5.0. 5.0.a. 6.0. 7.0. EDSR 04-12-1999

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Economic Development Agenda Memo April 8, 1999 Page 2 • approximately 1.3 million dollars. Of this amount, the federal dollars assigned for this road project will provide approximately$655,000 to the Brown's. The remainder would be the responsibility of the EDA. This breakdown is as follows: • 1.3 million dollars - purchase price • Minus $655,000 - federal government funds • Total remaining equals $475,000- EDA Bud Storm has been instructed to negotiate with the Brown's that the, $475,000 be provided on a contract for deed with the EDA over a minimum term of 10 years. The interest rate on this contract for deed is currently under negotiation. The federal funds assigned to this right-of-way acquisition include the purchase of the Brown's house, since the house lies within the right-of- way of Tyler Street. These federal funds will be provided to the Brown's at the time of closing on this transaction - approximately May/June, 1999. The importance of the remainder being financed on a contract for deed is that the natural funding source for this purchase is TIF District No. 19. It appears from initial cash flow projections that • if the remaining $475,000 purchase price is on a 10 year term, that this will be similar to the tax increment stream which can then be used to make payment on this contract for deed. Staff supports using development fund dollars to pay off the assessment (approximately $250,000) against the Brown property once it is purchased. This helps cash flow the entire utility project. This proposal will include using Tax Increment from District No. 19 to reimburse the development fund for these costs. The schedule for utility construction indicates that the Brown home will need to be vacated and demolished or moved off the site by approximately July 15, 1999. This suggests that the entire Brown purchase will likely come back to the EDA for final approval at its meeting on May 10, 1999. Attached to this memo is a map of the Brown land which will aid in our discussion of this issue. The Kirkeide property lies entirely within the Brown property, but outside the right-of-way of Tyler Street. The Kirkeide property is approximately 2.5 acres, and includes a house and several out buildings. Bud Storm has indicated the Kirkeide purchase may be approximately$200,000. This purchase would occur at the same time.