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Item No. 4c- <br /> Staff <br /> Report No. <br /> Meeting Date: 2/2/98 <br /> Type of Business: WK <br /> WK: Work Session;PH:Public Hearing; <br /> CA:Consent Agenda;CB:Council Business <br /> City of Mounds View Staff Report <br /> To: Mayor and City Council Members <br /> From: Rick Jopke, Community Development Director <br /> Item Title/Subject: Status Report on the Mermaid Hotel/Banquet Facility <br /> Date of Report: January 28, 1998 <br /> Background: <br /> At the January 12, 1998 City Council meeting Charlie Hall, Dan Hall and John Seibert presented <br /> their preliminary concept for the expansion of the Mermaid to include a 11,700 square foot <br /> banquet facility and a 185-room hotel. They also presented preliminary proformas and requested <br /> city tax increment assistance. City staff and Dave Maroney, the city's financial adviser on this <br /> project,have been working with John Seibert to review and refine the numbers to determine what <br /> is necessary to make this project work. The following is what has been determined so far: <br /> Project Ownership: A Limited Liability Corporation(LLC) will be formed to own the <br /> hotel and 50% of the common access. The LLC will likely comprise perhaps 3-4 <br /> investors. Charlie Hall will transfer the land needed for the hotel to the LLC and will own <br /> shares in the LLC equal to the market value of the land transferred. Land needed for the <br /> banquet facility may be transferred to Dan Hall. The remainder of the site would remain <br /> in its current ownership. <br /> Land Acquisition: The project as shown in the preliminary concept would require the <br /> acquisition of three parcels and a portion of a fourth parcel. City staff is working with the <br /> developer to determine if other design alternatives are possible to reduce potential <br /> acquisition costs. City staff has had discussions with the RentAll business on the corner <br /> of County Road H and Highway 10. The owner has indicated a willingness to cooperate if <br /> an appropriate alternative site in the area can be found and if the move would work <br /> financially for them. Alternate sites being considered include the vacant site behind the <br /> Super America site, and the former PAK Co. site on Highway 10. City staff has contacted <br /> two relocation consultants and is currently evaluating their proposals. The <br /> relocation consultant would work with the businesses which would be displaced by this <br /> project to find other sites and insure that they receive the benefits which are required by <br /> federal and state laws. <br /> TIF Assistance: The preliminary numbers provided by the developer show a need for <br /> $700,000 of TIF assistance for the banquet facility and additional $1,000,000 for the <br /> hotel. Project costs show a total of$800,000 for land acquisition. This may be low based <br /> on the amount of land to be acquired. The hotel developer has indicated that TIF <br />