04-13-2009 - Laserfiche WebLink

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Mounds View EDA April 13, 2009 Regular Meeting Page 4 Commissioner Mueller noted there may be timing issues because license renewals are coming due for The Mermaid and one condition for renewal is being current on tax payments. President Flaherty noted The Mermaid owners had just arrived and asked Mr. Hall to address the questions raised why MoundsVista was not able to pay off one-third of the bond note. Dan Hall, 2200 Highway 10 and owner of The Mermaid, explained that they do not have funds available to pay the note early. He stated they have placed personal guarantees so the City will not be out any money and bringing in another owner for the hotel assures there will be no shortfall in taxes so the TIF payments can be made. Mr. Hall stated this is a calculated move to solidify their business and there is no reason to accelerate the note payments since their request is miniscule in the broad scope of things and does not place a burden on Mounds View. Commissioner Mueller asked how many people MoundsVista presently employs. Mr. Hall stated they average 150 employees with 125 during summer months and up to 175 during the holiday season. They have 65-70 full-time employees. The new prospective owner wants to construct an addition to the hotel, which would increase property taxes paid. Commissioner Mueller asked about the property value on which the TIF note was originated. Mr. Hall stated it was $8.4 million to $8.6 million and their property taxes just increased by 10% so he does not believe the property value will go down if this passes. Vice President Stigney asked what they would be willing to do. Mr. Hall stated he cannot afford to pay on the note, his family still personally guarantees payment of the TIF, and Mounds View would not have any additional burden. Vice President Stigney asked if The Mermaid will go bankrupt if no TIF payment is made on the hotel parcel. Mr. Hall stated he does not want to use the word “bankruptcy” but he is out of money and this sale will put money back into the coffers of The Mermaid. He advised they have not paid property tax from last fall because they do not have the money. Vice President Stigney asked if they can submit supportive documentation of The Mermaid financials to show that is the case. President Flaherty stated The Mermaid is trying to make a sale to gain solvency and if any portion of the TIF bond is required, even 1/10th, it would come from operating revenue. Mr. Hall stated it would come from money needed to pay delinquent and current taxes. He pointed out that if taxes are not paid, he will not be able to obtain a liquor license. Commissioner Hull stated that 1/6th would be $68,000 and if Mounds View needs it that bad, it should close its doors. He stated he has no problem with the amendment approval without contingencies because The Mermaid is an excellent business and hires many people including residents.