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Special EDA Agenda Memo <br /> September 21, 1998 <br /> Page 2 <br /> • <br /> Recommendation <br /> Staff recommends the EDA authorize execution of the contract for <br /> private development by and between the Economic Development <br /> Authority in and for the City of Elk River and Bryan L. Jones, <br /> including execution of the attached warranty deed providing the <br /> property to the developer from the EDA at no cost to the developer. <br /> 6. Consider Resolution 98- Requesting the City Council to Call <br /> a Public Hearing for Establishment of Tax Increment <br /> Financing District No. 21 <br /> Background <br /> The three agenda items (#6,7,8) in regard to the West Business Park <br /> project deal individually with beginning the process of a tax increment <br /> district, recommending that the Council authorize a source of funds <br /> for the project, and executing a purchase agreement with Tony <br /> Emmerich for a 6 acre parcel. The West Business Park project has yet <br /> to be committed to by the developer, however, staff is recommending <br /> III approval of the actions necessary to start this process. It appears the <br /> West Business Park prospect may not be able to commit to a project <br /> this year, and in that case these various activities would be <br /> discontinued. Staff is recommending approval of the action items as a <br /> show of good faith to the developer that the EDA is willing to make <br /> commitments to this project. <br /> Proposed Incentive Package for West Business Park Project <br /> The incentive package which has been negotiated by staff and the <br /> developer is as follows: <br /> • Land to be purchased up front $280,000 <br /> • Site improvements to be paid by EDA up front $110,000 <br /> • A micro loan, 6 percent, 10 years, to be <br /> provided at closing on permanent financing $100,000 <br /> The cost of land purchase and site improvements would be reimbursed <br /> to the EDA through tax increment over an approximately 9 year <br /> period. The up front funding source for this $390,000 is proposed to be <br /> the development fund, and so staff is asking that the EDA recommend <br /> • the Council authorize use of the development fund for this purpose. <br /> The $100,000 micro loan is two times what the current guidelines <br /> allow, however, staff proposes to modify the guidelines to allow a <br />