08-25-1997 EDA - Laserfiche WebLink

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City of Mounds View Staff Report August 21, 1997 410 Page 3 Development Assistance Agreement: With the most recent negotiations the final development assistance agreement for building N includes the following terms. 1. The assistance package would provide The Everest Group with a maximum 15 year pay as you go note at 90/10 split. This would reimburse for the fair market value of the land and TIF eligible public and site improvements to be estimated and attached to the agreement as Exhibit D and E. 2. Similar to the Zep manufacturing project the agreement would state that the developer will provide satisfactory written substantiation of the amount and nature of the Development Costs for which reimbursement is sought and that only Available Tax Increment shall be used to pay the amounts otherwise due on the EDA Note. Therefore, if the increment projected is not collected, the EDA is not obligated to pay the developer more than 90%of what is available for the 15 increment years up to a maximum of$1.2 million. 3. The land value of$615,000 is based upon an appraisal commissioned by the EDA and • paid by Everest. 4. The increment will be pledged, as previously agreed to, subject to the EDA's district debt service or prior bonds. 5. Everest's development and contractor profit is not covered as a reimbursable expense. 6. As currently drafted Everest will have until Dec. 31, 1999 (two years)to construct the project with pay-as-you-go provisions applicable only after construction is complete. Everest is requesting that this date be extended to Dec. 31,2002 (five years). Staff would be willing to recommend acceptance of this provision as noted above. This would need to be acceptable to the EDA as it is a significant change from the terms agreed upon in May. An amendment to the attached resolution would need to be made to accept Everest's request and is reflected in Resolution No. 97-EDA67 Form B. In either case, the final payment date can not exceed February 1, 2014. 7. Assessable public improvements can be done by the City and assessed against the property if and when the City wished to complete improvements to Program Avenue. 8. No provision was made that would expose risk to the EDA due to changes at the State legislature by the reduction of the commercial/industrial tax classification rates. The • increment would incorporate any reduction in the classification rate which may reduce the amount reimbursed to Everest.