4.2.A. SR 12-06-2004 - Laserfiche WebLink

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Consider Development Agreement and Intcrfund Loans for Downtown Revitalization Project December 6, 2004 HRA and City Council Meeting Page 3 of 4 In addition to the TIF the other forms of assistance provided by the city are estimated as follows: · Jackson Land . SAC . WAC $ 500,000 to be based on final appraisal $ 175,880 $ 131,910 With regard to the look back provision MetroPlains is allowed a specific amount of profit as a percentage of total cost on the for-sale portions of the Bluff project (both the commercial and condos will be for-sale). On the rental housing and commercial portion of the Jackson project MetroPlains is allowed a specific amount for development fees and a return on investment based on the preliminary sources and uses statement provided in the development agreement. The amount of profit, return and fees is based on the key points agreement dated April 28, 2004 with the exception of the change in the Bluff Block commercial from a leasing to a for- sale structure. The Parking Lot Note is not part of the look back calculations. 3. SAC/WAC/Park Dedication/Building Permit Fees Within the development agreement the city is approving a reduction of the entire SAC and WAC fees, as was conceptually approved at the August 25, 2004 joint meeting of the Elk River Municipal Utilities Commission and City Council. MetroPlains will pay the city park dedication and SAC and WAC fees in addition to other city governmental fees when due. However the city will credit the estimated amounts listed above toward the SAC and WAC fees (Section 5.7). The City will then capture 100% of any annual inflation over the 25-year TIF district period and at 4% interest rate to reimburse itself for the SAC, WAC and Jackson land. The state auditor requires that the City Council adopt an interfund loan resolution for each item in order to formalize the city's intent to reimburse itself for qualified costs of the TIF district. In addition the city will be reimbursing itself from tax increment derived from the district for incurred qualified administrative costs (which do not require a resolution) related to the project in the amount of $250,000. In accordance with prior direction from the Park & Recreation Commission and City Council the park dedication fee paid by the developer will be dedicated to park improvements in the downtown area. There is no reduction or waiver on the park dedication fee and building permit fees. 4. Cost of the T ackson Block . The development agreement identifies $500,000 as the estimated value of the Jackson Block property. An appraisal to be completed by the developer's bank will be the final purchase price (Section 3.4). The inflation that the city may capture over the life of the TIF district will reimburse the city for the Jackson land. 5. Issuance of Cit;y Tax Increment Bonds The development agreement outlines a number of conditions that would need to be met in order for the developer to request the city to issue tax increment bonds to refund the tax revenue note (Section 5.8). This is an option that wouldn't occur until sometime in the future.