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<br /> <br /> <br /> <br />Council Worksession <br />October 25, 2016 <br />5:00 pm <br /> <br />Present: Mayor Valerie Johnson <br /> Councilmember Gina Bauman <br />Councilmember Brian Strub <br /> Councilmember Paul Jacobsen <br />Councilmember Mary Burg <br />Absent: <br /> <br />Staff in Attendance: Dean Lotter, Janice Gundlach <br /> <br />Guests in Attendance: <br /> <br />APi Option Extension <br />Lotter stated the Economic Development Commission (EDC) met on October 5th to discuss a request by APi <br />Group Inc. to extend the option on the northern two acres (Block G), adjacent from their training center and <br />office building that was substantially completed at the end of 2015. The act of exercising the option means <br />closing on the property on or before December 31, 2016. He explained staff had a presentation for the Council <br />to review regarding the financial implications for the option, along with other options available to the City. <br /> <br />Gundlach explained City staff met with APi representative Don Randall on September 19th. Mr. Randall <br />indicated APi is not ready to construct a third building and requested an extension. Staff reviewed a memo that <br />was provided to the EDC outlining three main factors in considering an option extension, those being: 1) APi’s <br />Investment into New Brighton Exchange, 2) Financial Impacts of an Extension, and 3) Other Development <br />Interests (affordable housing through MWF or Pulte Homes). <br /> <br />Gundlach reported that after a thoughtful discussion, the EDC made a motion recommending the City Council <br />authorize staff to negotiate with APi on an option extension agreement. More specifically, the EDC <br />recommended staff discuss the following three topics with APi regarding the most favorable terms of an <br />extension: <br /> <br />• Length of option extension limited to 2-3 years. <br />• Request payment of cash in lieu of lost increment (Ehler’s has estimated the City will lose $119,432 in <br />projected tax increment by keeping the property undeveloped for three additional years). <br />• The payment of cash in lieu of lost increment shall not be credited toward the land price. <br /> <br />Gundlach stated overall, the EDC unanimously recommended the Council consider an option extension with <br />APi. Staff asked Ehler’s to prepare a spreadsheet illustrating the financial impacts of the APi development, as <br />well as two other development prospects for this property (townhomes and apartments). This information was <br />handed out at the EDC meeting and is attached to this memo. Following the initial draft of this spreadsheet, <br />Pulte indicated an ability to construct more units that originally envisioned on the spreadsheet. Ehler’s will <br />incorporate this larger unit count (25 instead of 14) and bring an updated spreadsheet to the meeting for <br />Council to review. Ehler’s will also be available to help address any other financial/tax increment related <br />questions.