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City Council Regular Meeting Minutes September 9, 2003 • Page 3 demolish the structure and complete the public improvements would cost approximately$16 2 million for Phase I and$4 million for Phases II and III. She discussed the developer's proposal 3 for payment for land and special assessments for the Phase I development to assist in offsetting 4 this cost. 5 6 Ms. Kvilvang explained, based upon the latest Sources and Uses from the development team, it 7 was anticipated the Phase I development would generate approximately$10.5 million in present 8 value tax increment. She added, of this increment, it was anticipated the development team 9 would require approximately$7.5 million to $9 million to complete the redevelopment. She 10 warned these numbers were estimates and the final amount of increment would be presented 11 with the final Term Sheet. 12 13 Ms. Kvilvang stated all TIF calculations currently had included fiscal disparities being paid 14 within the district,pursuant to policy discussions with City staff and Council. She added this 15 option was currently financially viable since the current TIF projects showed excess increment 16 for the development. She noted the City may consider, however, keeping fiscal disparities 17 within the district for coverage on a Fannie Mae loan for the acquisition of the three commercial 18 properties needed for the Phase IA For Sale housing units. 19 20 Ms. Kvilvang indicated currently all TIF calculations showed 5% of available tax increment 21 being available for administration. She explained the City might elect to subordinate its 5% 22 administration until the entire development comes on line if the development required more than 95%of the TIF for actual redevelopment costs or coverage of bonds. She added it was IP anticipated this would not be required at this time. 25 26 Ms. Kvilvang stated it was anticipated the development team would finance their development 27 costs up front and they would request the City to "take them out" after the development was 28 completed through the issuance of tax-exempt TIF bonds. She noted this was a tool used in 29 many of the metropolitan communities to assist developers with development and was a low risk 30 proposition for the City, since the developments would be constructed and paying taxes when the 31 City was issuing these bonds. 32 33 Ms. Kvilvang indicated 39' Avenue would be reconstructed and upgrades would be made to the 34 sanitary sewer lines as well. She stated it was anticipated it would cost approximately$1.7 35 million to $2.1 million to complete these improvements and the cost would be assessed to and 36 paid for by the development and other benefiting properties within the TIF district. 37 38 Ms. Kvilvang stated she knew the city park was an important part of the development. She 39 indicated the development team would pay for the park improvements, which were estimated to 40 cost approximately$1.43 million. She added they would be reimbursed by the City for a portion 41 or all of the park improvements through park dedication fees generated from the development 42 and any grants the City might receive. She noted the park improvements might be phased over a 43 three-year period if the City did not receive the $900,000 in LCDA funds it requested from the 44 Metropolitan Council. She explained a few changes had been made to the park concept plan as 0 they related to future maintenance issues.