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\r <br /> ay°f <br /> lk TO: ECONOMIC DEVELOPMENT AUTHORITY <br /> R• <br /> iver FROM: WILLIAM RUBIN, ED COORDINATOV <br /> DATE: APRIL 26, 1993 <br /> SUBJECT: AGENDA MEMO FOR APRIL 26, 1993, <br /> EDA MEETING <br /> ITEM 3 . TESCOM DEVELOPMENT AGREEMENT <br /> The EDA is now in a position to approve the Development <br /> Agreement between the Elk River EDA and Tescom Corporation, <br /> Inc. This Agreement is not unlike previous TIF agreements <br /> (that is, Timron Precision Gear, etc. ) with one noted exception: <br /> The EDA was unable to obtain a reverter in the Quit Claim <br /> Deed which conveys title to Tescom. This element of the <br /> Quit Claim Deed enables the property to revert back to the <br /> EDA if a Certificate of Occupancy is not issued, and <br /> therefore, the project is not finished. As a substitute <br /> to the reverter, I refer you to Section 3 . 3 of the <br /> Development Agreement. This Section allows the EDA to <br /> accept $100,000 from the developer (Tescom) as a deposit <br /> • for performance of the obligations under the Agreement. <br /> After a permanent Certificate of Occupancy is issued, the <br /> $100,000 is returned to Tescom, and, Tescom is eligible to <br /> achieve its other reimbursements under the Agreement. <br /> Tescom is required to construct a new facility which contains <br /> approximately 28,080 square feet. Construction of the project <br /> is to be completed no later than January 1, 1994 . This enables <br /> the City/EDA to collect the first full increment beginning in <br /> 1995 . The project's finished market value for tax purposes <br /> will be $1,200,000 (land and building value) . This value will <br /> be subject to a "assessment agreement" that is executed by the <br /> EDA, Tescom, and the County Assessor. <br /> Because this project entails the creation of a new Tax <br /> Increment District, it is subject to certain restrictions that <br /> were placed on the TIF law in 1990 . The basic restriction <br /> deals with the City' s potential loss in State Aid or HACA. <br /> Tescom is responsible for reimbursing the City for its loss <br /> during the life of this TIF District. <br /> Action Requested <br /> The EDA is asked to approve the Contract for Private <br /> Development by and between the Elk River EDA and Tescom <br /> Corporation. <br /> • ITEM 4 . TIF PLEDGE AGREEMENT <br /> 720 Dodge Avenue N.W., Elk River, Minnesota 55330 (612) 441-7420 <br />