Loading...
HomeMy WebLinkAboutEDA MIN 06-16-08 ECONOMIC DEVELOPMENT AUTHORITY (EDA) SPECIAL MEETING MINUTES JUNE 16, 2008 CALL TO ORDERIROLL CALL President, Gary L. Peterson called the meeting to order at 6:16 p.m. Present: Gary L. Peterson, Bruce Nawrocki, Gerry Herringer, Tammera Diehm, Marlaine Szurek and Bruce Kelzenberg Bobby Williams arrived at 6:30 pm PLEDGE OF ALLEGIANCE New Perspective Senior LivinCl Facilitv Abatement Proposal Clark stated at the last EDA meeting Ryan Novacyzk from New Perspective, presented a work-out proposal for the previous Comforts of Home senior project at 3ih and Haft Blvd. New Perspectives requested assistance from the City and if approved it would come in the form oftax abatement. Since that meeting: 1) New Perspectives has negotiated with the other parties involved in the transaction; and 2) staff had Ehlers review the proforma information based on the most current assumptions. In the attached letter from Ehlers and Associates they state that after review of the proforma, they determined although the requested amount of assistance was not warranted, but based on the forecast, which included tax expenses that were 50% below the developers worst case estimate, some form may be needed to provide them some assurance they could meet required cash-on-cash returns for their equity investors. Ehlers recommended the City provide tax abatement assistance if needed on an annual basis as follows: 1) term of assistance would last for five years; 2) an annual analysis of need would be performed, which is the amount of aggregate taxes paid and should not exceed $81,000; 3) if it exceeds the $81,000, the City would abate its portion of incremental taxes generated from the project, up to the maximum available; and 4) utilize the proposed assessed market value for the project as determined by Anoka County to complete the calculation of need for each year. Based upon discussions that Ehlers had with the County Assessor, the value of the project would likely be below the $81,000. Ryan Novacyzk, New Perspective CFO, stated they are looking for some City assistance in case the county comes up with very large taxes. Herringer stated he looked at the New Perspectives building in Waconia and felt the exterior was nice but didn't feel it was too impressive and he wanted to know if they would be adding the Montessori School to their plans. Novacyzk stated the building that Herringer saw had exterior designed to fit into that neighborhood. In Columbia Heights the exterior design is going to be a little more presentable. Novacyzk also stated it is very important to have the memory care residents on the first floor and that is why they are using the previously planned school area for units. Nawrocki asked what would the taxable value of the units be. Novacyzk stated the assessor is looking at somewhere around $72,000 to $76,000. Motion by Diehm, second by Williams, to authorize staff to prepare an Amended Contract for Private Redevelopment with New Perspective based on the following provisions: (per Ehlers memo dated June 12, 2008 and as modified by the EDA). All Economic Development Authority Special Meeting Minutes June 16,2008 Page 2 00 ayes. Motion Carried. Clark stated staff would set up a special meeting before the City Council meeting the first meeting in July to review the agreement. Resolution 2008-07. First Amendment to the Amended and Restated Contract for Private Redevelopment with Huset Park Development Corporation Clark stated at the last EDA meeting there was some general discussion regarding this project. The proposal from Mike Bjerkesett of NHHI, Inc. would consist of a 50-unit, income restricted, four-story senior complex as part of the Huset Park Redevelopment Project. Schafer Richardson is proposing to build a three-story, approximately 30-units, with underground parking stalls, which would be attached to the NHHI building. This amendment reflects the following changes: 1) Under Section 1.1, the definition of Minimum Improvements would be modified to add 80 units of senior rental housing; 2) under Section 3. 1 (d) would be modified to show $10,000 per senior rental unit (as amended June 16, 2008); 3) Section 4.3, Completion of Construction for Phase I, the date would be changed to read: December 31,2010; 4) Section 3.8(h) would be modified to read: Tax Increment Revenue Bonds, Series 2007 in the principal amount of $2,890,000 (the "Series 2007 Bonds'). The last sentence would read: The net amount of the Series 2007 Bonds disbursed to Redeveloper will be counted toward the maximum aggregate principal amount of Initial Notes under Section 3.8(b), as such amount may otherwise be adjusted under the terms of this Agreement; and 5) Section 3. 8 (i) this is a correction item that goes back to Mayor June of 2007. This item has been sitting on the books for a long time and our attorney's stated as long as we are amending the contract we should correct this also. The EDA did two different notes: 1) issuing the general note of $6.5 million, which was the pay-as-you-go note and 2) an actual tax exempt revenue bond that was issued in the amount of $2.9 million. Diehm asked if our attorney reviewed the document. Clark stated Steve Bubul did. Nawrocki asked what the original tax amount was and what it will be. Clark stated it was $816,000 for this parcel and the new project would be $575,000 over a period of 20 years, or a $240,000 difference. Herringer stated he would feel better if the taxable amounts would be locked in. Diehm stated she agreed with Herringer. There should be a cap on the amount. Clark stated that is the amount of assistance we are willing to give and has already been established, and if the developer was of the opinion that additional qualified costs were merited, they could prepare this as a formal amendment request. Motion by Williams, second by Szurek, to waive the reading of Resolution 2008-07, there being an ample amount of copies available to the public. All ayes. Motion Carried. Motion by Williams, second by Szurek, to Adopt Resolution 2008-07, a First Amendment to the Amended and Restated Contract for Private Redevelopment; and furthermore, to authorize the President and Executive Director to enter into an Economic Development Authority Special Meeting Minutes June 16,2008 Page 3 of3 agreement for the same. Upon vote: Szurek-aye; Kelzenberg-aye; Williams-aye; Herringer-aye, Peterson-aye; Diehm-aye; abstain- Nawrocki. 6 ayes and one abstain. Motion Carried. ADJOURNMENT President, Peterson, adjourned the meeting at 7:15 p.m. Respectfully submitted, U-/ ~JL Cheryl Bakken Community Development Secretary H:\EDAminutes2008\6-16-2008 Special