04-05-1982 CC MIN - Laserfiche WebLink

Home Browse Search

City Council Minutes April 5, 1982 Page Three a policy on the constructing and assessing of costs for improvements and therefore, the City staff is asking the Council for guidance regarding such policy. The City Administrator further indicated that as Mr. Barthel and his development team have questioned the public improvements and how they are to be installed in the Barthel PUD, the City Council should review policy options regarding the construction and assessment of improvements. The City Administrator further indicated that whatever policy the City Council chooses will affect the growth of the City, as municipal bonding is a more attractive means of financing. Mr. Marlin Hutchinson, representative of the Barthel's development project, indi- cated that they are having a problem determining the costs to be assessed to each parcel in terms of water, sewer and streets, and further indicated that they have received estimates from the City's engineers which indicates that improvements to the project could be very costly, and therefore, they are asking the City of Elk River to consider a tax increment program. Mr. Hutchinson further indicated that Mr. Ed Tschida, of Professional Planning and Development Company, was present to make a presentation to the City Council regarding tax increment financing. Mr. Tschida indicated that a proposal of tax increment financing is suggested for the Barthel development because of the constraints of high financial costs. Mr. Tschida indicated that the shopping center could be' viewed as a cornerstone of the planned unit development and that construction of the shopping center would promote growth for the rest of the project. Mr. Tschida indicated that Minnesota Statute, Chapter 273, the Minnesota Tax Increment Financing Act, is a tool availJ.ablle:~cotc:ities. to assist in local economic development, and further indicated that streets, sewer and water improvements are allowed in this financing act. Mr. Tschida indicated that the project would consist of establishing a development district pursuant to Minnesota Chapter 472.A. for the shopping center. Mr. Tschida indicated that a tax increment financing plan would be a highly structured legal agreement which would involve public meetings of both the school board and the County, and that the City must approve the plan as well as its bond counciL Mr. Tschida indicated that the develope~ would pay the cost of the plan and that the proposed plan would not pro- , ject any inflation or increase in property value. He further indicated that the developer would submit a binding assessment agreement which would eliminate the City's risk in paying for the bonds from general revenues, and further indicated that the economic development district would not be for more than a ten year period as per state law. Mr. Tschida indicated that parcel A of the planned unit develop- ment planned for the shopping center is the area proposed for the tax increment dis- trict. Mr. Tschida further indicated that the developmnet of parcel A would facil- itate the rest of the planned unit development and also would create jobs and sales tax and other benefits to the community. Councilman Duitsman asked if there was security for the City other than the asses- sment agreement should the project fail. The City Administrator indicated that the planned unit development across the street from the proposed Barthel planned unit development had project costs of approximately $200,000 which were assessed to the parcels in the development. The City Administra- tor questioned the tax increment financing plan versus the City simply agreeing to bond for the project improvements. Mr. Hutchinson indicated that the improvement costs are very costly and that they are looking for a better way to finance the project.