09/28/1998 Council Packet - Laserfiche WebLink

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offering assistance. It is up to the EDA to evaluate whether that cost is worth the additional benefits which have been outlined above. If the EDA decides to pursue this option, there are two agreements which will be necessary. One will be between the city and the EDA and will outline the terms and conditions of the city's assistance to the EDA. Generally, this will be a commitment by the city to pay a specified portion of the taxes it receives from the development to the EDA for its use within the redevelopment project area. The more critical document will be the agreement between the EDA and the developer. The EDA's commitment to the developer absolutely should be on a pay as you go basis whereby its obligation would be limited to the taxes actually paid to the city from the project. If statutory tax rates go down, as they did in 1998 and will again in 1999, or if there are tax delays or delinquencies, there will be less or no money available to assist the developer. This significantly reduces the risk to the city and EDA. Staff recommends that any EDA/developer contract contain several key provisions. The first would be a requirement that no assistance be paid until a predetermined threshold of development is achieved within a specified period of time. This might take the form of requiring that a certain number of square feet of space or building dollar value be constructed within a specified period of time or no assistance would be offered. This would be designed to assure an early and substantial investment in the project. Similarly, it would be possible to exclude the taxes paid by an undesirable use or to negate the EDA's obligations entirely if such a use were included. For example, if the EDA did not want to see a specified use, taxes generated by that project could be excluded in calculating the amount of available assistance or that could even represent a "poison pill" which would cancel the agreement. The EDA could also specify architectural and design controls. This type of control is more or less permanent because once the buildings are constructed, they are likely to remain largely unchanged for a considerable period of time. Good design can be a lasting characteristic of such projects. The converse can also be true. These are only a few suggestions as to the type of conditions the staff envisions in the development agreement. Such provisions would, of course, have to be approved by both the EDA and the developer. I will attend the city council work session on September 23, 1998, and will be prepared to answer any questions you may have with regard to the project. If there is anything you would like to discuss prior to the meeting, please feel free to give me a call at my office at 337 -9262. RHB- 150056 LN140 -64 3