11-23-2009 EDA Packet - Laserfiche WebLink

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AGENDA ITEM 3 STAFF ORIGINATOR: Mary Alice Divine CC MEETING DATE: November 23, 2009 TOPIC: Resolution 09-01 - Addendum to Contract for Private Development between the Lino Lakes Economic Development Authority and Lino Lakes Lodging, LLC BACKGROUND In 2004 the EDA and the City entered into a Development Contract with Hartford Development, Inc. and provided assistance within Tax Increment Financing District No. 1-11. As pursuant to the contract, redevelopment occurred and a successor to the contract (Country Inn & Suites) redeveloped a portion of the commercial component of the minimum improvements as defined in the original contract. A developer is acquiring the hotel to convert it to an assisted living and memory care facility. The EDA has an interest in ensuring that the developer or its successors continue to pay real estate taxes on an assessed value that provides as much tax increment as before the conversion. This agreement obligates payment of taxes on a minimum assessed value of $3,750,000. The county assessor may, in actuality, place a higher value on the facility once final plans have been submitted, and the final assessed value will be executed in an assessment agreement that will be valid until the maturity date of the original contract. In order to provide the developer with a future option to sell the facility to a non-profit, the agreement requires a payment in lieu of taxes (the "PILOT Agreement"), for a period of 30 years if a non-profit owns the facility. Prior to the contract maturity date a non- profit would be required to make payment as if the property were subject to taxes. After the maturity date the annual payment would be only on the City's share of taxes. RECOMMENDATION Staff recommends approving Resolution No. 09-01. ATTACHMENTS 1. Addendum to Contract for Private Development - f)-)Ce ‘kz-/U-L7‘77- r ,6,5-1714;42 720-tc. tee- /f-a-o-c V L 44=4el r LAJ -yt , i