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l <br />515 Little Canada Road, little Canada, MN 55117-1600 <br />(651) 766 -4029 / VAX: (651) 766 -4048 <br />www.(I 111.t1e- -Can ad a. mn. us <br />M MORANDUM <br />MAYOR <br />13i11 131esener <br />COUNCIL <br />Rick Montour <br />John ICels <br />Michael McGraw <br />Shelly Boss <br />ADMINISTRATOR <br />Joel R. Hanson <br />TO: mayor Blesencr & Members of the City Council <br />FROM: Joel Hanson, City Administrator <br />DA'FE: August 4, 2011 <br />RE: HIA Deferment Pay -Off Policy <br />As you will recall, the City deferred over $800,000 of assessments for Canahury Square's HIA project. <br />I've attached a memo from June of 2010 which outlines the circumstances by which a deferred <br />assessment becomes payable. Even with this policy, we still receive occasional requests to allow the <br />deferred assessment (plus accrued interest) to be spread against a new owner to enable them to complete <br />the acquisition and financing of the unit. Staff has held to the policy outlined in the June 2010 memo. <br />However, this may be limiting some sales. <br />From staff's standpoint, our policy is solid. This was the understanding that was clearly communicated <br />throughout the IIIA process. What appears to be happening is that sales prices have been negotiated that <br />have not included the assessment payoff. When that is added to the transaction, financing is <br />jeopardized. <br />Therefore, staff would like the Council's direction as to how to proceed. There are essentially two <br />options. Option #I would be to stick to our policy and require the assessment be paid at the time of sale. <br />Option #2 would be to allow a new owner to have the outstanding balance spread against the realestate <br />taxes. h) this case, the number of years of repayment could be set at 15 (saute as the bonded assessment. <br />term) or set at the number of years remaining on the other active assessments. The interest rate on the <br />active assessments is 5.75% <br />1 <br />