CCP 10-23-2007 - Laserfiche WebLink

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foot in order to cover the bonds that were sold for that area. Nelson asked what the terms are for Block D. Black replied that it is a five-year option, on which they will begin paying after three years, and the expansion building would be constructed of high-quality materials. Kaufhold asked whether they would own or lease the building from Ryan. Black replied that Transoma would be leasing the building from Ryan Companies. Kaufhold asked why the City could not make Ryan pay for the option even if Transoma decided not to expand. Fernelius replied Ryan would be paying on the option in the fourth year to cover the loss of tax increment during that time. Kaufhold asked if there is an exclusive agreement with Transoma to develop the option, or if the expansion does not go through it could be developed for another tenant. Fernelius replied that the property is being held exclusively for Transoma. Lesher asked if Transoma has employees are from the area and if the jobs are well paying. Fernelius replied that their employees are mostly local, which was part of the reason for them to select this site. Black added that the average salary is approximately $75,000, excluding officers. Stang asked whether staff is comfortable with the option agreement. Fernelius replied that they are. Benke added that if the parcel was not under the option, it could take that long for it to be developed. Kaufhold expressed frustration that at the end of three years Transoma could walk away from the option and not pay any increment on the land. Fernelius stated if the company does walk away from the option, the City would be able to market the site. He added that if they decided after the third year not to expand, the City would be able to keep any money that was paid for the option and then market the site. Stang • suggested that there is a lot of land to develop and having this one parcel tied up will not be a loss to the development as a whole, Fernelius noted that Ryan had used that argument as a rationale to not pay anything for the option. Black reported that TOLD recently appeared at a Council work session to discuss their ideas for Blocks A and F, Sculthorp inquired why they have not included Block E. Black replied that Block E is not suitable for residential because of the dump material that on the site. He added that the City has been approached by a hotel company for Block A, and they are also interested in Block B. However, those discussions are very preliminary. Stang asked why they would be interested in the site, since it is difficult to access. Benke suggested that there are three different interchanges that feed to the site, which would be attractive to them. Stang stated he is concerned that a six-to-seven-story building on the corner would not be attractive in a residential area. Black replied that staff doesn't view height as an issue since the site was originally planned for a five-to-six-story building. Stang stated that he does not recall hearing of rental units on the east side before, and asked if this was new. Black replied that there had been discussions about rental units on the east side of the development. Flahave asked if there would be retail on the first floor. Black replied that there would be retail on the ground floor with higher-end rental units above it. Ile added that the units would be bigger than those at Main Street Village; renters would pay roughly $1.00 per square foot or $1200 per month for a 1200- square-foot apartment. Nelson inquired how Council reacted to the plan. Fernelius replied that Council is not excited about the TOLD plan. Stang added his conversations with other residents has indicated that no one would be happy with additional rental units, a number of people believe there are too many in the a City already. Fernelius stated that staff asked for direction from the Council, and they directed staff to pursue the hotel. Benke replied that an argument could be made that there is a need for higher-end rentals for seniors. Page 2 of 4