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EDA Memo-Housing Replacement Program April 8, 1999 Page 2 The developer is now requesting that the Development Assistance Agreement be further amended to clarify certain"housekeeping"matters, including: 1. A change in the date of the Agreement. 2. A revision of the definition of the term"Improvements"to reflect the alternate site plan approved by the City Council in December of 1998. 3. A change to indicate that the development entity is a general partnership and not a corporation. 4. A change to indicate that Jeffrey L. Neilsen is the General Partner and not President of Michael Investments. Jim O'Meara from Briggs and Morgan,who drafted the original agreement on behalf of the EDA,has reviewed the proposed changes and indicated that there are no legal issues with the proposed changes. At least one EDA member inquired about the 8%interest rate specified in Section 3.2 (d)of the proposed Agreement. That particular figure was arrived at during the negotiations that led to the original Agreement in 1997, and it has appeared(unchanged) in each of the revised versions that have been prepared since that time. Mr. David Maroney of Community Partners, who advises the City on TIF and related financial matters from time to time, has indicated that the 8%interest rate is comparable to the interest rates that other cities are currently using in development assistance agreements that are similar to the proposed Building N Agreement. Mr. Timothy Nelson of Everest Development has also indicated that a nearby community(Brooklyn Park) used interest rates of 8.5%, 9%and 9.5%in the last three TIF assistance agreements that it negotiated. I have not yet been able to confirm this information,but I have no reason to dispute it. It is my hope that any other actual or potential concerns regarding the proposed Agreement have been properly addressed through the information that Rick Jopke and I have provided at the last few City Council and EDA meetings. However, if that is not the case, and if questions or reservations about the Agreement still remain,I encourage you to contact me(717-4029),Rick Jopke(717-4021)or Mr. Tim Nelson at Everest(651-636-5500) as soon as possible, so that issues that are of concern to you can be addressed in advance of next Monday's meeting. I have attached a copy of the proposed Resolution, which has not been changed since it was provided to you in connection with the March 8th EDA meeting. In light of its length [30 pages], and the fact that a copy of it was previously provided to you,I have not attached another copy of the proposed Development Assistance Agreement. However, extra copies will be available at next Monday's meeting in case they are needed. Finally, inasmuch as it was not clear to me whether you were previously provided with a copy of Mr. Nelson's letter dated March 10, 1999, a copy has now been enclosed for your review. Mr. Nelson's letter includes a summary of the benefits that the proposed project might provide to the City, along with background information regarding some of the compromises and concessions that the developer agreed to during the course of past negotiations. From a staff perspective,the terms of the proposed Agreement, and the type and amount of City financial assistance, are consistent with other Business Park projects that the City has assisted. The advantages of"closing"this matter by adopting the proposed Resolution include"finishing"this part of the Business Park, increasing the City's commercial tax base,providing new employment opportunities, and maintaining a positive working relationship with a major local developer(who owns other Mounds View properties with significant development potential).