CC PACKET 04231996 - Laserfiche WebLink

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Foods store will be received. This assumes that the parcel on which the New • Market store is located is eliminated from the TIF District this year. If this parcel is not eliminated the reduction will be higher. Because of application of various rules in the Tax Increment Financing Act it is expected that this reduction should be substantially reduced or eliminated after 1998. As a condition for providing the TIF assistance Ste. Marie Company is required to execute an assessment agreement- for the parcel that is the remaining portion of the existing main shopping center building. The assessment agreement provides for a minimum market value for real estate tax purposes equal to the present market value of such parcel. This will prevent Ste. Marie Company or a subsequent owner of the parcel from seeking any further reductions in the market value of this parcel without the consent of the HRA. By executing the Assistance Agreement the City is agreeing to issue the TIF Bonds to provide the assistance to the development. The City is not obligated to issue the bonds until certain conditions are satisfied. These conditions include the execution and delivery of the Redevelopment Agreement and of the Assessment Agreement covering the CUB Foods store parcel by SUPERVALU, the purchase of the CUB Foods site by SUPERVALU and the execution and delivery of the Assessment Agreement by Ste. Marie Company covering the remaining portion of the main shopping center building. Once these conditions are satisfied the City is obligated to proceed promptly to issue the bonds and pay the assistance to Ste. Marie • Company: This puts the City at some market rate risk should interest rates rise. However, I do not see this as a problem since rates are generally stable at the present time and the City should be able to lock in the interest rates on the bonds in a relatively short period of time (30-45 days) once the conditions are satisfied. JPG:cmn -2- • DORSEY & WHITNEY LLP