07-22-98 Council Minutes - Laserfiche WebLink

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MINUT~S CITY COUNCIL JULY 22, 1998 The City Administrator pointed out that if taxes go down, the property owi~er will get the benet'it of Yhat reduction Yo Yhe point t(~at it hiYS the debt service amount. Bi(1 Ostlund, Griffin Com~~ny, stared Yhat theii hope was that the Council would ldopt the reconunendation of statf so thlt they can move forward wiYh the buyer for I<tindice 7tei~hts I. A chan~e in tl~is recommendation results in more variables Co be worl<ed out with the buyer. Ostlund reported Yhat Griftin Compauy has been trying to get this property competitive since the early 1990's. 7effRoyce, poteutial buyer ofKandice IIeights I, re~orted that he has a letter of commiCinent from a banlc ~~~d has ~mtil next Monday to close on the property. Royce poii~ted out th1C these bonds are 1t a 10% interest rate that inay have been an appropriate rate in the 1980's. Royce su~gested, however, that if the Council chan~es the minimum from tl~at recommended by tlie staff, he would asl< that the City find a more market rate f'or the bonds. Royce pointed out fhat the City has ah~eady received the lion's sl~are of the interest on these bonds receiving enough principle and interest to pay off tl~e bonds. The Administrntor suggested that thlt statement was a bit deceivin~ since the increment from Chose projects was supposetl to generate excess revenue to assist with future ~rojects. Fahey agreetl that this has been a dil'ficult developmenC, pointing out thaY the City plrticipated based on represenCltions mtide by the develo~er tliat never came to be. F~hey stated th~t he was comfortable with lowerin~ the TIF guarantee to a point that would equal debY service. Morelan pointed out thlt the total debt service for one yelr is approximately $60,000. The current minimums for both properties is approxim~tely $88,000. The reducCion is from approximaYely $88,000 annually to $60,000. Fahey suggesCed th~t if after taking time to review this action, the purchaser has additional concerns, he would be willing to call a specill meeting prior to Monday to discuss the matter. The City Administr~tor suggested th~tt Council Member Morelan's recommendation is £t wise one noting ChaC the taxp~tycrs' interests must be proCected and Yhe City nwst c~sh flow the bontls. Ostlund pointed out the diffc~ilYies in geYCing these two projects to cash flow, and suggested that if Mr. Royce is successful witl~ these projects he may lool< to do addition2l development to the north and the south. 6