CCP 02-12-2008 - Laserfiche WebLink

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work for just a portion of the development. The development concepts are less dense than what was earlier proposed and would be less financially attractive than the Rottlund/Sherman proposal. Council could decide to wait and see when the residential market turns around or build out with a different plan. Larson added that there is also a proposal similar to Main Street Condominiums, which was constructed as rental and later converted to condominiums. The proposal would be for 40 high-end units that would eventually be converted to condos at a later date, and the building would be built to the higher standards required for condos. Fernelius added that the total rental units for the development would be 200-300 at most, with some being senior rentals or townhome rentals. Lotter added the units would rent for $1500- 3000 per month. Benke suggested that people still want the executive townhomes. Sculthorp suggested that if the development were just the executive townhomes the project would be over $50 million in the hole. Black replied that the whole development could not be tilled with the executive townhomes, since the view of the park is part of the reason so many people are interested in them. He added that their significantly higher price range makes up for the lower density in that area. The area would take five to seven years to completely develop; the Council needs to decide whether they want to wait for the market to turn around or decide on a different type of development that could be built sooner. Sculthorp suggested that the density must be significantly greater than what is being proposed to make this development financial workable. He asked when the taxpayers are going to be told that they would need to pay for this development. Larson replied that the Council has not talked to the taxpayers because nothing is required of them; the bond payments are covered through 2010. Black added the sources -and -uses sheet is over the next twenty-five years and while it does show that the development is short $5 million there is capitalized interest built into the bond issues to help cover the expense in the early years. Flahave asked when the debt reduction on the bonds would start. Black replied that there are some bond payments that are due in 2010, which would be paid for by tax increments. Flahave asked whether the reserves are there to handle those payments. Fernelius replied that there are reserves in place to make those payments. Black added that there were bonds issued to also help handle those payments. He added that staff shares the concerns about the "worst case" scenarios that residents may have. Staff has been talking with other developers, trying to understand the new reality, and to find the best project for the development. There may be an investment on part of the City at the end of the development, which means the dollars the City has invested through its development fund would not be recovered. Nelson asked how much work Belair got done before the weather turned cold. Fernelius replied that they were able to get some of the demolition done. Black added that they were also able to do some of the well abatements also. Nelson asked if there were any surprises found on the site. Black replied that pipes from the old refinery, with liquid still in them, were found. Larson added that the City would be contacting Ashland Oil to help pay for their removal. Black noted that the pipes were found on the north park property, and the original thought was leave the pipes since the park would not be developed, however the PCA wants them removed. Lotter reported that the PCA is requiring groundwater monitoring wells around the refinery site to test for TCE, which has been found in Long Lake Park. The first tests have shown that WE is not coming from that site, but they have found diesel and other organics, which is why the PCA has increasing concerns about what is being left on the site. Nelson asked how the Parks Steering Committee could be planning for parks, since the development is a state of flux. Black replied three of the four parks are in areas that require ponding and thus those Page 2 of 4