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MINUTES <br />CITY COUNCIL <br />SEPTEMBER 25, 1991 <br />MARK MALSAM Mark Malsam, 2825 Country Drive, appeared before the <br />Council asking the City to begin negotiations for the <br />residential properties along Country Drive. Malsam <br />pointed out that the Kandice Heights Phase II project <br />is now underway. <br />Blesener felt it was too early to begin negotiations <br />since Kandice Heights Phase III has not begun. <br />Malsam pointed out previous discussions that once Phase <br />II was begun, there would be enough surplus tax <br />increment funds for the City to buy-out one of the <br />residential homes. Malsam again pointed out that Phase <br />II has started and it has been indicated that Phase III <br />will begin soon. <br />Blesener did not feel the City should begin negotiating <br />at this point and get property owners' hopes up until <br />Phase III is a certainty. <br />The City Administrator reported that staff has run <br />numbers to determine the amount of excess increment the <br />City will have if Phases II and III take place. The <br />Administrator pointed out that Phase II was downsized <br />and is a break-even project, and no real surplus <br />increments are generated. Phase I has generated some <br />healthy surplus increments, and it is expected that <br />Phase III will as well. However, the developer has not <br />signed a development agreement for Phase III, although <br />he has indicated that Phase III is a virtual certainty. <br />Blesener felt it was too premature to begin <br />negotiations for the residential homes at this time. <br />Blesener stated that he did not want to raise anyone's <br />hopes at this point. <br />The City Administrator reported that he will keep the <br />homeowners informed of the situation. The <br />Administrator also reported that the developer has <br />indicated that he plans to proceed with Phase III this <br />year. <br />Scalze asked when surplus increments would be <br />available. <br />The Administrator replied that the projects would not <br />generate taxes until two years after their <br />construction. However, the City can bond on the front <br />end for the surpluses, but this raises the cost of the <br />project. Also, an analysis of the projects will have <br />to be done to determine the surpluses that would be <br />generated. The Administrator reported that the <br />surpluses from Phase III will be needed to make the <br />buy-out of the residential homes feasible. <br />Page 8 <br />