3. HRSR 10-17-2008 - Laserfiche WebLink

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MetroPlains Agreement Revisions October 17, 2005 Page 2 Look back provisions which limit the internal rate of returns on the projects remain in place. Development Agreement Modifications In order for the tax increment placing agent to make the tax increment note more marketable they have asked for the following two considerations: - Collapsing the Parking Lot Note into the Development Cost Note. The original agreement had the developer's total 95% distribution being divided with 89% going to the Development Cost Note and 6% going to the Parking Lot Note. Having one note does not give the developer any additional increment but makes it simpler in marketing and financing (see pages 28, 35, 36 and 37). Placing an Assessment Agreement on the Bluff residential property that will last until the earlier date of December 31, 2010 or the date of issuance of any Refunding Bond. The same concept is proposed for the Jackson Place residential and the commercial space fox both Jackson Place and Bluff but with a termination date of December 31, 2015. This provides a "floor" of value for the refunding and establishment of a minimum value (see pages 10, 38-40 and Exhibit P). Attached is MSA 469.177 Subd. 8 which gives the City the authority to enter into an Assessment Agreement. The agreement also is changed as follows: - Establishes the sale price for Jackson Square at $130,000 ($5.63 per square foot). The value was established pursuant to the past agreement provision of a third party appraisal, which was conducted through the Minnesota Housing Finance Agency (MHFA) (see page 18, Section 3.4). - Allowance that a commitment letter from the MHFA and closing on interim financing is sufficient (in addition to the Agreement's other contingencies) to close on Jackson Place (see page 20/21). - Additional language bolstering the requirement that the Bluff Block Development can be commenced or completed without the construction of Jackson Place (see page 25). - After issuance of a refunding bond, the developer is allowed to collect an amount over the principle and interest of the bond, up to the allowable 95% and can not exceed the $3.3 million development cost outlined in Section 5.2. This amount will be memorialized in a "B" note. The reality is that after the refunding bond is sized the principle will be significantly less than the $3.3 million and any residual value will be negligible. The developer securing increment over the refunding bond principle amount still meets the intent of the original agreement, as the guiding principle was to have 95% of the "non- inflationary" increment being distributed fox eligible development costs (see page 34 and 35). S:\PLANNING\Scott Clark\2005 CC memos\10-17-OS Metro Plains Agreement.doc