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Item No 6C Meeting Date: January 27, 2020 Type of Business: EDA Administrator Review : ____ City of Mounds View Staff Report To: EDA President and Commissioners From: Brian Beeman, Assistant City Administrator Item Title/Subject: MWF Properties Skyline Redevelopment Extended Contingency Introduction: MWF Properties has recently been informed that the 4% Tax Credits funding that they were seeking for the Mounds View project has been depleted at the state level for 2020. This is unprecedented in the State of Minnesota and shows that there has not been this much demand in the 34 years the program has been around. Given this information, the funding is less certain than MWF originally believed and it could take much longer to obtain the funding than originally anticipated. The concern is twofold: First, MWF believes that they are paying higher than market for the EDA owned land. The TIF helps offset this cost it’s not a problem according to MWF if the project moves forward. Second, in order to meet Augusta’s timeline MWF will need to go through the entire City development process soon. MWF anticipates that the combined cost of engineering, legal, architect, and other consultants could be upwards of $100,000. MWF is okay moving forward with the development and risking the entitlement costs but they are hoping for a longer contingency period. As, it is a high risk for MWF to purchase the land prior to receiving funding. Given the funds are exhausted for this year, MWF is requesting a contingency through February of 2023. That would allow MWF to apply for funding again in 2021 and if not successful try again in 2022. MWF understands that this is a long contingency period which is why MWF is seeking the EDA’s interest level in the project with the proposed extended contingency. Discussion: The EDA to discuss the extended contingency period and provide feedback to staff. MWF Properties has stated that they will make every attempt to get financing and close sooner, however they want to be prepared in the event the funding issues continue. If the EDA is okay with the extended contingency period MWF has stated that they will continue to move ahead with the planning applications which will allow Augusta to close on their portion of the EDA property, thus reimbursing the EDA at least partially for its investment. Recommendation: Consider the extended contingency period for MWF Properties and provide direction to staff whether to proceed with the extended contingency period or move in a different direction. Respectfully submitted, ________________________ Brian Beeman Assistant City Administrator Attachments: None