09-11-2013 Council Agenda - Laserfiche WebLink

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MAYOR Bill Blesener COUNCIL Rick Montour John Keis Michael McGraw Shelly Boss 515 Little Canada Road, Little Canada, MN 55117 -1600 (651) 766 -4029 / FAX: (651) 766 -4048 ADMINISTRATOR www.ci.Iittle- canadaann.us Joel R. Hanson MEMORANDUM TO: Mayor Blesener and Members of the City Council FROM: Joel Hanson, City Administrator DATE: September 6, 2013 RE: Pinetree Pond (TIF 6 -1) Development Agreement Being out of the office so much of the week has hindered the completion of this agreement. I did meet with the Developer and his attorney today and I believe we have essentially finalized all of the terms of the agreement. I need to redraft some sections and I won't get that completed until early next week. The two major changes are the way we handle the distribution of the excess developer equity and the minimum value of the homes to be built. Regarding the minimum value, the original concept had the developer agreeing that the County's estimated market value for each home would be at least $450,000. The problem with this concept is the Developer can't guarantee that without an assessment agreement. Assessment agreements work well for commercial project, but I believe they would make it difficult to sell lots /homes in this project if we were to require them for each lot. We then moved to an alternate concept with a TIF guarantee. This creates a lot of uncertainty for the developer and extends out for a number of years. To resolve this issue, we will be changing the language to say the developer will be selling all homes in the development at an average value equal to or greater than $475,000. This is controllable by the developer and it also gives the City some additional protection in that estimated market values will likely track closely to the certificate of real estate value (CRV) that is filed at the time of each sale. The Developer has agreed to this change. The change note above then affects the distribution of the excess developer equity. If there is no TIF Guarantee, there is no need to maintain an amount for this purposed. The developer's attorney also suggested a reduction in the amount to be held from $300,000 to $200,000. That is not an unreasonable request given the circumstances we are dealing with. I will forward the final draft early next week. cc: Masterpiece Homes, Inc.