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Contract for Private Development <br />Based on an analysis of the information provided by Lyngblomsten, staff and the City’s financial <br />consultants are recommending providing $3,600,000 in assistance over a period of <br />approximately 9 years. The assistance will be provided as follows: <br />1. $382,000 from the Willow Ponds TIF District 1-5 for Qualified Development Costs <br />2. TIF in the amount of $3,218,000 for Qualified Development Costs <br />The assistance from TIF District 1-13 will be on a “pay as you go” basis for site improvements, <br />building and infrastructure costs. The EDA will issue a “note” in the amount of $3,218,000 in <br />exchange for the improvements identified in the agreement. The developer will be reimbursed <br />by tax increments generated by the development on an annual basis. The TIF note is expected to <br />be paid off within 8.5 years based on an initial taxable market value of $28,993,000. Should the <br />taxable market value increase the note will be paid off sooner. <br />The contract does includes a provision to reduce the principal of the TIF note based on actual <br />construction costs. The potential reduction is capped at $160,900 which represents a pro-rata <br />share of any project cost savings. <br />Additionally, the contract includes provisions for the EDA to share in the profit of any land sale <br />proceeds for the commercial area if said proceeds exceed 105% of the developer’s acquisition <br />costs. <br />A summary of the provisions of the Contract for Private Development, prepared by Kennedy & <br />Graven, is attached. Julie Eddington, the EDA’s Development Consul will be present at the <br />meeting to address any questions from the Board. <br />EDAC Recommendation <br /> <br />The City’s Economic Development Advisory Committee reviewed the project and recommended <br />approval of the TIF plan and contract. <br /> <br />RECOMMENDATION <br /> <br />The proposed project will increase the City’s tax base, provide senior housing opportunities, <br />provide needed infrastructure improvements and serve as a catalyst for redevelopment of an <br />important community gateway. <br /> <br />Staff is recommending approval of Resolution No. 19-01 and Resolution No. 19-02. <br /> <br />ATTACHMENTS <br /> <br />1. Map of TIF District 1-13 <br />2. Resolution No. 19-01 <br />3. TIF Plan for District 1-13