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City Council Regular Meeting Minutes <br />September 14, 2010 <br />Page 3 <br />1 of the City of St. Anthony, Minnesota and Apache Redevelopment LLC. ("The <br />2 Developer) Stacie Kvilvang, Ehlers & Associates, presenting. (tabled from the August <br />3 10. 2010 city council meeting) <br />4 <br />6 <br />7 <br />9 <br />10 <br />11 <br />12 <br />13 <br />14 <br />15 <br />16 <br />17 <br />18 <br />19 <br />20 <br />21 <br />22 <br />23 <br />24 <br />25 <br />26 <br />27 <br />28 <br />29 <br />30 <br />31 <br />32 <br />33 <br />34 <br />35 <br />36 <br />37 <br />38 <br />39 <br />40 <br />41 <br />42 <br />43 <br />44 <br />45 <br />46 <br />Ms. Stacie Kvilvang, Ehlers & Associates, discussed the history and improvements of the Silver <br />Lake Village Redevelopment, as well as the history of the development agreement for Phase III <br />Silver Lake Village Redevelopment. Ms. Kvilvang reviewed that at the August 10, 2010 City <br />Council meeting, Council requested a work session regarding the Phase III Development <br />Agreement. At the meeting, Council provided staff direction on the following proposed deal <br />points: 1) Further refinement of the definition of commencement of construction; 2) Priority of <br />repayment to City for the Fannie Mae loan with regards to the Phase IA make up note. <br />Ms. Kvilvang discussed staff meetings with the developer and the August 30, 2010 Council work <br />session discussion on the proposed terms of the Phase III Development Agreement. She <br />provided an overview of the following changes discussed with the City Council at the August 30, <br />2010 work session as they relate to the memorandum discussed at the August 10, 2010 City <br />Council meeting: <br />2. Surviving Provisions of the Phase I Development Agreement <br />a. Below Market Profit Tax Increment Assistance Increase <br />S. Phase III Tax Increment <br />a. Use and Amount of Increment <br />Phase 1118 <br />Phase IIIC <br />Ms. Kvilvang advised that based upon Council direction, a provision has been added to the <br />agreement to require the Developer to prove to the City's satisfaction that the Developer has <br />project financing and the Developer has an actual ownership interest in the land (at least a <br />purchase agreement). <br />Councilmember Stille observed that from the developer's perspective, many things will need to <br />go very well in relation to the make up note provisions. He stated he believes this is a fair <br />compromise. He noted the City is in agreement with going forward with Phase IIIB and Phase <br />IIIC. They are providing a carrot for the developer to complete the project, which someone will <br />need to do if the current developer does not. The profit for the developer will not be a windfall; <br />in comparison to the values it will likely be in the neighborhood of 2% to 5% of the value. <br />Mayor Faust noted that the agreement presented at the August 10, 2010 City Council meeting <br />was not acceptable to the Council, and that Ms. Kvilvang and Mr. Lindgren have renegotiated <br />with the developer. He pointed out that the developer has completed the phases that include <br />Wal-Mart and the commerce buildings, the townhouses and cottages, and that the redevelopment <br />is at the tail end. <br />Councilmember Gray questioned when the City will receive proof that the developer has lost $2 <br />million in the project. Ms. Kvilvang replied that this has been requested and the developer is <br />putting together the required paperwork for review. <br />