07-25-2001 Council Agenda - Laserfiche WebLink

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MAYOR Michael I. Fahey COUNCIL Beverly Scalze Jim LaValle Matt Anderson Rick Montour 515 Little Canada Road, Little Canada, MN 55117 -1600 ADMINISTRATOR (651) 766 -4029 / FAX: (651) 766 -4048 Joel R. Hanson Email: cityhall @ci.little- canada.mn.us MEMORANDUM TO: Mayor Fahey & Members of the City Council FROM: Joel Hanson, City Administrator DATE: July 20, 2001 RE: Development Agreements With the recent changes in State Law relative to tax increment financing (TIF) districts, we need to complete development agreements prior to August 1, 2001 to retain eligibility for the State's TIF grant program. We also need to finalize negotiations with Mr. Biagini relative to his default status on the Phase II portion of his project. To that end, we are preparing agreements for the following projects. • Oppidan, Inc. for Rice Street and Little Canada Road. (See letter to Tom Bray outlining the key concepts of the agreement.) A separate agreement will also be drafted for Phase II to attempt to keep the south side of Little Canada Road in play for possibly redevelopment. • Biagini Amendments. (See outline of key concepts for these revisions.) With the concepts proposed, the City is now much more secure in collection of TIF guarantees the Developer will owe due to the new property tax system. Mr. Biagini and his attorney verbally agreed to these concepts. I am expecting execution of a revised agreement before Wednesday's meeting. I have also made the Developer aware that major changes to these concepts will be unacceptable. Construction is to start on the Phase II building by August ls`. Mr. Biagini has also involved another party in the partnership with a substantial net worth that provides further protection to the deal. He has also informed me that the building will be 100% office use that further enhances the potential of the project. • Masterpiece Homes revisions to the Park View Court project. The major change here is taking this project from a "Pay As You Go" basis to a bonded project. Doing so will be contingent upon the project at Rice & Little Canada Road moving forward. It will also attempt to build in some protect to ensure the TIF grant program is in place. (This means our payment will be delayed until 2002 assuming doing so will keep us in compliance with the revised laws.) This will also protect cash flows off that project that would have been significantly reduced by the new property tax system. As you can see, final details have not yet been worked out. We will likely need a special meeting on Tuesday the 31' of July to approve the final agreements. (With the notable exception of the RAB amendment that must be done Wednesday night.) Please pick a time that is convenient. Cc: Paul Tucci Dick Biagini Gordie Howe PAGE 82