5. EDSR 05-14-2007 - Laserfiche WebLink

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^ The city (EDA) will issue up to $12 million of bonds with debt service of the bonds to be paid one-third by the YMCA through rent payments and two-thirds by the city through a tax levy. The bonds will have a term of 25 years unless a shorter maturity is mutually agreed upon by all parties and is approved by bond counsel. ^ The city will provide the building site for the facility at no cost to the YMCA. ^ The YMCA is responsible for payment of all operating costs including grounds maintenance, taxes, insurance, and costs for operating all programs. ^ The Lease spells out in detail how all future capital improvements will be funded. This item was discussed by the Council at a work session on the MOU and the Lease is consistent with the Council's comments made at that time. ^ The Lease as originally written states that the city has applied for a Sherburne County Landfill Legacy Grant for the YMCA. The Lease further states that grant proceeds will be applied to payment of the debt on prorated basis with one-third of the grant proceeds reducing the YMCA's rent and two-thirds reducing the city's tax levy. Based on Council discussion at the last worksession, alternate lease language is attached providing that all of the grant go to the city. Since the Council will be addressing this at the 5:00 special meeting, both are included now for your review. At the meeting, the version approved by the Council will be the one the EDA will be asked to approve. Our attorney on this project, Steve Bubul, Kennedy and Graven, and I will be present at Monday meeting to answer any questions the EDA may have about the lease at that time. Additional information was included in the May 7 memo for the Council meeting; this memo can be found on the city's website. Financial Impact Once the lease is approved, the EDA is obligated to issue $12,000,000 of debt to fund this project with the debt being repaid through a city property tax levy. The levy may be reduced by grant proceeds. The lease does not provide an escape clause for the city because the maximum obligation is set at $8,000,000 plus the land contribution. The city is liable for the entire debt if the YMCA does not may rent payments as scheduled. Attachments Resolution approving Lease agreement by and between the Economic Development Authority for the City of Elk River, Minnesota as Lessor and the Young Men's Christian Association of Metropolitan Minneapolis as Lessee and Ground Lease between the City of Elk River and the Economic Development Authority Lease agreement by and between the Economic Development Authority for the City of Elk River, Minnesota as Lessor and the Young Men's Christian Association of Metropolitan Minneapolis as Lessee. Ground Lease between the City of Elk River and the Economic Development Authority S:\Council\Lori\I~;llA memo re YMCA lease US 14 07.doc