Loading...
HomeMy WebLinkAbout01-28-1999 ECONOMIC DEVELOPMENT COMMISSION AGENDA January 28, 1999 7:30 A.M. MOUNDS VIEW CITY HALL-`BACK"CONFERENCE ROOM 1• , . CALL TO ORDER I R � C A.M. 2. ROLL CA!7L- (Present = P,Abse =A) rlson off i Marty Thomason (EDA Liaison) t Field ✓ Dorgan (Staff) - - - gopke (Staff) 1/Carroll (Staff) t Walther 3. APPROVE EDC MINUTES December 10, 1998 Action: Motion �ti , Second 1-/ a-'iTj Vote ;1! .411k( 4. SPECIAL BUSINESS (none anticipated) '' wy 5. EDC BUSINESS A. Housing Grant Application M`� G `i--7- PP Update Sc c____44- .4e ..7i B. Discussion of Mermaid Hotel and Banquet Center [Development Agreement] C. Discussion of EDC Procedural Matters [Vacancies, Election of Officers, Special Meetings, etc.] D. Comprehensive Guide Plan [Discussion of proposed Economic Development section of Comprehensive Guide Plan] 6. Report of Commissioners, Staff and EDA Liaison 7. ADJOURN •?/,2 A.M. Next Regularly Scheduled Meeting: February 25, 1999 N:IDATAIGROUPSIECONDEVIEDA-EDCIEDC\EDCAGE991AGEN0 128.EDC Minutes of the Economic Development Commission City of Mounds View Ramsey County, Minnesota • Regular Meeting g December 10, 1998 City of Mounds View, 'Back" Conference Room 2401 Highway 10, Mounds View, MN 55112 1. CALL TO ORDER: The meeting was called to order at 7:38 a.m. by Chairperson Cindy Carlson. 2. ROLL CALL: Members present: Cindy Carlson,Tom Field, Brian Sjoberg,Sean Walther,Ron Schmidt, EDA Liason Roger Stigney;Wendy Marty participated by telephone conference call. Members absent: Rosemary Goff Staff present: Economic Development Coordinator Kevin Carroll,Community Development Director Rick Jopke 3. APPROVAL OF MINUTES: G '/ 1, • Motion/Second:Walther/Sjoberg to approve the minutes fro÷gust 27, 1998. Motion carried unanimously. 4. SPECIAL BUSINESS None. 5. EDC BUSINESS — A. Update on Mermaid Hotel &Banquet Center Economic Development Coordinator Kevin Carroll provided the EDC members with a progress report regarding the Mermaid project,particularly with respect to proposed provisions to be induded in the working draft of the Development Agreement between the City and the Developer. There was general agreement among the EDC Commissioners that the final version of the Development Agreement should include the following --Clarification regarding the form/nature of the"Developer" : Individual(s)? Partnership(s)? Corporation(s)? ----Clarification regarding the amount(if any) of the Developer's cash equity • investment in the project and/or a requirement that the Developer make a cash equity \\MOUNDS VIEW\SYS\DATA\GROUPS\ECONDEV\EDA EDC\EDC\EDCMIN98\EDCMINI2.DOC { f contribution to the project in a specified amount unless the Developer can justify an inability and/or an unwillingoess and/or the absence of a need to do so. —A requirement that the Developer be reimbursed for only that portion of the project costs that exceeds the cash equity requirement(if any)referred to above, subject to any other applicable ceilings or limitations. —A requirement that the cash equity investment(if any)be made in full before the Developer begins to receive any project cost reimbursement(s)to which it may be entitled under the Development Agreement. --A requirement that the City be obligated to reimburse to Developer for only those projects costs for which the Developer has submitted paid invoices or other acceptable evidence of payment. —A requirement that the City not be required to convey the Rent-All site (assuming that the City is able to acquire it) to the Developer until the Developer has acquired all of the other parcels required for the project. —Clarification regarding the need,if any,for personal guarantees on the part of principals of the Developer. City staff assured the EDC that their thoughts and recommendations would be conveyed to the Developer,the City Council and other interested parties. • B. Comprehensive Guide Plan(Economic Development section) Discussion of this agenda item was deferred to a future meeting due to time constraints. 6. REPORTS FROM CHAIR, COMMISSIONERS,AND STAFF: None. 7. ADJOURNMENT There being no further business before the Commission,this meeting of the Economic Development Commission adjourned ata roximatee 9:30 a.m. Res dully Submit d, Carroll ' nomic Develop t Coordinator • \\MOUNDS VIEW\SYS\DATA\GROUPS\ECONDEV\EDA EDC\EDC\EDCMIN98\EDCMINI2.DOC To: Economic Development Commission Members From: Steve Dorgan, Housing Inspector [MORAN D U M Subject: Housing Grant Application Update Date: January 15, 1999 SUMMARY Staff is in the process of drafting grant applications to fund existing and proposed housing programs for the city. Applications will be made to the Minnesota Housing Finance Agency's (MHFA) Community Revitalization Fund, Metropolitan Council Local Housing Initiative Fund, and Ramsey County Community Development Block Grant Program. Funding will be sought for the following existing and proposed programs: Existing Program 1. Housing Replacement Program(HRP): The HRP was adopted by the City in 1996. Since that time, the City has purchased 4 single-family homes for the purpose of redevelopment. The homes have been demolished and the lots prepared for resale to prospective builders/developers for the construction of new single family homes. To date, acquisition, • demolition and administrative costs have been covered through Tax Increment Financing (TIF)funds. However, these funds have since depleted and limited funds are available to continue the program. Therefore, the City will make grant applications in the amount of $150,000 to both the MHFA and Ramsey County to continue the Housing Replacement Program. The grant is anticipated to provide acquisition, demolition and administrative costs for the program until the end of the year 2000. Proposed Programs 1. Interest Subsidy Home Improvement Loan Program: The EDC has previously reviewed a proposal to implement an interest subsidy home improvement loan program. Originally the proposed program was to us_e_TIF to_subsidize interest rates for home_improvement_loans. __ However, legal staff has advised that TIF funds may not be used to subsidize interest rates for single family homes improvement loans. Therefore, staff is making a grant application to the MHFA and Metropolitan Council Local Housing Incentive Account for funds that would subsidize interest rates of home improvement loans. These funds must be used for homes which household incomes are low-moderate (maximum of %115 of the area's median income). It is proposed that these funds will subsidize existing MHFA loan programs. 2. Crime Free Multi Housing Incentive Program: The City of Mounds View and the City of New Brighton assist in the coordination of the Mounds View—New Brighton Property Manager's Coalition. The Coalition was established in 1996 with members who include • owners and managers of rental properties within the two cities. One of the many functions of this group includes the promotion of Crime Free Multi-Housing certification for individual properties. A property achieves this status when they have completed three specific phases EDC Meeting 1111 January 28, 1999 including;training, crime prevention modifications to the building and grounds and finally a block club party. The 2"d phase of the certification often requires specific improvements to the building and grounds, which are sometimes expensive and delays the property from achieving the crime free status. Improvements include; installation of peepholes, reinforced strike plates for doors, lighting, landscaping and security windows for ground floor units to name a few. Both Mounds View and New Brighton will make joint application to Ramsey County for $25,000 to provide incentive funding to properties that achieve Crime Free Certification. The funds would be used to offset the financial burden that is incurred during the 2"d phase improvements. To date, only four properties have completed all three phases of Crime Free Multi-Housing within the two cities. One of those properties is located in Mounds View. ACTION TO BE CONSIDERED No formal action is necessary with this item. Staffs is requesting the EDC review the proposed programs in which grant applications will be made and provide direction to the City Council for consideration. • 4it Steve Dorgan, Housing Inspector 717-4023 C:\MYDOC\DOCUMENIIHOUSINGHOMELOAN\EDC REP\EDCI 28.DOC 111 2 To: Economic Development Commission Members From: Kevin Carroll, Economic Development Coordinator MEMORANDUM R IOtlf'IMDUM • Subject: Discussion of the Mermaid Hotel/Banquet Center [Development Agreement] Date: January 25, 1999 As you will recall, the entire EDC meeting on December 10th was devoted to a discussion of various aspects of the Mermaid proposal. At that time, staff members were in the process of reviewing some revisions(suggested by the Developers)to the initial draft of the Development-Agreement. The comments and suggestions that were made by the EDC members during the 12-10-98 meeting were incorporated into a revised draft of the Development Agreement,which was then forwarded to the Developers and their attorney for review and comment. I subsequently met with John Seibert, Dan Hall and his attorney (Mr. Chris Berndt)on January 7, 1998 to discuss the revised Development Agreement. A �.. copy of that Agreement has been enclosed for your review. The provisions that are underlined represent, for the most part, changes that were suggested by the EDC and/or city staff members. During that meeting, it became apparent that the Developer had no objection to most of the new provisions that had been suggested by the EDC and city staff. However, the Developer have some concerns about the language requiring an unspecified cash equity "injection" by the Developer, and personal guarantees on the part of the Developer's principals, as prerequisites to the use of TIF(tax increment financing) proceeds for the reimbursement of [some of]the Developer's project costs. At my request, the Developer's attorney summarized his client's position on this matter in a letter dated January 22, 1999, a copy of which has been attached for your review. As you will note,the letter also addresses certain other aspects of the proposed project, induding the identity of the "Developer,"the revised project costs, and potential "spinoff" benefits. An important issue for the EDC (and, ultimately, for the City Council)to address relates to the propriety, nature and amount of financial assistance from the City. Much of the discussion to date has focused on the Developer's request that the City contribute up to $550,000 toward the cost of acquiring the Rent All site. The proposed source of the funds in question would be the City's "pooled TIF account," which consists of tax increments received by the City in excess of the amounts needed by the City to make bond payments and other fixed obligations related to the existing TIF districts. Some concerns have been expressed regarding the impact(on existing and planned programs)of a "one-time" $550,000 deduction from the pooled TIF account. In the interest of exploring other options and reexamining some of our original financial assumptions, I recently contacted Public Financial Management •' (PFM), one of the City's financial consultants. PFM was asked to generate financial information regarding these two new "scenarios": ■ • .• • a. Our original (conservative)assumption was that the completed Mermaid "complex" would have an anticipated market value of$5.9 million, which would be sufficient to generate an annual tax increment (of about$218,000)that could cover the required payments on a bond issuance that would provide the Developer with about$1.7 in project cost reimbursement. In order to avoid the impact of a "one-time" $550,000 deduction from the pooled TIF account, it has been suggested that the City might want to consider increasing the size of the bond issuance so that the net bond proceeds could provide the Developer with$2.25 million(the $1.7 million referred to above plus an additional $550,000) in project cost reimbursement. This type of increase would, of course, result in a corresponding increase in the annual tax increment needed to service the larger bond issuance. Accordingly, the question that was posed to PFM was: what market value(of the completed Mermaid project) would be needed to generate a tax increment that would be sufficient to cover the annual payments on bonds that would provide the Developer with a total 4/(, ci of$2.25 million in project cost reimbursement, thereby eliminating the need to take $550,000 out of the pooled TIF account? The answer, which appears in Scenario #I (the attached fax from PFM), is that a i market value of$7.35 million would be required to generate the required tax increment of$271,817. It is worth noting that the Developer's revised projection regarding project costs(the last page of Mr. Bemdt's letter dated 1-22-99)reflects $7.49 million in construction costs alone and total project costs of$10.27 million. b. PFM was asked to analyze a second set of circumstances, in which the projected market value was left at$5.9 million (despite the evidence that a higher figure might be justifiable), but the bond issuance was still increased to a level that would generate $2.25 million in project cost reimbursement for the Developer. The question that was then posed to PFM was: inasmuch as the market value of$5.9 million would generate a tax increment that would cover orrly$1.7 millkin of the 2.25 million in - - ae project cost reimbursement, what additional amount would have to be paid out of the 1 <<E` pooled TIF account on an annual basis to cover the$550,000 difference in project d'' Aa cost reimbursement? The answer, which appears in Scenario #2 (attached), is that a payment of$30,000 e would be required in the first year, followed by 12 annual payments of$50,000 each. The advantage of this option is a series of smaller payments rather than a large, one- time "hit." The disadvantage is that a total of$636,000(an "extra" $86,000)would be paid over the 13 year period in.question. r: 1' 410 \ ) • • • SUMMARY It is my understanding that Mr. Seibert, Mr. Hall and Mr. Berndt will be present at the EDC meeting on Thursday to answer any questions that you may have about any aspect of the proposed project. Ideally, the EDC will then be prepared to discuss the project and make specific recommendations that can be conveyed to the City Council at its work session on 2-1-99, and/or at its regular meeting on 2-8-99 (which will be the next time that formal action could be potentially taken on the proposed Development Agreement). The EDC's discussion should.(at a minimum)address the following points: I . What are the benefits that this project would (or could)provide to the City of Mounds View, and do those benefits justify the type and amount of City financial assistance that the Developer has requested? A 1/� 2. Has the Developer demonstrated a need (as opposed to a mere desire)for the City's `'k�" t!{4` financial assistance, or alternatively, does a mechanism exist to ensure that the need in question will have to be adequately demonstrated before any City financial assistance is 110 actually provided? 3. Is there sufficient evidence that the Developer and its principals have made, or will be required to make, significant financial, legal and personal commitments to the project,thereby helping to ensure the project's ultimate success? 4. What are the risks that the City might face in connection with a project of this type, and have adequate steps been taken to either eliminate such risks or reduce them to acceptable levels? I have not prepared a proposed Resolution for your review at this time. I'm not sure which issues the EDC will want to "formally" address on Thursday, nor can I predict the position that the EDC will take on those issues. However, I willbe prepared to work with you to craft a Resolution"on the spot" that accurately reflects the views/thoughts/opinions/recommendations that you want to convey to the C Council regarding these matters. I encourage you to contact me by phone prior to Thu d. ' s meeting if y. 'd like more background information regarding any of the relevant issues. 21 AMA- 1(7- t44 K= in •rroll (612 17-4029) Economic Developmen Coordinator • N:\DATA\GROUPS\ECONDEWEDA EDC\OI2898.MEM I J WARCHOL 3433 BROADWAY STREET NORTHEAST,SUITE 110 • BERNDT attorneys MINNEAPOLIS-ST.PAUL,MINNESOTA 55413-1783 HAJEK FAX (612) 331-1069 TELEPHONE(612) 331-4211 a professional association CHRIS H. BERNDT January 22, 1999 Economic Development Committee c/o Kevin Carroll Economic Development Coordinator City of Mounds View Community Development Department . 2401 Highway 10 Mounds View, MN 55112 0 .Re: Mermaid Hotel/Convention Center/Banquet Center Project Our File No. 1159.40C Dear Mr. Carroll: I am the attorney for Hall, LLC, a Minnesota limited liability company (Developer) with respect to the project above identified. As you know, I have reviewed the revised draft of the Development Agreement proposed by the City of Mounds View(City) for use with respect to the new convention center/hotel/banquet center (Project) proposed by the Developer to be integrated with the current Mermaid Complex. The-revised Development Agreement incorporated for the first time,a provision which requires . the Developer to first pay an unspecified sum as cash equity towards the Project costs prior to the City making contribution of the Tax Increment proceeds (Reimbursement Amount). As with any major endeavor, this Project has gone through several conceptual phases. My client believes that the information submitted to you earlier, although not necessarily incorrect at the time it was submitted, may have not given you a clear understanding of the Project and my client's commitment to the Project. To further clarify the parties and the transaction, I submit the following additional information for your consideration: • Mr. Kevin Carroll 410 January 22, 1999 Page 2 BACKGROUND The Mermaid was originally purchased by a business controlled by Charles Hall more than twenty (20) years ago. The original business was owned and operated by the Mermaid Cocktail Lounge, Inc., a corporation which is now known as "Moundsvista, Inc." That corporation is controlled by Charles Hall who owns a majority of the issued and outstanding stock of that corporation. The remaining minority interests in the corporation are owned by the children of Charles Hall. In the late 1980s operation of the Mermaid was assumed by the Mermaid, Inc., a corporation which is owned by the.children of Charles Hall and has been led by Daniel L. Hall as its President. The Mermaid, Inc. leases the land, improvements and fixtures from Moundsvista. Both Moundsvista and the Mermaid have attempted to run their business in a fiscally conservative manner and have worked hard to keep debt at low levels to reduce operating costs and to allow them to continue to improve the Mermaid complex. DEVELOPER . The Developer of the hotel and banquet center is owned and controlled by Charles and Daniel Hall. In order to further the financing of the project and to provide for an integrated management and ownership of the entire Mermaid Complex, it is proposed that the Developer acquire existing . real estate and improvements of Moundsvista, Inc. and the additional sites owned by unrelated parties that will be necessary to accommodate the proposed Project. TRANSACTION In order to facilitate the Project and financing, it is proposed that the Developer acquire the existing real estate and improvements of Moundsvista together with several adjacent tracts. The Developer has not yet-reached-an agreementwithadjacent-property owners as-to-the acquisition ; cost. Under any analysis, the costs of acquiring the adjacent properties will be substantial. The financial materials and projected project costs already submitted to the City included allocations of land cost to the hotel component of the Project, as well as the banquet component of the Project. These projections represented earlier conceptual project designs that would have provided for separate tracts for each of the hotel, banquet center and the existing Mermaid complex to facilitate separate ownership and operation. Under the current proposal, the hotel,. banquet center and existing Mermaid complex are to be operated as one integral unit located on one site with common ownership and management. Accordingly, the land costs are no longer being allocated to each of the specific components of the Project. The allocation of land costs on the earlier projection were an effort to demonstrate the level of commitment of the Developer • to the City. In fact, under the current proposal, the commitment of my client is greater. In other words, the entire interest in the Mermaid complex together with the adjacent properties that will Mr. Kevin Carroll January 22, 1999 • Page 3 need to be acquired by the Developer to facilitate the Project will be committed to the Project. The existing debt against the Mermaid complex is approximately $750,000.00, the amount used to improve the existing bowling complex in 1998. This nominal debt that exists against the Mermaid is a result of the Hall family's commitment to reduced debt against properties to enhance operational goals. REVISED AND RESTATED PROJECT COSTS The Developer's consultant, John F. Seibert, has revised the hotel and banquet project costs to reflect the current project scope and expenses incurred by the Developer. The costs do not identify any expense incurred by the Developer in connection with acquiring the existing land and Mermaid complex. Because Moundsvista, Inc., the Mermaid, Inc. and the Developer are related parties, the economics of that transaction are not relevant in considering the level of commitment of the Halls, except to state that the Developer could meet a substantial requirement of cash equity towards the Project, but to do so would only be to unnecessarily encumber the existing Mermaid complex with debt the proceeds of which would go to a related party. The only result of such a transaction requirement would be to require the Halls to unnecessarily incur expenses • related to financing that would not directly benefit the Project. In other words, the Halls could easily borrow significantmonies against the existing Mermaid complex for the purposes of re- committing that as equity to the Project, but for the purposes of good lending business practices, the Halls would simply be moving the asset from its right pocket to its left pocket. The cash equity requirement should not unnecessarily penalize the Halls since they have endeavored to keep the debt on their existing project as low as possible. PROJECT REVENUE SPINOFF Mr. Seibert has recently acquired the summary financial data with respect to the average daily dollars spent by a patron of a hotel in the north metro area. For the year 1996, such information reflects-that the-average-expenditure per party ger day was$188.00.It-is projected that the per -— diem expenditure will be raised to $200.00 per day in the calendar 1999. The revenue expended by a visiting party to the hotel, it is broken down in the following manner: 29.6% Lodging 23.6% Food and Beverage 16.6% Transportation 16.2% Entertainment and Recreation 14.0% Other-Retail 411 Mr. Kevin Carroll . January 22, 1999 Page 4 CONCLUSION This clearly demonstrates that the hotel project will be important to the City at large, meeting needs that are not currently met by existing City facilities and resulting in significant spinoff business to benefit other economic sectors of the City. As the City is aware, a number of Developers have examined the prospect of building a hotel and banquet center on the Mermaid site, but have declined to do so because of the inability to meet project and operating costs without (i) the equity of the existing real estate and improvements to the Project; and (ii)the availability of tax increment financing proceeds to assist in financing the project costs. In other words, if a hotel banquet center is to be constructed, the cooperation of the City is needed. On behalf of my client, I recommend and request that the provisions relating to cash equity and the requirement that my client's deposit a sum of cash in addition to committing the land and the improvements to the Project be deleted. My client's will already incur substantial expense in connection with acquiring additional properties and integrating the hotel and banquet.center to 4110 the existing complex. To require them to submit to yourrequirement of cash equity ignores the fact that by doing so they would only dilute the equity in the Project by forcing my client to incur unnecessary financing expense in connection with borrowing and using the existing real estate and complex as collateral. Obviously, there will need to be other changes made to the revised Development Agreement relating to the Commencement Date and Completion Date of the Project. In addition, because of the significant personal commitment my client's have made to the Project, we are requesting that any reference of a personal Guaranty of the Tax Increment shortfall Guaranty be deleted. My client also recognizes the significant commitment it will make to the City with respect to the regional stormwater holding pond referenced in paragraph 3.6 of the revised Development Agreement. I will look forward to supplementing this information in any manner that you may request and trust that this response will better identify both the parties and the nature of the transaction. Since / 4 Chris H. Berndt CHB/smp • cc: Hall, LLC John F. Seibert Jan lo i.i :a.p conn Seibert 16121421-0549 p.z Mermaid Complex Development Project Costs Co Developed by Halls, LLC & JCS Development, Inc. eand ct$ $350,000.00 Purchase of B.E.G.Property $350,000.00 Purchase of Music Off 10 Property - $150,000.00 Purchase of Easement&Pond-Cabot 100,000 ft $8.00/ ft $100,_000.00 Purchase of Property From Mound Vista sq s9 $1,600,000.00 Total Land Costs Land Improvement Costs $100;000.00 Parking Lot development 100,000.00 Parking Lot Landscape&Curbing $75,000.00 Parking Lot Intergration Costs $$50000.00 Demolition and removal $425,000.00$100 Holding Pond Construction 100.000.00 Total Land Improvement Costs Construction Costs $5,075,000.00 Building costs-Hotel $526,000.00 FF&E costs for Hotel $$525,000.00 Building costs-Banquet Center $200,000.00 FF&E costs for Banquet Center $250,000.00 0 Building lntergration Costs $200,000.00 Glass Foyer between Buildings 00.000.00 Mansord for the Mermaid $$1$100.000.00 Total Construction Costs Development&Soft Costs , Financing&Soft Costs for Hotel $200 400.00 $200,000.00 Development Costs-Hotel Contingency&Working Capital-Hotel $175,000.0075,000.00 Financing&Soft Costs for Banquet Center $55,000.00 Development Costs-Banquet Center $50,000.00 Contingency&Wo-king Capital Banquet _ -- --- --- -$755;00000 -- -- Total Development&Soft Costs Total Project Development Costs $10,270,000.00 Financing Requirements Equity Requirements ? Cash ,500.00 TIF Proceeds $1,700.000.00 Total Equity $2,567,500.00 Debt Financing $7,702,500.00 4110 Total Project Development Costs $10,270,000.00 01/20/99 17:04 FAX 15152436994 PFM DES MOINES I1J001/007 Teams Place 515-243-2800 Suite 214 515 243-8994 fax 2600 Grand Avenue www.pfm,corn Des Moines,IA' PFM 50312-5400 I Public Financial Management Financial and Investment Advtsas Fax • Finn Tr, tri ( JO t From 0-0 , rive;&41?... Client# Fax ( 1 -- 37'4 - 3 4 b�.. Phone (Q i�,- f - 40 a-°! Date 1— 16- 9 q Pages �- Including cover ❑ Urgent 0 As Requested 0 For Review 0 Please Reply Message • S 44 I IeJL•Jr �- V w ..:<dra b � ,bArk 2� 7.01100 &Ask P^ a. ? # 13 Sb,trtrt7 • ,,,,.:4 , # 2, •-fi r►t../��;- i'r ,.,1.�,,tom,( �a pal 1,0,e4 450t COO _FY ye.o over t' /4ov4-- KtAmtv.4.-zei ploy:cis" - i The information contained in this facsimile message is privileged and confidential Information,intended only for the use of the .ndividual or entity named above. If the reader of this message is not the intended recipient,you are hereby notified that any dissemination,distribution or copy of lois communication is strictly prohibited. If you have received this communication in error,please immediately notify us by telephone. 01/20/99 17:04 FAX 15152436994 PFM DES MOINES Q002/007 iCity of Mounds View, Minnesota EXHIBIT I Mermaid Project Capitalization Schedule Projects Upfront Financing,Site Acquisition etc. $1,700,000 Rent-All Property acquisition 550,000, Total City-Commitments for Project Costs $2,250,000 Less: Reserved 0 City Cash(Contribution)/Extra Bond Proceeds 3,650 $3.650 Projected 1999 City Bonding Needs $2,253,650 Estimated Costs of Issuance 28,300 Capitalized Interest 0 Estimated Underwriter's Discount 23,050 1999 Taxable TIF Bond Issue(Rounded to nearest$5,000) $2,305,000 • Anticipated Market Value of Mermaid Project: $7,350,000 * Assessed Market Value to Taxable Valuation Taxable Valuation $5,979,661 *** Assumes Tax Capacity Rate exceeds$150,000 limit 3J0% Captured Tax Capacity from Mermaid Project $209,288 Total Tax Rate 129.878% Anticipated Tax Receipts Captured in District $271,819 **** **Anticipated market value needs to be confirmed with updated project plans from the developers. ***Minimum-assessment-agreement will-stipulate-$4,800,000-taxable value-as-of Jan 2,2000. ****Per Ramsey County,District will decertify on January 1,2013. • Page 1 of 1 -rvi C! 01/20/99 17:04 FAX 15152436994 PFM DES MOINES Cj003/007 4'" o0o11D � e coN nVN1D1D .+ 00000000 w 43 4? O 111 N N 01 Y! N .-. e-4 V 1 44 44 44 64 604 44 43 404 •'. 1D 01 0' CO O 00 et hw.r el 10 64447 44*6444 496,44 444*6,44 la g lf • 11 / 0o0 onet44 nCDVDV2 0 tO '.00 0oo0o0000 44 44 01 1D .+ en N 01 N w3 NO o 1D 44 69 44 y 64 44 604 44 041 .w 0'�1Opp cc! 'eR} .t.om� X�0}}1 N N N�N %.0 N N N N N N N N 4:: A W H 403 43 44 44 44 404 414 44 44 44 44 444 I 151 oa ff�6004h1404444l4AX444boo443641440'4601464/} 151i004K St 449 O i i re P 6004 404$ O1010010% 01010% 0101O0o00o0o 0 604 43 i} 604 404 44 4) 1 40'1 od op ad od ad 0d od ad ad oG od ad O • p, tl' N N NNN N N N N N N N 4 C yy 46�0444444414K4434344N44�444 4. vs 444 4404 4404 404 401 3 404 6004 444 403 6004 404 44 403 4404 604 4004 4 6,414,1IR 444 Q a °' X404 664D 6,404 6 4414409 6004 444 V!0 f607444444K6O 404 6,444404604 g a� ,tp0 yy b VI1DmmNmm V et41o1000000000 O y+ is 0O14 � 0 ~ 0N0 Vcc0 VIiR404 401 401644AiR44 407 4*i 10 en Vi . N N .-. V� N tri d A C 'N} 1p 10 1D 1D 12 1D 1p 1D ye 12 Fe" O c 44404401434444444044.4 404 444 404 4 444 C7 4N4- 44 OO 044 S 01 01 01 0% 01 01 01 01 0, 01 01 01 0 0 O O o O O O 404 44 404 43 44 44 44 44 46 VI CO 00 CO. CO.a0 00 m m CO CO 00 00 Z N N N N N N N N N N N N 0 49441044144443114644444444443 ICI aI N a - 8 0Eo a =44 1 yg 6, o os0101010. 0, 010. 01010% 0. 010 0 0 0 0 0 0 0 U * oa a0 ao ao 0o ao 0o a0 0o co 00 00 67 44 414 44 44 4/} 604 49 `5 • * ii N N N N N N N N N N N Nra 404 6,4404443 6,441444944444444* 404 d ig d m 00 00 m cc m m a0 m m m 00 m m 00 00 m m m m m 00 m la a N lc N N N N N N N N N N N N N N N N N N N N t-- co • V oommm00mmoommmmmmoommmmmmmm 0;_0;_oC_d_d-o; 0%-0% oC_0-O�-aC-oC-O�-a; of-C% 0 0 0 0% 0% 0% N N N N N N N N N N N N N N N N N N N N N N N H d �i' o • OOOmoomoomm000pomp000000 00000000 4-. `e yusNgqC1 00 NINN 0000cc00 NNp010 N14944�44 �� 43 44 C14 re ig U NNNpON1ONO1NNNpp� pNala\ $ 00 04 D U K6961443i4 4441405 44440443 N4} 0 = E,.' t. h N .�-. e .4 4. I. M C N F 13 1.d D 1Ci .�-i ~' 05 R. la: oo •-4 el Cm U 0 ii E•4 • e 2 = 1 i w se a dd ." 11 _ 6 ,... a OOpp1111 (Q.� vz N 00 Ch 0 Ti a Ch ^ g C g g g $ 0 0 0 0 0 0 �p 0 0 0 C7 Np o * ' O D .8 Lc 41 N N N NN N N N N N N N N N N N N N N N N 1IS N m O1 1.4 6,1 VVI 12 NNj 000 00, O .-. N 405 d' un 10 N 0 O1 6J Ta a3 ••• 4 •�-. N N NNN NNNNNNNNNNNN SC6/14411(.4 01/20/99 17:05 FAX 15152436994 PFM DES MOINES Z004/007 City of Mounds View,Minnesota EXHIBIT 3 Proposed Taxable TIF Bonds,Series 1999 SOURCES&USES DEBT SERVICE SCHEDULE SOURCES Debt Annual Date Principal Coupon Interest Service Debt Service Par Amount of Bonds 2,305,000.00 Accrued Interest Other Monies 2/1/00 99,544 99,544 8/1/00 80,000 5.350% 66,363 146,363 245,906 Total Sources 2,305,000.00 2/1/01 64,223 64,223 8/1/01 135,000 5.370% 64,223 199,223 263,445 2/1/02 60,598 60,598 USES 8/1/02 145,000 5.440% 60,598 205,598 266,196 2/1/03 56,654 56,654 Deposit w TIP Protect 2,253,650.00 8/1/03 150,000 5.460% 56,654 206,654 263,308 • Deposit to Reserve Account 2/1/04 52,559 52,559 Capitalized Interest Account 0.00 8/1/04 160,000 5.510% 52,559 212,559 265,118 Municipal Bond Insurance 2/1/05 48,151 48,151 Underwriters'Discount(910.00 per bond) 23,050.00 8/1/05 165,000 5.590% 48,151 213,151 261,302 Costs of Issuance 28,300.00 2/1/06 43,539 43,539 Accrued Interest 8/1/06 175,000 5.640% 43,539 218,539 262,078 Rounding Amount 2/1/07 38,604 38,604 8/1/07 185,000 5.710% 38,604 223,604 262,208 Total Uses 2,305,000.00 2/1/08 33,322 33,322 8/1/08 195,000 5.790% 33,322 228,322 261,645 2/1/09 27,677 27,677 ASSUMPTIONS 8/1/09 210,000 5.890% 27,677 237,677 265,354 2/1/10. 21,493 21,493 ated Date 5/1/99 8/1/10 220,000 6.000% 21,493 241,493 262,985 Delivery Date 5/1/99 2/1/11 14,893 14,893 First Interest Date 2/1/00 8/1/11 235,000 6.100% 14,893 249,893 264,785 First Principal Date 8/1/00 2/1/12 7,725 7,725 Last Principal Date 8/1/12 8/1/12 250,000 6.180% 7,725 257,725 265,450 2/1/13 8/1/13 2/1/14 8/1/14 2/1/15 Arbitrage Yield 5.85161% 8/1/15 TIC 6.01403% 2/1/16 AIC 6.21666% 8/1/16 Average-Life -8.16-Years 2/1/17 8/1/17 -Assumes interest payment is capitalized 2/1/18 8/1/18 2/1/19 8/1/19 2/1/20 8/1/20 2/1/21 2,305,000 1,104,778 3,409,778 3,409,778 Scale: January 15,1999 Treasury&75bps - el7 cr.5rvi/ -t O -14:: / Prepared by Public Financial Management,Inc. 1/20/99 Mermaid TIF Cashflow.xls 01/20/99 17:06 FAX 15152436994 PFM DES MOINES 11005/007 • City of Mounds View, Minnesota EXHIBIT 1 Mermaid Project Capitalization Schedule Projects Upfront Financing,Site Acquisition etc. $1,700,000 Rent-All Property acquisition 550.000 Total City-Commitments for Project Costs $2,250,000 Less: Reserved 0 City Cash(Contribution)/Extra Bond Proceeds 3.650 $3,650 Projected 1999 City Bonding Needs $2,253,650 Estimated Costs of Issuance 28,300 Capitalized Interest 0 Estimated Underwriter's Discount 23,050 1999 Taxable TIF Bond Issue(Rounded to nearest$5,000) $2,305,000 • Anticipated Market Value of Mermaid Project: $5,900,000 ** Assessed Market Value to Taxable Valuation 8196 Taxable Valuation $4,800,000 *** Assumes Tax Capacity Rate exceeds$150,000 limit 3.50% Captured Tax Capacity from Mermaid Project $168,000 Total Tax Rate 129.878% Anticipated Tax Receipts Captured in District $218,195 **** **Anticipated market value needs to be confirmed with updated project plans from the developers. ***-Minimum assessment agreement will stipulate$4,800,000 taxable value as of Jan-2,-2000. ****Per Ramsey County,District will decertify on January 1,2013. • 4'741 Page 1 of 1 7,_ 01/20/99 17:06 FAX 15152436994 PFM DES MOINES a006/007 N 000• 0000bwNtn11O1010000m00000000 1 - 646400 riC0\ e D %O tn '. NV�p **** *4 64646964 tF•l T tt OmNmNt} m00 .-ItnhO iy c 40044444 i4 f,4 444 64 V! Zs 4 0 00 .-I PP0101mQ0k010NNN00000000 All 4,46401N C% 000100 01 N m gOC mV}646,+R690,V! fR LI aOr,t rT�y ,� m RRg (l W ** 4y ** t4ft****4 6Hv3 1 04,44 ,44 , ? 04440 1++ y OO QhtnhVltn >ntolrlhsntn tn00000000 • �g 6444 v Q� O� O� O� O� O� O� O� O� O� O� O� 0 i4 44 44 64 44 444, �q .. - Mai 00 00 00 00 OC 00 00 00 00 00 00 00 0004 ggygyg �- VN3 V3iN44 446N4 fA 4444,444,4,44 c G 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 6641 ' i4 54 69 64& 4,4, 4, '49 V} i4 V3 4 464 64 4,4,4, 4 d aA `/ .. .at 8� 888888888888 4,4,4, 4,4,4,4, A 0 0 i1 V7 h V1 n V1 1n u V's to 41 YI 01 ,12 OCOO"0000"O"oo0'O i3 m h.Y1 V1 to Y1 Y1 V1 1A in 1 1 Y1 lei \ i 6964494464 444,i44A 444tK • " O y tD to 1b 00 00 N 00 00 to d' Vt to 0 0 0 0 0 0 0 0 0 . 0 y Ci 0 .1m0 ,-. 00v1,10200 %.i 41_ *1_ 'd�V3 44 44 f4 4,44(A 44 cd to Z •E Yi c•i.O m .7 r. N N ri V1 cV v1 O �1 .* ,0 ,,, ,, ,o ,O �O �O t0 t0 Om Fa 4) NNNNNNNNNNN N H Ur" tVca 4, 4,4,4, 4,4,4, 4,4,4, 4,4,4, i4 000 V1 l0 1n >n to to to V1 to In to to 0 0 0 0 0 0 0 0 111 1. i4 64 O m m O• 01 O/ O\ m 01 m m Ot O1 69 44 64 64 4 64 d4 4, Za6o0 c1 00 00 00 00- oo ao ao 0o ao ao 6444,4, 4446N46N944 4444, 0 p0 6i 5 8 fir:: ��.E N m v 44 Via = , A4 O444, C Qtnv1v11ntnv+ tn tntntn00000000 44.64 64 a\ 01 Ot 01 0\ 01 m 01 m 01 01 O, 44 h 64"h 44 44 64 bU-i * 03 Ai4 00 00 00 00 00 00 00 00 00 00 00 00 * N N N N N N N N N N N N 1 414 FR 69 44 44 64 64 63 69 49 64 44 4 0000000000000000000000000000000000 0000 00000000 U NN NNNNNNNNNNNNNNNNNNNNN —3 ,E -00--00-00-00-00-m-00-ao-ao oo oo 00-ao-0o-a0 a0 00.00-m_-m_-00_x0-oo Yg a N N N N N N N N N N N N N N N N N N N N N N N [r QQ55�� c��c55�� 55�� s 55� 552� 44 O �' s" §§ Z5E5 § § §§ 252525 $6�4 a6�46�4fs4� a g 'F •14 49 fA 64 8 Sa .. M Mc) . . . 2 - ea • 3 0 g 494949644949 4,4444444. F n M ' flli V Hi •o10044O � ..,N � V 0 S v o. . 1.jlhl !P. 02 p .+ ; yyr�' s � m O � 8a „,, co0. O .+ Nmmof *eItWtrtNOwl� 00000 NNpNNNr4O *~ ~ N '' ”, NNNNNNNNNN §G lbw 1 t- 00a NnONoNO — Nt*1 % (���'// ijC R . � N pNNpNpNNNN j am , ; • 1 ..4 NNNNN v 01/20/99 17:07 FAX 15152436994 PFM DES MOINES Cj007/007 City of Mounds View,Minnesota =STT 3 Proposed Taxable TIP Bonds,Series 1999 411 SOURCES&USES DEBT SERVICE SCHEDULE SOURCES Debt Annual Date Principal Coupon Interest Service Debt Service Par Amount of Bunds 2,305,000.00 Accrued Interest 'Other Monies 2/1/00 99,544 99,544 8/1100 80,000 5.350% 66,363 146,363 245,906 Total Sources 2,305,000.00 2/1/01 64,223 64,223 8/1/01 135,000 5.370% 64,223 199,223 263,445 2/1/02 60,598 60,598 USES 8/1/02 145,000 5.440% 60,598 205,598 266,196 2/1/03 56,654 56,654 Deposit to TIP Project 2,253,650.00 8/1/03 150,000 5.460% 56,654 206,654 263,308 Deposit to Reserve Account 2/1/04 52,559 52,559 Capitalized Interest Account - 0.00 8/1/04 160,000 5.510% 52,559 212,559 265,118 Municipal Bond insurance 2/1/05 48,151 48,151 Underwriters'Discount($10.00 per bond) 23,050.00 8/1/05 165,000 5.590% 48,151 213,151 261,302 Costs of Issuance 28,300.00 2/1/06 43,539 43,539 Accrued Interest 8/1/06 175,000 5.640% 43,539 218,539 262,078 Rounding Amount 2/1/07 38,604 38,604 8/1/07 185,000 5.710% 38,604 223,604 262,208 Total Uses 2,305,000.00 2/1/08 33,322 33,322 8/1/08 195,000 5.790% 33,322 228,322 261,645 2/1/09 27,677 27,677 ASSUMPTIONS 8/1/09 210,000 5.890% 27,677 237,677 265,354 2/1/10 21,493 21,493 4110 Dated Date 5/1/99 8/1/10 220,000 6.000% 21,493 241,493 262,985 Delivery Date 5/1199 2/1/11 14,893 14,893 First interest Date 2/1/00 8/1/11 235,000 6.100% 14,893 249,893 264,785 First Principal Date 8/1/00 2/1/12 7,725 7,725 Last Principal Date 8/1/12 8/1112 250,000 6.180% 7,725 257,725 265,450 2/1/13 8/1/13 2/1/14 8/1/14 2/1/15 Arbitrage Yield 5.85161% 8/1/15 TIC 6.01403% 2/1/16 AIC 6.21666% 8/1/16 Average Life _ 8.16 Years 2/1/17 8/1/17 -Assumes interest payment is capitalized 2/1/18 8/1/18 2/1/19 8/1/19 2/1/20 8/1/20 2/1/21 2,305,000 1,104,778 3,409,778 3,409,778 Scale: January 15,1999 Treasury&75bps S Prepared by Public Financial Management,Inc. 1/20/99 Mermaid TiF Cashflow.xls Item No. 41110 Meeting Date: 2-01-99 Staff Report No. Type of Business:Mai WK Work Session;PH:Public Hearing; CA:Consent Agenda;EDAB:EDA Business Mounds View City Council Work Session Staff Report To: Mounds View City Council From: Kevin Carroll, Economic Development Coordinator Item Title/Subject: Mermaid Hotel/Banquet Center (Development Agreement) Date of Report: January 29, 1999 The latest draft of the Development Agreement regarding the Mermaid project was discussed by the members of the EDC at a meeting that was held on January 28, 1999. The meeting was also attended by EDA liaison Lynne Thomason, city staff members Chuck Whiting,Rick Jopke and Kevin Carroll,Dan Hall [on behalf of the Developer], and Mr. Hall's attorney,Mr. Chris Berndt. At the conclusion of the discussion,the EDC members authorized me to prepare a written summary of • their comments for the benefit of the City Council and/or EDA. My summary has been reviewed and unanimously approved by all of the EDC members. It is followed by copies of the material that was distributed to the EDC members in advance of the 1-28-99 meeting. The EDC comments that appear below are being provided to the City Council/EDA pursuant to Municipal Code Sec. 408.02, which provides (in part)that: The [Economic Development] Commission shall serve as an advisory commission to the Economic Development Authority...on matters relating to fostering a positive economic climate, encouraging economic development and enhancing the tax base of the City. The Commission shall also make recommendations to the Authority regarding retention and expansion of existing businesses...[and] redevelopment...opportunities.... Summary of EDC Comments/Recommendations: 1. The EDC's interest in and support of the proposed redevelopment project has been favorably affected by the information that the Developer recently provided regarding the anticipated ownership/management structure. The original plans seemed to envision multiple"outside" investors, separate ownership of various real estate parcels, and separate management of the hotel, banquet center and restaurant components of the completed project. The current plans seem to unify ownership/management of the affected real estate and the various business operations, which will presumably make it easier to evaluate the overall financial aspects of the proposal and to predict the project's ultimate market value,taxable valuation and property taxes. 2. The EDC has concluded that the proposed Mermaid Hotel/Banquet Center project would provide a variety of benefits to the City of Mounds View including,but not limited to: lodging of a type and on a scale not presently available in Mounds View,banquet facilities that would accommodate Council Memo January 29, 1999 Page 2 • more(and larger)groups than can presently be handled by the City's other privately and publicly owned facilities; 75-80 new jobs; "spin off'business from hotel and banquet center patrons; a significantly enhanced commercial tax base;visual and other aesthetic improvements to the "Gateway to Mounds View;"and new opportunities to improve the Highway 10 corridor and stormwater drainage/treatment in the vicinity of the redevelopment project. 3. The EDC has concluded that the benefits listed above, and other actual or potential benefits,justify some level of City financial assistance if the project cannot or will not move forward in the absence of such assistance. 4. The EDC believes that the type and amount of any financial assistance provided by the City should be based upon several factors, including(but not limited to)the Developer's need for such assistance,the City's ability to provide the requested financing,the amount of risk involved(from the City's perspective), and the extent to which the language of the proposed Development Agreement eliminates or minimizes any such risks. 5. Based upon(among other things)the preliminary financial information provided by the Developer and the fact that no hotel or banquet facility construction has been initiated at the Mermaid to date (despite the fact that such improvements have been contemplated and discussed for several years), it appears to the EDC that the Developer needs city financial assistance to complete the . redevelopment in question. 6. However, inasmuch as some of the assumptions underlying the Developer's original written Banquet Center/Hotel"Investment Analysis"have changed,the EDC recommends that at some point(to be determined by the EDA)in this process the Developer should be required to revise or update that Analysis to reflect more current facts, circumstances and assumptions. The EDC believes that the revisions and/or updates should include substantially more information and supporting documentation than has been received to date. The operating income/expense projections should be specific enough to enable a qualified financial consultant to conduct a meaningful investment return analysis. 7. The information initially provided by the Developer characterized owner equity as"cash." The Developer has now clarified that reference by indicating that the Developer will be pledging its equity in the existing facility as equity for the redevelopment project, rather than investing additional cash. The contributed equity will be pledged as collateral for the Developer's other financing, and will provide assurance to the Developer's lender(s)and to the EDA that the Developer has a significant investment at risk. Accordingly,the EDC recommends that the Development Agreement be revised by deleting the provisions requiring the Developer to invest "cash equity" as a prerequisite to receiving reimbursement from the City for project-related costs. 8. The Developer has estimated that the current owners' equity in the Mermaid facility is approximately$4 million(after deducting existing indebtedness of approximately$750,000.00). The Developer has indicated that a new appraisal is now underway,which will provide more specific information regarding the value of the existing facility. The EDC believes that said value, along with the value created by the new construction(having projected construction costs of approximately$7.5 million), should provide a new market value in an amount significantly greater than the$5.9 million valuation that was previously used to calculate anticipated tax receipts and, therefore,the amount of bonding that the redevelopment project can support. • 9. The EDC's collective belief is that the market value of the completed Mermaid project will generate"captured"property tax receipts of at least$271,819.00 per year,which will be sufficient to cover the required payments on a bond issuance that will provide the Developer with$2.25 million in project cost reimbursement(s)-- thereby eliminating the need to use any funds from the "pooled TIF account." In short,the EDC believes that the redevelopment of the Mermaid can be a"self-supporting"pay-as-you-go TIF project, in the sense that no funds other than the increased property taxes on the redeveloped property would be needed to pay off the bonds that would be used to provide the Developer with the financial assistance that has been requested. 10. The EDC therefore recommends that the EDA set a"ceiling"of$2.25 million on the amount of project cost reimbursement to which the Developer may be entitled,with the understanding that the actual amount of such reimbursement shall be ultimately dependent upon further analysis regarding the Developer's financial need. The EDC anticipates that such analysis shall be conducted(at the EDA's discretion)by city staff and/or by consultants retained by the city and/or by whatever lender may be providing the Developer's permanent financing. For example,in the event that the Developer is able to establish,to the EDA's satisfaction,that the Developer would not undertake the redevelopment project in the reasonably foreseeable future without the use of pay-as-you-go tax increment financing in the"net"amount of$2.25 million,the EDA would then agree to provide the Developer with project cost reimbursement(s)in that total amount. 11. One of the EDC members indicated a preference for conservatively assuming that the market value of the completed project would not exceed$5.9 million. That member was willing to 411 commit up to$50,500.00 a year from the pooled TIF account if doing so would enable the city to provide the Developer with the$2.25 million in project cost reimbursment that the Developer had requested. At least a few of the other EDC members were willing to commit some(unspecified) portion of the pooled TIF account funds to the project on an annual basis,but only if it became apparent that the market value of the redeveloped property would be lower than the figure that would be needed to generate property taxes sufficient to handle the annual payments on a bond issuance that would provide the Developer with$2.25 million in project cost reimbursement. The EDC members in question considered that possibility to be extremely remote. 12. The initial discussions/negotiations regarding the Mermaid project included the City's [potential] acquisition of the Rent All site at a cost not to exceed$550,000.00, said amount to be paid from the pooled TIF account. If the"net"amount of the bond proceeds is increased from the original $1.7 million_to a new figure of$2.25 million,_the$550,a00.0_0 difference would be paid to the Developer in the same fashion as the original$1.7 million--as project cost reimbursement. In order to get reimbursed for the cost of the Rent All site,the Developer would have to pay that cost. Accordingly,the EDC recommends that responsibility for the acquisition of the Rent All site be assumed by the Developer. ACTION TO BE CONSIDERED Fo P •• cussion only. 01 ection will be sought regarding whether a"final"version of the Development ement should •e phlced on • a ends for the 2-8-99 City Council meeting. d° e Carroll(61 --71 -4029) • conomic Development Coordinator N:\DATA\GROUPS\ECONDEV\COUNCIL\01-01-99.RE V To: (". Economic Development Commission Mem' • I From: Kevin Carroll, Economic Development Coordinator MEMORANDUM Subject: Discussion of the Mermaid Hotel/Banquet Center [Development.Agreement] Dat • January 25, 1999 As you will recall, the entire EDC meeting on December 10th was devoted to a discussion of various aspects of the Mermaid proposal. At that time, staff members were in the process of reviewing some revisions(suggested by the Developers)to the initial draft of the Development Agreement. The comments and suggestions that were made by the EDC members during the 12-10-98 meeting were incorporated into a revised draft of the Development Agreement, which was then forwarded to the Developers and their attorney for review and comment. I subsequently met with John Seibert, Dan Hall and his attorney (Mr. Chris Berndt)on January 7, 1999 to discuss the revised Development Agreement. A copy of that Agreement has been enclosed for your review. The provisions that are underlined represent, for the most part, changes that were suggested by the EDC and/or city staff members. • During that meeting, it became apparent that the Developer had no objection to most of the new provisions that had been suggested by the EDC and city staff. However, the Developer did have some concerns about the language requiring an unspecified cash equity "injection" by the Developer, and personal guarantees on the part of the Developer's principals, as prerequisites to the use of TIF(tax increment financing) proceeds for the reimbursement of [some of]the Developer's project costs. At my request, the Developer's attorney summarized his client's position on this matter in a letter dated January 22, 1999, a copy of which has been attached for your review. As you will note, the letter also addresses certain other aspects of the proposed project, including the identity of the "Developer,"the revised project costs, and potential "spinoff" benefits. An important issue for the EDC(and, ultimately, for the City Council)to address relates to the propriety, nature and amount of financial assistance from the City. Much of the discussion to date has focused on the Developer's request that the City contribute up to $550,000 toward the cost of acquiring the Rent All site. The proposed source of the funds in question would be the City's "pooled TIF account," which consists of tax increments received by the City in excess of the amounts needed by the City to make bond payments and other fixed obligations related to the existing TIF districts. Some concerns have been expressed regarding the impact(on existing and planned programs)of a "one-time" $550,000 deduction from the pooled TIF account. In the interest of exploring other options and reexamining some of our original financial assumptions, I recently contacted Public Financial Management • (PFM), one of the City's financial consultants. PFM was asked to generate financial information regarding these two new "scenarios": ■ a. Our original (conservative)assumption was that the completed Mermaid ""complex" would have an anticipated market value of$5.9 million, which would be sufficient to generate an annual tax increment (of about$218,000)that could cover the required payments on a bond issuance that would provide the Developer with about$1.7 million in project cost reimbursement. In order to avoid the impact of a "one-time" $550,000 deduction from the pooled TIF account, it has been suggested that the City might want to consider increasing the size of the bond issuance so that the net bond proceeds could provide the Developer with $2.25 million (the $1 .7 million referred to above p/us an additional $550,000) in project cost reimbursement. This type of increase would, of course, result in a corresponding increase in the annual tax increment needed to service the larger bond issuance. Accordingly, the question that was posed to PFM was: what market value(of the completed Mermaid project) would be needed to generate a tax increment that would be sufficient to cover the annual payments on bonds that would provide the Developer with a total of$2.25 million in project cost reimbursement, thereby eliminating the need to take $550,000 out of the pooled TIF account? • The answer, which appears in Scenario #I (the attached fax from PFM), is that a market value of$7.35 million would be required to generate the required tax increment of$271,817. It is worth noting that the Developer's revised projection regarding project costs (the last page of Mr. Berndt's letter dated 1-22-99) reflects $7.49 million in construction costs alone and total project costs of$10.27 million. b. PFM was asked to analyze a second set of circumstances, in which the projected market value was left at$5.9 million (despite the evidence that a higher figure might be justifiable), but the bond issuance was still increased to a level that would generate $2.25 million in project cost reimbursement for the Developer. The question that was then posed to PFM was: inasmuch as the market value of$5.9 million would generate a tax increment that would cover only 1.7million of the$2.25 million in project cost reimbursement, what additional amount would have to be paid out of the pooled TlFaccount on an annual basis to cover the$550,000 difference in project cost reimbursement? The answer, which appears in Scenario #2 (attached), is that a payment of$30,000 would be required in the first year, followed by 12 annual payments of$50,500 each. The advantage of this option is a series of smaller payments rather than a large, one- time "hit." The disadvantage is that a total of$636,000(an "extra" $86,000)would be paid over the 13 year period in question. • ■ • SUMMARY It is my understanding that Mr. Seibert, Mr. Hall and Mr. Berndt will be present at the EDC meeting on Thursday to answer any questions that you may have about any aspect of the proposed project. Ideally, the EDC will then be prepared to discuss the project and make specific recommendations that can be conveyed to the City Council at its work session on 2-I-99, and/or at its regular meeting on 2-8-99 (which will be the next time that formal action could be potentially taken on the proposed Development Agreement). The EDC's discussion should (at a minimum)address the following points: I. What are the benefits that this project would (or could) provide to the City of Mounds View, and do those benefits justify the type and amount of City financial assistance that the Developer has requested? 2. Has the Developer demonstrated a need (as opposed to a mere desire)for the City's financial assistance, or alternatively, does a mechanism exist to ensure that the need in question will have to be adequately demonstrated before any City financial assistance is 411 actually provided? 3. Is there sufficient evidence that the Developer and its principals have made, or will be required to make, significant financial, legal and personal commitments to the project, thereby helping to ensure the project's ultimate success? 4. What are the risks that the City might face in connection with a project of this type, and have adequate steps been taken to either eliminate such risks or reduce them to acceptable levels? I have not prepared a proposed Resolution for your review at this time. I'm not sure which issues the EDC will want to "formally" address on Thursday, nor can I predict the position that the EDC will take on those issues. However, I will be prepared to work with you to craft a Resolution "on the spot" that accurately reflects the views/thoughts/opinions/recommendations that you want to convey to the City Council regarding these matters. I encourage you to contact me by phone prior to Thu •:y's mee ' _ ' you'd like more background information regarding any of the relevant issues. f _vin Carrot . 12-717-40 9) Economic Development Coordinator • N:\DATA\GROUPS\ECONDEV\EDA-EDG\O I 2898B.MEM ■ WARCHOL 3433 BROADWAY STREET NORTHEAST,SUITE 110 IIIBERNDT attorneys MINNEAPOLIS-ST.PAUL,MINNESOTA 55413-1783 HAJEK FAX (612) 331-1069 TELEPHONE(612) 331-4211 a professional association CHRIS H. BERNDT January 22, 1999 Economic Development Committee c/o Kevin Carroll Economic Development Coordinator City of Mounds View Community Development Department 2401 Highway 10 Mounds View, MN 55112 0 Re: Mermaid Hotel/Convention Center/Banquet Center Project Our File No. 1159.40C Dear Mr. Carroll: I am the attorney for Hall, LLC, a Minnesota limited liability company (Developer) with respect to the project above identified. As you know, I have reviewed the revised draft of the Development Agreement proposed by the City of Mounds View(City) for use with respect to the new convention center/hotel/banquet center (Project) proposed by the Developer to be integrated with the current Mermaid Complex. The revised Development Agreement incorporated, for the firsttime, a provision which requires . the Developer to first pay an unspecified sum as cash equity towards the Project costs prior to the City making contribution of the Tax Increment proceeds (Reimbursement Amount). As with any major endeavor,this Project has gone through several conceptual phases. My client believes that the information submitted to you earlier, although not necessarily incorrect at the time it was submitted, may have not given you a clear understanding of the Project and my client's commitment to the Project. To further clarify the parties and the transaction, I submit the following additional information for your consideration: 0 Mr. Kevin Carroll January 22, 1999 Page 2 BACKGROUND The Mermaid was originally purchased by a business controlled by Charles Hall more than twenty (20)years ago. The original business was owned and operated by the Mermaid Cocktail Lounge, Inc., a corporation which is now known as "Moundsvista, Inc." That corporation is controlled by Charles Hall who owns a majority of the issued and outstanding stock of that corporation. The remaining minority interests in the corporation are owned by the children of Charles Hall. In the late 1980s operation of the Mermaid was assumed by the Mermaid, Inc., a corporation which is owned by the-children of Charles Hall and has been led by Daniel L. Hall as its President. The Mermaid, Inc. leases the land, improvements and fixtures from Moundsvista. Both Moundsvista and the Mermaid have attempted to run their business in a fiscally conservative manner and have worked hard to keep debt at low levels to reduce operating costs and to allow them to continue to improve the Mermaid complex. DEVELOPER 411 The Developer of the hotel and banquet center is owned and controlled by Charles and Daniel Hall. In order to further the financing of the project and to provide for an integrated management and ownership of the entire Mermaid Complex, it is proposed that the Developer acquire existing real estate and improvements of Moundsvista, Inc. and the additional sites owned by unrelated parties that will be necessary to accommodate the proposed Project. TRANSACTION In order to facilitate the Project and financing, it is proposed that the Developer acquire the existing real estate and improvements of Moundsvista together with several adjacent tracts. The — - Developer has not yet reached an agreement with adjacent property owners as to the acquisition cost. Under any analysis, the costs of acquiring the adjacent properties will be substantial. The financial materials and projected project costs already submitted to the City included allocations of land cost to the hotel component of the Project, as well as the banquet component of the Project. These projections represented earlier conceptual project designs that would have provided for separate tracts for each of the hotel, banquet center and the existing Mermaid complex to facilitate separate ownership and operation. Under the current proposal, the hotel,- banquet center and existing Mermaid complex are to be operated as one integral unit located on one site with common ownership and management. Accordingly, the land costs are no longer being allocated to each of the specific components of the Project. The allocation of land costs on the earlier projection were an effort to demonstrate the level of commitment of the Developer • to the City. In fact, under the current proposal, the commitment of my client is greater. In other words, the entire interest in the Mermaid complex together with the adjacent properties that will Mr. Kevin Carroll 40 January 22, 1999 Page 3 need to be acquired by the Developer to facilitate the Project will be committed to the Project. The existing debt against the Mermaid complex is approximately $750,000.00, the amount used to improve the existing bowling complex in 1998. This nominal debt that exists against the Mermaid is a result of the Hall family's commitment to reduced debt against properties to enhance operational goals. REVISED AND RESTATED PROJECT COSTS The Developer's consultant, John F. Seibert, has revised the hotel and banquet project costs to reflect the current project scope and expenses incurred by the Developer. The costs do not identify any expense incurred by the Developer in connection with acquiring the existing land and Mermaid complex. Because Moundsvista, Inc., the Mermaid, Inc. and the Developer are related parties, the economics of that transaction are not relevant in considering the level of commitment of the Halls, except to state that the Developer could meet a substantial requirement of cash equity towards the Project, but to do so would only be to unnecessarily encumber the existing Mermaid complex with debt the proceeds of which would go to a related party. The only result • of such a transaction requirement would be to require the Halls to unnecessarily incur expenses • related to financing that would not directly benefit the Project. In other words, the Halls could easily borrow significant monies against.the existing Mermaid complex for the purposes of re- committing that as equity to the Project, but for the purposes of good lending business practices, the Halls would simply be moving the asset from its right pocket to its left pocket. The cash equity requirement should not unnecessarily penalize the Halls since they have endeavored to keep the debt on their existing project as low as possible. PROJECT REVENUE SPINOFF Mr. Seibert has recently acquired the summary financial data with respect to the average daily dollars spent by a patron of a hotel in the north metro area. For the year 1996, such information reflects that the average expenditureperper da was_$188.00. It is projected that the per p party Y P J diem expenditure will be raised to $200.00 per day in the calendar 1999. The revenue expended by a visiting party to the hotel, it is broken down in the following manner: 29.6% Lodging 23.6% Food and Beverage 16.6% Transportation 16.2% Entertainment and Recreation 14.0% Other-Retail • Mr. Kevin Carroll 0 January 22, 1999 Page 4 CONCLUSION This clearly demonstrates that the hotel project will be important to the City at large, meeting needs that are not currently met by existing City facilities and resulting in significant spinoff business to benefit other economic sectors of the City. As the City is aware, a number of Developers have examined the prospect of building a hotel and banquet center on the Mermaid site, but have declined to do so because of the inability to meet project and operating costs without (i) the equity of the existing real estate and improvements to the Project; and (ii) the availability of tax increment financing proceeds to assist in financing the project costs. In other words, if a hotel banquet center is to be constructed, the cooperation of the City is needed. On behalf of my client, I recommend and request that the provisions relating to cash equity and the requirement that my client's deposit a sum of cash in addition to committing the land and the improvements to the Project be deleted. My client's will already incur substantial expense in connection with acquiring additional properties and integrating the hotel and banquet.center to illthe existing complex. To require them to submit to yourrequirement of cash equity ignores the fact that by doing so they would only dilute the equity in the Project by forcing my client to incur unnecessary financing expense in connection with borrowing and using the existing real estate and complex as collateral. Obviously, there will need to be other changes made to the revised Development Agreement relating to the Commencement Date and Completion Date of the Project. In addition, because of the significant personal commitment my client's have made to the Project, we are requesting that any reference of a personal Guaranty of the Tax Increment shortfall Guaranty be deleted. My client also recognizes the significant commitment it will make to the City with respect to the regional stormwater holding pond referenced in paragraph 3.6 of the revised Development Agreement. I will look forward to supplementing this information in any manner that you may request and trust that this response will better identify both the parties and the nature of the transaction. Since -', / , .4 I Chris H. Berndt CHB/smp • cc: Hall, LLC John F. Seibert Jan 1a as 11 :a1p John Seibert (612)421-0549 p. 2 Mermaid Complex Development Project Costs Co Developed by Hells, l-LC ,&JCS Development, Incl •Land t5 Purchase of B.E.C.Property $350,000.00 Purchase of Music Off 10 Property - $350,000.00 Purchase of Easement&Pond-Cabot $100,000.00 Purchase of Property From Mound Vista 100,000 sq ft @$8.00/sq ft $800,000.00 Total Land Costs $1,600,000.00 Land improvement Costs Parking Lot development $100;000.00 Parking Lot Landscape 8 Curbing $75000.00 Parking Lot Intergration Costs $50,000.00 Demolition and removal $100,000.00 Holding Pond Construction $100,000.00 Total Land improvement Costs $425,000.00 Construction Costs Building costs-Hotel $5,075,000.00 FF&E costs for Hotel $525,000.00 Building costs-Banquet Center $1,200,000.00 40 FF&E costs for Banquet Center $250,000.00 Building lntergration Costs $240,000.00 Glass Foyer between Buildings $100,000.00 Mansord for the Mermaid $100.00000 Total Construction Costs $7,490,000.00 Development&Soft Costs Financing&Soft Costs for Hotel $200,000.00 Development Costs-Hotel $200,000.00 Contingency 8 Working Capital-Hotel $175,000.00 Financing&Soft Costs for Banquet Center $55,000.00 Development Costs-Banquet Center $75,000.00 Contingency&Working Capital Banquet $50,000.00 Total Development&Soft Costs $755,00000 Total Project Development Costs $10,270,000.00 Financing Requirements Equity Requirements Cash $867,500.00 TIF Proceeds $1,700,000.00 Total Equity $2,567,500.00 Debt Financing $7,702,500.00 iioTotal Project Development Costs $10,270,000.00 01/20/99 17:04 FAX 15152436994 PFM DES MOINES 1001/007 Terrace Place 515-243-2600 Suss 214 515 243.8994 fax 2600 Grand Avenue www.pfm.com Des Maines,IA' PFM 50312.5400 • Public Financial Management Financial and Investment Advisors Fax • Te vedth Cairo Firm From 0-o r.? ..„„,„.,eve iskQ Client# Fax (ole- Tt " 34 • .. Phone (pi).- "i!+ - 4Oa-q Date I-- )10- 1 Y Pages including cover 0 Urgent 0 As Requested 0 For Review 0 Please Reply Message 110 Sc0,r6i 4 ' WL mak* uJ fk, . r.ftsd.e.& p7 bAc1i: 2, 20,auo br4 ? *7, 3 Sb,OVID CMwN1.4.4 I,,�l,.,,,�- r •� exp—rt ,....c..aieda sib PA? 16,e4 2, ZC)J fib 601.41 °c+at.h ":- i 450, Cob pr yeQ„c over t /46v.1- f KAAAN-40-zedi ptery:c-i • The information contained in this facsimile message is privileged and confidential Information,intended only for the use of the individual or entity named above. If the reader of this message is not the intended recipient you are hereby notified that any dissemination,distribution or copy of this communication is strictly prohibited. If you have received this communication In error,please immediately notify us by telephone. 01/20/99 17:04 FAX 15152436994 PFM DES MOINES a 002/007 • Cityof Mounds View,, Minnesota EXHIBIT I Mermaid Project Capitalization Schedule Projects Upfront Financing,Site Acquisition etc. $1,700,000 Rent-All Property acquisition 550,000, Total City-Commitments for Project Costs $2,250,000 Less: Reserved 0 City Cash(Contribution)/Extra Bond Proceeds 3.650 $3.650 Projected 1999 City Bonding Needs $2,253,650 Estimated Costs of Issuance 28,300 Capitalized Interest 0 Estimated Underwriter's Discount 23,050 1999 Taxable TIF Bond Issue(Rounded to nearest$5,000) $2,305,000 Anticipated Market Value of Mermaid Project: $7,350,000 * Assessed Market Value to Taxable Valuation Taxable Valuation $5,979,661 *** Assumes Tax Capacity Rate exceeds$150,000 limit 3.50% Captured Tax Capacity from Mermaid Project $209,288 Total Tax Rate 129.878% Anticipated Tax Receipts Captured in District $271,819 **** **Anticipated market value needs to be confirmed with updated project plans from the developers. —_ - ***Minimum assessment agreement will stipulate$4,800,000 taxable value as of Jan 2,2000. **** Per Ramsey County,District will decertify on January 1,2013. • Page 1of1 J 01/20/99 17:04 FAX 15152438994 PFM DES MOINES a 003/007 `4 oo a * 8a $ aH . 4u; 000043o 1.6. oo %0 •�t .� 000 N . No; 00 ,-.4ol4 H H 44... .„.„0 ,.„1....1..4mn43440 z 4 III II 00 .E - NC N N "CNmt�100 0000000 i 43H . �O .-� to N� o� N �OnOO �O V!4343Hs�!434543 u en ���pp0!��OppmOn.�. 0lnON41 ,...' ea Nc�HyNNNNNNNNN ii9 H 4344 4.6444,44M. iRV/HVl4 3403 H 403 45403 433 403 3 43 44'403''434'034034x3343 43 443 a I O A ti y ., OH 4 Q m m m 0, C, m m oN O1 01 a1 0. 8 0H 403 &03 403 404409 • V1 0C o0 ad 00 0Q 00 00 co ad mod 00 &04• • V n n N n n n n n n n n *3 4434Ni44}444434N3LN3443444 yY ••11 000000000000000000000 :400 .pp fes+ iR64VIKH HiI164V1 HH H4?dlH64 VtVt b4H64*, 6? Nm op I 44400 3 634343 3VO43 '3434x034344 343 34, 61 1 a • +' yO ,n �O . .. Nmm V1 � Vfv1000000C00 °j a v C� 040' 0 '" 0 n0e.�t} Ulmm �ryHv}iRbgvlyl4,..) O w C' — m—' 0N �Oenat,,t �rj V1 R1 vs V1.-. N N .-i, N eF ,n � �"� NNNNNNNNNNNNN F" .4 N" M 43343' 43 HH44 646443 HH-49 43 '44030 � 01Q0s0mcho\ O� q� mmm 00000000 44 43 43 49 6,43 44 43 in oa 00 00 00 00 00 00 00 ao 00 00 m • C Z N N N N N N N N N N N N N V36,H436,H6,6,63H 6,436'3 IS 0 aha0 I 4„ 000000' 0 D1a, m 0% 0% mm0% 0% 01000000 00 g 4 43 00 00 a0 00 0n 00-m 0000000000 6, 43 H 6,6,6, bf3 6, 4. '3 o • * n n n n n n n n n n n n 0 4N94N36N4N N434N96,6N44 434N3 E"1 0 4 m 00 00 00 00 00 00 m m m m 00 m m 00 m 00 m m m m m m a n n n n N N n n n n n n N n n n N n n n n N N m ___. _ V_ R 00 m m 00 m 00 m m m m m m m m m m o0 m m m m m 00 _GT01_CT..Q�.Q1.Ot 0�-O\ a\ � O� 0\ 01 C1 D1 Ot 01 01 a\ O1 � O� Q\ '�._ N N N N N N N N N N N N N N N N N N N N N N N C Er r» .a4 . . . . . . a d to. 0 0 0 a0 a0 a0 o0 a0 o0 o0 00 00 00 00 00 0 0 0 0 0 0 0 04'0 H 6, 6, N N N N N N N N N N m N H 6'43 H 43 43 6,H ea g U N N S N N N N N N N C g 0bo 0 V M H+A '34343 4 3 43 to 43494343 a F4 V w em G' N E t Oa cls, A00 ^ ~ � � .in � m C.) ° Ct 00 >4 >" mApppcgaoNmOo . Nmvtn moA -D _ y - SpNpNpNrQNJJ NP. NNNNNNN O •p (z '!O 6Nora\ - NNm vl ' N000% 0NnetPP4i - pgNNNNNNNpNNNN S � �� " 7 r. 0448 OAAp NNNNN 01/20/99 17:05 FAX 15152436994 PFM DES MOINES 41,004/007 City of Mounds View,Minnesota EXHIBIT 3 Proposed Taxable TIP Bonds,Series 1999 • SOURCES&USES DEBT SERVICE SCHEDULE SOURCES Debt Annual Date Principal Coupon Interest Service Debt Service Par Amount of Bonds 2,305,000.00 Accrued Interest Other Monies 2/1/00 99,544 99,544 8/1/00 80,000 5.350% 66,363 146,363 245,906 Total Sources 2,305,000.00 2/1/01 64,223 64,223 8/1/01 135,000 5.370% 64,223 199,223 263,445 211/02 60,598 60,598 USES 8/1/02 145,000 5.440% 60,598 205,598 266,196 211/03 56,654 56,654 Deposit to TIP Project 2,253,650.00 8/1/03 150,000 5.460% 56,654 206,654 263,308 Deposit to Reserve Account 2/1/04 52,559 52,559 Capitalized Interest Account 0.00 8/1/04 160,000 5.510% 52,559 212,559 265,118 Municipal Bond Insurance 2/1/05 48,151 48,151 Underwriters'Discount($10.00 per bond) 23,050.00 8/1/05 165,000 5.590% 48,151 213,151 261,302 Costs of Issuance 28,300.00 2/1/06 43,539 43,539 Accrued Interest 8/1/06 175,000 5.640% 43,539 218,539 262,078 Rounding Amount 2/1/07 38,604 38,604 8/1/07 185,000 5.710% 38,604 223,604 262,208 Total Uses 2,305,000.00 2/1/08 33,322 33,322 8/1/08 195,000 5.790% 33,322 228,322 261,645 2/1/09 27,677 27,677 0 ASSUMPTIONS 8/1/09 210,000 5.890% 27,677 237,677 265,354 2/1/10 21,493 21,493 Dated Date 5/1/99 8/1/10 220,000 6.000% 21,493 241,493 262,985 Delivery Date 5/1/99 2/1/11 14,893 14,893 First Interest Date 2/1/00 8/1/11 235,000 6.100% 14,893 249,893 264,785 First Principal Date 8/1/00 2/1/12 7,725 7,725 Last Principal Date 8/1/12 8/1/12 250,000 6.180% 7,725 257,725 265,450 2/1/13 8/1/13 2/1/14 8/1/14 2/1/15 Arbitrage Yield 5.85161% 8/1/15 TIC 6.01403% 2/1/16 AIC 6.21666% 8/I/16 Average Life 8.16 Years 2/1/17 8/1/17 -Assumes interest payment is capitalized 2/1/18 8/1/18 2/1/19 8/1/19 2/1/20 8/1/20 2/1/21 2,305,000 1,104,778 3,409,778 3,409,778 Scale: January 15,1999 Treasury&75bps • '5 cSv/4-/-1 OP .4 / J Prepared by Public Financial Management,Inc. 1/20/99 Mermaid TIF Cashflow.xls 01/20/99 17:06 FAX 15152436994 PFM DES MOINES IJ005/007 SCity of Mounds View, Minnesota EXHIBIT 1 Mermaid Project Capitalization Schedule Projects Upfront Financing,Site Acquisition etc. $1,700,000 Rent-All Property acquisition 550.000 Total City-Commitments for Project Costs $2,250,000 Less: Reserved 0 City Cash(Contribution)/Extra Bond Proceeds 3.650 $3.650 Projected 1999 City Bonding Needs $2,253,650 Estimated Costs of Issuance 28,300 Capitalized Interest 0 Estimated Underwriter's Discount 23,050 1999 Taxable TIP Bond Issue(Rounded to nearest$5,000) $2,305,000 • Anticipated Value of Mermaid Project: 5 p d Market $ ,900,000 ** Assessed Market Value to Taxable Valuation 81% Taxable Valuation $4,800,000 *** Assumes Tax Capacity Rate exceeds$150,000 limit 3.50% Captured Tax Capacity from Mermaid Project $168,000 Total Tax Rate 129.878% Anticipated Tax Receipts Captured in District $218,195 **** **Anticipated market value needs to be confirmed with updated project plans from the developers. ***Minimum assessment agreement willstipulate$4,800,000 taxable value as of Jan 2,2000. ****Per Ramsey County,District will decertify on January 1,2013. • 4 '7 c, Page 1 of 1 . 7�-- 01/20/99 17:06 FAX 15152436994 PFM DES MOINES is 006/007 N O O Z 00 a0 �O �O N vn en eh 01 a0 N en 0 0 0 0 0 0 0 0 I r. 4.1 ir4 O sO .� a\ .-» en 0 10 h N N �G 44 44 44 64 64 69 1f 69 .tel � OenNenNdwenm .• vir0 S 1y .. en" e+1 .4 V1 I.1!'d..-+ en - ,-i C-� Vl 49 K V! Vl 44 if}4!V!40 i ta z 4 0 13 00 ,-4NN00Oe00OTN eme1 N 7-1 1" 11 1! OS N N 0 g 00 s0 '� O .� ooa� t�O� [�aOt+1OeO4 .-e I F . a0 V' l�of VD N R3 t* e*� t� �i �D l�A NNNNNNNNNN , NN U Vt6?i4VfNi?HM}i/}eR 6948 A6T1A4440/} 4R40140144 449400160446011511511511514440014 • 1 008V1Vtv, V1VtVfV1Vt V1 v, Vfvs80000000 aggaaa 401 49 0\ 01 C: 01 C% C; CI 01 Olt C: 0; O\ H!44 69 K 401 44 401 .. I i 00 00 00 00 00 00 00 00 00 00 00 00 00 4NI 4,49 449 N 44401401440}401 4401 44%!N n` 5 C 44 Ir 4 4609064,44 60449444,4,404,4,4 4 406 69 4 409 40}44 a � `� .. , a $ 888888888888 S 'Z' ElLiIXE4 C O O O O G O O O O O o 1 A O VI let lei iQ3 �4}tit In in 044+�Rf94444444441446+1444 U 00 V 1 0% 00 0o N 00 00 V t d' 00 00 0 0 0 0 0 0 0 0 0 • O .v 001 Tr.%% 0n' .~-I en 0.O 0 71 VY 00 00 V1 64 64 69 49 69 v!14 69 enaNdw '� A0 a .a lei w enbbNO o �y0ti4o �q NNNN `.:el L N N N N N N N N N �"� U.' N 694.,69 64 64 49 49 64 44 49 64 1!64 44 • 2 O O O Vf Vi V1 V1 V1 Vi en Vs Vr V1 Vf 0 0 0 0 0 0 0 0 49 401 0 0% 0% 0% 0% 0iv 0% 0% 0% 0% 0% 0% 0% 401 49 4s&4 tr9 64 64 4r! 0 4 00 00 00 00 00 00 00 00 00 00 0o ao 00 N N N N N N N N N N N N N 44 11 69 49 44 44 19 69 401 64 69 11 49 t 14 I 8 6' w F Oil 1;ii N Va0 4s Yr a4000 in in in vi in in in vi in in » Ve00000000 419..49 ON 0% 0% 0% 01 0% 0\ 0% 0+ 0% 0% 0+ 401 44 49 44 69 401 64 44 W * 4°3' 00 00 00 00 00 00 00 00 00 00 00 0 0 NNFl NN fn 4 4 NNNN40 N P 9 69 401 1lK69401644064940140! N _._. _. i00 00 00 ao 00 00 00 00 0o 00 00 00 00 00 00 00 00 00 a0 00 a0 a0 00 2 N_lam N r N N N N N N r N N NNNNN N N N N N V 00 00 00 00 00 a0 00 00 00 00 m ao a0 co 00 00 co 00 co 00 co a0 00 g ay N N N N N N N N N N N N N N N N N N N N N N N SE� p QQ QQ QQ qQ p pQ QQ QQ QQ u '6+ 4448Ci. 000OOOGO GOo K44444K 404 a . a V W3 VO NU'�VP pg 0 0 0 0 0 co 0 40 3 C 46 69 406 40 64 4 69 49 49 4,49 64 E u N. LS-0N 14 in 4n • 0 p s -_aa 44 r. .-. d a 74 la tis oe Fi —4 N V 3 i U � A. ii " ° F �' o d a p ,ti+ �+ OoeT p� 4p'1Aj V 8 ,r;., 1g2 � Nener V1YONce2ch2 2q A w Y"� �` 1+ r � � $ 0 05oo5 oOOONNNNNNNN * w Q > as : a . .+ NNNNNNNni N N N N � .� C Om a oN, aa .p-� Nc � epn � opo 0 N4n � +n �oro0a 6-1,—"P'::717444i 'gyp' N 0�g' .�i '•rczANNNNN N N NNNNNNN NN N 1d W 01/20/99 17:07 FAX 15152436994 PFM DES MOINES 2 007/007 City of Mounds View,Minnesota >IMBIBrr 3 Proposed Taxable TIF Bonds,Series 1999 • . , _: " SOURCES&USES DEBT SERVICE SCHEDULE SOURCES Debt Annual Date Principal Coupon Interest Service Debt Service Par Amount of Bonds 2,305,000.00 Accrued Interest Other Monies 2/1/00 99,544 99,544 8/1/00 80,000 5.350% 66,363 146,363 245,906 Total Sources 2,305,000.00 2/1/01 64,223 64,223 8/1/01 135,000 5.370% 64,223 199,223 263,445 2/1/02 60,598 60,598 USES 8/1/02 145,000 5.440% 60,598 205,598 266,196 2/1/03 56,654 56,654 Deposit to TIP Project 2,253,650.00 8/1/03 150,000 5.460% 56,654 206,654 263,308 Deposit to Reserve Account 2/1/04 52,559 52,559 Capitalized Interest Account . 0.00 8/1/04 160,000 5.510% 52,559 212,559 265,118 Municipal Bond insurance 2/1/05 48,151 48,151 Underwriters'Discount($10.00 per bond) 23,050.00 8/1/05 165,000 5.590% 48,151 213,151 261,302 Costs of Issuance 28,300.00 2/1/06 43,539 43,539 Accrued Interest 8/1/06 175,000 5.640% 43,539 218,539 262,078 Rounding Amount 2/1/07 38,604 38,604 8/1/07 185,000 5.710% 38,604 223,604 262,208 Total Uses 2,305,000.00 2/1/08 33,322 33,322 8/1/08 195,000 5.790% 33,322 228,322 261,645 2/1/09 27,677 27,677 ASSUMPTIONS 8/1/09 210,000 5.890% 27,677 237,677 265,354 4111 2/1/10 21,493 21,493 Dated Date 5/1/99 8/1/10 220,000 6.000% 21,493 241,493 262,985 Delivery Date 5/1/99 2/1/11 14,893 14,893 First Interest Date 2/1/00 8/1/11 235,000 6.100% 14,893 249,893 264,785 First Principal Date 8/1/00 2/1/12 7,725 7,725 Last Principal Dare 8/1/12 8/1/12 250,000 6.180% 7,725 257,725 265,450 2/1/13 8/1/13 2/1/14 8/1/14 2/1/15 Arbitrage Yield 5.85161% 8/1/15 TIC 6.01403% 2/1/16 AIC 6.21666% 8/1/16 AverageLife8.16 Yeats 2/1/17 8/1/17 -Assumes interest payment is capitalized 2/1/18 8/1/18 2/1/19 8/1/19 2/1/20 8/1/20 2/1/21 2,305,000 1,104,778 3,409,778 3,409,778 Seale: January 15,1999 Treasury&75bps 0 c-L-------7 l, -4-71-i 6 Prepared by Public Financial Management,Inc. 1/20/99 Mermaid TIF Cashflow.xls CITY OF MOUNDS VIEW 0110 ECONOMIC DEVELOPMENT COMMISSION 1999 MEETING DATES January 28, 1999 February 17, 1999 (Special Meeting, 6:00 p.m.) February 25, 1999 March 25, 1999 April 22, 1999 May 27, 1999 • June 24, 1999 July 22, 1999 August 26, 1999 September 23, 1999 October 28, 1999 November 24, 1999 (Tentative -- regular meeting date of 11-25-99 falls on Thankgiving) December 23, 1999 (All meetings will be held at Mounds View City Hall at 7:30 a.m. unless otherwise noted) N:\DATA\GROUPS\ECONDEV\EDA-ED099EDCMT.DOC 1999 Economic Development Commission Members (Revised 7-15-99; revisions shown in italics) Name Term Expires Rosemary Goff December 31,2000 8450 Knollwood Dr.,MV MN 55112 (Resident) 612-784-1994(h) 651-296-0265 (w) 651-296-5651 (fax) E-mail:roseg@senate.leg.state.mn.us Tom Field December 31,2001 8409 Knollwood Dr.,MV MN 55112 (Resident) 612-786-8771 (h) 612-349-5102(w) 612-338-8218 (fax) E-mail:tfield@riversidebank.com Cindy Carlson December 31,2001 Western Bank (Business 2711 Highway 10,MV MN 55112 representative) 651-290-7866(w) 651-290-7878 (fax) E-mail: ccarlson@western-bank.com Sean Walther December 31,2000 2425 Ridge Lane,MV MN 55112 (Resident) 612-785-4272(h) 612-427-1410(w) 612-427-5543 (fax) E-mail: swalther@ci.ramsey.mn.us Wendy Marty December 31,2001 2626 Louisa Ave.,MV MN 55112 (Resident) 612-780-8876(h) 612-729-9365 (w) 612-780-5098 (fax) E-mail: little�Y compuserve.com Julie Olsen December 31,2000 2663 Lake Court Circle,MV MN 55112 (Business 612-783-9366(h) representative) 612-783-8920(fax) E-mail:gem.realtor@iname.com Jerold Kahn December 31, 1999 2833 Woodcrest Dr., MV MN 55112 (Business 651-638-0800(w) representative) 612-780-1250(h) E-mail: gasacts@aol.com N:\DATA\GROUPS\ECONDEV\EDA-EDC\99EDCLST.DOC To: Economic Development Commission Members From: Kevin Carroll, Economic Development Coordinator M[NORAIiDUM Subject: EDC Procedural Matters Date: January 25, 1999 Vacancies At the 12-10-98 EDC meeting we briefly addressed the issue of vacancies, and during that discussion it became apparent that there was some uncertainty regarding the length of the terms of the current members. I subsequently reviewed a series of Resolutions from past years and put together a summary(attached) regarding dates of appointment, term lengths, expiration dates, etc. A few dates are missing due to Resolutions that could not be immediately located. I have attached a copy of a Staff Report to the EDA dated 1-22-99 regarding the potential reappointment of the three EDC members whose terms expired on 12-31-98. We will know on 1-25-99 whether or not the proposed Resolution was adopted. I will contact the three EDC members by telephone on 1-26-99 if anything other than the recommended • action occurs. The aforementioned Staff Report will also give you an update regarding the plans to fill the two business sector vacancies created by the resignations of Brian Sjoberg and Ron Schmidt. Officers City Code Chapter 408, subd. 1 provides that at the first regular meeting of the year,the EDC shall appoint a chair, a vice-chair and"such other [officers] as" needed, subject to EDA approval. Inasmuch as the two new business representatives will not be appointed until sometime after the first regular EDC meeting of the year on 1-28-99, I propose that the election of officers be deferred to the 2-25-99 EDC meeting, at which time a full slate of seven voting EDC members should be available. It is unclear whether Ms. Carlson's one year term as Chair"automatically" expired on 12-31-98, but if so, I see no reason why the EDC members could not appoint her to serve as"interim" Chair solely for purposes of the 1-28-99 meeting. Incidentally, Chapter 408 provides that no member may serve as Chair for more than two consecutive terms; it is my understanding that 1998 was Ms. Carlson's first year as Chair, so she would be eligible to serve as Chair again if re-elected. If"formal"EDA approval of the EDC's newly-elected officers is deemed necessary, that would presumably occur at the EDA meeting on 3-8-99 pursuant to the timetable outlined above. ■ • Meetings Chapter 408, subd. 2 requires that meetings be held at times"which the [EDC] shall fix by resolution." This seems to me to be a useless formality, given the fact that the Bylaws already specify that the meetings are to be held on the fourth Thursday of each month, and given the additional fact that meetings have to be rescheduled from time to time anyway. Still, there seems to be a"tradition" of doing this, so a proposed EDC resolution will be prepared for consideration at the 2-25-99 EDC meeting. This will give the new members(and the rest of the EDC members) an opportunity to re-examine the meeting day and time,if they should wish to do so. We may also want to talk about the possibility of an occasional"extra"meeting, inasmuch as we have been occasionally unable to complete our EDC business in the time available. In particular, if the first three items on the 1-28-99 agenda consume the entire meeting, we may need to consider coming back for a brief meeting in a week or two to discuss the Comprehensive Guide Plan issues. If that becomes necessary, I'd like to suggest that the EDC meet again at 7:30 a.m. on February 4th or 11th, although I would also be very receptive to a late afternoon or early evening meeting on a Wednesday or Thursday. Bylaws • Chapter 408, subd. 6 requires that the EDC Bylaws be reviewed on an annual basis at the first regular meeting in February. If you do not already have them, I will provide you with a copy of the Byla, s at the 1-28-99 meeting, so that you have sufficient time to review them before they are • s• ssed at the'- -99 meeting. fe/GIAA\, I � j Ke 'n Carroll (61217-4029) Economic Development Coordinator • N:\DATA\GROUPS\ECONDEV\EDA-EDC\0 12899B.MEM Item No. 5 Staff Report No. Meeting Date: 1-25-99 Type of Business: EDA 11111WK:Work Session;PH:Public Hearing; C4:Consent Agenda;CB:Council Business City of Mounds View Staff Report To: EDA President and Commissioners From: Kevin Carroll,Economic Development Coordinator Item Title/Subject: EDC Vacancies Date of Report: January 22, 1999 Summary: • The EDC is composed of seven voting members, including three business representatives and four residents, along with one nonvoting member(i.e., the EDA's designated liaison to the EDC). Voting members are appointed by the EDA President"with the approval of the"EDA. The terms of Cindy Carlson(current Chair, and business representative), Tom Field (resident) and Wendy Marty(resident)technically expired on 12-31-98. Ms. Carlson just completed a two year term. Mr. Field was appointed (on October 13, 1997)to complete the remainder of someone • else's term, so he has served for a little more than a year. Ms. Marty was also appointed (on July 27, 1998)to fill the remainder of someone else's term, so she has served for about 6 months. I have spoken with each of them about the expiration of their terms, and all of them are very interested in continuing to serve on the EDC. It is my understanding that EDA President Coughlin has also spoken with each of these individuals, and that he is prepared to recommend to his fellow EDA Commissioners that Ms. Carlson, Mr. Field and Ms. Marty be reappointed. Each of these three appointments (or reappointments)would be for a full three year term. Incidentally, the other two of our three business representatives (Brian Sjoberg and Ron Schmidt) have"unofficially" resigned. Mr. Schmidt apparently sold his interest in the Amoco station, and Mr. Sjoberg has indicated that his increasingly busy schedule no longer leaves sufficient time for EDC business.There are two years left on Mr. Sjoberg's term, and one year left on Mr. Schmidt's term. We are in the process of soliciting applications from members of the business community, and we anticipate that staff and EDA President Coughlin may be in a position to recommend candidates for the two vacancies in question in the near future. Recomm u dation: St• ecommen.. adoption of pr p .ed Resolution 99-EDA-101 (attached). / j, 44i. , K Carroll ( 7-4029) . Economic Develo• ent Coordinator • NADATAIGROUPSIECONDEV\EDA ED0012599.MEM EDC MEMBERS' TE1WS 0 ,( 444 j ) ROSEMARY GOFF: Appointed per Res.XX-EDA-30C dated XX-70Lxx. Original team ended 12-31-97. Reappointed per Res.98-EDA-80 dated 1-12-98. Term expires 12-31-2000. TOM FIELD: Appointed per Res.97-EDA-70 dated 10-13-97. Term expired 12-31-98. Interested in reappointment. BRIAN SJOBERG: Appointed per Res. 96-EDA-40 dated 2-5-96. Original term expired 12-31-96. Reappointed per Res. 97-EDA-58 dated 1-13-97. Second term ended 12-31-97. Reappointed per Res. 98-EDA-80 dated 1-12-98. Term expires 12-31-2000. Has resigned,although no written resignation has been received RON SCHMIDT: ill Appointed per Res.XX-EDA-XX dated xx-xx-xx. Original term expired 12-31-96. Reappointed per Res. 97-EDA-58 dated 1-13-97. Second term expires 12-31-99. Has resigned,although no written resignation has been received. CINDY CARLSON: Appointed per Res. 95-EDA-36 dated 11-13-95. Original term ended 12-31-96. Reappointed per Res. 97-EDA-58 dated 1-13-97. Second term expired 12-31-98. Interested in reappointment. SEAN WALTHER: Appointed per Res. 98-EDA-95 dated 07-27-98. Term expires 12-31-2000. WENDY MARTY: Appointed per Res.98-EDA-95 dated 07-27-98. Term expired 12-31-98. Interested in reappointment 0 N:\DATA\GROUPS\ECONDEV\EDA-EDC\012899C.MEM S I Ta Economic Development.CowigiociAlarkers From: Kevin Carroll,Econo n c = S lSubject: Comprehensive Guide Plane evelo mert Section) Date: January 25, 1999 l.l O IIAI l D U The material for the last EDC meeting included a draft of portions of a proposed Economic Development section of the [updated]Comprehensive Guide Plan. Before or during the meeting, maps identifying areas suitable for redevelopment were distributed. As you know, the lengthy discussion of the Mermaid issue at the last EDC meeting preduded us from discussing the Comprehensive Guide Plan issue. In the belief that you probably retained the material related to this issue after the last meeting, additional copies have not been provided with this packet. If you disposed of or cannot locate the material in question, please call me at 717-4029 and I will arrange to get additional copies to you as much in advance of Thursday's meeting as possible. I will also plan to have a few • extra copies at the meeting in case they are required. In the event that the other issues on the agenda for Thursday once again prevent the EDC from having enough(or any)time to discuss this policy/planning issue,the EDC may want to consider scheduling a special meeting that would be devoted exclusively to this topic area. My recommendation regarding possible days and times would include 7:30 a.m. on Thursday, February 4th or I I th or 6:00 or 7:00 p.m. on Wednesday, February 10th or 17th. ,4 / /4" J `, / /41-4/1/6A 1 Ke3igCarroll (612- 17-4429) Economic DevelopmefCoordinator • N:\DATAGROUPS\ECONDBAEDA-EDCV I 2899D.MEM ■