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MINUTES <br />City Council <br />February 28, 1990 <br />THE COUNTRY DRIVE AREA, EXPANSION OF THE TIF DISTRICT <br />AND MODIFICATION OF TAE BUDGET AS RECOMMENDED IN THE <br />FEBRUARY 20, 1990 LETTER FROM BUSINESS DEVELOPMENT <br />SERVICES AND CALLING A PUBLIC HEARING FOR APRIL 11, <br />1990 AS RELATES TO THE COUNTRY DRIVE REDEVELOPMENT TIF <br />PROJECT AREA <br />The foreqoing resolution was duly seconded by LaValle. <br />Ayes (5) Scalze, LaValle, Blesener, Collova, Faheye <br />Nays (0). <br />Resolution declared adopted. <br />Pelstring reported that his firm is in the process of <br />finalizing the Development Agreement between the City <br />and LEB Development. Pelstring reported that he was <br />asked by the City Administrator to address the issue of <br />security for the City should the developer not pay the <br />taxes on his development. Pelstring reported that his <br />firm is suggesting that the City require a letter of <br />credit for the first year's taxes on the development, <br />which would amount to approximately $85,000. However, <br />there will still be some liability on the part of the <br />City since property taxes on commercial property need <br />to be in arrears for three years before a property is <br />subject to tax forfeiture. Pelstring pointed out that <br />once a building is sold, the back taxes would have to <br />be paid. <br />Pelstring reported that if the City were to require <br />that a developer submit a letter of credit for three <br />years of property taxes, it becomes difficult for the <br />developer to cover the full cost. Pelstring reported <br />that his experience is that the one year's letter of <br />credit is a good compromise. <br />The City Administrator stated that he wanted it pointed <br />out to the Council that there is some inherent risk to <br />the City, but, hopefully, it would not be an issue. <br />Blesener asked when TIF funds are disbursed to a <br />developer. <br />Pelstring replied that the developer would be required <br />to acquire the property, pay demolition costs, and have <br />a portion of the building completed, between 30% and <br />50% before TIF funds would be disbursed. <br />Scalze asked when construction would begin in the <br />Country Drive area. <br />Page 12 <br />