05-14-2003 Council Agenda - Laserfiche WebLink

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oi Little Canckto ?ate COMMUNITY PRIDE 1953 - 2003 515 Little Canada Road, Little Canada, MN 55117 -1600 (651) 7664029 / FAX: (651) 766-4048 ww'u ci Jittle- canada. mn. us MEMORANDUM TO: Mayor Fahey & Members of the City Council FROM: Joel Hanson, City Administrator DATE: May 9, 2003 RE: Sherman Redevelopment Update it -(AYOR Michael I. Fahey COUNCIL Jim LaValle Matt Anderson Rick Montour Bill Blesener 21DAUNISTIC4TOR Joel R. Hanson Status of Development Agreements: We had hoped to have the development agreements ready for execution for the townhome and commercial portions of the projects. However, some unexpected delays on the commercial portion of the project are slowing us down. While the townhome portion is ready to proceed, I do not want to execute that component unless the commercial component is also wrapped up. (We need the increment guarantees from the commercial portion to make the entire project work.) Mr. Sherman is diligently working on this aspect and we should have everything ready to go by not later than the end of June. Amended Right of Entry: In the meantime, Mr. Sherman does want to get moving on the townhome portion in order that he can have units ready for sale this fall. To that end, we are proposing the Amended Right of Entry Agreement that is attached for your approval. This agreement will enable him to grade the site and commence the installation of utilities, all at his risk. If we do not achieve execution of the development agreements, he would be out the dollars he has invested in this work. (Obviously, this creates a great incentive to get the development agreements executed.) This amendment also works in our favor in that the more units he gets completed by the end of this year, the faster we achieve the desired tax increment income stream. Subject to any comments of the City Attorney, I would recommend approval as drafted. Environmental Clean -up: Mr. Sherman has made application to the Metropolitan Council for clean -up funds for the contamination that exists on the former Guerin property. This application was required by our Stipulated Settlement Agreement with the Guerin Family. The Developer has also prepared a remediation action plan as part of this process. It appears the clean -up costs could be significantly less that our initial estimate, which means money, would be returned to the Guerins' if this holds true. Modifications to Financing Plan: Staff is also recommending we modify our financing plan for the project. As you will recall, Council authorized the issuance of $3,440,000 of G.O. Taxable Tax Increment Refunding Bonds. Council Member Blesener raised the question about the need to refinance if the City owns the bonds (due to negatively impacting the yield we pay ourselves coupled with the costs of issuance). Staff initially felt that it made sense to refinance due to lower interest rates and the long -term well being of the TIF district. It also did not appear that we