6. HRSR 04-04-2011 - Laserfiche WebLink

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Proposed Timeline The Spending Plan requires that construction ox substantial rehabilitation must commence before July 1, 2011 and would not have commenced by such date without the assistance. Following HRA action on the funding request, the applicant proposes to proceed with purchase agreement, construction plans and Planning and Council approvals for construction to start end of May 2011 and a project opening Fall 2011. The applicant has submitted a letter from its lender indicating approved financing fox up to a $1,500,000 project. The applicant's proposed project cost is in the amount of $1,590,850. FINANCIAL IMPACT The TIF 16 Fund has a current cash balance of $43,994 and is expected to receive $60,503 in tax revenues generated from the TIF 16 King & Main project by the end of 2011. RECOMMENDATION The request meets the minimum requirements as established by statute, the HRA and City Council in the attached Spending Plan. Staff recommends the HRA consider the following options regarding the request: • Approve the request - $90,000 grant to assist SAC/WAC and adjacent land costs. The City's finance advisor, Maxk Ruff at Ehlers & Associates has reviewed the application and advised that there appears to be sufficient cash flow to support a loan to the project rather than need for a grant. Authorize Staff to negotiate aloes-interest loan to the project tied to the actual SAC/WAC fees. This option would ensure the HRA would not be providing a "competitive advantage" to the restaurant as compared to recently assisted similar projects (e.g. Pompeii Pizza EDA Micro Loan of $75,000). In addition the Micro Loan program is not available to commercial businesses located outside the downtown, therefore the applicant is still receiving benefit that would otherwise not be available but for this TIF 16 Spending Plan. Deny the request if it does not meet the City's intentions for the funds. The HRA is not under obligation to approve any and/or all requests). Statutory deadline for commencement of construction and use of funds is June 30, 2011 unless otherwise extended this legislative session. If no requests axe approved prior to the deadline, the HRA would be required to use the TIF 16 funds to reimburse the HRA $39,671.78 balance due, decertify the TIF district, and distribute the balance and future taxes to the city, county and school district. ATTACHMENTS ^ City of Elk River Adopted Spending Plan for TIF District No. 16 ^ Proposal Request and Business Plan -Elk River Pizza Ranch, Robert McDonald Action Motion by Second by Vote Follow Up C:\Users\cmehelich\Desktop\4.4.11 HRA TIF16 Action Requested.doc