6.0. EDSR 02-12-2001 - Laserfiche WebLink

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Li``2 ELK RIVER ECONOMIC DEVELOPMENT : TJZITY 0 MEMORANDUM TO: Economic Development Authority FROM: Lori Johnson, Finance Director DATE: February 12, 2001 SUBJECT: Consider TIF 19 Contract for Private Redevelopment Initial Improvements BACKGROUND The EDA entered into a Contract for Private Redevelopment between the EDA and Associated Investors of Elk River,Fisher Sand & Aggregate, LLP, and Elk River Business Park, LLC(Redeveloper) on July 30, 1999. The Contract requires the Redeveloper to meet certain building construction requirements (Improvements) in order to be eligible for Tax Increment Financing(TIF) assistance from TIF 19. Because the • Redeveloper did not meet the requirements of the"Initial Improvements" which were to have been completed by December 31, 2000, staff is requesting that the EDA take action on this default. It is important that the Contract is followed in all respects in order to meet the stringent requirements placed on the administration of TIF districts and to ensure that all TIF payments and uses are clearly authorized by and made in strict accordance with the TIF documents. Therefore, EDA action is required on this default to determine the TIF assistance allowable under the Contract. Staff has reviewed this issue in detail with the City Attorney. It was our conclusion that a letter of default should be send to the Redeveloper. Attached is a draft letter prepared by Peter Beck to the Redeveloper that outlines in detail the requirements of the Contract and the remedies available to the EDA to address this default. If the EDA approves, this letter will be sent to the Redeveloper. Please refer to the letter for the details of the Contract that relate to this default. It is important to know that, although the Redeveloper is in default,this default does not negatively affect the tax increment that will be received from TIF 19. In fact,the Initial Improvements required that 140,000 square feet of retail/commercial space be constructed by December 31, 2000, and, as of that date, there were 120,327 square feet already occupied (Home Depot) and another 140,991 square feet very near completion (Wal-Mart). The Initial Improvements lso required construction of 50,000 square feet of industrial space. A 50,687 square foot i dustrial building is currently under construction Sand may be completed in the next few' eeks; obviously, it was not completed by December 31, 2000,as required by the greement. This building does not affect TIF 19 13065 Orono Parkway • P. O. Box 490 • Elk Riv r, MN 5.5330-1743 • (612) 441-7420 • Fax (612) 441-7425 Equal Opportunity Housin and Equal Opportunity Employment