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MINUTES <br />CITY COUNCIL <br />APRIL 30, 1996 <br />$4.50, and $6.00 were shown. The dollars gained from <br />resale of the property to a developer would be used to <br />reduce the long-term debt the City would incur and to <br />support the TIF District. <br />Fifield indicated that if the City wants to acquire <br />land to assemble a site for a developer, over the long- <br />term the City would require dollars from the sale of <br />the land to a developer, and TIF revenue from the site. <br />It may take 24 months before these funds are available. <br />As a result, the City would be incurring capitalized <br />interest on the bonds during this period of time. <br />Fifield pointed out that should a development occur <br />this year, TIF revenue would not be generated until <br />taxes payable in 1998. The bonds the City would sell <br />to finance land acquisition would not be tax-exempt. <br />Therefore, the interest rate would be higher. Fifield <br />stated that he is proposing a 15-year bond issue, <br />although a 25-year issue would be allowed. Fifield <br />indicated the net cost of the land, plus capitalized <br />interest, plus cost of bond issuance would equal the <br />bond amount. An issue of less than 15 years would be <br />preferable. <br />Fifield then explained his preliminary estimates of <br />requirements for the new development relative to tax <br />capacity, estimated market value, and projected <br />construction costs as outlined in his handout. Fifield <br />pointed out his estimates assume the entire tax <br />increment from the parcel would be used to repay debt <br />and that no administration expense would be charged. <br />The City has the ability to charge up to 10% in <br />administrative expenses. <br />The City Administrator suggested the land should be <br />resold to a developer at close to market value. The <br />key is the City's involvement in assembling the land <br />for a developer. The Administrator pointed out the <br />multiple owners of small parcels, the high cost of <br />acquisition, questions reqarding what the City will do <br />with roads and assessments in the area are all factors <br />which need to be resolved. The Administrator felt the <br />City needed to take a leadership role to spell out <br />these conditions. The less variables a developer has <br />to deal with, the greater our chances for success. <br />Morelan asked what a cleared piece of developable land <br />could be sold for. <br />The City Administrator estimated $8.25 per square foot <br />based on a recent appraisal, and indicated that the <br />2 <br />