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Housing and Redevelopment Authority Meeting Minutes November 30, 1999 Page 2 1 VI. CONSIDER LETTER OF UNDERSTANDING WITH THE HITCHING POST (2550 2 HIGHWAY 88), AND REVISED DRAFT OF LETTER OF UNDERSTANDING WITH 3 REPUBLIC INVESTMENT COMPANY. 4 Executive Director Michael Morrison directed the H.R.A.'s attention to a letter dated November 5 29, 1999 from James A. Furseth regarding The Hitching Post. He reminded the H.R.A. that 6 negotiations have been ongoing with The Hitching Post regarding the City's purchase of land 7 easements. Recently, a price of$110,000 was agreed upon. Pursuant to Mr. Furseth's letter of 8 November 29, 1999, The Hitching Post has requested that the H.R.A. consider its original 9 request of$125,000 due, in part, to the increased cost of renovating the project to the desired 10 standards set by the City. 11 Morrison reviewed for the H.R.A. that the original concept of the Shopping Center Plan was that 12 the City would forward approximately $700,000 to the Shopping Center Owners in return for 13 public easements, which the gazebo and landscaping improvements would be implemented on 14 that property. In return for the $700,000, the Shopping Center Owners were going to pay for 15 those improvements. Until December 31, 1999, Morrison stated that the City has the option of 16 utilizing funds from the Kenzie District TIF account to implement this project. 17 Morrison stated that City Attorney William R. Soth had reviewed the above plan and advised the 18 City last week that funds could not be taken from the TIF account for improvements that would ' 19 be made next year in order to keep in compliance with the intent of the law. However, the City 20 can provide funds from the.TIF account for the property at a fair value, and then an agreement 21 could be reached with the Shopping Center owners regarding the utilization of those funds for 22 the public improvements. 23 Morrison stated that Staff's recommendation for the City is to proceed with The Hitching Post for 24 the purchase of 24,000 square feet for either the $110,000 or $125,000 figure, and approximately 25 8,500 square feet of Shopping Center property. The Shopping Center property appears to be val- . 26 ued at a higher price because of its location close to Highway 88. Morrison stated at that time, 27 Staff would return to the new Council with a plan for improvement based on the agreements 28 reached. 29 City Attorney Soth stated that the law is clear that the funds from the Kenzie District would be 30 required to be spent before the end of the 1999 year. The possibility of placing the funds into es- 31 crow and then disbursing the funds for improvements later was researched,but it was determined 32 that was not a viable option. Mr. Soth reiterated that the funds actually must be spent in 1999 33 and, therefore, the City's option is to simply purchase the land (easements) from both of the 34 Shopping Center and The Hitching Post at this time. 35 Mr. Soth cautioned that the price for the land must be fair and not exceed the land's actual value. 36 He further stated that the plan should be to allocate as much of the funds from the Kenzie District 37 TIF account this year, and then allocate the rest from the Chandler District in the future.