09-27-95 Council Workshop Minutes

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MINUTES CITY COUNCIL SEPTEMBER 27, 1995 perform. Morelan estimated that it will take about $2,000,000 to finance the entire project. Fifield replied that that was correct. The proposal has been reviewed by bond counsel who is comfortable with the plan as laid out. Morelan asked what will happen when the financing is retired in three years. Fifield pointed out that he has not yet done detailed cash flow projections. However, the City will be receiving dollars up front which can be invested; monthly payments can be invested; and the dollars are being loaned out at a rate in excess of the borrowing rate. Fifield stated that the plan works and the intention is to retire the debt in three years. LaValle asked for an explanation of the numbers. The City Administrator reported that the buyer will use this Statement of Intent to neqotiate the purchase price of the Market Place with TCF. The current asking price is $1.5 million. The buyer will attempt to negotiate a price not to exceed $1.350 million. It is estimated it will take $350,000 to do building rehabilitation which shall include roof replacement, HVAC replacement, and conversion of the building from an interior mall to exterior orientation. Another $200,000 is included for improvements that will help the shopping center meet standards that the City wants to see for the Rice Street/Little Canada Road area. The Administrator reported that it is the City's understanding that the developer will go forward with the project even if City financing does not materialize. Scalze noted that the total is $1.9 million. The City Administrator pointed out that the potential purchase of the Budget Power property would be included in the bond financing, bringing the total to $2.2 million. The developer will be putting $150,00o equity into the program up-front that will be available to the City. Morelan suggested that should TCF not discount their price, it will not be to the City's benefit to go through with the financing.