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<br />rC! ---\) <br />( ~ <br /> <br />Lity of ~ <br />Ell{ <br /> <br />**Item 3.4.** <br /> <br /> <br />MEMORANDUM <br /> <br />TO: <br /> <br />Mayor & City Council <br /> <br />~ROM: <br /> <br />Paul T. Steinman, Director of Economic <br />Development <br /> <br />DATE: <br /> <br />June 23, 1998 <br /> <br />SUBJECT: SAC/WAC Calculation Method - Hotels <br />and Motels <br /> <br />Staff has had several discussions over the past two months with a developer <br />proposing a hotel project in Elk River. The developer indicated from the <br />onset that a hotel project of this type will not become a reality in Elk River <br />under the current SAC/W AC calculation method. It is staffs understanding <br />that the Council has previously generally discussed that an adjustment <br />might be made which will allow for a reduction in the cost of these services to <br />a hotel developer. With this in mind, staff has determined that a more <br />appropriate calculation method for hotels and motels which will lower these <br />SAC/W AC charges by 50 percent. The ordinance currently calculates that <br />one SAC and one WAC is to be paid per unit. Staffs discussion has been that <br />it would be appropriate to reduce this calculation method to .5 SAC and .5 <br />WAC per unit. <br /> <br />On the proposed hotel project, this would mean a reduction in SAC/W AC fees <br />to the developer from approximately $210,000 to $105,000. The developer is <br />planning to submit information on June 29, 1998, for the Planning <br />Commission agenda, to proceed with this project should the Council <br />authorize staff to complete an ordinance change allowing for the change in <br />the calculation method as discussed. <br /> <br />From an economic development perspective, west business park prospects <br />have consistently inquired about locally available "Class A!' hotel facilities for <br />company clients and overseas visitors. One specific prospect is currently <br />waiting to see if a hotel project is going to proceed within the next several <br />months in the city of Elk River. This prospect is putting a lot of emphasis on <br />the need for newer hotel facilities to accommodate clients and visitors to its <br />facility. <br /> <br />13065 Orono Parkway. P.O. Box 490. Elk River, MN 55330 · TDD & Phone: (612) 441-7420 · Fax: (612) 441-7425 <br />