5.1. HRSR 12-06-2004 - Laserfiche WebLink

Home Browse Search

Consider Development Agreement and Interfund Loans for Downtown Revitalization Project December 6,2004 I IRA and City Council Meeting Page 2 of 4 Over the past 2 years the city and developer have completed a number of steps to refine the project including market and financial feasibility studies, community input and other steps • outlined in the attached Project Planning 8: History. Summary MetroPlains has accepted the attached Development Agreement that has been drafted based on the key points in the attached April 28, 2004 memo and direction from the HRA and City Council. Following is a summary of the final agreement as it relates to the key points: 1. Linkage between the Tackson project and the Bluff project. The HRA and City Council have directed staff and the developer that the completion of both Jackson and Bluff projects together are desired elements of the Downtown Revitalization Project. The project meets the city's goal and objectives as described in the attached Project Description. Each component of the project is described in the definitions (Sectionl.1). The development agreement provides for the City Council to formally approve the construction plans and parking plans prior to any construction (Section 4.1). At its November meetings it was the consensus of the HRA and Council to proceed with the development agreement with the construction schedule outlined by MetroPlains generally as follows: • Winter 2004-Spring 2005 Acquisition of properties completed. • Spring 2005 Construction of King Avenue parking lot • Summer 2005 Construction start of Bluff Block with demolition and • environmental remediation (except for US Bank site) • Summer 2005 Construction start of Jackson Block • Fall 2005 US Bank vacation and demolition • Fall 2005 Bluff Block new construction start The development agreement includes several activities that must be completed by MetroPlains prior to construction on the Jackson Block property (Section 4.3), including MetroPlains' payment of the King Avenue parking lot improvement. 2. Amount of tax increment financing assistance The development agreement defines "Pledged Tax Increment" that the developer would receive up to 89% of the actual available increment based on the lesser of the actual market value at the time or the market value as of the completion of the project for the purpose of reimbursing MetroPlains for TIF eligible costs incurred based on the developer's gap in funding. In addition, MetroPlains will receive 6% of the annual increment for the purpose of reimbursing the cost of the King Avenue parking lot. Together current estimates indicate that MetroPlains could receive approximately $2.3 million in TIF. The remaining 5% the city will receive for reimbursement of administrative costs of the project. Section 5.2 outlines the process for issuance of the TIF revenue note, also known as a "pay-as-you-go note" to the developer. In addition, a"look back" procedure is outlined in Section 5.3 in order to ensure that the developer will not receive any more assistance (via TIF, Sac/Wac and Jackson land) than is necessary to make the project financially feasible. •