Laserfiche WebLink
MEMORANDUM <br />TO: Mayor Fahey and Members of the City Council <br />FROM: Joel Hanson, City Administrator <br />DATE: April 9, 2004 <br />RE: Kandice Heights I Development Agreement Amendment <br />As part of the initial Kandice Heights I development agreement dated May 1, 1990, an annual <br />TIF guarantee of $54,675 was required. When the property was sold in the late 90's, we <br />agreed to reduce the guarantee to an amount equal to our annual debt service requirements for <br />the bonds associated with this project. (Each year's TIF collections are to be compared to <br />each year's debt service payment.) This property generated TIF exceeding the debt service <br />requirements until legislative changes started impacting the class rates for commercial <br />property. As a result, TIF shortfall amounts have occurred in 2002 and 2003. (Because <br />annual debt service declines in 2004 and 2005, the shortfalls no longer occur.) See the <br />attached spreadsheet. <br />I have spoken with the owner of this property, Mr. Jeff Royce. The concept I believe he will <br />agree to is to pay us $8,626 at this time as payment in full for all past and future TIF <br />guarantees. (Please note that the debt service on this issue will be paid off in 2005.) In <br />return, we will eliminate the letter of credit requirement whereby he pays a fee to provide a <br />LOC in the amount equal to the annual TIF guarantee. This will save him over $1,108 a year <br />in 2004 and 2005. That leaves him a net cost of about $6,410 to fulfill his TIF guarantee <br />requirements. (Foregoing the TIF guarantee LOC under this arrangement poses no risk to the <br />City.) <br />Subject to Mr. Royce's final approval of this concept, I would recommend the City Council <br />approve this amendment to the Kandice Heights I development agreement. <br />cc: Jeff Royce <br />