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MINUTES <br /> New Brighton Economic Development Commission Approved <br /> Regular Meeting—November 16, 2010 <br /> 7:30 a.m. <br /> Members/Liaisons Present: Gina Bauman, Dennis Flahave, Bob Benke, Bob Smith, Mike Murlowski, <br /> Terri Snell and D.L. Beach <br /> Members/Liaisons Absent: Ruben Vasquez, Mark Nelson, Marie Hansen, <br /> Staff Present: Grant Fernelius, Community Development Director; Katie Bruno, Office Assistant. <br /> Call to Order <br /> Commissioner Benke called the meeting to order. <br /> Approval of Minutes <br /> Minutes from the September 21, 2010 were approved. <br /> Report from Council Liaison <br /> Councilmember Bauman reported council met November 15 to discuss the 2011 Budget in greater <br /> detail. It was reported a 0% levy is still proposed for 2011. <br /> Northwest Quadrant Report <br /> The City and Stuart Development Company continue to work on plans for a 124 unit, market-rate <br /> apartment project, which is now named The View Apartments at Long Lake. <br /> The developer is currently planning to build 124 units. The unit mix will be refined in the <br /> months ahead,but generally will be comprised of 45% one bedrooms, 45%two bedrooms, 5% <br /> three bedrooms and 5% efficiencies. <br /> The developer had initially wanted to pay$500,000 for site The City argued that the land is worth more, <br /> but more importantly a low land price could have implications elsewhere in the NWQ. The developer <br /> was willing to work with the City on concept to pay more for the site, but have some portion forgiven <br /> over time. <br /> The agreed upon purchase price is $1.250 million, of which the developer will pay$200,000 at closing. <br /> The remaining amount($1.050 million)will be amortized as a loan at 3% interest for 20 years. <br /> Beginning in Year 11, the developer will start making annual payments of$70,576 for 10 years, which <br /> amounts to $705,764. As a result, the City will net $904,764 for the site after 20 years. <br /> While the loan will be unsecured(i.e. no mortgage), it will be backed up by a personal guarantee from <br /> Stuart Nolan, the owner of Stuart Development Company. The personal guarantee will also cover <br /> repayment of the deferred park dedication fees. In the event of non-payment, the City can make a legal <br /> claim against the assets of Mr. Nolan. <br /> The developer initially sought $1.5M of cash assistance for the project. These funds are intended to <br /> reduce the overall cost and thus the amount of equity or debt needed. The City has offered$1.2M of <br /> cash assistance. Under the 2010 Jobs Bill, the State Legislature loosened the restrictions on TIF funds in <br /> an effort to jump start economic development. Cities can tap into these resources, but only <br /> for eligible economic development projects that are started by June 30, 2011. All surplus TIF funds <br /> used for this purpose must be spent by December 31, 2011. <br /> For this project, the City will escrow $1.2 million with a title company. The City funds can only be <br /> spent development-related costs (i.e. architects, engineers, construction, but not developer fees). <br /> The developer has indicated that they will be investing $4.0 million of their own funds in the project as <br /> equity. <br /> There has been a significant amount of discussion about the valuation of the project. The County <br /> Assessor will be responsible for this function and at meeting this summer they indicated that similar <br /> apartment projects (i.e. new construction) are being valued at roughly$115,000 per unit. Their cash <br />