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City Council Minutes December 6, 2004 Page 3 approve the construction plans and parking plans prior to any construction. Ms. Ippel indicated that the development agreement includes several activities that must be completed by MetroPlains prior to any construction on the Jackson Block property, including MetroPlains' payment of the King Avenue parking lot improvement. Amount of Tax Increment Financing AJJiJtance Ms. Ippel stated that the development agreement defines "Pledged Tax Increment" that the developer would receive up to 89% of the actual tax increment through a pay-as-you-go note for the purpose of reimbursing MetroPlains for TIP eligible costs. Ms. Ippel also stated that MetroPlains will receive 6% of the annual tax increment for the purpose of reimbursing the cost of the King Avenue parking lot and the city will receive the remaining 5% for reimbursement of administrative costs of the project. She noted that there is a "look back" procedure outlined in the agreement in order to ensure that the developer does not receive any more assistance (via TIP, SACj\'I/ AC, and Jackson Land) than is necessary to make the project financially feasible. Ms. Ippel stated that in addition to the TIP, it is estimated that the city will be providing Jackson Land, SAC, and WAC as additional forms of assistance. SAC! rV:4C / Park Dedication / Building Permit Feu Ms. Ippel indicated that the city is approving a reduction of the entire SAC and \'1/ AC fees in the development agreement. In return, the city will capture 100% of any annual inflation over the 25-year TIP district period and at 4% interest rate to reimburse itself for the SAC, WAC, and Jackson Land. She noted that the park dedication fee paid by the developer will be dedicated to park improvements in the downtown area. Cost qlthe -'mhon Block Ms. Ippel stated that the development agreement identifies $500,000 as the estimated value of the Jackson Block property. She indicated that the property will be sold to MetroPlains for $1.00. She stated that the inflation that the city may capture over the life of the TIP district will reimburse the city for the Jackson land. IJJuam'e orGO Tax Increment Bonds Ms. Ippel stated that 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. Pun-haJe olBlu,if Blo.'k Pr~Derties Ms. Ippel explained that the sale of the Jackson Block property is conditioned, among other things, upon the developer having fee title to all of the Bluff Block property. The development agreement outlines the conditions and process that the city would undertake at its own discretion and under limited circumstances for the acquisition of the Bluff Block property through the use of its powers of eminent domain. She noted that staff does not currently anticipate that this will be necessary. Tvpe qlBlulfBlock Pr~ied Ms. Ippel stated that there is no discussion of this in the final development agreement due to the fact that MetroPlains has decided the Bluff Block condos and commercial units will be for-sale only. Ms. Mehelich indicated that the HRA recommends that the City Council approve the resolution authorizing execution of a development agreement. She noted that the development agreement identifies the subsidy for each component of the project and the exemptions from the Business Subsidy Act, with the exception of the Jackson Block