05-16-2005 CC MIN - Laserfiche WebLink

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City Council Minutes May 16, 2005 Page 10 . 1) As a condition of closing on the Jackson Block property, Metroplains must deposit $500,000 with the City of Elk River. . .. 2) If construction of the Bluff Block does not commence by December 31, 2005, MetroPlains will not receive tax increment financing... Councilmember Motin stated he would like the following clarification included in the amendment: . The city may transfer title of Jackson property but MetroPlains can't start construction on Jackson Block until the other requirements (the King Avenue parking lot be substantially completed, demolition of Nadeau's and the Jungle building, and environmental remediation) in the development agreement are met. Councilmember Motin indicated that the intent of the Housing and Redevelopment Authority is that the Bluff Block project is started prior to or at the same time as Jackson Place. Ms. Mehelich stated these conditions are in the development agreement and would remain in effect. She stated that MetroPlains would like to comment on the two amendment terms mentioned above. . Vem Hanson, of Metro Plains Development-Stated MetroPlains' intent is to clarify a snafu with the development agreement, which requires that the closing on Jackson property occur prior to the King Avenue parking lot construction and conflicts with another section of the agreement that requires the parking lot be completed prior to the closing on Jackson. He stated that in the efforts to clarify this conflict, a couple other points were raised. He stated that MetroPlains has provided a deposit with the city for the construction cost of the parking lot, as required in the agreement. John Errigo, of MetroPlains Development-Stated MetroPlains has two concerns with the recommended amendment terms of the development agreement. He stated the deposit should be reduced to the appraised value due to an independent appraisal being completed that estimates the value of the property "as is" at $200,000. Mr. Errigo stated MetroPlains also would like the Bluff Block construction date pushed back to spring 2006. He stated that MetroPlains has a purchase agreement with US Bank stating that the bank does not have to be out of their building until October 1, 2005. He stated US Bank is eJ..'Pected to be out early summer 2005 but there may be unforeseen circumstances that would prevent them from vacating prior to the October 1, 2005 date. He stated if US Bank is not vacated by the October date, then MetroPlains may have difficulty breaking ground by December 31, 2005. Ms. Mehelich stated staff recommends the $500,000 deposit be required. She stated the $500,000 was determined by an analysis from Ehlers and Associates. She stated staff would be willing to compromise on pushing the construction start date for Bluff property to spring 2006. . MOVED BY COUNCILMEMBER MOTIN AND SECONDED BY COUNCILMEMBER DIETZ TO AMEND THE DEVELOPMENT