2017.02.07 WS Agenda combined - Laserfiche WebLink

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o While housing does not produce permanent jobs, Pulte has communicated that for every home constructed, they create four construction jobs on site. • Housing o The quality and style of homes Pulte would build are complimentary to the area. The close proximately of parks and highly sought after school district (which is no longer accepting open enrollment) has put these homes in high demand and will likely position them to be of a great value long term. • Loyalty o APi’s headquarters buildings was one of the first buildings to commit to New Brighton Exchange and they have enhanced their presence in the area with the training center. Throughout this negotiation process, staff has continued to express appreciation to APi for their investment in New Brighton Exchange. Staff has also communicated there may be other ways the City can assist APi in the future to expand within their existing properties, should the Council wish to move forward with Pulte. o Pulte has certainly demonstrated great loyalty to the community as well, being they are seeking more land. Their existing site required a large infrastructure investment (utilities and streets). Additionally, Pulte took on larger risks with a site that was low on dirt and had environmental challenges, including groundwater contamination and vapor/gas migration. • Financial Outcomes o The long term market value of an APi office building could be higher than townhomes and commercial property is taxed at a higher rate. o From a purely financial standpoint, the best option is to work with Pulte as it is nearly guaranteed development, their townhome market is well known, and the overall tax increment collection comes within $100,000 of APi’s existing option arrangement. Further, if Pulte can construct more than 25 units, land proceeds will rise and the total increment collected over the life of the district will likely exceed $100,000. Staff continues to work towards an extension agreement with APi and has made APi aware there are financial obligations the City must meet for New Brighton. Staff has further communicated to APi the key would be finding the proper balance between APi’s needs and the City’s needs. On that note, and based upon the City Manager’s direction, staff reached out to APi to counter their counter extension offer. Staff offered the following: • A 5 year extension • Annual option payments based on lost tax increment (~$66,352) • Land price of $8/SF • Option payments would not be credited toward the land sale Staff asked APi to respond to this offer by noon Tuesday, February 7th. Staff will report to Council APi’s decision and will be prepared to address questions at the work session discussion. ATTACHMENTS Option Comparison Table 1/26/2017 Email from APi Ehler’s Block G Scenarios Pulte’s LOI dated 11/21/2016