11-24-2004 Council Agenda - Laserfiche WebLink

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9k% (ealeatii 515 Little Canada Road, Little Canada, MN 55117-1600 (651) 766 -4029 / FAX: (651) 766 -4048 www.ci.little- canada.mn.us MEMORANDUM TO: Mayor Fahey & Members of the City Council FROM: Joel Hanson, City Administrator DATE: November 19, 2004 RE: Sherman Associates Redevelopment Update MAYOR Michael 1. Fahey COUNCIL Jim LaValle Matt Anderson Rick Montour Bill Blesener ADMINISTRATOR Joel R. Hanson George Sherman will be present at Wednesday's meeting to update the Council on the Rice Street/Little Canada Road area project. Some key issues he will discuss include the leasing status of Th.e Lodge and the Lodge's retail area, town home sales and construction completion at the Villas, and constntction of the new commercial building at the NE corner. One issue we will discuss is the completion of town homes at the Villas. The development agreement required that 26 units be done by December 31, 2004. Only 15 will be completed. (Four others are 80% complete and another seven are under construction.) Our development agreement anticipated this possibility and requires the developer to advance pay the TIP guarantee associated with the number of units required to be completed. Mr. Sherman would like to amend the development agreement to revise the townhome completion schedule. Under the current agreement, 26 units were to be completed by 12/31/04 and the remaining 18 by 12/31/05. He would like the schedule revised to 26 units by 12/31/05 and 19 units by 12/31/06. (Note one additional unit has been added.) The change in schedule will prevent Sherman Associates from going into default on the development agreement, but it will not relieve the financial obligations associated with the TIF shortfall guarantees. (This means he will still be making TIF guarantee payments as if he had complied with the initial schedule.) A "First Amendment to Development Agreement" has been prepared to address this issue. (Note: any action on these documents must be taken as the EDA.) Another issue he will discuss is the status of construction of the 26,000 square foot commercial building on the NE corner of Rice and LC Road. This building was to be 50% completed by 12/31/04 and substantially complete by 4/30/05. Again, while he won't make the required completion schedule, he is not relieved from TIF guarantee requirements. To resolve this issue, Mr. Sherman would like to amend the purchase agreement to push out the closing date while at the same time granting him a right -to -enter for the purpose allowing construction to start prior to that date, at the developer's risk. We need to get a clear :nilerstanding for his inte.,i to start and complete this important phase of the project. (Again, this requires action by the EDA.) 1