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• • Item No. 8A Meeting Date: July 18, 2002 Type of Business: EDA • WS: Work Session; PH: Public Hearing; CA: Consent Agenda; EDA: EDA Business City of Mounds View Staff Report To: Mounds View City Council From: Aaron Backman, Economic Development Coordinator Item Title/Subject: Expenditure of TIF for the Demolition of the Building at 2214 Co. Rd. 10 Date of Report: July 18, 2002 Background Over the past six months, Community Development staff has been interacting with Abbey Carpet, a floor covering business located in New Brighton. The business has to relocate its operations due to an ongoing redevelopment project in that community. The owner of the store, John Kopas, has been in business for 29 years and has been looking for a visible location for a 10,000 sq. ft. showroom/warehouse facility. The intent is to construct a 20,000 sq. ft. building, half of which would be occupied by Abbey Carpet. I have provided Mr. Kopas and his builder, Rob Carlson Builders of Blaine, information regarding several sites along Highway 10. The site most attractive to him is the old Perkins Restaurant location. • Negotiations between Abbey Carpet and the Hall family proceeded during May and June. To accommodate the new larger building, the present 4,000 sq. ft. structure will need to be removed. Mr. Kopas asked if the City would be able to provide some financial assistance for this redevelopment project. The Economic Development Commission, at its June 21, 2002 meeting, unanimously approved a resolution directing Backman to explore financial assistance that would take the form of TIF funds allocated for demolition of the existing structure, and/or a tax abatement with a graduated rate over five years. On July 17, 2002 Mr. Kopas provided a written offer to Dan Hall of$700,000 for the purchase of the property(the purchase agreement has been provided to the City). The builder estimates that the new structure will involve an investment of approximately $1 million in Mounds View. Action to be Considered Per the recommendation of the EDC, staff discussed the provision of financial assistance with the business principal and the builder. Mr. Kopas indicated that the greatest need was for demolition assistance. This assistance would be capped at $25,000, that is, not to exceed that amount. It would be paid on a reimbursement basis and anything above that figure would be borne by the developer. The purpose of the assistance is to encourage the redevelopment of a property with a vacant building near the entrance to the City, and to facility the advent of a new business in the community. As part of the Agreement, the EDA agrees to defray up to $25,000 of the costs associated with demolition of the existing structure on the property. • 1