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MAI'OR <br /> t bill I4~csencr <br /> dJ <br /> 'rC ~ COUNCIi, <br /> Rit.i< Montour <br /> ~ John Reis <br /> <br /> ~/~j/ ~G~GG 'l/~i~a~~ Wch ul N~Graw <br /> ~(~/y~~ Shelly noss <br /> 51 5 Little Canada Road, Little Canada, VIN 551 L7-1600 FlDNIINIS"f12ATOR <br /> (651) 766-1029 / FG~X: (651) 966-40h8 Joel R. ttansmt <br /> www. ci.llLtle-canada.mn. us <br /> MEMORANDUM <br /> TO: Mayor 131esencr atnd Members of the City Council <br /> PROM: Joel Hanson, City Administrator <br /> Shelly Ruecl<ert, Cinance llirector <br /> llATE: July 23, 2010 <br /> 12E: Business llevelopment Loan - 13ob Wagner <br /> "flee LcgislaCUre recently passed a Jobs t3ill which allows for the use of'Tax Increment financing <br /> (T[F) Co spur new construction and, therefore, job creation (see attached). "This has provided the <br /> City more opporhmiCies to offer "TIP financing. <br /> Concurrently, we have been in discussions with 13ob Wagner Chc past several months regarding <br /> MeC Council SAC fees assessed. Staff had been researching an allowable method to provide a <br /> payment schedule for these charges. Dw•ing the couese of these discussions, I3ob Wagner noted <br /> that he has been tenable to obtain bank financing 1vr tenant build-out. Staff asked for more <br /> details regarding the development's existing financing and Che capital needed to complete tenant <br /> build out. Staff has reviewed Che inlonnation provided including the cash flow available upon <br /> build out. Based on [his review, it is staffs opinion that providing'I•IP financing would be an <br /> investment opportunity. 'I he proposed transaction is an Inter-fund loan TIF District 2-1 of up to <br /> $291,675 at 6% interest with a 15-year amortiratiou schedule and a balloon payment due at 5 <br /> years. Presently, Che 5-year U•utsury races arc between 1.5% and 3.0%. <br /> The proposed transaction would result in developer debt to the TIF District and, in turn, the TIF <br /> District would have an inter°fuud loan due to a governmental fund. "fhe building cash flow is <br /> anticipaCed Co be Che source of repayment to the TIF Fund. FIowcver, if the project tails, the <br /> existing'I•II' collections of the district are sufficient Co repay the Inter-fund loan, thus providing <br /> additional security for the City's loan. The $261,675 loan would fund Che following: <br /> Met Council SAC Fee $56,675 <br /> Existing "Tenant Expansion $45,000 <br /> New'I'enanC (Neatoscan) $100,000 <br /> Assumption of Owner Financing $90 000 <br /> $291,675 <br /> 1 <br /> <br />