HRA MINUTES 06281988 - Laserfiche WebLink

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• 2 1 tions related to the proposed Evergreen Townhouse redevelopment 2 project. 3 Mr. Childs indicated Mr. Krier was recommending that the H.R.A.: 4 *should pass a motion recognizing the development as a "for - 5 sale" townhouse development to which the H.R.A. will provide tax 6 increment assistance for the extensive soil correction needed before 7 the project can proceed; 8 *should direct staff to negotiate a redeveloper's agreement 9 with Evergreen Development Corporation with the characteristics Mr. 10 Krier had stipulated in his recommendation; 11 *should authorize the preparation of a Tax Increment Plan which 12 would later be forwarded to Ramsey County and the school district 13 for their review; 14 *should schedule a public hearing on the project after which 15 the Tax Increment District can be certified by resolution. 16 The Executive Director anticipated the preliminary plan would be •17 ready by July 8th for consideration at the July 12th H.R.A. meeting 18 in such a form as could be sent to the county and school district. 19 Mr. Hoium explained that with prime rate around 9% for the construc- 20 tion loan the banks have been indicating they would be charging 21 prime plus 2% plus up to 2 additional points which would bring the 22 rate right at the 13% shown in their proposal. 23 Mr. Childs indicated he would be proposing that the security be 24 handled the same way as the City had handled the Chandler Place 25 project where instead of the redeveloper having to put up a 26 $350,000.00 Letter of Credit, Evergreen would carry the debt 27 themselves but with tax increments pledged to pay off their lenders 28 in the amount of the soils corrections. This would eliminate the 29 need for the City to sell bonds or to incur any up front risk. 30 The Manager said the way the security had been handled for Chandler 31 Place, the City had incurred no debt and the lender will receive 32 their bond reserve within a very short time. Because of this, the 33 tax increment project had been developed at lower costs than would 34 have been incurred the other way. He perceived Evergreen's to be 35 the same kind of project for which some innovative way of financing 36 can be found. He added that this might be a way .of balancing out 37 the risks both the City and the redeveloper have to take with a 38 project like this one. . 39 Councilmember Ranallo asked Mr. Childs to prepare to report showing 40 just when the City would be paying off the Chandler and Kenzington 41 projects in the hopes that some day the City would probably be