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<br />Request for Action <br /> <br />To Item Number <br />City Council 4.3 <br /> <br />Meeting Date Prepared By <br />February 3, 2025 Brent O'Neil, Economic Development Director <br /> <br />Item Description Reviewed by <br />Resolution 25-07: Release of Mortgage at 15725 Brent O'Neil <br />Jarvis Street NW Cal Portner <br />Tina Allard <br />Action Requested <br />Adopt, by motion, Resolution 25-07 authorizing the release of the mortgage at 15725 Jarvis Street NW. <br /> <br /> <br /> <br />Background/Discussion <br />The city holds a mortgage at 15725 Jarvis Street NW of $500,000. This property is owned by PLM Properties, <br />an affiliated company of Heritage Millwork, and houses some of Heritage's present operations. This mortgage <br />was granted to the city by PLM as part of the framework for the city's land sale to Heritage for its new facility <br />on Gateway Road and the use of Tax Increment Financing (TIF). There was a concern the city bore a <br />heightened financial risk in the short period between the transfer of the property to Heritage and the <br />construction of the new building, with the concern alleviating as the building reached completion. To address <br />this concern, the mortgage on Jarvis provides supplemental and temporary collateral to the city during the <br />construction period of Heritage's new facility. <br /> <br />With construction substantially complete, PLM has requested the mortgage be released in February. The <br />agreement with Heritage directed its release in conjunction with the final Certificate of Occupancy (CO) <br />being issued, which is expected this spring. This request also corresponds with an anticipated issuance of a <br />temporary CO of the Gateway building in February, with much of the work being finished. <br /> <br />As Heritage plans the transition from the current facilities to the new Gateway facility, it has an agreement to <br />sell the Jarvis facility and will after the mortgage is released. The concerns driving the need for the Jarvis <br />mortgage have been addressed, and we support the release of the Jarvis mortgage at this time. <br /> <br />The mortgage the city is holding on the Gateway Road property, equal to the land sale price of $1,378,020.60, <br />is not affected by this action and will remain in place until the city has received full payment for the land. <br /> <br />Financial Impact <br />N/A <br /> <br />The Elk River Vision <br />A welcoming community with revolutionary and spirited resourcefulness, exceptional service, and community <br />engagement that encourages and inspires prosperity <br /> <br />