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MAYOR <br />Michael I. Fahey <br />COUNCIL <br />Beverly Scalze <br />Jim LaValle <br />Matt Anderson <br />Rick Montour <br />515 Little Canada Road, Little Canada, MN 55117-1600 ADMINISTRATOR <br />(651) 766 -4029 / FAX: (651) 766 -4048 Joel R. Hanson <br />Email: cityhall @ci.little- canada.mn.us <br />MEMORANDUM <br />TO: Mayor Fahey and Members of the City Council <br />FROM: Joel Hanson, City Administrator <br />DATE: June 22, 2001 <br />RE: Redevelopment Bond Sale <br />Attached are projections of a $3 million taxable bond issue for the redevelopment area. <br />The first shows tax increment estimates based upon today's tax system. It also assumes <br />potential development on the Venetian property and the Market Place site. The second <br />sheet indicates tax increments assuming current property tax reform discussions. You <br />will note we when from a surplus situation to a projected deficit (a swing of $130,000 to <br />$170,000 per year). Our assumption is the TIF grant program would be used to erase this <br />deficit. <br />If redevelopment does not occur following this format, we would collapse that portion of <br />the bond issue that is not supportable from existing TIF cash flows plus known new <br />development. This scenario should still allow us to proceed with the office project on the <br />northeast corner of Rice Street and Little Canada Road. <br />As I mentioned in earlier correspondence with you, we will need to liquidate some <br />current investment holdings to allow us to purchase this $3 million bond issue. We may <br />absorb some small losses to do so, but we will be locking in a higher yield (7.10 %) with <br />the new issue. I will be taking bids on the sale of these investments on Tuesday at which <br />time I will be able to determine the exact impact of this action. If the Council approves <br />the issuance of these bonds, we will close this transaction on Friday, June 29th, <br />Two developers have expressed interest in this project and both may have merit. We will <br />need 'to focus on one of them in the drafting of a development agreement. Staff's <br />recommendation is we should conduct further discussions with them regarding the <br />specifics of their development and return this information to you at which time a final <br />decision can be made. This may require a workshop to meet with both prospective <br />developers. <br />Rusty Fifield will be present at Wednesday's meeting to provide further information <br />regarding this transaction. <br />Page 163 <br />