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• Item No. 7C ,-1 -- Staff Report No. EDA-97-72C Meeting Date 5-12-97 • 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: May 9, 1997 Overview: At the April TIF Workshop, Tim Nelson of the Everest Group spoke to the EDA with regards to their proposal to build the 103,000 square foot Building N in the Mounds View Business Park. (See attached map for location of building). Staff was directed to bring a recommendation for the EDA's consideration regarding a TIF agreement with the Everest Group. • History: In 1993, Everest requested $900,000 of TIF assistance over 13 years at 9% interest with a 90\l0 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. The EDA decided to offer Everest with$450,192 of assistance for 5-7 years at 7% interest with an 85\15 split. Everest was willing to accept a total of$450,000 for 11-12 years at 8.5% interest. There was no agreement on the negotiations and therefore the project did not proceed in 1993. Everest informed the City that due to the lack of TIF the proposed tenant had elected to locate elsewhere. In 1994, discussions were open again for the development of Building N due to Everest's negotiations with a"mystery company". The proposal,which was done by Casserly, Molzahn&Associates, requested $808,441 for 9 years at 7% interest at an 85\15 split. Through these negotiations,the EDA made informal decisions with regards to parameters for use of TIF. Those parameters included the EDA's desire to use TIF for an owner occupied building verses a leased facility. The EDA did note that they would consider a long term leased project(for at least the duration of the TIF agreement) if the EDA had prior knowledge of the company prior to signing an agreement. Again,this proposal did not proceed as the"mystery company" never materialized. Again in 1995, the Everest Group came to the EDA to reconsider the decision to have an owner • occupied building prior to signing a development agreement. They were ready to build the