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i� a.7.a <br />raj, zze <br />AGENDA ITEM 5 <br />STAFF ORIGINATOR: Briars Wessel <br />DATE: 1/24/00 <br />TOPIC: Consideration of the Contract for Private <br />Development between Lino Lakes EDA and H&L <br />Mesabi <br />BACKGROUND: <br />This development contract outlines the conditions for public assistance to H&L <br />Mesabi for the construction of a 15,000 SF facility on 3.1 acres in the Apollo <br />Business Center (see attached map). <br />In this agreement, the city agrees to provide a maximum amount of tax increment <br />financing totaling $110,200, which amounts to 16% of the MMV. The agreement <br />removes the assessments of $65,3994 upfront, and reimburses the developer a <br />$5,000 escrow upon completion of the building. The remaining $39,806 will be <br />provided on a pay-as-you-go basis toward the cost of the land. The city will be <br />reimbursed first for the assessments and administration costs, and then the <br />developer will receive the pay-as-you-go increment. Estimated payback for H&L <br />Mesabi is in 2009, seven years from the first tax collection. <br />This project is in TIF District 1-9, which requires a 10% local contribution <br />($13,220) from the city's general fund. The interest that the city has lost on the <br />years it has deferred assessments in the business park is a legitimate expense <br />that will cover the local contribution. <br />OPTIONS: <br />1. Approve the contract for private development between Lino Lakes EDA and <br />H&L Mesabi <br />2. 2. Return to staff for further consideration <br />RECOMMENDATION: <br />Option 1 <br />