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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 46 04-EDA-188 Requesting that the Mounds View EDA Adopt the Modification to the 47 Project Plan for the Mounds View Economic Development Project. 48 49 Ayes-5 Nays-0 Motion carried. 50 51 B. Resolution 04-EDA-189 Authorizing Staff to Draft a Development 52 Agreement to Provide $75,000 in TIF Assistance to Velmeir Companies to 53 facilitate the Redevelopment of the Amoco Property located at 2800 Co. 54 Highway 10. 55 56 Economic Development Coordinator Backman stated the commercial site at 2800 Co. Highway 57 10 was formerly an Amoco gasoline station and has been vacant for over three years. Three 58 underground storage tanks, the associated piping and contaminated soils were removed from the 59 site in June of 2001. For over a year the Velmeir Companies, a Michigan development group, 60 has been working to redevelop the site for a 13,000 square foot CVS Pharmacy facility. Velmeir 61 has negotiated purchase agreements with Amoco and all adjoining property owners, prepared and 62 submitted site plans to the City, obtained preliminary plat approval from both the Planning 63 Commission and City Council, and is now before the City Council for final plat approval. 64 65 Economic Development Coordinator Backman stated the current total project cost is over $3.65 66 million, which exceeds the project budget as set by the end user. Expected additional costs 67 during the past two months have been added to the site development costs. In particular, Rice 68 Creek Watershed District has added over $106,000 in stormwater management costs. These 69 added costs put the project in jeopardy. In a June 22, 2004 letter John Kauppila, Director of 70 Construction for Velmeir, indicates that construction of the new store in Mounds View is at risk 71 unless the developer can obtain some financial assistance from the City. Mr. Kauppila highlights 72 three potential areas of assistance – Demolition & Site Clearing, Stormwater Requirements with 73 RCWD, and Park Dedication Fees. The company requests a TIF grant for $75,000 that could be 74 applied to one or more of the eligible items. Velmeir indicates that if the amount is provided 75 they are still over budget and absorbing costs, but they will commit to moving forward with the 76 development. 77 78 Economic Development Coordinator Backman stated that staff has been in discussions with the 79 TIF advisors regarding this request. The items brought up by Velmeir are allowable TIF 80 expenses. From a procedural standpoint, the Velmeire should pay the full amount of the fees or 81 costs, then the City could reimburse the developer up to an agreed upon amount. Anything above 82 the cap would be borne by the developer. As with the TIF grant to Rob Carlson Builders for the 83 Highway Business Center, the purpose of the assistance is to encourage the redevelopment of a 84 property with a vacant building near the entrance to the City, and to facilitate the advent of a new 85 business in the community. 86 87