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T0: MAYOR AND CITY COUNC <br />FROM: CLERK-ADMINISTRATO <br />DATE: AUGUST 9, .1989 <br />SUBJECT: MOUNDS VIEW BUSINESS PARK SOUTH - CONTRACT FOR <br />PRIVATE REDEVELOPMENT <br />Attached please find the second draft of the Contract for <br />Private Redevelopment between the City of Mounds View and <br />Commercial Property Investments, 7nc., a subsidiary of <br />Everest Development Ltd. for the Mounds View Business Park. <br />South project. Also, please find a letter from Mr. Robert <br />J. Deike of Holmes and Graven, the City's tax increment <br />counsel, regarding this agreement. <br />The framework for this agreement is identical to that of the <br />agreement between the City of Mounds View and Everest <br />Development for the original Mounds View Business Park <br />project. Dates and values have changed as well as a number <br />of differences in the manner of security for the project. <br />The following is an outline of the major points that the <br />developer and the City agree to in this contract. <br />1. Developer agrees to: <br />a. Commence project by 9/9/89 and substantially <br />complete minimum improvements by 1/1/92. <br />b. Construct buildings having a minimum market <br />value of $4,070,000 by 1990, $1,700,000 by 1991 <br />and $1,630,000 by 1992 for a total project market <br />value of $7,400,000. <br />c. Provide Letters of Credit and security in the <br />following manner: <br />i. Development Letter of Credit equal to the <br />City's cost and expenses connected with the <br />sale of bonds. <br />ii. Guarantee Letter of Credit equal to the <br />higher of one year's increment or the highest <br />one year's debt service. Letter of Credit is <br />to remain in effect for six years after the <br />issuance of bonds. <br />Provide a tax guarantee in the form of a <br />first mortgage lien on the property. <br />2. The City agrees to: <br />a. Issue tax increment bonds totalling $2.45 <br />million. Two bond issues will be sold due to <br />IRS regulations regarding taxable and non-taxable <br />bonds. The first issue for $1.55 million will be <br />