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Item # 5 <br /> ELK RIVER ECONOMIC DEVELOPMENT AUTHORITY <br /> MEMORANDUM <br /> TO: Economic Development Authority <br /> FROM: Cathy Mehelich, Director of Economic Development <br /> DATE: March 12, 2001 <br /> SUBJECT: Consider TIF 19 Contract for Private Redevelopment <br /> Event of Default <br /> Background <br /> The EDA entered into a Contract for Private Redevelopment with Associated Investors of <br /> Elk River,Fisher Sand&Aggregate,LLP,and Elk River Business Park,LLC(Redeveloper) <br /> on July 30, 1999. The Redeveloper did not meet the requirement to have a Certificate of <br /> Occupancy for the"Initial Improvements"by December 31,2000. The EDA took action in <br /> February to put the Redeveloper on formal notice of the Event of Default by mailing the <br /> letter drafted by the City Attorney. <br /> Issue <br /> 11, Since formal written notice,the Redeveloper has been issued a Certificate of Occupancy for <br /> the 50,000 square foot building in the East Business Park(February 22,2001). The receipt <br /> of the Certificate of Occupancy satisfies the requirements of the "Initial Improvements" <br /> outlined in the Contract. Attached is the response correspondence from the Redeveloper. <br /> Although the Event of Default occurred,this default does not cause any financial harm to <br /> the tax increment that will be received from TIF 19. At this time the Redeveloper has <br /> accomplished the general goals of the agreement,which includes the construction of 140,000 <br /> square feet of retail/commercial space and 50,000 square feet of industrial space. <br /> Action Requested <br /> Staff recommends that the EDA make a motion to waive imposing a remedy at this time for <br /> the technical default of failing to have a Certificate of Occupancy for all "Initial <br /> Improvements" by December 31, 2000. Staff further recommends that a letter be sent to <br /> the Redeveloper notifying them that the EDA insists on strict compliance of the Contract <br /> terms,including the scheduled completion of the Business Park, and that this waiver shall <br /> not be construed to set a precedent or preclude the EDA from asserting any available <br /> remedy upon any future default. <br /> • <br /> 13065 Orono Parkway • P. O. Box 490 • Elk River, MN 55330-1743 • (612) 441-7420 •Fax (612) 441-7425 <br /> Equal Opportunity Housing and Equal Opportunity Employment <br />