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<br /> MINUTES <br /> <br /> CITY COUNCIL <br /> <br /> JULY 28, 2010 <br /> The Administrator indicated that the existing owner financing would <br /> remain in place and would be subordinate to any City loans. "I'he City <br /> loan would be subordinate to the bank and SBA financing. He also <br /> indicated that an administration fee would be added to cover the City's <br /> costs in this transaction. The Administrator recommended that the hearing <br /> be called for the August 25, 2010 Council meeting. <br /> Blesener asked if a review would be done of lease agreements, etc. to <br /> ensure that there are the resources available to make loan payments. The <br /> City Administrator reported that Mr. Wagner would be required to submit <br /> all documents that a bank would typically look at in underwriting a loan <br /> such as this. <br /> Keis noted that this would be a loan to Mr. Wagner and not subsidized by <br /> TIF unless he would default on the loan. The City Administrator replied <br /> that that is correct, but noted that TIF dollars would be used, not general <br /> fund taxpayer dollars in the event that Mr. Wagner defaults. <br /> Mr. Wagner stated that he would like to build out the remaining vacant <br /> space in his building as well as do tenant improvements for two existing <br /> tenants. He noted that his lack of build out money is preventing him from <br /> renting the remaining space. Wagner also indicated that the $56,000 SAC <br /> charge is a bitter pill to swallow and he questioned Met Council's <br /> classification of his rental spaces in determining this SAC charge. <br /> The City Administrator reported that the Met Council classification <br /> methods are based on comparable uses and noted that they are looking at <br /> revising their methodology. However, he did not believe they would go <br /> back and revised existing classifications. <br /> Blesener asked if the next step in the process was the public hearing. The <br /> City Administrator indicated that he told Mr. Wagner that if the Council <br /> was not interested in pursuing this opportunity, they would say so tonight <br /> and not move forward in the process. <br /> Wagner reported on the growth potential of Neato Scan as well as the <br /> difficulty in obtaining bank financing. <br /> The Administrator reported that City staff is proposing a 15-year <br /> amortization schedule, 6% interest rate, and 5 year balloon. The goal <br /> would be that Mr. Wagner obtains private financing in five years. <br /> Blesener noted that the Legislature has recognized the problem that <br /> businesses are having in this economy by allowing the use of TIF funds in <br /> this fashion. Keis asked if utilizing these funds in a loan impacts any <br /> 12 <br /> <br />