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HomeMy WebLinkAbout08-24-1998 EDA PacketAGENDA ECONOMIC DEVELOPMENT AUTHORITY MONDAY AUGUST 24, 1998 6:00 P.M. 1. Call to Order and Roll Call 2. Consideration of Minutes of Monday, June 22, 1998 3. Discussion Item: Development proposal, JADT Development Group (Shopping Center) 4. Adjourn CITY OF LINO LAKES ECONOMIC DEVELOPMENT AUTHORITY MINUTES DATE: Monday, June 22, 1998 MEMBERS PRESENT: C. Lyden, C. Dahl, K. Sullivan MEMBERS ABSENT: J. Bergeson, A. Neal OTHERS PRESENT: Brian Wessel, Mary Divine, Jerry Shannon CONSIDERATION OF MINUTES EDA Member Lyden moved to approve the minutes from the June 8, 1998 EDA meeting. EDA Member Dahl seconded the motion. Motion passed unanimously. CONSIDERATION OF RESOLUTION NO. 98-02 AWARDING THE SALE OF $5,350,000 LEASE REVENUE BONDS, SERIES 1998A (CIVIC COMPLEX) Mr. Jerry Shannon from Springsted, Inc. explained to the Authority that this resolution awarded the sale of the bonds for the Civic Complex to the successful bidder, Cronin and Company, Inc. at a net effective rate of 5.26%. The resolution also authorizes the execution of lease agreements with the city and all related documents. He added that Moody's rating of the EDA moved upward from Baa to Baal, and the city's rating from Baal to A3. The favorable interest rate on the bonds was due to the rating increase and a good market. EDA Member Lyden asked if it were possible to pay the bonds off early without penalty. Mr. Shannon said in the future it would be possible to refinance the bonds. Mr. Shannon said that the city will lease the site to the EDA until the bonds are repaid, and when all the required lease payments are made, the land and the building will be owned by the city. EDA Member Lyden moved to approve Resolution No. 98-02. EDA Member Dahl seconded the motion. Motion passed unanimously. ADJOURNMENT EDA Member Dahl moved to adjourn at 6:15 p.m. EDA Member Lyden seconded the motion. Motion passed unanimously. AGENDA ITEM 3 STAFF ORIGINATOR: Brian Wessel DATE: 8/24/98 TOPIC: Discussion Item: Development Proposal, JADT Development Group (Shopping Center) BACKGROUND: Tim Baylor of JADT Development Group has been working with his development team for the past year to assemble land and produce a conceptual plan for the shopping center in the Town Center. He is requesting economic assistance in the development of the shopping center. Various alternatives for providing public assistance to the project have been considered. Lino Lakes has limited ability to provide financial assistance to the project, since tax increment financing is not available. The developer has estimated assessments for Phase 1 at $610,000, plus related engineering costs. Preliminary discussions with Bruce Munneke, the county assessor, reveal that a fully developed Phase 1 should generate net property taxes of approximately $335,723 per year. Net city taxes generated from a fully developed Phase 1 would amount to approximately $69,600 per year based on 1998 tax rates. Staff recommends the city consider a "non -TIP' pay-as-you-go assistance. In this arrangement, JADT would be assessed for public infrastructure improvements to the shopping center. The city could reimburse the city portion of taxes generated until the developer had recouped the cost of assessments, or 10 years, whichever came first. The city's commitment would be formulated in an agreement effective only if development began within a specified time frame. The pros and cons of the proposal: Disadvantages: • It would be 10 years before the city received its portion of the taxes on the shopping center site Advantages: Residents of the city would be provided the shopping opportunities and services not presently available in Lino Lakes. Professionals in the development community have estimated it may be five or more years for a shopping center to develop if incentives are not provided. • The city would have control over development that it would not have without public participation. A development agreement can include expectations of the developer in the areas of architectural and landscape standards, shared parking, transit services and other city requirements. • Only the taxes that are generated by development are reimbursed. The city will be under no obligation to pay more than the taxes that are generated. • The Forest Lake School District and the county receive their portions of the additional tax base, adding to overall tax base stabilization within the city. The process for providing assistance through the reimbursement of the city portion of the taxes begins with the EDA authorizing the preparation of a Redevelopment Project Plan. A redevelopment area could include additional land within the Town Center or along Lake Drive, providing the city with an opportunity to have more control over the type and quality of development that occurs. OPTIONS: 1. Authorize the preparation of a Redevelopment Project Plan and direct staff to proceed with the negotiations for a development agreement with JADT. 2. Return to staff for further consideration RECOMMENDATION: This is a discussion item only. EDA can take action if they desire by directing staff to move forward with preparation of the Redevelopment Project plan and a development agreement.