07-08-1996 WS - Laserfiche WebLink

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• Page Two Staff Report for Work Session 7/8/96 History: • Staff's response to Everest's proposals have been based on the history of negotiations on Building "N"and previous pay-as-you-go agreements. In 1993 Everest proposed$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. Everest was willing to reduce the duration of the agreement from 13 to 10 years. The City made a counter proposal to provide Everest with$1.80 per square foot or a total of$450,192 for 5-7 years at 7% interest with an 85\15 split. Everest was willing to accept$1.75 per square foot or 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 City'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. Considerations: Everest's argument for the amount of TIF needed is based upon their assessment of the competition in the market 111 place. I have discussed some of their examples with several Cities and in all cases the circumstances are very unrelated due to severe soil contamination and clean up costs. The EDA should reflect on how badly you would like the development to proceed and what you are willing to provide them to make that happen. I will be out of the office on Friday but can discuss the procedure in further detail anytime Monday prior to the meeting. Everest may be in attendance at Monday's meeting to make their request to the EDA directly.