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©mr OF REQUEST FOR EDA CONSIDERATION Agenda Section . <br /> STAFF REPORT Report Number:g0-7 er7M/� <br /> DHOS Report Date: 9/26/96 <br /> WORK SESSION MEETING DATE <br /> EW September 30. 1996 <br /> S <br /> ' S$•Partnecsv`Q <br /> Item Description: Discussion of Proposal for the Development of Building N; Mounds View Business <br /> Park <br /> Administrator's Review/Recommendation: <br /> -No Comments to supplement this report <br /> -Comments attached. <br /> Explanation/Summary(attach supplement sheets as necessary) <br /> Summary: <br /> At the July work session, staff was directed to negotiate an agreement with The Everest Group for the <br /> development of Building N and K in the Mounds View Business Park. Staff has been working with <br /> Dave Maroney from Community Partners, of whom Chuck had a working relationship in Benson, to <br /> shed a new perspective on the negotiations. It was decided to focus once again just on Building N <br /> since Building K posed too many uncertainties and difficult public scrutiny. <br /> As you recall the last proposal from Everest for Building N included a$1.3 million present value <br /> assistance agreement over 15 years at a 90/1Q split. To substantiate costs, Community Partners <br /> requested additional financial information from Everest. Upon the analysis of this information the <br /> City called a meeting to discuss the project with Everest. We invited Council members Hankner and <br /> Trude to assist in setting some parameters regarding the use of available increment to reduce the term <br /> of the agreement(often requested by Everest) and acceptable terms if the use of available increment is <br /> not an option. Through this meeting it was decided that a 15 year pay-as-you-go agreement does not <br /> pose additional risk upon the City but allows for an equitable time frame to pay back the developer for <br /> costs incurred on the project but as a concession the City would be interested in collecting 15% <br /> increment on the project over this period of time to allow additional funds for other redevelopment <br /> projects within the City. <br /> Upon closer evaluation, an error in calculating available increment was discovered. Apparently, a <br /> majority of the Building N parcels were in the modification of the District which took place in 1989. <br /> This modification creates a tax differential whereby the value of the increase in the tax rate from the <br /> original district to the modification goes back to the taxing jurisdictions (County, School District and <br /> City)thereby making less increment available to the project. <br /> L/.-v esti— <br /> Economic De•-lop ent Coordinator <br />