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Mounds View EDA April 13, 2009 <br />Regular Meeting Page 2 <br /> <br /> <br />Economic Development Specialist Steinmetz presented the past consideration of the <br />MoundsVista, Inc. (dba The Mermaid) TIF revenue bond agreement for assistance of $631,897 <br />and request to modify the Development Assistance Agreement to allow for the sale of the hotel <br />and continuation of semi-annual payments to the bondholders. In response to the suggestion that <br />MoundsVista pay off one-third of the outstanding balance of the bonds, they indicated they are <br />not in a financial position to do so. Economic Development Specialist Steinmetz presented <br />staff’s recommendation to approve the first amendment to the Development Assistance <br />Agreement, allow for the sale of the hotel, and continuation of semi-annual payments to the <br />bondholders. If approved, the Council will consider the final plat to divide the property into one <br />lot for the hotel and a second lot for the restaurant and banquet center. <br /> <br />President Flaherty opened the floor for public comment. None was offered and it was noted the <br />applicant was not in attendance. <br /> <br />Commissioner Mueller noted if they wish to sell, the contract requires payment of the bond note. <br />Economic Development Specialist Steinmetz explained the MoundsVista attorney alluded to that <br />requirement; however, the contract does not contain such a requirement. In early negotiations <br />between staff and MoundsVista, several options were discussed but MoundsVista has clearly <br />indicated they need to sell the hotel and transfer those funds to their other property. In addition, <br />when the final plat is recorded, Ramsey County will require payment of taxes. <br /> <br />Vice President Stigney referenced a letter from the MoundsVista attorney indicating their <br />intention to sell only the hotel and that the Agreement requires payment in full of the note if any <br />portion of their property is sold. Executive Director Ericson clarified that the letter from the <br />MoundsVista attorney is incorrect because there is no such requirement in the Development <br />Assistance Agreement. Executive Director Ericson stated the EDA is under no requirement to <br />amend the Agreement but if an amendment is considered, the EDA can place a condition for <br />partial or full payment of the bond note. <br /> <br />Vice President Stigney stated his understanding the Agreement may not “require” payment but <br />the EDA can place that condition. He indicated he had asked staff to negotiate at least partial <br />payment in consideration for an amendment so the TIF District is reduced in some manner. <br /> <br />Commissioner Gunn stated even if they don’t pay down the note, payments will continue and all <br />that would be accomplished by payment of one-third of the note is to move up the District’s close <br />date. She noted that a lot is owed in back taxes, which may be equivalent to the one-third <br />amount. Economic Development Specialist Steinmetz stated she is not aware of the amount of <br />back taxes owed. Commissioner Gunn stated a willingness to approve the amendment since the <br />TIF District will continue, she would like the business to stay in Mounds View, and if approved <br />they would be able to pay their current and back taxes. <br /> <br />Commissioner Hull stated support to consider the amendment with no contingencies since it <br />would result in the hotel being sold, The Mermaid would be in a better financial position,