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Item No. 7B Staff Report No. EDA-97-83C Meeting Date . 8-25-97 • Type of Business EDAB WK: Work Session;PH:Public Hearing; CA:Consent Agenda;EDAB:EDA Business Mounds View Economic Development Authority Staff Report To: Mounds View Economic Development Authority From: Cathy Bennett, Director of Economic Development Item Title/Subject: Consideration of Resolution No. 97-EDA67 Approving and Authorizing the Execution of a Development Assistance Agreement with The Everest Group for Building N Date of Report: August 22, 1997 Overview: At the May 12, 1997 EDA meeting specific terms for a development assistance agreement were presented to the EDA and a motion was made to direct staff to prepared a development assistance agreement accepting the terms as presented. Attached is the final development assistance • agreement which includes the terms discussed at the May meeting with the exception of one item. Tim Nelson of the Everest Group is requesting that the EDA extend the term required to complete the 103,000 square foot Building N in the Mounds View Business Park from 1999 to 2002. This would give Everest five years to complete the building instead of two years as previously discussed. Staff is willing to recommend this change for the following reasons. • The longer Everest waits to complete construction the less increment will be available for reimbursement as the term of the agreement begins upon execution. On the flip side though the City does not collect increased increment until construction in complete. • The City does not incur additional risk by extending the term since it is a pay-as-you-go agreement. • An agreement is reached now with the understanding that the terms are nonnegotiable at a later date. Everest is concerned that if they are unable to secure a tenant and complete the construction of the building by the end of 1999 that they would have to begin negotiations again with potentially a new Council and/or staff. History: In 1993, Everest requested$900,000 of TIF assistance over 13 years at 9% interest with a 90\10 split. • This was in response to a company that was willing to lease 70 percent of the facility from Everest. There was no information provided to the EDA with regards to the proposed tenant. At that time Everest was willing to reduce the duration of the agreement from 13 to 10 years.