05-09-2005 EDA MIN - Laserfiche WebLink

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Economic Development Authority Minutes May 9, 2005 Page 2 summary of the information. Ms. Mehelich stated that it appears to be neither parry is interested in acquiring the property and undertakutg the improvement costs. Staff recommends that the EDA abandon the master developer concept and consider contracting with a broker for marketing the business park. President Gongoll asked if there was a chance the gas line muting through the property could be relocated. Ms. Mehelich stated that this was mentioned in the Duke Realty proposal and that the City Engineer could address the question. Commissioner Klinzing stated that she agreed with staff's recommendation. She fek that the Amcon proposal would create a similar situation to the one that already exists in Elk River Business Park, and that she is not comfortable with how that is progressing. She felt that a 30,000 square foot user would be a good fit for Amcon's current site, and that the City is looking for larger users to enhance the job market and tax base. She felt that Duke Realty's proposal was more in line with what the EDA envisioned for the properly, but she did not see the need for a partnership with them. Commissioner Fazber conctued with Commissioner Klu~zing's comments. He did not feel either of the development partnerships would be in the best interest of the City at this time. He felt that Amcon should have been able to construct more buildings by now. Commissioner Klinzing stated that Amcon has expressed concern with competition from neighboring properties. She was concerned that they have not met the requirements of their agreement with the City. Commissioner Farber asked what the status of Amcon's obligations was. Ms. Mehelich stated that the developer is behind they are only receiving half of the tax increment until they fulfill their build out obligation. She stated that staff continues to work with the developer and provide them with leads. She stated that there a couple of smaller users (20,000 square feet) who have expressed interest. Director of Finance Lori Johnson stated that the Elk River Business Pazk developers aze behind 100,000 square feet in their obligations. She stated that the most recent deadlines were scheduled for January 1, 2004 and January 1, 2006. The developer will not be paid tax increment financing in full until they meet their requirements. Ms. Johnson noted that they will need to maximize the use of the remaining lots in order to be paid in full because of the amount given up for commercial development. Commissioner I{]inzuig asked Ms. Johnson what the impact will be on the City's bonds. Ms. Johnson stated that there will be no impact, since the trunk assessments were paid for by the trunk bonds, and that all bond commitments are paid fast, and that there are two notes to the developer, one is paid fast, and then the other is paid second. She said that the City does not suffer a loss, other than the fact that there is not as much tax base coming in. Commissioner Klinzing asked what would happen if Amcon's obligations were a complete default. Ms. Johnson explained that the City has the first right to purchase any property lefr undeveloped. Comnssioner Moon stated that Amcon has expressed a number of reasons they have been unable to fulfill their build-out commitment, including the City imposing too high of standazds for the Business Park. Commissioner Moon questioned which would generate more profit -the increase in property value by waiting to develop, or the TIF return. Ms. Johnson stated that it would be to Amcon's benefit to develop the property as soon as