7.6. A. & B. SR 06-06-2005 - Laserfiche WebLink

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5 IX. FINANCING It is the City's intent to assess all costs associated with the improvement against the benefiting property. Since the property is own~d by the EDA, the City will be assessing itself. It is the City's intent to use the proceeds from Tax Increment Financing (TIF) and/or Tax Rebate as lots are developed to pay the assessments. In discussions with Cathy Mehelich, Director of Economic Development and Lori Johnson, Finance Director the major financial issue is the timing of cash flow from TIF and/or Tax Rebate proceeds to retire the debt versus the desire to have marketable lots for industrial prospects. There are two options to address these canpeting issues. They are as follows: 1. Proceed with design of the plans and specifications for the entire development and the preliminary platting of the property, but do not bid or begin construction until there is at least one significant lot development proposed. If plans and specifications are complete a bid could be sought and construction could begin within 45 - 60 days. 2. A second option would be similar to the first with the exception that the City could proceed with bidding and construction of the underground utilities in the first phase but not the street component, (project cost estimated at $250,000) then when a prospect is ready to begin only the street component would need to be bid and built. If the development of a lot occurs prior to completion of the street. component temporary access to Twin Lakes Road could be allowed. Either ofthese options would help minimize the financial risk of lacking cash flow needed to retire the debt incurred with development of Northstar Business Park. X. ECONOMIC DEVELOPMENT AUTHORITY On May 9, 2005 a draft version of this report was presented to the Economic Development Authority. After lengthy discussion of the various options from full development of the entire Northstar Business Park to do nothing and wait for a significant prospect, the EDA passed a motion unanimously to recommend to the City Council that Option 2 described above be followed. That option would proceed with preparation of plans for the entire area but only bid and construct the underground utilities in the first phase. After industrial prospects are identified to generate significant proceeds to retire the debt, then finish construction in the first phase. Finally, future phases would proceed to construction as development of the lots in the first phase occurs. XI. PROJECT SCHEDULE Cathy Mehelich, Director of Economic Development, has identified the first prospect that agreed to locate in the Northstar Business Park. This prospect is anticipated to build approximately a 20,000 square foot building to be located on Lot 6. The following schedule assumes the need to have utility construction complete for a fall/winter occupancy.