mr. Biagini is requesting that the Cowici( table action on this matter until next week and that the Council call for a special meeting at that time. The Administrator reported that he tried to schedule another meeting with M,r. Biagini for this week; however, Mr. Biagini indicated that his schedule did not allow him to meet this week. The Administrator reported that he discussed the matter further with the City Attorney as well as Tom Bray of Briggs & Morgan. Based on that discussion the Administrator asked for authorization to issue a notice of termination of development agreement to Mr. Biagini as well as authorization for the City Attorney to commence civil action to terminate any rights Mr. Biagini may have in the property. The City Administrator indicated that it could still be possible that a settlement could be negotiated with Mr. Biagini that would reimbwse him for any improvement costs he has invested in the land. It is also possible that an amended development agreement could be negotiated with Mr. Biagini. If that happens, the civil action could be terminated. The City Administrator indicated that some of the issues to be resolved include the fact that Mr. Biagini needs a mortgage commitment that meets the City's objectives. He also needs to get a building permit approved and construction started on the Phase II building by August 1". The Administrator acknowledged that Mr. Biagini is not pleased with the his recommendation Co terminate the development agreement. He could not be present this evening, but wanted his concern expressed to the Council. Anderson asked if there was any interesC in moving forward quickly and asked if Council action could reasonably be delayed until next week.