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Potential for Home Buy Out Along Country Drive <br />Page Two <br />*Acquisition of the parcels is governed by State Statute. <br />In order to avoid costs associated with relocation, we must <br />deal with voluntary transactions, have all owners treated <br />similarily, not acquire any parcels if negotiations fail to <br />result in amicable agreements, and the owners must be <br />informed of the fair market value of their property. <br />*Pursuant to Statutory requirements, it appears a <br />development agreement should be required if the City is to <br />acquire the parcels in question. This would necessitate <br />having some performance clauses related to timing and <br />penalty provisions. Depending on the specific structure of <br />that agreement, Loren Brueggemann has indicated a <br />willingness to enter into this agreement. <br />*The developer has also indicated that he feels Phase IV <br />should occur by next year. <br />*If the City is to acquire the parcels in question, we <br />should require that Phase IV occur in this area in order to <br />minimize risk. This would allow us to not only generate <br />tax increments from the project, but also would allow us to <br />recoup some costs from the developer related to his land <br />purchase price. The only caveat that this raises is the <br />timing for the purchase of other parcels based on previous <br />discussions. <br />*Due to the potential for the State changes in commercial <br />property tax factors, we should be requiring a guaranteed <br />minimum tax on Phases II and III in order to ensure <br />sufficient tax increments will be generated to meet this <br />project. This would obviously have to be negotiated with <br />the developer and should include various performance <br />standards to allow taxes to return to normal levels in <br />order to keep the project competitive. (It should be noted <br />that by artificially inflating property taxes we could <br />jeopardize the success of the project.) <br />*The developer indicated that if Phase IV occurred on the <br />parcels in question, we could anticipate between 40,000 and <br />60,000 square feet of building construction in this area. <br />If the City chooses to get involved with the acquisition of <br />these parcels, we are obviously assuming some risks. Because <br />there are no guarantees that Phase IV development will occur, <br />this factor must be kept in mind. It will also be necessary to <br />do a more detailed evaluation on whatever risk the City may be <br />assuming should tax increment collections not be sufficient. <br />Though I feel that we can address these factors, it is important <br />to note them on the front end so we go into this process with <br />our eyes open. <br />Page 2 <br />