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07-25-1996
ECONOMIC DEVELOPMENT COMMISSION DRAFT AGENDA JULY 25, 1996 6:00 P.M. MOUNDS VIEW CITY HALL COUNCIL CHAMBERS 1. CALL TO ORDER P.M. 2. ROLL CALL (Present = P, Absent = A) CarlsonSchmidt akkevtl- Goff Welsch Nelson V Terhark Sjoberg Hankner (EDA Liaison) Bennett (Staff) 3. APPROVE EDC MINUTES • May 30, 1996 Action: Motion Second Vote 4. SPECIAL BUSINESS Presentation on Tax Increment Financing - Steve BubulBob-Long --Kennedy-&-Gr-avin - Jim Casserly - Casserly , Molzahn & Associates 5. EDC BUSINESS A. Review of revised Tax Increment Policy Action: Motion Second Vote Comments: B. Preliminary Discussion of Everest Proposal for TIF Assistance Comments: C. Consideration of Proposed Automatic Fire Suppression Ordinance No. 586 as it relates to the impact to Mounds View Businesses. Action: Motion Second Vote Comments: D. Discussion of the EDC's Advisory Responsibilities and Procedures for Communication Between the EDC and EDA Action: Motion Second Vote • Comments: 6. Report of Commissioners, Staff and EDA Liaison 7. ADJOURN P.M. Next Meeting August 22, 1996 • • U cioou.¢o ide►ai w2 (.00.44- to mud. "L)44UA/A; \ J:114d"6" 1‘.4j Cek 4=1 1NA ()‘‘.11.442j lblafer. pOQ• WoLdlik (-141 aker is kiko C)`--4 as& -maAJLt.k Oatoioe_ Atry) a'P \) 0.".14%. d‘eV1/401".41 41) ngfA' thiL' VCIJ • ose,30,Y1 v rAisdi# U9;),d 4ra C9itV#V oteU• 't3.J 401/4)( 1%* Ath 40)11) %°6 S tat, cAALIttu� otSZ3L19...aa_Q.0( ppaulo. • ECONOMIC DEVELOPMENT COMMISSION DRAFT AGENDA • JULY 25, 1996 6:00 P.M. MOUNDS VIEW CITY HALL COUNCIL CHAMBERS 1. CALL TO ORDER P.M. 2. ROLL CALL (Present = P, Absent = A) Carlson Schmidt Goff Welsch Nelson Terhark Sjoberg Hankner (EDA Liaison) Bennett (Staff) 3. APPROVE EDC MINUTES May 30, 1996 Action: Motion Second Vote 4. SPECIAL BUSINESS Presentation on Tax Increment Financing - Steve Bubul, Bob Long - Kennedy & Gravin - Jim Casserly - Casserly , Molzahn & Associates 5. EDC BUSINESS A. Review of revised Tax Increment Policy Action: Motion Second Vote Comments: 0 ii B. Preliminary Discussion of Everest Proposal for TIF Assistance Comments: C. Consideration of Proposed Automatic Fire Suppression Ordinance No. 586 as it relates to the impact to Mounds View Businesses. Action: Motion Second Vote Comments: D. Discussion of the EDC's Advisory Responsibilities and Procedures for Communication Between the EDC and EDA Action: Motion Second Vote • Comments: 6. Report of Commissioners, Staff and EDA Liaison 7. ADJOURN P.M. Next Meeting August 22, 1996 • Minutes of the Economic Development Commission City of Mounds View . Ramsey County, Minnesota Regular Meeting May 30, 1996 City of Mounds View, Council Chambers 2401 Highway 10, Mounds View, MN 55112 1. Call to Order: The meeting was called to order at 6:10 p.m. by Chairperson, Dan Nelson. 2. Roll Call: Members present were as follows: Cindy Carlson, Rosemary Goff, Dan Nelson, Brian Sjoberg, Ron Schmidt, Delane Welsch and Bev Terhark. In addition, Economic Development Coordinator Cathy Bennett was present. EDA Liaison Sue Hankner and Alternate Liaison Gary Quick were absent. 3. Approval Of Minutes: Motion/Second: Carlson/Goff moved approval of Minutes of April 25, 1996 Meeting. • Motion Carried 7 ayes 0 nays 4. Special Business Chairman Dan Nelson brought forward the discussion of the purchase of the Bel-Rae and the • EDC's request to have the EDA come to a meeting to discuss procedure with the purchase and the future roles and responsibilities of the EDC. Chairman Nelson expressed disappointment that EDC's advice regarding the purchase and use of the Bel-Rae site was not taken into consideration or recorded in any minutes of the EDA in discussions regarding the Bel-Rae. Commissioner Carlson felt the decision to purchase the Bel-Rae was based on emotion rather than financial circumstances and that the EDC's expertise could have provided a balance. Chairman Nelson suggested that he address the EDA at the next regular meeting. 5. A. Discussion of Tax Increment Policies for new/expanded development in Mounds View Coordinator Bennett presented a draft TIF policy per the discussions at the March meeting. The information for review included a Policy, Application for Tax Increment Financing,Analysis Form and Deposit Agreement. • 1 Several revisions were made to ensure that all commissioners ideas were incorporated into the policy. Additions to the Analysis Form were made to clarify some of the subjective nature of development such as Elimination of Blight, Target Industries and • generation of tax base verses public improvements. Staff was directed to contact the City of Burnsville regarding the intent of the point value under service impact. B. Update on Housing Program and Discuss Ways to Market the Program Under the Guidelines of the Program. Motion/Second: Schmidt/Sjoberg moved to table Update on Housing Program until there has been direction from the EDA regarding EDC roles and responsibilities. Motion Carried 7 ayes 0 nays C. Review EDA's Priorities for Highway 10 and Identify Strategies for Redevelopment in these Priority Areas Motion/Second: Schmidt/Sjoberg moved to table Review of EDA Priorities for Highway 10 until there has been direction from the EDA regarding EDC roles and responsibilities. Motion Carried 7 ayes 0 nays Reports From Chair, Commissioners and Staff: • Commissioner Ron Schmidt requested a leave of absence or resignation from the EDC due to personal views as a resident and business owner regarding some City policies and decisions over the past few years. Mr. Schmidt felt that he would not be doing the EDC justice until he is able to work through some of the differing views regarding the City of Mounds View. Chairman Nelson suggested a leave of absence rather than resignation. Commissioner Schmidt agreed to a leave of absence until he can take a more positive view of the City of Mounds View. 7. Adjournment There being no further business before the Commission, this meeting of the Economic Development Commission adjourned at 7:40 p.m. Respectfully Submitted, (1 • Economic Development Coordinator • 2 • Staff Memo To: Economic Development Commission Members From: Cathy Bennett, Economic Development Coordinator Date: July 18, 1996 Subject: Presentation on Tax Increment Financing (TIF) (Spec. Bus.) At theI Ju y 8, 1996 work session, the Council (EDA) requested that the EDC review a request for TIF by the Everest Group, developers of the Mounds View Business Park. In an effort to prepare for this discussion I have asked experts in TIF to come and give a summary on the legal requirements and market demands for TIF. • Mr. Steven Bubul, tax increment attorney and Bob Long, City attorney from Kennedy & Gravin have agreed to come and give an overview of the legal requirements under the Minnesota State Tax Increment Financing Law. Mr. Jim Casserly from Casserly Molzahn & Associates will also address TIF from a market perspective in the Metro. Mr. Casserly is a consultant in the use of TIF and has worked for several cities as well as for several developers • Staff Memo To: Economic Development Commission Members From: Cathy Bennett, Economic Development Coordinator Date: July 18, 1996 Subject: Review of Revised Draft Tax Increment Policy (5.A.) Attached is the revised tax increment policy that was discussed at the May 30th EDC meeting. The major changes are mostly included in the Analysis Form and include the following: 4. - Add Annual Salary • 5. - Add Total Taxes 6. - Include -2 (not contributing to tax base), +1 - +3 (Elimination of Blight), +1 (Target business) and add comment column for other subjective public benefits. 7. - I checked into Burnsville's intent of the service impact and negative values. Burnville has a policy to strive for head of household positions and believes the service industry is likely not to employ these positions. Also, they believed there is more of a drain on the police and fire services related to the addition of service sector operations verses manufacturing due to the higher exposure to the public. The EDC may want to either leave these in, remove or alter the point values based on what types of industries we anticipate coming to Mounds View through the redevelopment of Highway 10. 9. - Remove the BIPP program since there is a set of guidelines for eligibility within the specific program. 10. Add column to reflect staff recommended points, EDC recommended points and Comment area if these points differ. Minor additions were made to the Deposit Agreement. If this draft policy is acceptable the EDC may want to apply Everest's proposal as a test case prior to formal adoption. ATTACHMENT: DRAFT TIF POLICY, APPLICATION, ANALYSIS FORM, DEPOSIT AGREEMENT • DRAA DATE - - Tax Increment Policy i Mounds View Economic Development Authority Mounds View, Minnesota GENERAL POLICY: The Mounds View Economic Development Authority has the powers under the Minnesota Statute Sections 469.124 through 469.137 and Sections 469.001 through 469.047 to govern and monitor the use of tax increment financing for three tax increment districts and the Mounds View development district which encompasses the entire boundaries of the City of Mounds View. It is the responsibility of the Mounds View Economic Development Authority to use tax increment financing as a tool to accomplish the City's economic development and redevelopment goals and objectives. The Mounds View Economic Development Authority understands and abides by the fundamental principal which makes tax increment financing viable to encourage development and redevelopment which would not otherwise occur. The Mounds View Economic Development Authority shall consider tax increment financing in cases that serve to accomplish the City's development goals and activities as hereby defined in projects eligible for tax increment financing. The Mounds View Economic Development Authority desires development that would result in the retention and expansion of business, creation of jobs and the tax base and the elimination of blight. • PROJECT ELIGIBLE FOR TAX INCREMENT FINANCING: Projects eligible for consideration of Tax Increment Financing assistance per the Mounds View Economic Development Project Plan dated May 9, 1994 include, but are not limited to (1) the attraction, retention, rehabilitation and preservation of commercial, industrial, retail, residential, recreational and public service facilities; (2) new and rehabilitated public infrastructure; (3) community and other public service centers; (4) senior/mature adult and/or other housing development partnerships or other multi-use housing projects and facilities; (5) other public utilities (including telecommunications); (6) business incubator loan and other business programs; and (7) transportation systems. More emphasis will be placed on those items which increase the tax base and eliminate blight. COSTS ELIGIBLE FOR TAX INCREMENT FINANCING: Project costs qualifying for Tax Increment Financing assistance, as defined under the TIF Act, include utilities design, landscape design, architectural and engineering fees directly attributable to site work, site related permits, earthwork/excavation, soils correction, landscaping, utilities (sanitary sewer, storm sewer, and water), streets and roads, street/parking lot paving, street/parking lot lights, curb and gutter, sidewalks, land acquisition, special assessment, legal (relating to acquisition, financing, and closing fees), soils tests and environmental studies, surveys, park dedication fee, SAC, WAC charges, titles insurance and TIF application deposit. . 1 OTERMINATION OF AMOUNT OF ASSISTANCE TO APPLICANT: Within TIF Districts No. 1, 2, and 3 The amount of Tax Increment Financing provided to an applicant will be based on the analysis of information provided on the application for Tax Increment Financing assistance (Attachment"A") and amount of increment generated by the project as evaluated by the City's Financial and Bond Counsel. The standard guideline for assistance is % of the project's annual increment for a term determined by the Economic Development Authority Board based on the analysis of information provided in Attachment "A". No project will be considered if the term exceeds the life of the Tax Increment District. The level of assistance provided will be evaluated on a case by case basis and may reflect an increase or decrease in assistance dependant upon the level of increase in the tax base or amount of elimination of blight. Evaluation of subjective information provided may result in adjusting the amount of assistance provided at the discretion of the Board of the Economic Development Authority. Within the Development District (herein referred to as the "City" limits) but outside of TIF Districts The amount of Tax Increment Financing assistance provided to an applicant will be based on(A) the analysis of infoimation provided on the application for Tax Increment Financing assistance (Attachment "A"), (B) snuare footage cost of the project and (C) balance available in the Economic Development Authority excess *increment fund. TYPES OF ASSISTANCE Within TIF Districts No. 1, 2, and 3 Tax Increment Financing can be provided in either"pay as you go" or"up front" payments. "Pay as you go" is wherein the Mounds View Economic Development Authority compensates the applicant for a predetermined amount for a predetermined number of years. The applicant pays for(re)development up front and then annual payments are issued to the applicant based on increment generated from the project. "Up front' payments is wherein the Mounds View Economic Development Authority must issue revenue or general obligation bonds to pay for the (re)development prior to completion of the project. The increment generated from the project is then used for repayment of the bonds. The Mounds View Economic Development Authority gives preference to the use of"pay as you go" assistance to finance private development. Within the City but outside of TIF Districts Financing in the form of excess tax increment funds will be provided in annual installments to the applicant based on the positive cash flow balance in the Economic Development Authority's excess tax increment ed. 2 APPLICATION FOR TAX INCREMENT FINANCING ASSISTANCE: • The Mounds View Economic Development Authority shall require a deposit in the amount of$1,000 from the applicant for the EDA's consultants to investigate the feasibility of providing Tax Increment Financing assistance to the applicant and per the terms of the deposit agreement (Attachment "B"). SUBMITTAL OF APPLICATION FORMS: Applicants requesting Tax Increment Financing assistance within an existing district or in the creation of a new district, shall be required to complete and submit the following: 1. Application for Tax Increment Financing Assistance 2. Deposit for Review of Tax Increment Financing Assistance • • • ATTACHMENT "A" APPLICATION FOR TAX INCREMENT FINANCING PROJECT: 1. Business Name: Address: Telephone #: Contact: 2. Brief Description of the Business. (Please provide # of years in business under current ownership and # of years in Mounds View) • Present Ownership of the Site: 4. Present Project: Building square footage, location of project, size of property, description of buildings - materials, etc. Attach site plan, if available 5. If Property is to be Subdivided, Show Division Planned. • (Attachment "A" Cont.) • 6. Estimated Project Costs: (please enclose construction performa, if available.) a. Land Acquisition $ b. Site Development $ c. Building Cost $ d. Equipment $ e. Architectural & Engineering Fees $ f. Legal Fees $ g. Financing Costs $ h. Broker Costs $ I. Contingencies $ j. Other (please specify) $ Total $ 7. Total Estimate Market Value at Completion $ 8. Submit an Itemized List of Eligible Costs Qualifying for Assistance (see page 1 of Tax Increment Policy). • 9. Sources of Financing a. Equity $ b. Bank Loan $ c. Tax Increment Assistance $ d. Industrial Revenue Bonds $ e. Other (please specify source) $ 10. Form of Tax Increment Financing Assistance Requested. Pay As You Go Bond Issuance Excess Increment 11. Name & Address of Architect, Engineer, and General Contractor. • ottachment"A" Cont.) 12. Estimated Real Estate Taxes on Project Site upon Completion of Project. (please show calculations.) 13. Project Construction Schedule: a. Construction start date b. Construction completion date c. If phased project: Year % Complete Year % Complete 14. Estimated Number of Jobs: Created (within 2 yrs) Retained 15. Average Annual Wage Level of Jobs • Created (within 2 yrs) Retained 16. Is Job Training Assistance Needed? TAX INCREMENT FINANCING REQUEST: 1. Describe amount and purpose for which tax increment financing is required. 2. Statement of necessity for use of tax increment financing for project. • 3. Describe the Potential for Growth. • 4. What is your Desired Return on Equity Invested. 5. If Rental Space, What is the Range of Targeted Rental Rates: • • CITY OF MOUNDS VIEW ECONOMIC DEVELOPMENT AUTHORITY ANALYSIS OF APPLICATION FOR TAX INCREMENT FINANCING ASSISTANCE FOR NAME OF APPLICANT Date Reviewed Total Score Result of Analysis • 1. PUBLIC VERSUS PRIVATE INVESTMENT Private Investment TIF/Public Investment Total Investment Ratio of public vs. private investment Point Private Public Value + 1 Less than $3 to $1 + 2 Over $3 to $1 + 3 Over $4 to $1 +4 Over $6 to $1 + 5 Over $8 to $1 2. NUMBER OF EMPLOYEES (Computed as full time equivalent positions) 411 Point Number Value + 1 > 1 - 15 +2 > 16 - 30 + 3 > 31 - 45 +4 > 46 - 75 + 5 > 75 - plus Current Number of Employees Estimated Number of New Employees (within the next 2 years) Total Number of Current and Estimated New Employees • PUBLIC INVESTMENT PER CURRENT EMPLOYEE Point Value INVESTMENT 0 $12,500 + + 1 $10,000 - $12,500 +2 $7,500 - $10,000 + 3 $5,000 - $7,500 +4 $2,500 - $5,000 + 5 $ 0 - $2,500 TIF/Public Investment $ Current Number of Employees Investment per Employee = $ ANNUAL PAY LEVEL OF POSITIONS Point Annual Dollar Total # of Weighted Value Salary Weighting Employees Dollar Amt. 0 $ 0 - 14,999 $10,000 + 1 $15,000 - 24,999 $20,000 + 2 $25,000 - 29,999 $27,500 + 3 $30,000 - 44,999 $37,500 + 4 $45,000- 59,999 $52,000 + 5 $60,000 and Over $60,000 Total Full Time Equivalent Weighted Average • 5. REAL ESTATE/PROPERTY TAXES GENERATED • (projected tax revenues should be bases on the existing property tax system and rates plus legislative future changes if subject to estimation.) Point Total Projected Value Annual Taxes + 1 Below $25,000 +2 $25,000 - $49,000 + 3 $50,000 - $99,999 +4 $100,000 - $249,999 + 5 $250,000 and Over 6. SIGNIFICANT IMPACT MULTIPLIER Point * Provide Comments regarding Value Type of Development subjective public benefits of project. + 0 Retail + 2 Office + 3 Office / Service (50/50) + 3 Value Added (retail with significant service component) +4 Industrial -2 Activity Not Contributing to Tax Base +1 Company/Corporate Headquarters - location of upper management where decisions are made (add 1 pt to above) +1 Target Business +1 - +3 Elimination of Blight (add points to above value) • Total Point Value * SERVICE IMPACT Point Value Type of Development - 4.0 Retail - 3.5 Office/Warehouse Service - 3.0 Hi Tech - 2.0 Office 8. FORM OF ASSISTANCE REQUESTED (within TIF District 1, 2, and 3) Point Value - 2 Up-Front + 5 Pay-As-You-Go FORM OF ASSISTANCE REQUESTED (within City but outside of TIF Districts) Point Value - 2 One-Time Payment + 1 3 Annual Payments + 2 4 Annual Payments + 3 5 Annual Payments • 10. WORKSHEET SUMMARY • POINT VALUE Public versus Private Staff Pt.Value Number of Employees EDC Pt. Value Public Investment per Employee Pay Level of Positions Comments: Real Estate/Property Taxes Generated Significant Impact Multiplier Service Impact Form of TIF Assistance Required Total Points 11. RATING FOR PROJECTS,LOCATED WITHIN TIF DISTRICTS 1, 2, AND 3 • Point Value Term of Assistance 0-10 0 Years 11 - 13 3 Years - or - Remaining life of TIF District, whichever is less 14 - 16 5 Years - or- Remaining life of TIF District, whichever is less 17 - 20 7 Years - or - Remaining life of TIF District, whichever is less 21 and Over 10 Years - or- Remaining life of TIF District, whichever is less i. RATING FOR PROJECTS IN DEVELOPMENT DISTRICT (OUTSIDE OF TIF DISTRICT) (1) Building Size: Square Foot Cost of Project: (Land & Building) Project (2 ) Per S.F. Cost Per S.F. Allowance $20.00 - $30.00 $3.00 $30.01 - $40.00 $4.00 $40.01 - $50.00 $5.00 OVER$50.01 $6.00 Points (3) Percent of Accumulated Assistance • 11 - 13 30% 14 - 16 50% 17 - 20 70% 21 & OVER 100% S.F. of Bldg: (1) $ X S.F. Allowance (2) $ X % of Assistance: (3) Equals Amount of Assistance: $ i Deposit Agreement for Evaluation of Tax Increment Assistance By and Between the Mounds View Economic.Development Authority and (The • Applicant) This agreement made as of the day of May, 1996 by and between the MOUNDS VIEW ECONOMIC DEVELOPMENT AUTHORITY, a body corporate and politic, organized and existing under the laws of the State of Minnesota(the "EDA") and (The Applicant). WITNESSETH: WHEREAS, the EDA has the powers provided in Minnesota Statutes, Sections 469.124 to 469.134 and 469.090 to 469.108 (collectively, the "Act"); and WHEREAS, pursuant to and in furtherance of the objectives of the Act, the EDA has undertaken a program to promote development and redevelopment of certain land within the City of Mounds View and in connection is engaged in carrying out the Mounds View Economic Development Project as detailed in EDA document dated 5/9/94 (the "Project") within the City; and WHEREAS, the redevelopment and development of property within the Project by private developers are stated objectives of the Project Plan. NOW THEREFORE, in consideration of a mutual covenants made herein and for other good and valuable consideration set forth in the Agreement, the parties agree as follows: Section 1. (The Applicant) agrees to provide the EDA with a deposit of$1,000 for the EDA's consultants to investigate the feasibility of providing Tax Increment Financing assistance to (The Applicant) for the redevelopment of the (the "Property"). If the EDA incurs additional expenses directly related to the feasibility of providing Tax Increment Assistance to (The Applicant) beyond the $1,000, prior to the execution of the Developer's Agreement, the EDA shall notify (The Applicant) in writing and (The Applicant) will be required to deposit additional funds as a condition of the EDA entering into any such Development Agreement. Section 2. If the project is approved and (The Applicant) proceeds with the project, the EDA shall reimburse (The Applicant)' deposit to the extent permissible under the TIF Act. If(The Applicant) does not proceed with the redevelopment of the Property due to the decision of either the EDA or (The Applicant), the EDA shall reimburse the applicant for the unused portion of the deposit. Section 3. Nothing contained in this agreement shall in any way obligate either party to proceed with the redevelopment of the Property or otherwise enter into a Development Agreement. IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written. • MOUNDS VIEW ECONOMIC DEVELOPMENT AUTHORITY BY: JERRY LINKE ITS PRESIDENT BY: CATHY BENNETT ITS EXECUTIVE DIRECTOR STATE OF MINNESOTA ) ) SS COUNTY OF ) The foregoing instrument was acknowledged before me on this day of , 1996, by Jerry Linke and Cathy Bennett, the President and Executive Director respectively of the Mounds View Economic Development Authority named in the foregoing instrument. • Notary Public • (The Applicant) BY: • ITS: STATE OF MINNESOTA ) ) SS COUNTY OF ) The foregoing instrument was acknowledged before me on this day of , 1996, by , the of (The Applicant) named in the foregoing instrument. Notary Public • • • Staff Memo To: Economic Development Commission Members From: Cathy Bennett, Economic Development Coordinator Date: July 18, 1996 Subject: Preliminary Discussion of Everest Request for TIF (5.B) Assistance I have attached documents regarding the negotiations and proposals for TIF assistance by Everest Development that was prepared for the EDA work session on July 8, 1996. The staff report gives a chronological account of the negotiations over the past several months and a brief history working with Everest in the proposed development of a new 103,000 s.f. warehouse/office facility. Everest is expected to be in attendance to answer questions regarding the project. • Since this is the first proposal the EDC has reviewed, it may be in the EDC's best interest to briefly discuss the proposal, address questions and not take action until the August meeting. This will give members a chance to think about the project based on the information that was provided through the special presentation. In addition, I would need to defer any questions I can not answer to our Bond Attorney and Fiscal Agent who are not expected to be in attendance at this meeting. Also you may want to have Everest complete the Application for Assistance so that staff can prepare the Analysis under the proposed Tax Increment Policy. The completion of this information can be reviewed at the August meeting and it will assist in a more objective recommendation to the EDA.. If you have any questions regarding the information provide please feel free to contact me prior to Thursday's meeting. ATTACHMENT: COUNCIL WORK SESSION STAFF REPORT REGARDING EVEREST PROPOSAL FOR TIF ASSISTANCE. 4110 criv 1 REQUEST FOR COUNCIL CONSIDERATION Agenda Section 2- STAFF REPORT Report Number: al,- 17-7,W5 L)�ilJ(y j!DS Report Date: 7/2/96 WORK SESSION MEETING DATE • ` ('}; v, July 8. 1996 J5 J I S agtesx 'Partners�`P Item Description: Discussion of TIF Proposal for the Development of Building "N" & "K", Mounds View Business Park Administrator's Review/Recommendation: -No Comments to supplement this report -Comments attached. Explanation/Summary, (attach supplement sheets as necessary) Summary: Chuck and I have been working with Everest on proposals for the development of buildings "N" and "K" since April. I have attached all of the written correspondences between Everest and the City since April 5, { 1996 when we were first approached by Everest to develop a strategy on the final development of the park and a retention program. What followed was a proposal for the development of Building "N" in addition to a request for a $200,000 grant tied to the this development (proposal dated May 21, 1996). The proposal requested $1.3 pay-as-you- go revenue bond over 15 tax increment years with an interest rate of 7% and a 90/10 split. This proposal �ls approximately $4.28 per sq.ft. of assistance. After reviewing the proposal with Chuck and bond attorney Jim O'Meara a counter proposal was submitted offering an 8-year pay-as-you-go agreement at 7% interest which equaled approximately $2.75 per sq. ft. of assistance plus the willingness to negotiation on a low interest loan with the company that was tied to the agreement rather than a grant (letter dated June 3, 1996). Everest responded that the project would not proceed under the City's counter proposal and suggested that we provide them with approximately $435,000 from excess tax increment up front plus a pay-as-you-go note that would equal $850,000 (letter dated June 3, 1996). Staff and O'Meara met with Everest to discuss this proposal and it was recommended that Everest make a proposal that would tie in the Building "K" development as a package. On June 24, 1996 staff again met with Everest to discuss a combined proposal for Building "N" and "K". The combined proposal requested a 13-year pay-as-you-go revenue note at 7% interest for a total request of $1.8 million in assistance. This proposal equals $3.36 per sq.ft. of assistance plus the City's cost in acquiring the additional three properties which we estimated to cost $350,000. In response, the City ran some of our own numbers through Springstead and came up with an alternate proposal for separate Building "N" and "K"developments and combined developments. These figures are outlined in the City's letter dated July 1, 1996. Chuck will be meeting with verest later this week to further discuss the most recent offer. • Cathy Bennett,con. Dev. Coordinator\EDA Director Page Two Staff Report for Work Session 7/8/96 History: • Staffs response to Everest's proposals have been based on the history of negotiations on Building "N"and previous pay-as-you-go agreements. In 1993 Everest proposed $900,000 of TIF assistance over 13 years at 9% interest with a 90\10 split. This was in response to a company that was willing to lease 70 percent of the facility from Everest. There was no information provided to the EDA with regards to the proposed tenant. Everest was willing to reduce the duration of the agreement from 13 to 10 years. The City made a counter proposal to provide Everest with $1.80 per square foot or a total of$450,192 for 5-7 years at 7% interest with an 85\15 split. Everest was willing to accept$1.75 per square foot or a total of$450,000 for 11-12 years at 8.5% interest. There was no agreement on the negotiations and therefore the project did not proceed in 1993. Everest informed the City that due to the lack of TIF the proposed tenant had elected to locate elsewhere. In 1994, discussions were open again for the development of Building N due to Everest's negotiations with a "mystery company". The proposal, which was done by Casserly, Molzahn &Associates, requested $808,441 for 9 years at 7% interest at an 85\15 split. Through these negotiations, the EDA made informal decisions with regards to parameters for use of TIF. Those parameters included the City's desire to use TIF for an owner occupied building verses a leased facility. The EDA did note that they would consider a long term leased project(for at least the duration of the TIF agreement) if the EDA had prior knowledge of the company prior to signing an agreement. Again, this proposal did not proceed as the "mystery company" never materialized. Considerations: Everest's argument for the amount of TIF needed is based upon their assessment of the competition in the market place. I have discussed some of their examples with several Cities and in all cases the circumstances are very unrelated due to severe soil contamination and clean up costs. The EDA should reflect on how badly you would like the development to proceed and what you are willing to provide them to make that happen. I will be out of the office on Friday but can discuss the procedure in further detail anytime Monday prior to the meeting. Everest may be in attendance at Monday's meeting to make their request to the EDA directly. • * Oitjjk2 bek(1 C' • -1-0 - � � EVEREST DE'v'EL OP!v1EN T LTD 44.(1 April 5, 1996 1 `" VIA FACSIMILE AND REGULAR MAIL Cathy Bennett, Economic Development Coordinator CITY OF MOUNDS VIEW 2401 Highway 10 Mounds View, MN 55112 Fax#784-3462 • Re: MOUNDS VIEW BUSINESS PARK Dear Cathy: We would like to meet with the Mounds View EDA at the earliest opportunity to discuss the proposals concerning Mounds View Business Park which we set forth in our letter of March 29th. I will personally be out of the office from Monday, April 8, through Monday, April 15. In the interim, if you have a date in mind when we could meet with the EDA, please call my colleague, Rob Davidson, at 636-5500. If you would prefer that we meet first with you and other staff to discuss the proposals, please advice. Thank you for your consideration. We look forward to hearing from you soon. Sincerely, EVEREST DEVELOPMENT, L TD. • othy J. Nelson TJN:lc EVEREST DEVE'U?\AEti'T LTD • March 29, 1996 Cathy Bennett, Economic Development Coordinator MOUNDS VIEW ECONOMIC DEVELOPMENT AUTHORITY City of Mounds View 2401 Highway 10 Mounds View, MN 55112 RE: MOUNDS VIEW BUSINESS PARK Dear Cathy and EDA Members: I am writing on behalf of Everest Development, LTD., developer of Mounds View Business Park, and at the request of City officials, to indicate our desire and offer a Proposal to expand and complete the business park and to establish a business retention program to encourage existing companies within the business park to remain and expand in Mounds View. We offer the proposal set forth below, in the hope and expectation that the CityD and the E • • share with Everest the mutual goals of completing the business park and keeping it strong, to realize the benefits of increased tax base and employment, further contributions to the City's excess TIF funds, and the secondary economic benefits such as increased consumer spending for goods and services within Mounds View. Before outlining our proposals, some historical perspective on the development of Mounds View Business Park may be in order. In 1988, Everest entered into a development agreement with the City, in which the City agreed to provide tax increment financing assistance in exchange for Everest's commitment to construct at least 613,000 square feet of development within a three year period, with a guaranteed minimum assessed value of at least $19,500,000. We believe this was a commitment no other developer in the Twin Cities would have undertaken at the time. Construction of the first phase of Mounds View Business Park started in early 1988, and within approximately 24 months, Everest completed development of over 650,000 square feet of office/industrial space with tax values exceeding the guaranteed minimums. With the exception of a build-to-suit sale to Multi-Tech Systems, all of the space in the first phase of Mounds View Business Park was leased space which attracted such quality tenants as Baker's Square, Onan, Pharmacia Deltec, Owens & Minor, Firstar Data Processing, and Liberty Check Printers. • 2665 Long Lake Road Suite 330 • Roseville, MN 55113 Cathy Bennett City of Mounds View Page 2 • In September, 1989, Everest entered into an additional development agreement under which the City provided tax increment financing in connection with the development of three buildings totaling 264,000 square feet in Mounds View Business Park South, with Everest guaranteeing a minimum assessed value of $7,400,000. Between 1990 and 1992, Everest completed the three buildings in Mounds View South and leased them to such tenants such as Medtronic, Mounds View School District, U.S. Geological Survey, First Team Sports, Garment Graphics, and Liberty Check Printers. The buildings in Mounds View South took longer to lease because they were built during a period of economic downturn and severe real estate recession. Everest honored the terms of its development agreement by building the buildings with internal financing at a time when mortgage financing was non-existent, and then sat with empty space for up to 2 1/2 years. In June of 1994, Everest finalised pay-as-you-go TIF assistance agreements for the C. G. Hill project and the Multi-Tech Systems expansion project. Both of these owner-occupied projects were completed as anticipated by January, 1995, contributing $3,000,000 of additional tax base to the City of Mounds View. In 1993 and again in 1994, Everest submitted tax increment financing proposals for the development of Building N, a 103,000 square foot office/industrial building proposed for a 6.89 acre site on Program Avenue, east of the Mounds View Inn motel and south of the Clinch-On • Products building. Although Everest and the EDA discussed and explored potential terms of a pay-as-you-go TIF assistance package for Building N, the EDA elected not to finalize a development assistance agreement until a company acceptable to the EDA was secured in advance to be an owner/occupant or, at least, an anchor tenant for the project. Without a building in the ground and a development assistance agreement in place, we have been unable to secure an advance commitment from a company for this project. We believe the decision of the EDA not to finalize a tax increment agreement for Building N was a serious and wasteful error which has deprived the City of tax base and employment, and has opened the door for other nearby communities to benefit by landing tenants who could have located in Mounds View. BUILDING'N' PROPOSAL We request that the EDA reconsider its position concerning the Building N project by proceeding to finalize an appropriate pay-as-you-go development assistance agreement to reimburse TIF- eligible project costs. In exchange, we will agree to commence project construction in 1996 with completion by 1997. With a development assistance agreement in place, we are willing to guarantee construction of the project and are 100% confident that we will attract a desirable company or companies to occupy the building as an owner or tenant(s), just as we have done successfully on the existing 1,100,000 square feet of space in the business park, and on every other project we have developed. We are prepared to discuss the particulars of a development 110 assistance agreement for the Building N project with the EDA and/or its representatives at your earliest convenience. Cathy Bennett City of Mounds View Page 3 • MOUNDS VIEW BUSINESS PARK SOUTH - EXPANSION PROPOSAL Everest currently owns approximately 3.9 acres of property and a single-family rental residence on the south side of Highway 10, north of Woodale Drive. Adjacent to the Everest-owned parcels are three (3) single-family residential properties at 2280, 2288, and 2300 Highway 10. Enclosed is a map which depicts these properties. Acquisition of the three adjacent residential properties, together with the Everest-owned parcels, would permit assemblage of an overall redevelopment site of approximately 5.9 acres of land area. We believe this site would be suitable and appropriate for the development of "Building K", an office/industrial building of approximately 65,000-80,000 square feet, as an expansion of Mounds View Business Park South. Such a Building K would complete the development of Mounds View Business Park at the fourth and final corner of the Highway 10/Woodale Drive intersection. Over the past several years, Everest has suggested on a number of occasions the need for the City to take affirmative steps to acquire these properties to continue with business park development. To date, these suggestions have not been pursued. We propose that the EDA acquire, for reconveyance to Everest, the three residential properties at 2280, 2288, and 2300 Highway 10, utilizing a portion of the excess TIF funds that have been and b�' continue to be generated by Mounds View Business Park. If the EDA assists in acquiring this site, Everest will commit to develop it. We are aware that the City and the EDA have plans to ilize some of its excess TIF funds to encourage and facilitate other Highway 10 redevelopment , Ji . projects. In our view, the opportunity to develop another high quality office/industrial facility of substantial size, adding to the critical mass of the business park, should qualify for high prioritization among the potential Highway 10 projects. The more employment base created in k Mounds View Business Park• ,, the greater demand should be for goods and services within the ,N community, enhancing the feasibility of other development and redevelopment projects along the Highway 10 corridor. BUSINESS RETENTION GRANT PROGRAM We believe it is important to the long-term success and vitality of Mounds View Business Park that the City/EDA develop an aggressive business retention program to maximize the opportunities to keep business park tenants in Mounds View and/or to attract quality new tenants to replace those that may leave for perceived "greener pastures". Whether we like it or not, the business of economic development is competitive between and among communities. There are several north suburban communities with a variety of incentive programs designed to lure companies, including Mounds View Park Business . � �� 1+o111par11Cs, to relocate to their communities. Free land, forgivable loans, fast-track approvals, and use of eminent domain to acquire development sites, are among the tools and incentives being used by a number of communities to aggressively attract industry. Not surprisingly, many of the best and most desirable companies actively search for and solicit available economic development incentives as they consider relocation versus renewal of an existing lease. Cathy Bennett B tt e City of Mounds View Pane 4 • As a concrete and specific example of the above-described phenomena, in late 1994, Everest attempted to attract Computype, Inc., a Roseville company involved in the bar code label printing business, to be an owner/occupant or anchor/tenant for the Building N project. After an extensive and competitive site search process, Computype officials informed us that our proposal to relocate the company to Mounds View Business Park was attractive and had been selected as its first choice, that is, ung.: the City of Roseville offered and provided to Computype a $700,000 forgivable loan to remain in Roseville. Roseville retained a growing high-tech company and the Building N site remained vacant. To keep and attract desirable companies in Mounds View Business Park, we suggest that the City establish a business retention grant program which would provide assistance to tenants for equipment purchases, tenant improvements, remodeling costs, etc., with grant amounts keyed to the size of the company, number of employees, and some measure of documented company growth and expansion. The business retention program could be funded from a portion of the excess tax increment funds being generated by Mounds View Business Park. A City strategy and policy of keeping Mounds View Business Park strong and well-occupied, and the availability of appropriate tools to implement that policy, would seem to be a prudent way for the City/EDA to preserve and maintain the success of the business park and all the benefits which flow from that success, which in turn should have multiplier effects for the economic'health and vitality of the Highway 10 corridor and the community of Mounds View as a whole. We look forward to the opportunity to discuss the foregoing with ro osalsyou in the near P P future. Sincerely, EVEREST DEVELOPMENT, LTD. imothy J. Nelson T.N/cm • mvpropsUdaily 3/29/96 THE EVEREST GROUP LTD • may 4 t taw Chuck Whiting Clerk-Administrator CITY OF MOUNDS VIEW 2401 Highway 10 Mounds View, MN 55112-1499 Cathy Bennett Economic Development Coordinator CITY OF MOUNDS VIEW 2401 Highway 10 Mounds View, MN 55112-1499 111 Re: MOUNDS VIEW BUSINESS PARK - BUILDING N REQUEST FOR TIF ASSISTANCE Dear Chuck and Cathy: The Everest Group ("Everest") proposes the construction of "Building N", an approximate 103,000 SF office/warehouse/manufacturing facility on approximately 6.89 acres (300,038 SF) of land located on Program Avenue adjacent to the east of the C.G. Hill & Sons facility, the Mounds View Inn Motel, and McDonald's Restaurant. Everest requests that the City of Mounds View (the "City") provide pay-as-you go TIF assistance in connection with the development of Building N. Participation in the Building N project presents a two-fold opportunity for the City and Everest - the opportunity to attract a substantial new company to Mounds View Business Park, and the opportunity to retain an important existing Mounds View company within the Business Park. S 2665 Long Lake Road Suite 330 • Roseville, MN 55113 (612) 636-5500 Fax:(612) 636-0183 G/ eji I 41G -712-'U--L/CA �, J Cc) - l U r.Cz_bGam' .(_1-?c 6 /d 7. • 1 Page Two (;t`')')-r, "_ ). May 21, 1996 '` � i - Everest is currently negotiating with a Twin Cities company ("Company A") to locate a substantial new facility requirement within an existing building in Mounds View Business Park. Company A's facility need is of a size that would �� involve both existing vacant space in Mounds View Business Park and existing occupied space, requiring the relocation of an existing Mounds View Business Park tenant ("Company B") to create a contiguous space large enough to meet Company A': rt:o..: ..ements. J Everest prop: •S t ;crate Company B to new leased space within Building N by canceling Company B's c.=�';s+Ing lease and negotiating a new longer term i�OU ,, lease for Building N. Unites:. ' ._:�canv B can be relocated to Building N, �,�I7 Company A's facility requirement .;:� enc, _ ,_... -., , • elsewhere. To relocate from its existing space into Building N, Company B will \ `incur significant costs of relocation for moving expenses, racking systems and other equipment. U v Everest acquired and assembled the four parcels of land which make up the • Building N site over the period 1987 to 1990, and has now held the property for up to nine (9) years as an industrial development site to compliment the existing development in Mounds View Business Park. Provided that a development agreement can be finalized expeditiously, construction of the project would occur in 1996, with substantial completion by January 2, 1997, for taxes payable in , 1998. Upon completion, the estimated market value of the facility would be i + approximately $2,910,790, with an estimated tax capacity of $133,896.1' 1 Projected property taxes are calculated at $183,369 per year, compared to' ` current taxes of $32,420 per year on the undeveloped land. The estimated total project cost for Building N is approximately $4,365,000, including $1,200,000 in site acquisition and carrying costs already incurred, approximately $590,000 in site improvements and public improvements, and $2,575,000 in building construction cost. Pay-as-you-go tax increment ,. assistance is requested to reimburse a portion of site acquisition, site --2 ;mprovement and public improvement costs already incurred or to be incurred by I,`►,, e developer. \\ '''.;,407The TIF assistance requested is through a Revenue Note in the principal 1 ' amount of $1,285,334 payable over fifteen (15) tax increment years at a simple •, interest rate of seven (7%) percent. After application of the pay-as-you-go TIF 0 principal amount, Everest would still have an unreimbursed investment in the Building N site of approximately $505,000, or $1.68 per square foot of land area. J Page Three May 21, 1996 Company B has indicated it cannot justify the proposed relocation to Building N unless a sourC: or Tunas is avalea�,e to at .y approximately $300,000 relocation costs. Accordingly, in addition to tie pay-as-you-go TIF assist described above, Everest requests that the City provide a grant of $230,0( , + Company B out of the City's excess tax increment funds, to be utilized to ac' 4 Company B's moving expenses, racking and equipment costs, to supple- it a il contribution of $100,000 toward Company B's moving expenses from r B's current building owner/landlord. Attached are the following three schedules: 1. Schedule A - cash flow analysis, includ' 2. Si, t u er+ fn . e .ae r ,te; 3. Schedule C estimated site and p .clic improvements costs. SCHEDL...= A The assumptions for Schedule A are listed on the second page of that schedule and include the following: 1. The original market value and original tax capacity (based on the payable 1996 values per Ramsey County) are $507,800 and $23,359, respectively. 2. The estimated market value of the building assumes a market value of $23.33 per square foot for 103,000 SF. Combining this building market value of $2,402,990 with the land market value of $507,800, generates a total estimated market value upon completion of $2,910,790. Based on current class rates, this market value converts into an estimated tax capacity of $133,896. 3. Assuming the current pay 1996 tax rate of 1.36949, this estimated tax capacity will generate real estate taxes of $183,369 or $1.78 per square foot of building, 4. During the term of the Revenue Note, the City would retain 10% of the tax increment generated for Administrative/Development Program Expenses and apply the remaining 90% to the Revenue • Note. Page Four May 21, 1996 SCHEDULE B This Schedule illustrates the form of a Revenue Note. The proposed Revenue Note has a principal amount of $1,285,334, payable over fifteen (15) tax increment years at 7% simple interest. The Revenue Note, dated as of 8/1/96, is payable semi-annually, with the first payment on 8/1/98 and the final payment on 2/1/2013. SCHEDULE C This schedule sets forth the estimated site improvement and public improvement costs Everest expects to incur to develop the project. Please note that in addition to installation of water, sanitary sewer and storm sewer service to the • property, the public improvements include the reconstruction/improvement of a portion of Program Avenue adjacent to the Building N site, where the pavement is currently substandard and curbing nonexistent or in poor repair. The foregoing proposal presents an opportunity for Everest and the City to retain and attract successful companies to the Mounds View business community, and to take another step toward completion of Mounds View Business Park. Time is of the essence in our negotiations with the tenant prospects described above. / We look forward to discussing this proposal with you and the EDA at the earliest opportunity. Sincerely, ry THE EVEREST GROUP, LTD q"‘I ti (1)-.: )37 Timothy J. Nelson �� rte' TJN:lc • • r1/4y--) mviet596 i\ �1/4� SCHEDULE A (CONTINUED) • Mounds View Building N Site TIF Projections for completion of construction by 12/31/96 05/21/96 Original Market Value and Tax Capacity Square Feet of Land 300,038 Value/square foot $1.6925 Market Value of Land Before Improvements 507,800 (Pay 1996) 4.60% Original Tax Capacity 23,359 Estimated Market Value and Tax Capacity After Improvements Land Value 507,800 Building Square Feet 103,000 $23.33 Building Value 2,402,990 2,402,990 Estimated Market Value After Improvements 2,910,790 4.60% Estimated Tax Capacity After Improvements 133,896 Construction 1996 • Valuation 1997 Taxes Payable 1998 Property tax rate for taxes payable in 1996 1.36949 Assumed annual inflation 2.00% Admin Fees 10.00% Interest Rate of Revenue Note 7.00% Date Revenue Note Begins to Accrue Interest 08/01/96 • SCHEDULE A • THE EVEREST GROUP/CITY OF MOUNDS VIEW BUILDING "N" Cash Projection Increment Tax Payment Original Estimated Estimated Less Available Increment Date Years Tax Capacity Tax Capacity Tax Increment Admin Fees Tax Increment Years 08/01/96 23,359 23,359 0 0 02/01/97 23,359 133,896 0 0 08/01/97 23,359 133,896 0 0 02/01/98 0.0 23,359 136,574 75,690 0 0.0 08/01/98 0.5 23,359 136,574 75.690 7,569 68,121 0.5 02/01/99 1.0 23,359 139,305 77,523 7,569 68,121 1.0 08/01/99 1.5 23,359 139,305 77,523 7,752 69,771 1.5 02/01/2000 2.0 23,359 142,092 79,394 7,752 69,771 2.0 08/01/2000 2.5 23,359 142,092 79,394 7,939 71,454 2.5 02/01/2001 3.0 23,359 144,933 81,301 7,939 71,454 3.0 08/01/2001 3.5 23,359 144,933 81,301 8,130 73,171 3.5 02/01/2002 4.0 23,359 147,832 83,247 8,130 73,171 4.0 08/01/2002 4.5 23,359 147,832 83,247 8,325 74,923 4.5 02/01/2003 5.0 23,359 150,789 85,232 8,325 74,923 5.0 08/01/2003 5.5 23,359 150,789 85,232 8,523 76,709 5.5 02/01/2004 6.0 23,359 153,804 87,257 8,523 76,709 6.0 08/01/2004 6.5 23,359 153,804 87,257 8,726 78,531 r' 6.5 02/01/2005 7.0 23,359 156,881 89,322 8,726 78,531 AL/ 7.0 0"0 '" 2005 7.5 23,359 156,881 89,322 8,932 80,390 is 7.5 2006 8.0 23,359 160,018 91,428 8,932 80.390 ‘ 8.0 08/01/2006 8.5 23,359 160,018 91,428 9,143 82,285 8.5 02/01/2007 9.0 23,359 163,218 93,577 9,143 82,285 9.0 08/01/2007 9.5 23,359 163,218 93,577 9,358 84,219 9.5 02/01/2008 10.0 23,359 166,483 95,768 9,358 84,219 10.0 08/01/2008 10.5 23,359 166,483 95,768 9,577 86,191 10.5 02/01/2009 11.0 23,359 169,813 98,003 9,577 86,191 11.0 08/01/2009 11.5 23,359 169,813 98,003 9,800 88,203 11.5 02/01/2010 12.0 23,359 173,209 100,283 9,800 88,203 12.0 08/01/2010 12.5 23,359 173,209 100,283 10,028 90,255 12.5 02/01/2011 13.0 23,359 176,673 102,609 10,028 90,255 13.0 08/01/2011 13.5 23,359 176,673 102,609 10,261 92,348 13.5 02/01/2012 14.0 23,359 180,206 104,981 10,261 92,348 14.0 08/01/2012 14.5 23,359 180,206 104,981 10,498 94,483 14.5 02/01/2013 15.0 N/A N/A N/A 10,498 94.483 15.0 2,691,232 269,123 2,422,109 SCHEDULE B THE EVEREST GROUP/CITY OF MOUNDS VIEW • Principal $1,285,334 Interest Rate 7.00% Date of Note 08/01/96 Payment Beginning Accrued Current Total Interest Principal Ending Date Balance Inte st Interest , Payment Portion Portion Balance 08/01/96 1,285,334 44,987 \..... � �e'10 1,285,334 02/01/97 1,285,334 44,987 j/v' -� 0 1,285,334 08/01/97 1,285,334 44,987 v r �`�0 0 1,285,334 02/01/98 1,285,334 44,987.- 0 1,285,334 08/01/98 1,285,334 44,987 68,121 68,121 0 1,285,334 02/01/99 1,285,334 44,987 68,121 68,121 0 1,285,334 1 08/01/99 1,285,334 44,987 69,771 69,771 0 1,285,334 02/01/2000 1,285,334 44,987 69,771 69,771 0 1,285,334 08/01/2000 1,285,334 44,987 71,454 71,454 0 1,285,334 02/01/2001 1,285,334 44,987 71,454 71,454 0 1,285,334 08/01/2001 1,285,334 44,987 73,171 73,171 0 1,285,334 02/01/2002 1,285,334 44,987 73,171 47,977 25,194 1,260,140 08/01/2002 1,260,140 44,105 74,923 44,105 30,818 1,229,322 02/01/2003 1,229,322 43,026 74,923 43,026 31,896 1,197,425 08/01/2003 1,197,425 41,910 76,709 41,910 34,799 1,162,626 02/01/2004 1,162,626 40,692 76,709 40,692 ,36,017 1,126,609 08/01/2004 1,126,609 • 39,431 78,531 39,431 39,100 1,087, 02/01/2005 1,087,509 38,063 78,531 38,063 40,468 1,047 08/01/2005 1,047,041 36,646 80,390 36,646 43,743 1,003,298 02/01/2006 1,003,298 35,115 80,390 35,115 45,274 958,024 08/01/2006 958,024 33,531 82,285 33,531 48,755 909,269 02/01/2007 909,269 31,824 82,285 31,824 50,461 858,808 08/01/2007 858,808 30,058 84,219 30,058 54,161 804,647 02/01/2008 804,647 28,163 84,219 28,163 56,056 748,591 08/01/2008 748,591 26,201 86,191 26,201 59,991 688,601 02/0112009 688,601 24,101 86,191 24,101 62,090 626,510 08/01/2009 626,510 21,928 88,203 21,928 66,275 560,235 02/01/2010 560,235 19,608 88,203 19,608 68,595 491,640 08/01/2010 491,640 17,207 90,255 17,207 73,048 418,593 02/01/2011 418,593 14,651 90,255 14,651 75,604 342,989 08/01/2011 342,989 12,005 92,348 12,005 80,343 262,645 02/01/2012 262,645 9,193 92,348 9,193 83,155 179,490 08/01/2012 179,490 6,282 94,483 6,282 88,201 91,289 02/01/2013 91,289 -k. 3,195 ,---9-4-,-4 , .--9.1289-Z 0 179,947 . 956,829 / 2,422,1091 1,136,776 / 1,285,334 MINV ICI q 2 CJct' y7'\ a� ����'� , 1 . Uct /S •\ ,-k-' (�{ ,.� .' 5S`S� n gi • EVEREST CONSTRUC I ION May 17, 1996 SCHEDULE C MOUNDS VIEW BUSINESS PARK Bot.°_DING N SITE AND PUBLIC IMPROV ' ITEM _ $ 1. Clearing, Excavation, L, Control $75,000.00 2. Ponding with Clay Liner 10,000.00 3. Retaining Walls 70,000.00 4. Soil Corrections 50,000.00 5. Watermains and Hydrants 55,000.00 6. Sanitary Sewers 15,000.00 . 7. Storm Sewer System 55,000.00 8. Driveway Aprons and Curbing 12,000.00 9. Paving Base 56,000.00 10. Street Lighting 7,000.00 11. Landscaping 45,000.00 12. Irrigation 20,000.00 13. Program Avenue (paving and curb) 25,000.00 14. Soil Reports/Surveys 6,000.00 15. Architectural/Engineering Fees 10,000.00 16. Soils Testing/Location Surveys 10,000.00 17. Permits 10,000.00 18. Supervision, General Conditions 20,000.00 • 19. Overhead and Fee 39,000.00 TOTAL $590,000.00v �, J J1 I 2J it ' IN "\. 1 �� (GI) •• 0 � '.0 97 1 Q 6 Q• 2 . 9 8 a-c.. • �. .D‘ ^ N2 PONDING 1 1 Ns. E 5MT 1. .'.� 25.25 oc. 11'43ac) i a Zy•Ti j 4r.......), 4 1"-- gVgg•-0-ST- klY ,t. ?.1i r� y Cis) >W •s Q r�sL) •• (4 , , ▪ 127.29 (7S) •' 1U 3 0.z.. \ • (1‹/C) ▪ (GG) r� 2 \` 6 ' V • J_1?-1_47 . °(-?__19j Go \ (G77) 79 03) 1 0 2's 3Z� 's.t.\j , 121.E - - .7 • ' • L _ _ _ _ _ _ Ix 00c R254'_,,t8 WOODALfr1E DRIVE ,T DOC *Z5i0302 --- . etc ` _ 2 I ,-- .4.7".7....... �. .Otir " . — o rr ,` \„\ .. �+.._�.,C ' 2 0.6I.L.Ki aT' O ( `i 7) •' • • 249. 93 N + MOUNDS VIEW + l 1,,,.. ... 7.56. 2 , f g.s9) --1-' 1 { BUSINESS - PARK II .( : 8 \,. - I f iI L-- -- - _ _ _ . ; I.... - - - - - - - ' C377 T© • • .- •.. ((-yurAse ..,. . , . \,...7,....., 0 -0 Phone: (612) 784-3055 p. —n F. pr+ 7 • Fax: (612) 784-3462 �re4s4. . Partners' June 3, 1996 Mr. Timothy Nelson The Everest Group, LTD 2665 Long Lake Road, Suite 330 Roseville,MN 551 13 Dear.Tim: Chuck and I reviewed your request for a pay-as-you-go tax increment financing assistance proposal for Building "N" in Mounds View Business Park. The request includes 51.285,334 present value revenue note which equates to approximately$4.28 per square foot of assistance on the project. The term of the proposal is 15 years at 7% interest rate. At the EDA work session on April 29, 1995, we were directed to encourage a proposal for Building"N" and negotiate the terms of the agreement prior to bringing an equitable tax increment package to the EDA for review. After careful IIIPview with the EDA's fiscal and bond attorney's I would Iike to make an alternate proposal which, in my opinion, e EDA Board members would be more susceptible to. The proposal.inciudes an eight year, 7% interest rate pay-as-you-go agreement which would equal approximately $2.75 per square foot of assistance. This is more in line with the pay-as-you-go agreements the EDA has approved in the past. In regards to the proposed 5200.000 grant to "Company B" I wouid propose a very desirable low interest rate loan with the company over a term not to exceed their lease agreement to finance the new equipment and racking systems. At this time we are not interested in setting a precedence of providing grants but would be willing to review a favorable loan agreement. The City of Mounds View's EDA is very interested in working with The Everest Group to see the completion of the very successful business park. If these terms are agreeable I would be willing to arrange for a special work session prior to either of the regular meetings in June. Please contact me with questions or comments at your earliest convenience. Sincerely, 71i Lathy B��tnett OA Executive Director cc: Chuck Whiting, City Administrator ?MINTED WITH �r1-. ,..,.., 24C1iC^w8v 1 n • ren rc /io+v \AM i cc -^_• +00 \f \x/ THE EVEREST GROUP LTD • June 3, 1996 VIA FACSIMILE (784-3462) AND REGULAR MAIL Cathy Bennett EDA Executive Director CITY OF MOUNDS VIEW 2401 Highway 10 Mounds View, MN 55112-1499 Dear Cathy: Thank you for your letter dated June 3 responding to our proposal for pay-as- you-go tax increment financing for Building N in Mounds View Business Park. We have reviewed with our investor the alternate proposal you suggested for an 8-year pay-as-you-go TIF financing package and are writing to inform you that • the Building N project would not proceed under the alternate TIF proposal as it would leave far too high .a level of TIF-eligible but unreimbursed project costs. Our proposal was prepared and submitted after careful consideration of project costs and the economics necessary to meet the requirements of Companies A and B, as described in our 5-21-96 proposal letter. A quick analysis shows land acquisition and site costs totalling $5.97 per square foot in the Building N site. Your proposed level of TIF financing would only bring this cost down to $3.22 per square foot, an uncompetitive site cost to support industrial development, especially considering that several competing communities are offering free land or full land write-downs to encourage industrial development. Quite simply, we are unable to attract the kind of industrial owner/occupants or tenants desired by the City and the developer without a competitive economic development package. The lack of a competitive economic development package is why this site has remained undeveloped 9 d u developed for9 years. • We will continue to work with you and Chuck Whiting in an effort to explore other opportunities to complete the Business Park and keep it strong. • 2665 Long Lake Road Suite 330 • Roseville, MN 55113 ;612)636-5500 Fax:(612)636-0183 • Page Two CITY OF MOUNDS VIEW An alternative the EDA might consider to facilitate the development of the Building N project would be to blend a pay-as-you-go TIF revenue note approach with up-front reimbursement of certain project costs from the City's excess increment funds (e.g. $850,000 under a pay-as-you-go revenue note, and $435,000 from excess TIF funds). We can assure you that the Building N project will not proceed without the level of TIF commitment set forth in our initial proposal letter. Accordingly, we respectfully request that you reconsider our May 21 proposal for pay-as-you-go TIF assistance, or consider the possibility of blending pay-as- you-go and up-front TIF financing as briefly outlined above. Thank you for your consideration. Sincerely, • THE EVEREST GROUP, LTD 40:714044400., Timothy J. Nelson TJN:Ic cc: Chuck Whiting, City Administrator BUILDINGS "K" AND "N" ; .Y71 • MOUNDS VIEW BUSINESS PARK v TIF PROPOSAL SUMMARY TIF - ELIGIBLE COSTS '^A4\: n/ M� v Building K: Acquisition Costs: $ 278,000 — Site Development Costs: $ 470.000 ��^.� :-- �✓ Tr 2 m $ 748,000 Building N: fir- Acquisition Costs: $1,201,500 f���—� � - °c%`� Site Development Costs: $ 590,000 $1,791,500 — ,` 7"-` `"c.2 Total Costs: $2,539,500 Aik Pay-as-you-4o Revenue Note TIF Assistance: (Terms: 13-years, 7% interest, 10% to Admin) Building K: $ 676,383 Building N: $1,156,796 Total TIF Reimbursement: $1,833,179 Developer's Unreimbursed Costs: - $ 706,321 TIFK&N (p)6/96 k--\` , 11111, 3 SCHEDULE A (CONTINUED) Mounds View Building K Site TIF Projections for completion of construction by 12/31/97 06/21/96 Original Market Value and Tax Capacity Square Feet of Land 245,296 Value/square foot 51.5039 Market Value of Land Before Improvements 368,900 (Pay 1996) 4.60% Original Tax Capacity 16,969 Estimated Market Value and Tax Capacity After Improvements Land Value 368,900 • Building Square Feet C65,00S1 523.33 Building Value 1,516,450 1,516A50 Estimated Market Value After Improvements �1 885,350�� 4.60% Estimated Tax Capacity After Improvements 86,726 •truction 1997 Valuation 1998 Taxes Payable 1999 Property tax rate for taxes payable in 1996 1.36949 Assumed annual inflation 2.00% Admin Fees 10.00% Interest Rate of Revenue Note 7.00% Date Revenue Note Begins to Accrue Interest 08/01/96 i SCHEDULE A THE EVEREST GROUP/CITY OF MOUNDS VIEW ti BUILDING "K" Cash Projection Increment Tax Payment Original Estimated Estimated Less Available Increment Date Years Tax Capacity Tax Capacity Tax Increment City Share Tax Increment Years 08/01/96 16,969 16,969 0 0 02/01/97 16,969 16,969 0 0 08/01/97 16,969 16,969 0 0 02/01/98 16,969 86,726 0 0 08/01/98 16,969 86,726 0 0 0 02/01/99 0.0 16,969 88,461 47,766 0 0 0.0 08/01/99 0.5 16,969 88,461 47,766 • 4,777 42,989 0.5 02/01/2000 1.0 16,969 90,230 48,954 4,777 42,989 1.0 08/01/2000 1.5 16,969 90,230 48,954 4,895 44,058 1.5 02/01/2001 2.0 16,969 92,034 50,165 4,895 44,058 2.0 08/01/2001 2.5 16,969 92,034 50,165 5,016 45,148 2.5 02/01/2002 3.0 16,969 93,875 51,401 5,016 45,148 3.0 08/01/2002 3.5 16,969 93,875 51,401 5,140 46,261 3.5 02/01/2003 4.0 16,969 95,753 52,661 5,140 46,261 4.0 08/01/2003 4.5 16,969 95,753 52,661 5,266 47,395 4.5 02/01/2004 5.0 16,969 97,668 53,947 5,266 47,395 5.0 08/01/2004 5.5 16,969 97,668 53,947 5,395 48,552 5.5 02/01/2005 6.0 16,969 99,621 55,258 5,395 48,552 6.0 08/01/2005 6.5 16,969 99,621 55,258 5,526 49,732 02/01/2006 7.0 16,969 101,613 56,596 5,526 49,732 0 08/01/2006 7.5 16,969 101,613 56,596 5,660 50,936 7.5 02/01/2007 8.0 16,969 103,646 57,960 5,660 50,936 8.0 08/01/2007 8.5 16,969 103,646 57,960 5,796 52,164 8.5 02/01/2008 9.0 16,969 105,719 59,351 5,796 52,164 9.0 08/01/2008 9.5 16,969 105,719 59,351 5,935 53,416 9.5 02/01/2009 10.0 16,969 107,833 60,771 5,935 53,416 10.0 08/01/2009 10.5 16,969 107,833 60,771 6,077 54,694 10.5 02/01/2010 11.0 16,969 109,990 62,219 6,077 54,694 11.0 08/01/2010 11.5 16,969 109,990 62,219 6,222 55,997 11.5 02/01/2011 12.0 16,969 112,189 63,695 6,222 55,997 12.0 08/01/2011 12.5 16,969 112,189 63,695 6,370 57,326 12.5 02/01/2012 13.0 16,969 114,433 65,202 6,370 57,326 13.0 08/01/2012 13.5 16,969 114,433 65,202 65,202 0 13.5 02/01/2013 14.0 16,969 116,722 66,738 65,202 0 14.0 1,638,627 274,552 1,297,337 • 0 SCHEDULE B THE EVEREST GROUP/CITY OF MOUNDS VIEW OILDING "K" Principal $676,383 Interest Rate 7.00% Date of Note 08/01/96 Payment Beginning Accrued Current Total Interest Principal Ending Date Balance Interest Interest Payment Portion Portion Balance 08/01/96 676,383 23,673 0 676,383 02/01/97 676,383 23,673 0 676,383 08/01/97 676,383 23,673 0 676,383_ 02/01/98 676,383 23,673 0 676,383 08/01/98 676,383 23,673 0 676,383 02/01/99 676,383 23,673 0 676,383 08/01/99 676,383 23,673 42,989 42,989 0 676,383 02/01/2000 676,383 23,673 42,989 42,989 0 676,383 08/01/2000 676,383 23,673 44,058 44,058 0 676,383 02/01/2001 676,383 23,673 44,058 44,058 0 676,383 08/01/2001 676,383 23,673 45,148 45,148 0 676,383 02/01/2002 676,383 23,673 45,148 45,148 0 676,383 08/01/2002 676,383 23,673 46,261 43,362 2,898 673,485 02/01/2003 673,485 23,572 46,261 23,572 22,689 650,796 418/01/2003 650,796 22,778 47,395 22,778 .24,617 626,179 01/2004 626,179 21,916 47,395 21,916 25,479 600,700 /01/2004 600,700 21,025 48,552 21,025 27,528 573,173 02/01/2005 573,173 20,061 48,552 20,061 28,491 544,682 08/01/2005 544,682 19,064 49,732 19,064 30,668 514,014 02/01/2006 514,014 17,990 49,732 17,990 31,742 482,272 08/01/2006 482,272 16,880 50,936 16,880 34,056 448,215 02/01/2007 448,215 15,688 50,936 15,688 35,248 412,967 08/01/2007 412,967 14,454 52,164 14,454 37,710 375,257 02/01/2008 375,257 13,134 52,164 13,134 39,030 336,227 08/01/2008 336,227 11,768 53,416 11,768 41,648 294,579 02/01/2009 294,579 10,310 53,416 10,310 43,106 251,473 08/01/2009 251,473 8,802 54,694 8,802 45,892 205,580 02/01/2010 205,580 7,195 54,694 7,195 47,498 158,082 08/01/2010 158,082 5,533 55,997 5,533 50,464 107,618 02/01/2011 107,618 3,767 55,997 3,767 52,230 55,388 1,939 • ----57,326 1,939 55,387 0 142,040 421,588 1,240,011 563,628 676,383 •• EVEREST CONSTRUCTION COMPANY I3(Ri)I 1!it IV'Ikftil�,n�fl ! !TI) June 21, 1996 SCHEDULE C MOUNDS VIEW BUSINESS PARK BUILDING K SITE AND PUBLIC IMPROVEMENTS ITEM 1. Clearing, Excavation, Erosion Control $ $183,000.00 2. Ponding with Clay Liner 10,000.00 3. Watermains and Hydrants 47,000.00 4. Sanitary Sewers • 3,000.00 5. Storm Sewer System 75,000.00 6. Driveway Aprons and Curbing 10,000.00 7. Paving Base 30,000.00 8. Street Lighting 6,000.00 9. Landscaping 25,000.00 10. Irrigation 10,000.00 11. Soil Reports/Surveys 6,000.00 12. Architectural/Engineering Fees 7,000.00 13. Soils Testing/Location Surveys 6,000.00 14. Permits 6,000.00 15. Supervision, General Conditions 1 000 16. Overhead and Fee 31_ TOTAL $470,000.00 KSchedC(P) • 2685 Long Lake Road P.O. Box 1 301 ti0 • Roxcvillt', MN 551 1 3 `1'122) 616•5500 Fax: 1612) 636-0103 • SCHEDULE A • THE EVEREST GROUP/CITY OF MOUNDS VIEW BUILDING "N" Cash Projection Increment Tax Payment Original Estimated Estimated Less Available Increment Date Years Tax Capacity Tax Capacity Tax Increment City Share Tax Increment Years 08/01/96 23,359 23,359 0 0 02/01/97 23,359 133,896 0 0 08/01/97 23,359 133,896 0 0 02/01/98 0.0 23,359 136,574 75,690 0 0.0 08/01/98 0.5 23,359 136,574 75,690 7,569 68,121 0.5 02/01/99 1.0 23,359 139,305 77,523 7,569 68,121 1.0 08/01/99 1.5 23,359 139,305 77,523 7,752 69,771 1.5 02/01/2000 2.0 23,359 142.092 79,394 7,752 69,771 2.0 08/01/2000 2.5 23,359 142,092 79,394 7,939 71,454 2.5 02/01/2001 3.0 23,359 144,933 81,301 7,939 71,454 3.0 08/01/2001 3.5 23,359 144,933 81,301 8,130 73,171 3.5 02/01/2002 4.0 23,359 147,832 83,247 8,130 73,171 4.0 08/01/2002 4.5 23,359 147,832 83,247 8,325 74,923 4.5 02/01/2003 5.0 23,359 150,789 85,232 8,325 74,923 5.0 08/01/2003 5.5 23,359 150,789 85,232 8,523 76,709 5.5 02/01/2004 6.0 23,359 153,804 87,257 8,523 76,709 6.0 08/01/2004 6.5 23,359 153,804 87,257 8,726 78,531 6.5 02/01/2005 ' 7.0 23,359 156,881 89,322 8,726 78,531 7.0 08/01/2005 7.5 23,359 156,881 89,322 8,932 ,80,390 7.5 01/2006 8.0 23,359 160,018 91,428 8,932 80,390 8.0 01/2006 8.5 23,359 160,018 91,428 9,143 82,285 8.5 2/01/2007 9.0 23,359 163,218 93,577 9,143 82,285 9.0 08/01/2007 9.5 23,359 163,218 93,577 9,358 84,219 9.5 02/01/2008 10.0 23,359 166,483 95,768 9,358 84,219 10.0 08/01/2008 10.5 23,359 166,483 95,768 9,577 86,191 10.5 02/01/2009 11.0 23,359 169,813 98,003 9,577 86,191 11.0 08/01/2009 11.5 23,359 169,813 98,003 9,800 88,203 11.5 02/01/2010 12.0 23,359 173,209 100,283 9,800 88,203 12.0 08/01/2010 12.5 23,359 173,209 100,283 10,028 90,255 12.5 02/01/2011 13.0 23,359 176,673 102,609 10,028 90,255 13.0 08/01/2011 13.5 23,359 176,673 102,609 102,609 0 13.5 02/01/2012 14.0 23,359 180,206 104,981 102,609 0 14.0 08/01/2012 14.5 23,359 180,206 . 104,981 104,981 0 14.5 02/01/2013 15.0 N/A N/A N/A 104,981 0 15.0 2,691,232 642,785 2,048,447 • SCHEDULE A (CONTINUED) • Mounds View Building N Site TIF Projections for completion of construction by 12/31/96 05/21/96 Original Market Value and Tax Capacity Square Feet of Land 300,038 Value/square foot $1.6925 Market Value of Land Before Improvements 507,800 (Pay 1996) 4.60% Original Tax Capacity 23,359 Estimated Market Value and Tax Capacity After Improvements Land Value 507,800 Building Square Feet 103,000 $23.33 Building Value 2,402,990 2,402.990 Estimated Market Value After Improvements X2,910,790 Estimated Tax Capacity After Improvements 133,896 Construction 1996 . ✓aluation 1997 Taxes Payable 1998 property tax rate for taxes payable in 1996 1.36949 Assumed annual inflation 2.00% Admin Fees 10.00% interest Rate of Revenue Note 7.00% Date Revenue Note Begins to Accrue Interest 08/01/96 • SCHEDULE B • THE EVEREST GROUP/CITY OF MOUNDS VIEW Principal $1,156,796 Interest Rate 7.00% Date of Note 08/01/96 Payment Beginning Accrued Current Total Interest Principal Ending Date Balance Interest Interest Payment Portion Portion Balance 08/01/96 1,156,796 40,488 0 1,156,796 02/01/97 1,156,796 40,488 0 1,156,796 08/01/97 1,156,796 40,488 0 1,156,796 02/01/98 1,156,796 40,488 0 1,156,796 08/01/98 1,156,796 40,488 68,121 68,121 0 1,156,796 - 02/01/99 1,156,796 40,488 68,121 68,121 0 1,156,796 08/01/99 1,156,796 40,488 69,771 69,771 0 1,156,796 02/01/2000 1,156,796 40,488 69,771 69,771 0 1,156,796 08/01/2000 1,156,796 40,488 71,454 71,454 0 1,156,796 02/01/2001 1,156,796 40,488 71,454 57,641 13,813 1,142,982 08/01/2001 1,142,982 40,004 73,171 40,004 33,167 1,109,816 02/01/2002 1,109,816 38,844 73,171 38,844 34,328 1,075,488 08/01/2002 1,075,488 37,642 74,923 37,642 37,281 1,038,207 02/01/2003 1,038,207 36,337 74,923 36,337 38,585 999,622 08/01/2003 999,622 34,987 76,709 34,987 41,722 957,899 02/01/2004957,899 33,526 76,709 33,526 43,183 914,717 1/2004 914,717 32,015 78,531 32,015 46,516 868,201 1/2005 868,201 30,387 78,531 30,387 48,144 820,057 08/01/2005 820,057 28,702 80,390 28,702 51,688 768,369 02/01/2006 768,369 26,893 80,390 26,893 53,497 714,872 08/01/2006 714,872 25,021 82,285 25,021 57,265 657,607 02/01/2007 657,607 23,016 82,285 23.016 59,269 598,338 08/01/2007 598,338 20,942 84,219 20,942 63,277 535,061 02/01/2008 535,061 18,727 84,219 18,727 65,492 469,569 08/01/2008 469,569 16,435 86,191 16,435 69,756 399,813 02/01/2009 399,813 13,993 86,191 13,993 72,198 327,615 08/01/2009 327,615 11,467 88,203 11,467 76,736 250,879 02/01/2010 250,879 8,781 88,203 8,781 79,422 171,457 08/01/2011 171,457 6,001 90,255 6,001 84.254 87,203 87,203 3.052 -----9OT255____ 3,052 87,203 (0) 161,951 729,699 ( 2,048,447 ) 891,651 1,156,796 I EVEREST CONSTRUC 110N COMPANY "n LTD sway 17, 1996 SCHEDULE C MOUNDS VIEW BUSMESS PARK BUILDING N SITE AND PUBLIC IMPROVEMENTS ITEM $ 1. Clearing, Excavation, Erosion Control $75,000.00 2. Ponding with Clay Liner 10,000.00 3. Retaining Walls 70,000.00 4. Soil Corrections 50,000.00 5. Watermains and Hydrants 55,000.00 6. Sanitary Sewers 15,000.00 7. Storm Sewer System 55,000.00 • 8. Driveway Aprons and Curbing 12,000.00 9. Paving Base 56,000.00 10. Street Lighting 7,000.00 11. Landscaping 45,000.00 12. Irrigation 20,000.00 13. Program Avenue (paving and curb) 25,000.00 14. Soil Reports/Surveys 6,000.00 15. ArchitecturaVEngineering Fees 10,000.00 16. Soils Testing/Location Surveys 10,000.00 17. Permits 10,000.00 18. Supervision, General Conditions 20,000.00 19. Overhead and Fee 39,000.00 • TOTAL $590,000.00 2685 Long Lake Road P.O. Box 130190 • Roseville, MN 55113 (612) 636-5500 Fax: (612) 636-0183 Ct © Phone: (612) 784-3055•• L EW Fax: (612) 784-3462 41- es.' • PartnerS��e July 1, 1996 Mr. Timothy Nelson The Everest Group, LTD 2665 Long Lake Road, Suite 330 Roseville, MN 55113 Dear Tim: I want to thank you for preparing the proposal on Building"K" as requested and for being patient as we proceed through these negotiations. After our discussions regarding Building "N" and "K" staff is not prepared to recommend your current proposals to the EDA for consideration because the terms of the agreements are not in the best interest of the City for several reasons. The Building "N" proposal would require the City to reimburse Everest for both public improvements • and almost all of the investment made in the purchase of the land. The Everest Group made the decision to purchase the land several years ago as an investment without any guarantee that tax increment funds would be available to reimburse for the carrying costs of that investment. In addition, the development of Building "N"would be for a speculative building since negotiations with Company"A" have not proceeded as planned. Several members of the EDA have not been favorable to speculative buildings in the past and corporate citizenship is a concern when tax dollars, whether incremental from the development or not, are involved. The length of your proposal also raises concern as it comes very close to the decertification date of the district. The Building "K" proposal should incorporate the City's costs to acquire the homes not currently owned by Everest. Condemnation proceedings are very costly and lengthy. To meet the planned construction dates the City may need to provide incentives for the relocation of the property owners in an expedient time frame. Current excess increment funds would need to be expended for this transaction and it is in the best interest of the City to replenish a portion of these funds for other redevelopment purposes. In light of these circumstances staff is willing to recommend the following proposal to the EDA for consideration. The proposal takes into consideration some of the EDA's previous desires for future tax increment agreements regarding the Mounds View Business Park,the interests of the community and yet attempts to meet some of your investors needs for an equitable project. Building "N" (Terms: 8-years "Pay-as-you-go" revenue note, 7% interest, 15% Admin) Construction fall 1996, pay 1998 • Total Reimbursement: $757,259.96 present value plus interest of$362,982.04 Assistance per sq.ft.: $2.52 I►IIIIITEO NKlWITHI,,, 2401 Highway 10 • Mounds View, MN 55112-1499 ARE SOYI loo°.IBtyCWO paper Equal Opprotunily Employer •Page Two of Two Everest Group 7/1/96 Building "K" (Terms: 10-years "Pay-as-you-go"revenue note, 7% interest, 35% Admin*) Construction 1997, pay 1999 * City would take the lead on acquiring privately owned homes on the site and take the costs of acquisition, relocation, closing and administrative costs for these transaction out of the increment generated from the project. Total Reimbursement: $409,778.38 present value plus interest of$284,499.62 Assistance per sq.ft.: $1.67 Combined proposal: (Terms: 9-years "Pay-as-you-go" revenue note, 7% interest, 20%Admin*) * City would take the lead on acquiring privately owned homes on the site and take the costs of acquisition, relocation, closing and administrative costs for these transaction out of the increment generated from the project. Total Reimbursement: $1,205,672.14 present value plus interest of$661,751.66 Assistance per sq.ft.: $2.21 As you know the EDA has a strong interest in completing the Mounds View Business Park in the • upcoming years but we would like to stay consistent with the types of pay-as-you-go tax increment arrangements that have been approved over the past few years. Please contact me as soon as possible if you are interested in discussing this proposal with the EDA at the July 8, 1996 work session. With the July 4th holiday, I would need a response no later than July 2nd to include the information in the EDA agenda packet. Sincerely, Lo..4.-It Rd Cathy Bennett EDA Executive Director cc: Chuck Whiting, City Administrator Jim O'Meara, Briggs and Morgan • 85 E.SEVENTH PLACE,SUITE 100 . SAINT PAUL,MN 55101-2143 • 612-223-3000 FAX:612-223-3002 O SPRINGSTED PL do Finance A d�is<a s TELECOPY INFORMATION • TELECOPY NUMBER: (642) 223-3002 Data: 1 /1 /9 C. TO: C1- -y Q Mo ,r, b s VtF+ FAX#: 7 3 � - 3y G ATTENTION: t=k `73‹:^`''`ETA PHONE: RE: - t-v g e---TT 6)2.0 e FROM: h-, " .i) F PHONE: (612) 2.-2-3 - 3 0 7 3 • This is transmittingfrom a Canon L770 Telecopier. We are sendingpages, INCLUDING � � this cover page. If you do not receive all of these pages, please call (612) 223-3000. Thank you. 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O N cn O c)1 OCD O to O in O en O in O U A a O -a O en O Cm O en in y 7 = A r3e Of • Staff Memo To: Economic Development Commission Members From: Cathy Bennett, Economic Development Coordinator Date: July 18, 1996 Subject: Consideration of Proposed Automatic Fire Suppression (5.C) Ordinance No. 586 as it relates to the impact to Mounds View Businesses. The City Council is currently considering the adoption of Ordinance No. 586 relating automatic fire suppression. In June of 1983, the Council amended Section 60 of the City Building Code to included • the adoption of the Uniform Building Code, Chapter 38 Appendix E relating to automatic fire suppression systems. Within Appendix E there is an option to adopt a threshold of 2,000 or 5,000 square footage for storage/factory/mercantile facilities. This was not addressed in the 1983 amendment therefore the City Council must adopt a new ordinance to address the option. The Mounds View Fire Department is recommending the minimum 2,000 square footage threshold be adopted. Fire Chief Nyle Zikmund will be in attendance at the EDC meeting to give a brief presentation and answer questions. In addition, he has prepared background information for your review prior to the meeting. One of the EDA Action Steps that came out of the business retention surveys was to "Contact business representatives and solicit their input prior to adoption of public policy which may have an effect on their business." Joyce Pruitt, Acting Community Development Director mailed a letter to all businesses representatives regarding this issue but some businesses owners may not have been clear on how the Ordinance change impacts them; especially as it relates to remodeling a current unsprinkled facility. The Ordinance, up for final adoption at the July 22nd Council Meeting, was tabled and referred to the EDC for further evaluation and recommendation as to its impact on the business community. If you have any questions prior to the meeting please feel free to call! 411 ATTACHMENT: BACKGROUND INFORMATION PROVIDED BY FIRE CHIEF NYLE ZIKMUND • Background Information Fire Sprinklers, Codes, Impacts Background and Significance: The City of Mounds View adopted, as part of the Uniform Building Code (UBC) Chapter 38 or Appendix E which is the automatic fire suppression systems provision. This action was taken by council in 1983. Recently, the issue has come back to council for re-adoption on two points, a technical procedure needs addressing and the fire department is recommending changing the threshold on certain occupancies to a lower level. The issue is before the EDC as a function of the commitment made by council and staff to advise the business community of any actions that may impact them. Chief Nyle Zikmund of the Fire Department will be on hand at the July 25 meeting to give a brief presentation and answer questions. Current Code: As adopted the sprinkler code (Chapter 38 or Appendix E) requires fire sprinklers in commercial and industrial buildings based upon square footage and occupancy classification. There are more than seven broad occupancy classes, many with numerous subdivisions. The most common occupancies are business, factory/storage, mercantile, educational, assembly, and educational. • Chapter 38 sets thresholds for each of these and requires the sprinklers under new construction or whenever any remodeling is done in which square footage is added. When added the total footage, new and addition, is combined for determining the threshold purposes. Situations arise where current buildings that are already over the threshold and were not sprinklered due to age or the fact that oversight occurs may have to sprinkle the entire building when they only add a very small addition. Schools are the best example of this when they propose to add.a 4,000 square foot addition to the kitchen and the entire 80,000 square foot complex must be sprinklered. However severe this may seem, the legislature enacted this provision as these are exactly the types of buildings, due to their size, that need sprinklers. Most situations do not fall into this example as most expansions and additions are typically doubling of space. The threshold limits for the broad categories are; 8,500 office/businnes and educational, 3,000 for service stations (repair shops) 5,000 for most assemblies (depends on occupant load and whether a stage is present, 5,000 for storage/factory/mercantile. The last category is subject to local adoption of a 2,000 threshold versus the 5,000 threshold. This is based upon more severe fire loads typical of these occupancies and documented losses allowing local jurisdictions to control the fire problem specific to their area. • Impact: • Chief Zikmund will discuss the impact to life safety, firefighter safety, and civilian safety during his presentation. Additionally, information will be provided detailing the substantial insurance premium savings (47% to 87%) for sprinklered occupancies versus non-sprinklered occupancies, the cost of installing sprinklers in new construction versus existing, and the budgetary impact of fire sprinklers with respect to the operating and capital budget. Summary: The issue before the council and EDC is the 5,000 versus 2,000 threshold. The remainder of the code is intact, has been enforced, and continues to be enforced. Changing the threshold requires evaluation of more government regulation (perceived or real) against the cost savings and life safety issues that sprinklers are purported to address. As part of the discussion information will be presented detailing financing of sprinkler systems in budgetary hardship cases. Prepared by Nyle Zikmund July 17, 1996 • • • Staff Memo To: Economic Development Commission Members From: Cathy Bennett, Economic Development Coordinator Date: July 18, 1996 Subject: Discussion of the EDC's Advisory Responsibilities (5.D) and Procedures for Communication Between the EDC and EDA Several EDC members were in attendance at the July 8, 1996 Council work session regarding EDC's request for guidance from the EDA on what items and recommendations they should be reviewing. There was some discussion regarding the procedure for reviewing the EDC's recommendations regarding the Bel-Rae. Several of the EDA members noted that they did take their recommendation into consideration but that the • action was taken for the betterment of the entire community verses just for economic development purposes. It was decided that it is difficult to gauge what should and should not be discussed by the EDC and how should their recommendations be formally considered. The EDA suggested the EDC review how other Cities EDA and EDC's communicate. I have contacted 15 Cities that have EDA's. Six of those have an advisory commission. I would suggest that each member choose a City and attend the next EDC meeting and report back at our August 22nd meeting. Crystal has addressed this issue and their suggested policy is attached. The Cities that have Advisory Commissions to the EDA are as follows: City Date . Time Location Coon Rapids August 13th 7:30 A.M. Coon Rapids City Hall Arden Hills August 21st 8:00 A.M. US Army Reserve Center Crystal August 13th 7:00 P.M. Crystal City Hall New Brighton August 13th 7:30 A.M. Family Service Center Oakdale August 7th 5:00 P.M. Oakdale City Hall • Woodbury August 6th 7:30 A.M. Woodbury City Hall JUL-15-96 MON 16:05 CITY OF CRYSTAL FAX Na 6125370944 P, 06/08 MEMORANDUM411 DATE: October 26 , 1994 TO: Crystal Economic Development Authority FROM: Mark Hoffmann, Chair Crystal Economic Development Authority Advisory Commission RE: Role and Function of Commission The Economic Development Authority Advisory Commission (EDAAC) is concerned about its utility to the EDA and effectiveness as an advisory commission. Because of its membership, which includes representatives of the business community, the Commission can offer valuable advice to the EDA on redevelopment and economic development matters. The EDAAC also has the time, since it is not concerned with the general operation of the city, to spend more time deliberating the course of economic development in Crystal. 111 The EDAAC has concluded that the appropriate place for the powers of the EDA is 'as it is now constituted. It is appropriate to have the responsibility and accountability in the hands of elected officials -- the City Council. The EDAAC has drafted revised responsibilities to offer more direction for the Commission. The EDAAC would like to spend some time at the November 9 work session with the EDA reviewing changes to how the EDAAc functions. Generally, these changes are: 1. The Commission will review development and redevelopment projects in which the EDA participates. A draft of the review process for such projects is attached. 2. The commission will continue to be responsible for completing the requirements of the Star City program. 3 . To maintain communication with the EDA, the Commission will meet annually with the EDA and at other times as needed. 4 . Beyond the annual meetings, the Commission will meet only on an as-needed basis to review any projects or respond to requests from the EDA. JUL-15-96 MON 16:05 CITY OF CRYSTAL FAX NO, 6125370944 P. 07/08 110 5. The Commission will continue to review and respond to requests for recommendations from the EDA. If these responsibilities are acceptable for the EDAAC, the Commission will draft an amendment to the city code =clarifying the Commission responsibilities. 11111 JUL-15-96 MON 16:06 CITY OF CRYSTAL FAX NO, 6125370944 P. 08/08 SDA PROPOSAL FOR REVIEW PROCESS FOR EDA-ASSISTED REDEVELOPMENT AND DEVELOPMENT PROJECTS 111111 STAFF • prepare preliminary project proposal EDA • concept review • authorize preparation of development agreement and analysis of costs/assistance • refer to Commissions for review and comment Economic Development Authority Advisory Commission • review project concept for consistency with long-term redevelopment plans; balance project with other priorities taking into account proposed costs and level of assistance for project Planning Commission • preliminary concept review of proposal with respect to conformance with comprehensive plan • when appropriate, encourages developer to hold informational neighborhood meeting as site plan is developed EDA • final approval of development agreement Economic Development Authority Advisory Commission • staff update on project (no action necessary) ; review only necessary if project is substantially changed from original plan Planning Commission • Public Hearing on site plan review and, other land use procedures • recommends approval or denial of • site plan and other land use issues City Council • approval of site plan and other land use issues