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Housing & Redevelopment Authority January 3, 2006 Page 4 Commissioner Motin indicated that he doesn't expect market values in Sherburne County to go down and that the assistance should be completed in less than 12 years. He stated that the only way that it would not be completed in less than 12 years is if the market goes stagnant. Commissioner Toth questioned if assistance has been given to other financial institutions. Ms. Mehelich stated that no public financial assistance has been given to other financial institutions. She stated that in the `SOS, the HRA redeveloped a downtown site at a cost of about $400,000 for property acquisition, remediation, and other site costs. Ms. Mehelich stated that First National Bank purchased the property for the fair market value of the land at $175,000. She stated that because First National Bank purchased the property for the fair market value, staff is of the opinion that this does not constitute as assistance. Commissioner Lieser questioned if this request only applies to the City and if Sherburne County reviews the project separately. She also questioned if the School District will be involved. Ms. Mehelich indicated that the County will complete their own separate review process and that it is not customary to request this type of financing assistance from the School District. Commissioner Toth questioned if the County denies the request for TRF assistance, if the proposed expansion will still take place in Elk River. Pat Dwyer, Sr. VP & CFO The Bank of Elk River - stated that yes, the project would still take place if the County was to deny the project but that The Bank has met with both City and County officials and both have indicated they are in support of providing TRF assistance for the expansion. Mr. Dwyer explained that it was not until The Bank received this verbal support that they went ahead and had the architectural plans completed for the Elk River site. Mr. Dwyer indicated that the assistance that The Bank of Elk River will receive is pretty close to that of what First National Bank received if you figure in inflation. Mr. Dwyer stated that he would like to see either option two or three chosen and noted that either options' terms would end up being the same at approximately 10-years. Ms. Mehelich explained that the TRF agreements are written so that the agreement ends when the term reaches expiration or when the total amount of TRF assistance is reached, whichever occurs first. Mr. Dwyer noted that The Bank of Elk River needs more space and that the Otsego location would have been a cheaper option for an expansion but that The Bank is family owned and the family has a strong commitment to Elk River and would like to maintain their headquarters in Elk River. MOVED BY COMMISSIONER MOT1N AND SECONDED BY COMMISSIONER LIESER TO RECOMMEND TO THE CITY COUNCIL APPROVAL OF UP TO $300,000 OF TAX REBATE FINANCING TO THE BANK OF ELK RIVER BASED ON ONLY THE NEW MARKET VALUE WITH A TERM OF 12 YEARS WITH THE CONDITION ADDED THAT 20 NEW POSITIONS MUST BE CREATED WITH A MINIMUM WAGE OF $15.00 WITHIN TWO YEARS OF PROJECT COMPLETION. MOTION CARRIED 5-0.