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ITEM 5.2__ <br /> Cicy or N. <br /> Elk River TO: MAYOR AND CITY COUNCIL <br /> FROM: PATRICK KLAERS , CITY ADMINI 1� � _ <br /> • <br /> DATE: OCTOBER 31 , 1991 <br /> SUBJECT: INDUSTRIAL PARK FUNDING <br /> . <br /> INTRODUCTION <br /> Over the past ten years, the City Council has periodically <br /> discussed the purchase of the Industrial Park from the Elk <br /> River Associated Investors . Serious discussions on this issue <br /> again took place during the summer of 1991 . Recently, on <br /> 10/17/91 the City Council decided on a 3-2 vote to purchase all <br /> • of the remaining parcels in the Elk River Industrial Park from <br />• the Elk River Associated Investors . The price for this <br /> purchase is $210,000 for seven lots , plus $50,000 for the lot <br /> that is to be used for recreation fields . Funding for this <br /> $50 ,000 lot has already been agreed upon by the City Council . <br /> The issue before the City Council is how to finance the <br /> $210 ,000 purchase for industrial lots . <br /> BACKGROUND <br /> The City staff has previously suggested that one possible way <br /> to finance the $210 ,000 Industrial Park purchase is to use the <br /> following sources : <br /> $110 ,000 - City Liquor Store Reserves <br /> $ 55 ,000 - Loan from City Revolving Loan Fund <br /> • . • $ 20,000 - City Capital Projects Reserve Fund • <br /> $ 25, 000 - City Equipment Reserve Fund - Undesignated <br />• On 10/17/91 when the City Council decided to move forward with <br /> this purchase, staff heard some concerns regarding the use of <br /> $55 , 000 from the City Revolving Loan fund. Concerns were <br /> expressed regarding how the use of these funds could limit the <br /> flexibility of our economic development endeavors . This <br /> concern was expressed in spite of the fact that when the <br /> purchase takes place , the Elk River Associated Investors will <br /> be contributing $39 ,000 into the Revolving Loan fund based on a <br /> previous agreement . <br /> At the 10/17/91 meeting, staff was requested to provide the <br /> Council with a "laundry list" of possible funding sources for <br /> this land purchase . At this time, it appears that there are <br /> very few additional sources of funds available for this <br /> purchase . Staff has a limited number of options to present to <br /> the City Council . <br /> To begin, it would appropriate that the FDA, who ultimately <br /> will be the owner of the property and the group responsible <br /> 720 Dodge Avenue N.W., EIk River, Minnesota 55330 (612) 441-7420 <br />