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HomeMy WebLinkAboutCC WORKSESSION PACKET 09232019If you would like to request special accommodations or alternative formats, please contact the City Clerk at 612-782-3313 or email city@savmn.com. People who are deaf or hard of hearing can contact us by using 711 Relay. Work Session Agenda Monday, September 23, 2019 5:30 p.m. 1. Doran Tax Increment Financing (TIF). Stacie Kvilvang, Ehlers Presenting 2. Adjournment City of St. Anthony CITY COUNCIL WORK SESSION City Council Chambers Minutes August 5, 2019 Present: Mayor & Council. Jerry Faust, Mayor; Hal Gray, Councilmember; Randy Stille, Councilmember, Thomas Randle, Councilmember and Jan Jenson, Councilmember. Absent: None Staff: Mark Casey, City Manager, Shelly Rueckert, Finance Director and Charlie Yunker, Assistant to the City Manager. Call to Order: Mayor Faust called the meeting to order at 5:30 pm Tobacco 21: Staff presented a memo, existing ordinance and information from ClearWay Minnesota. By consensus of the Mayor and Council, staff was directed to bring forward an amended tobacco ordinance that includes increasing the age to twenty-one and updated language to restrict use of electronic vaping. 2020 Preliminary Levy: Staff presented spreadsheets for the 2020 preliminary levy. By consensus of the Mayor and Council, staff was directed to bring forward a preliminary levy of $7,609,459 representing a 4.08% increase from 2019. Business Retention and Expansion (BR&E): Staff discussed conducting visits at the Anthony Lane Business Park. Staff will bring back additional information. Assessing to Taxes Private Utility Work: Staff presented a redline version of the Assessment Policy. By consensus of the Mayor and Council staff was directed to amend the Assessment Policy to take in account the cost of private sewer and water replacement cost be included in the property owner’s assessment if petitioned by the property owner. Night to Unite: Staff presented the listing and location map of forty-nine block parties. Adjourn: The meeting adjourned at 7:11 p.m. Minutes respectfully submitted by Mark Casey, City Manager. Memo To: Mark Casey – City Manager From: Stacie Kvilvang - Ehlers Date: September 23,2019 Subject: Doran Redevelopment – Terms of Assistance Doran Companies submitted a TIF application for redevelopment of the former Walmart located at 3800 Silver Lake Road. They are in the process of obtaining City planning approvals for development of the site into 464 market rate apartments. Total development costs are expected to be approximately $115M. They have requested various forms of assistance from the existing TIF District (3-5) and any SAC credits that are available to the Site (47 credits totaling approximately $116,000). You have requested Ehlers to review their TIF application and development pro forma to determine how much TIF, if any is warranted. Below is a summary of our findings: 1. Extraordinary costs for redeveloping the site are estimated as follows, which could be TIF eligible (per numbers provided by the developer): Demolition of existing structures: $715,000 Rebuild retaining wall: $512,000 TOTAL $1,227,000 Note: Land acquisition is not considered an extraordinary cost because the overall price per unit is within market AND the developer negotiated the price before any formal TIF application was submitted to the City. 2. Developer is deferring 100% of their developer fee ($4,250,000). These are at risk dollars that are paid out of cash flow and it is estimated to take 7 years to be repaid. 3. Overall, Developer’s returns are below market (cash-on-cost of 6% - typical is 6.3% to 7% and cash-on-cash of 3.6% - Typical is 10%, but still willing to do the project due to long- standing relationship with the City and the site Based upon our review of their development proformas, we are of the opinion that the project warrant s $2.5 million in the form of a pay-as-you-go TIF note. This is 25% of the TIF generated (legal pooling amount) from their project over the remaining nine (9) years of the District. In addition, the HRA can provide them up front TIF assistance in the amount of $600,000 to assist with the cost of demolition (current cash balance of approximately $900,000 in the District). Total assistance would equate to $3.1 million. We are reviewing shortfall payments that may occur for existing General Obligation Commercial Bonds to determine what the potential impact the redevelopment will have (timing of demolition and completion of construction of Phase I). The Developer is open to a minimum assessment agreement (MAA) to assure the value for the property is maintained for a period of 1 to 2 years, as long as it doesn’t significantly further impede the low returns he is already receiving. Please contact me at 651-697-8506 with any questions.