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Mounds View EDA June 28, 2004 Regular Meeting Page 2 MOTION/SECOND. Gunn/Stigney. To waive the reading and approve Resolution 04-EDA-188 Requesting that the Mounds View EDA Adopt the Modification to the Project Plan for the Mounds View Economic Development Project. Ayes-5 Nays-0 Motion carried. B. Resolution 04-EDA-189 Authorizing Staff to Draft a Development Agreement to Provide $75,000 in TIF Assistance to Velmeir Companies to facilitate the Redevelopment of the Amoco Property located at 2800 Co. Highway 10. Economic Development Coordinator Backman stated the commercial site at 2800 Co. Highway 10 was formerly an Amoco gasoline station and has been vacant for over three years. Three underground storage tanks, the associated piping and contaminated soils were removed from the site in June of 2001. For over a year the Velmeir Companies, a Michigan development group, has been working to redevelop the site for a 13,000 square foot CVS Pharmacy facility. Velmeir has negotiated purchase agreements with Amoco and all adjoining property owners, prepared and submitted site plans to the City, obtained preliminary plat approval from both the Planning Commission and City Council, and is now before the City Council for final plat approval. Economic Development Coordinator Backman stated the current total project cost is over $3.65 million, which exceeds the project budget as set by the end user. Expected additional costs during the past two months have been added to the site development costs. In particular, Rice Creek Watershed District has added over $106,000 in stormwater management costs. These added costs put the project in jeopardy. In a June 22, 2004 letter John Kauppila, Director of Construction for Velmeir, indicates that construction of the new store in Mounds View is at risk unless the developer can obtain some financial assistance from the City. Mr. Kauppila highlights three potential areas of assistance – Demolition & Site Clearing, Stormwater Requirements with RCWD, and Park Dedication Fees. The company requests a TIF grant for $75,000 that could be applied to one or more of the eligible items. Velmeir indicates that if the amount is provided they are still over budget and absorbing costs, but they will commit to moving forward with the development. Economic Development Coordinator Backman stated that staff has been in discussions with the TIF advisors regarding this request. The items brought up by Velmeir are allowable TIF expenses. From a procedural standpoint, the Velmeire should pay the full amount of the fees or costs, then the City could reimburse the developer up to an agreed upon amount. Anything above the cap would be borne by the developer. As with the TIF grant to Rob Carlson Builders for the Highway Business Center, the purpose of the assistance is to encourage the redevelopment of a property with a vacant building near the entrance to the City, and to facilitate the advent of a new business in the community.