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09/14/1998 Council Packet
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09/14/1998 Council Packet
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City Council
Council Document Type
Council Packet
Meeting Date
09/14/1998
Council Meeting Type
Regular
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Mr. Batty noted that TIF is not available for this project, and discussed the merits of this <br />plan. In it, the EDA would enter into an agreement with the city, and is a better approach <br />for this project than a tax abatement, another form of reimbursing city taxes. EDA <br />President Sullivan asked what would happen if the developer defaulted. Mr. Batty said the <br />pay -as- you -go assistance kept the city from risk, because it would be reimbursed only if <br />the project were built. Under 429, if a property defaults, assessments and taxes are paid <br />first. Under this plan the $69,600 is the increase in the amount of taxes this property now <br />generates. <br />Mr. Mulrooney addressed the issue of how soon a shopping center would develop without <br />assistance. He said that underwriting the project reduced the hurdles to development and <br />made it more feasible by allowing greater latitude on the part of the developer to reduce <br />rents, etc. He suggested a shopping center was unlikely to develop at that site without <br />assistance until the market (head count) was higher, probably in the range of five years. <br />Mr. Wessel noted that assistance makes the project less dependent on the current <br />population. <br />Mr. Mulrooney added that because of fiscal disparities, approximately 40% of the gross <br />taxes went into the metro pool and were returned to the city, which is a fiscal disparities <br />winner. Mr. Batty added that the substance of the development agreement would spell out <br />what the city received in exchange for assistance, and a threshold could be set so if the <br />development did not draw major development, the deal would be off. The burden would <br />be on the developer. <br />EDA Member Bergeson noted that if development did not occur for five years if no <br />assistance were provided, the city was really only losing five years worth of taxes, not 10. <br />He added that his reason to support this project was not so much financial as to keep the <br />momentum for development of the Town Center. <br />Mr. Batty informed the Authority of the procedure, which would require everything to <br />come back for approval, plus a public hearing. EDA President Sullivan said a decision <br />should be made before the city proceeded with it, since it wouldn't help the city's <br />credibility to pull out after leading the developer on. Mr. Wessel said members should not <br />initiate the plan until they felt comfortable with it. Ms. Divine noted that an escrow would <br />be required of the developer before formal action that required legal services was initiated. <br />EDA President said the members needed time to think about it, and the absent members <br />needed information. It was agreed it would go to the next Council work session and they <br />intended to act on it at the next EDA. <br />ADJOURNMENT <br />EDA Member Bergeson moved to adjourn. EDA Member Dahl seconded the motion. <br />Motion passed unanimously. <br />
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