05-11-1999 Council Agenda - Laserfiche WebLink

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Mayor & City Council May 7, 1999 Page 2 The key points of the development agreement with Mr. Biagini are as follows: ♦ This would be a bonded transaction versus a "pay as you go" format. The bonds will be taxable and I am evaluating the feasibility of the City purchasing all or a portion of these bonds for our own investment instrument given the higher yield they will pay. ♦ An assessment agreement will be required to guarantee adequate value from the land and structure. The structure will be valued at $65 per square foot and the land at a $1.50 per square foot. ♦ Because this is a bonded transaction, we will also require a cash flow guarantee on the tax increment generated by the project to protect us against further compression of the class rates. The guarantee will be based on the class rates in effect in 1999 applied against the estimated market value generated from the assessment agreement. ♦ The 30,000 square foot office building will need to be completed by December 31, 1999. This is to ensure there will be full taxes payable in the year 2001 to meet debt service cash flow requirements. Should the project not be completed by that date, the developer would then have to make up for any cash flow lost by the later completion. ♦ The Precision Tree property needs to be acquired. Half of the property will be needed for the office building project. Because of the timeline involved with that acquisition, the City will need to commit to the use of eminent domain if necessary and guarantee property availability by the end of October in order that the parking lot can be completed in time. The balance of that property will be combined with the acre we already own to the north. ♦ Mr. Biagini will also be committing to construct at least 15,000 square feet of office /warehouse building on the northern parcel (balance of site). This project will need to be completed by December 31, 2000. ♦ The land sale price to Mr. Biagini will be $1 for the office building site and a $1.50 per square foot for the office /warehouse site. These costs will be after demolition of any structures on the site. The City will also provide for an allowance of up to $30,000 for a retaining wall on the north site should it prove necessary. All other site corrections, screening, or development costs will be the responsibility of the developer. It should also be noted that the lower land sale price associated with the office building is possible because of the substantially higher estimated market value generated by that project. Mr. Biagini will be providing us with a site rendering for the proposed building. If the Council is comfortable with this concept as explained, I would recommend we authorize the execution of the Fasciana and Nadeau purchase agreements. I would also recommend that you authorize me to finalize work on the development agreement with Mr. Biagini governing this transaction as outlined. JRH:kpp cc: Dick Biagini Patrick Daulton, CI Title Page 11