3.0. EDSR 11-09-1998 - Laserfiche WebLink

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1. The developing partnership would contribute the land as front-end equity into the partnership. Land cost is approximately$700,000. 2. The city,we are proposing,would provide: (a) The cost for grading,wetland mitigation and soil correction. (b) The full installation of Tyler including all trunk utility lines. (c) The ring road through the 40 acres of industrial property and related utilities per plans that have been preliminarily submitted to the city. We have carefully assessed our risk position on this development and have based our proposal,in part, on that assessment. In order to move this project forward under the framework proposed above,we will have over$3 million at risk. This is comprised of approximately$700,000 for the land and$2,500,000 of combined equity and debt (on which we will have personal guarantees) for the Phase I—speculative multi-tenant building. 3. The city is to assess the industrial share of Tyler Avenue only and you have indicated to us that there will be an assessment of approximately$6,000 per gross acre or approximately$240,000 on the industrial property. The balance of the costs which would then include the ring road,utilities, grading, soil corrections and wetland mitigation would then be an up front investment by the city. 4. The city would receive from tax increment proceeds from the 40 acres annual amounts required to cover the payment on the special assessments related to Tyler and to cover principal and interest 1110 paid on bonds established to cover the front end investment costs for the items specified above. On an annual basis,the partnership would receive any amounts remaining to cover the pay-as-you-go note established to repay the partnership for its land investment. While it is anticipated,based upon previous projections,that this would be repaid much sooner we would request that the potential amortization period for the pay-as-you-go note be as long as 15 years at an interest rate of 8.5%. In addition,we understand that it would be agreeable to the city to have surplus tax increment proceeds from the retail portion of the property used to cover any payments under the pay-as-you-go note on the industrial property to the extent that there are not sufficient funds available from the tax increment generated by the industrial property in any given year. We are excited about moving ahead on this property development with you and look forward to further discussion of this at the EDA meeting on Monday,November 9. In the meantime, should you have any questions concerning this letter or any other related matter,please do not hesitate to call. You ryt , Richard V. Martens President RVM/bb Cc: Tony Gleekel Jim Winkels • Pat Pelstring