HRA MINUTES 04261994 - Laserfiche WebLink

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Housing and Redevelopment Authority Minutes • April 26, 1994 Page 2 Don and Judy Makowske, were present representing Mako for the discussion of Tax Increment Financing being used as funding for this proposed project. Mr. Thistle presented a report on the request for tax increment financing which he distributed to those present. He stated that this is just a preliminary stage in the process. There has been one brief meeting with the developers and staff. Springsted's initial analysis raised as many questions as it answered. Mr. Thistle said more time is needed with the developers to clarify the proposals. At this point, there does not appear to be anything that would prevent the project from working. One of the issues that was discussed with the developers at the first meeting was pay-as-you-go on tax increments. Because this is a condominium project, a pay -as you -go is complicated. Mr. Thistle stated he is not sure that realistically pay-as-you-go would be very workable. The problem is that on a pay-as-you-go, the person paying the taxes is the person getting the benefits. He wondered how the benefit would be separated in a situation with a condominium where there would be potentially 24 tax payers and any one of them didn't pay. Mr. Thistle indicated something other than pay-as-you-go may have to be considered on this project. Mr. Thistle said he had had a brief conversation with Jerry Gilligan from Dorsey & Whitney and they agreed that the developers could have a new project set up or the existing Kenzie • Terrace TIF Project could be extended to this location. In addition, 25% of the project's proceeds are allowed to be spent outside of the District. The City has a policy of requiring the developers to put some money up front to defray the City's costs in case the project is not completed. Mr. Thistle suggested that some of those issues should be pursued. Chair Ranallo inquired if Mr. Thistle thinks the condominiums will sell in that area considering the problems involved when selling the condominiums at the Kenzington. Judy Makowske responded that condominiums are just one possibility that they are considering. Mrs. Makowske is of the opinion that townhomes would be better for the City and that they could be constructed in the proposed location. The developer would make that decision. Mako is not doing the developing themselves. Mrs. Makowske stated two parcels of their property have been repossessed and are owned by Mako, Inc. The other parcel is owned by Harry and Elaine Olson. There are three parcels of properties plus the alleys. The total amount of land that is just under two acres. She stated that the Makowske's interest is that they sold the land in 1981 and do not want to run apartments at this point in their lives. They want to sell the property to a developer or someone who would upgrade the property. Chair Ranallo questioned how they would come up with up front money without a developer. Mrs. Makowske anticipates having a developer and stated that Mako has been working with a • person who will get a developer when it is known what the land can be used for.